Holding

The Court held that the award under Section 163‑A must be treated as an application under Section 140, allowing adjustment and refund, and that a claimant cannot simultaneously pursue claims under Section 163‑A (or 140) and Section 166.

Summary

The appellants, children of deceased victims, filed parallel claims under Section 163-A (structured no‑fault compensation) and Section 166 (fault‑based compensation) of the Motor Vehicles Act, 1988. The High Court treated the Section 163‑A award as interim and allowed the claimants to retain the amount, prompting the insurer to appeal. The Supreme Court examined the legislative intent of Sections 140, 141, 163‑A, 163‑B and 166, reaffirming that Section 163‑A provides a final settlement but, for the facts of this case, ordered that the award be treated as a Section 140 application so that the excess amount invested by the Tribunal could be refunded to the insurer. It held that a claimant must elect either the no‑fault scheme under Section 163‑A (or 140) or the fault‑based remedy under Section 166, but not both. Consequently, the Court directed adjustment of the amounts, dismissed the appeals and review petitions, and instructed the parties to settle the balance within four weeks.

Issues considered

Whether an award under Section 163‑A of the Motor Vehicles Act, 1988 is a final award or an interim award.
Whether a claimant can pursue parallel claims under Section 163‑A (or Section 140) and Section 166 of the Act.
Whether the amount awarded under Section 163‑A can be adjusted or refunded in light of the provisions of Section 140.
Interpretation of the expression "any other law" in Section 140(5) and its relation to Section 163‑A.

Legislation cited

Fatal Accidents Act, 1855
Motor Vehicles Act, 1988s. 140, s. 141, s. 163-A, s. 163-B, s. 166, s. 167, s. 168
Workmen's Compensation Act, 1923

Subjects

Motor Vehicles ActSection 163-ASection 140Section 166no‑fault liabilityinterim compensationfinal awardstructured compensation formulasocial welfare legislationclaim adjustment

Judgment

...\:
DEEPAL GIRISHBHAI SONI AND ORS .
v.
A

UNITED INDIA ASSURANCE CO. LTD., BARODA

MARCH I 8, 2004

[Y.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.] B

Motor Vehicles Act, J988

Sections 163-A and J66-Award passed under a proceeding under section
163-A of the Act-Bench of two judges referring the matter to a larger Bench c
doubting the correctness of the decision in Oriental Insurance Co. ltd v.
Hansrajbhai V. Koda/a and Ors., 12001 J 5 SCC 175, wherein it was held that
the award passed under Section 163-A of the Motor Vehicles Act, 1988 is a
final award and not interim in nature"-correctness of-Affirming the Koda/d's
case, the three Judges Bench held, Parliament inserted section 163-A to the D
Act for quick and efficacious relief by granting compensation on the basis of
a structured formula envisaged under Second Schedule to the Act considering
all relevant particulars and without insisting for the proof of negligence in
causing the accident-Remedies envisaged under sections 163-A and 166 of
the Act are distinct and separate and are both final remedies-Claimant cannot
pursue both the remedies. E
Sections 140 and 163-A-Held, compensation paid under section 140 is
ad-hoc in nature which shall be reduced/adjusted from the amount of
compensation payable under the said Section or Section 163-A of the Act-
Claim under section 140 is in addition to any other claim which may be made
under any other law for the time being in force.
F
4.
A Ben.ch of two judges referred the appeal to a larger Bench of three
judges doubting the correctness of the decision rendered by a Bench of
two judges in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Koda/a and Ors.,
[2001) 5 SCC 175, wherein it was held that the award passed under Section
G
163-A of the Motor Vehicles Act, 1988 is a final award and not interim in
nature and that the claimants are debarred from making further claims
on the basis of fault liability under section 166 of the Act. Two review
petitions seeking review of the judgement in Koda/a 's case and another
.l(
simil:ir appeal were also tagged with the main appeal.
213 H
214 Slil'REME COURT R1:ro1ns 1200~1 o S.l'.R.
A The claimants/appellants contended that the award under section
163-A of the Motor Vehicles Act, 1988 is ~n interim award granting only
'adequate and rational compensation' on a structured formula and not a
final award; that, the actual loss suffered by the victim is not adjudicated
upon in Section 163-A proceeding; that the Act is a beneficial legislation
B and it should be construed liberally; that an award of 'just compensation'
envisaged under section 166 of the Act cannot be denied by treating the
award under section 163-A of the Act as a final award; that the ceiling
provided in Second Schedule indicates that the compensation payable
under Section 163-A is interim in nature which would be adjusted when
a final award is passed under section 166 of the Act; that the proceedings
C envisaged under sections 140 and 163-A of the Act are alternative to each
other; that the Bench in Koda/a 's case did not consider the legislative
history of the Act and misinterpreted and misconstrued the expression 'any
other law' appearing in Section 140(5) of the Act; and that the said
expression also includes other provisions of the Act since the remedies
provided under section 163-A and 166 of the Act are distinct and separate.
D
The respondents contended that by enacting Section 163-A of the Act,
the Parliament intended to make an exception to the provisions of section
166 of the Act for the purpose of implementing the principles of social
justice; and that the award under section 163-A of the Act is a final award
E and not interim in nature for the fact that under the Second Schedule to
the Act, one third of the total income is excluded from the total amount
of compensation and that certain provisions relevant for total amount of
compensation payable have been provided.

Dismissing the appeals and the review petitions, the Court
F HELD: I.I. The Motor Vehicles Act, 1988 is in the nature ofa social
welfare legislation. Section 140 of the Act deals with interim compensation.
By inserting Section 163-A, the Parliament intended to provide for making
of an award consisting of a pre-determined sum without insisting on a long-
drawn trial or without proof of negligence in causing the accident. The
G Amendment was, thus, a deviation from the common law liability under
the Law of Torts and was also in derogation of the provisions of the Fatal
Accidents Act, 1855. The Act and the Rules framed by the State suggest
that a new device was sought to be evolved so as to grant a quick and
efficacious relief to the victi1_11s falling within the specified category. The
H heirs of the deceased or the victim in terms of the said provisions were
D.G. SONI r. UNITED INDIA ASSURANCE CO .. LTD . 215
.1 -I: assured of a speedy and effective remedy which was not available to the A
claimants under Section 166 of the Act. 1232-F; 234-C-E!

1.2. Section 163-A of the Act was enacted for grant of immediate
relief to a section of people whose annual income is not more than Rs.
40,000 having regard to the fact that in terms of Section 163-A of the Act
read with the Second Schedule appended thereto, C<lmp~Psation is to be B
paid on a structured formula not only having regard to the age of the
victim and his income but also the other factors relevant therefor. An
award made thereunder, therefore, shall be in full and final settlement of
the claim as would appear from the different columns contained in the
Second Schedule appended to the Act. The same is not interim in nature. C
The note appended to column 1 which deals with fatal accidents makes
the position furthermore clear stating that from the total amount of
compensation one-third thereof is to be reduced in consideration of the
expenses which the victim would have incurred towards maintaining
himself had he been alive. This together with the other heads of
compensation as contained in column Nos. 2 to 6 thereof leaves no manner D
of doubt that the Parliament intended to lay a comprehensive scheme for
the purpose of grant of adequate compensation to a section of victims who
would require the amount of compensation without fighting any protracted
litigation for proving that the accident occurred owing to negligence on
the part of the driver of the motor vehicle or any other fault arising out E
of use of a motor vehicle. (234-E-H; 235-A]

2.1. Payment of the amount in terms of Section 140 of the Act is ad
hoc in nature. A claim made thereunder is in addition tO any other claim
which may be made under any other law for the time being in force.
Section 163-A does not contain any provision identical to Section 140(5) p
....... of the Act which indicates that whereas in terms of the latter, the liability
' ' of the owner of the vehicle to give compensation or relief under any other
law for the time being in force continues subject of course to the effect
that the amount paid thereunder shall be reduced from the amount of
compensation payable under the said Section or Section 163-A of the Act.
[235-B-C; 236-A-B] G
2.2. By reason of Section 163-A, the compensation is required to be
determined on the basis of a structured formula whereas in terms of
Section 140 only a fixed amount is to be given. A prov_ision of law providing
for compensation is presumed to be final in nature unless a contra H
I

!--
216 SUPREME COURT REPORTS 12004] 3 S.C.R.

A indication is found to be in the statute either expressly or by necessary (
~·
implication. While granting compensation, the Tribunal is required to
adjudicate upon the disputed question as regard age and income of the
deceased or the victim, as the case may be. Unlike Section 140 of the Act,
adjudication on several issues arising between the parties is necessary in
a proceeding under Section 163-A of the Act. 1236-B-DI
B
General Manager, Kera/a State Road Transport Corporation,
Trivandrum v. Mrs. Susamma Thomas and Ors., 119941 2 SCC 176, referred
to.

2.3. The Parliament intended to provide for a final amount of
c compensation under section 163-A of the Act and not an interim one.
Under the scheme envisaged under Section 163-A, the rights and
obligations of the parties are to be determined finally. The amount of
compensation payable is not to be altered or varied in any other
proceedings. rt does not contain any provision providing for set off against
D a higher compensation unlike Section 140 of the Act. 1236-G-H; 237-A-BI

2.4, The remedy for payment of compensation under Sections 163-
A and 166 of the Act are final and independent of each other. A claimant
cannot pursue his remedies thereunder simultaneously. Thus one must opt/
elect to go either for a proceeding under Section 163-A or under Section
E 166 of the Act, but not under both. 1238-D-EI

2.5. In agreement with Kodala's case, unlike Sections 140 and 141
of the Act, the Parliament did not want to provide additional compensation
in terms of Section 163-A of the Act. Whenever the Parliament intended
to provide for adjustment or refund of the compensation payable on the
F basis of no-fault liability from the amount of compensation payable under ,;.,
the award on the basis of fault liability under Section 166 of the Act, the
same has expressl)I been provided for. Since no such procedure for refund
I
•
or adjustment of compensation has been provided for in relation to the
proceedings under Section 163-A of the Act, it must be held that the
G scheme of the provisions under Sections 163-A and 166 of the Act are
distinct and separate in nature, [238-E-F; 239-B-DI

2.6. In Section 140(5) of the Act, the expression "also" has been used
which is indicative of the fact that the owner of the vehicle would be
)l
-
additionally"liable to pay compensation under any other law for the time
H being in force. Right to claim compensation under Section 140, having
D G. SONI"· UNITED INDIA ASSURANCE CO, LTD 217
<

,I -.I;
regard to the provisions contained in Section 141, is in addition to any A
other right to claim compensation on the principle of fault liability. Such
a provision does not exist in Section 163-A of the Act. If no amount is
payable under the fault liability or the compensation which may be
received from any other law, no refund of the amount received by the
claimant under Section 140 is postulated in the Scheme. Section 163-A,
on the other hand, nowhere provides that the payment of compensation
B
of no-fault liability in terms of the structured formula is in addition to
the liability to pay compensation in accordance with the right to get
compensation on the principle of fault liability. It is also not correct to
~
contend that the expression "any other law for the time being in force"
used in Section 140(5) would include any other provisions of the Motor c
Vehicles Act. Had the intention of the Parliament been to include the other
provisions of Motor Vehicles Act within the meaning of the expression
"any other law for the time being in force", it could have said so expressly.
The Parliament has chosen to use the expression "any other law", to mean
a law other than the provisions of the Motor Vehicles Act. The proviso
appended to Sub-Section (5) of Section' 140 of the Act is required to be D
given a purposive meaning. Further, different forms prescribed under the
State Motor Vehicle Rules as regard determination of the final
compensation is suggestive of the fact that both proceedings are meant to
be final in nature. (239-E-H; 240-A-B and EJ
E
2.7. In Section 163-A of the Act, the expression "notwithstanding
anything contained in this Act or in any other law for the time being in
force" has been used, which goes to show that the Parliament intended to
,-
insert a non-obstante clause of wide nature which would mean that the
provisions of Section 163-A would apply despite the contrary provisions
existing in the said Act or any other law for the time being in force. Section F
_,,. 163-A of the Act covers cases where even negligence is on the part of the
'
J- / victim. It is by way of an exception to Section 166 and the concept of social
justice has been duly taken care of. [240°-G-H; 241-A-B)

Oriental Insurance Co. Ltd v. Hansrajbhai V. Koda/a and Ors., [2001)
l sec 175, affirmed. G

2.8. This Court does not agree with the findings in Kodala's that if
a person invokes provisions of Section 163-A of the Act, the annual income
'< of Rs. 40,000 per annum shall be treated as a cap. The proceeding under
Section 163-A being a social security provision, providing for a distinct
H
I

).-.

218 SUPRl:ML: COURT REPOR rs 120041 3 S.C.R.

A scheme, only those whose annual income is upto Rs. 40,000 can take the
't- '
benefit thereof. All other claims arc required to be determined in terms
of Chapter XII of the Act. 1241-C-DI

3.1. The Act is a beneficial one and, th us, deserves liberal
construction with a view to implementing the legislative intent but it is
B trite that where such beneficial legislation has a scheme of its own and
there is no vagueness or doubt therein, the court would not travel beyond
the same and extend the scope of the statute on the pretext of extending
the statutory benefit to those who are not covered thereby. For the purpose
of interpretation of statute, same is to be read in its entirety. The purport

c and object of the Act must be given its full effect. The object underlying
the statute is required to be given effect to by applying the principles of
purposive construction. 1237-D-E; 238-B-D]

Regional Director, Employees' State Insurance Corporation, Trichur v.
Ramanuja Match Industries. AIR (1985) SC 278; 1198511 SCC 218, Kuna/
D Singh v. Union of India and Anr., 1200314 SCC 524; State of Tripura and
Anr. v. Roopchand Das and Ors., (20031 I SCC 421; High Court of Gujarat
and Anr. v. Gujarat Kisan Mazdoor Panchayat and Ors., JT (2003) 3 SC 50;
Indian Handicrafts Emporium and Ors. v. Union of India and Ors., 12003]
7 SCC 589; Ameer Trading Corporation Ltd. v. Shapoorji Data Processing
Ltd., JT (2003) 9 SC 109 - (2003) 9 SCALE 713 and Ashok Leyland v. State
E of Tamil Nadu and Anr., (2004) I SCALE 224, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3126 of2002.

From the Judgment md Order dated 9.11.2002 of the Gujarat High -,
Court in F.A. No. 2272 of 2000.
F
WITH ,.,._
,.
C.A. No. 3127/2002, R.P. (C) No. 160/2002 in C.A. No. 2573/2001, -
R.P. (C) No. 161/2002 in C.A. No. 2572/2001 and C.A. No. 1680/2004.

G Gaurab Banerjee, G.L. Sanghi, Jitender Sharma, Arunabh Chaudhary, I
A.P. Medh, Hrishikesh Barna and Ms. Pragya Bhagel for Ms. M. Karanjawala,
Ms. Seema Sund, R.C. Mishra for Dr. Meera Agarwal, K.L. Nandwani, Debasis
Misra, Parmanand Jha, Ms. Minakshi Vij and Himinder Lal for the appearing
..,.
parties.

H The Judgment of the court was delivered by
D.G. SONI 1·. UNITED INDIA ASSURANCE CO .. LTD. ISINHA, .I] 219

S.B. SINHA, J. Leave granted in S.L.P. (C) No. 708 of 2003. A
Reference to this Bench :

A Division Bench of this Court by an order dated 19.04.2002 doubting
the correctness of 2-Judge Bench decision in Oriental Insurance Co. Ltd v.
Hansrajbhai v Koda/a and Ors., [2001] 5 sec 175 (Kodala) has referred B
the matter to a 3-Judge Bench whereby and whereunder the proceedings
under Section 163-A of the Motor Vehicles Act, 1988 (hereinafter referred
to and called for the sake of brevity as "the Act") has been held to be a final
4' proceeding as a result whereof the claimants had been debarred from
proceeding with their further claims made on the basis of fault liability in
terms of Section 166 thereof. C
Subject matter :

The appeals arise out of judgment and order dated 9.11.2000 passed by
the High Court of Gujarat at Ahmedabad in First Appeal No. 2272 of 2000
whereby and whereunder the claims of the appellants have been calculated D
limiting the income of the deceased at Rs. 40,000 per annum .. Two review
applications have also been filed seeking review of the judgment and order
passed in KJdala 's case (supra).

An application under Article 136 of the Constitution of India has also
been filed marked as S.L.P. (C) No. 708 of 2003 arising out of the judgment E
and order dated 28.8.2002 passed by the High Court of Himachal Pradesh in
F.A.O. [MVA] No. 181 of2001.

Background Fact :

The fact of the matter may be noticed from C.A. No. 3126 of 2002.
F
The parents of the appellants herein met with an untimely death in an accident
arising out of use of a motor vehicle on or about 4.9.1998. The appellant No
1 was at the relevant time·a major and the other three appellants were minors.

The appellants filed two claim petitions; one under Section 163-A of
the Act and the other under Section 166 thereof claiming compensation for G
a sum of Rs. 4,97,800 for the death of their mother, Ms. Prabhaben as also
a sum of Rs. 17, 30,900 for the death of their father, Shri Girishbhai Soni.
Proceeding on the basis that in terms of Section 163-A of the Act, merely an
)( interim relief was to be granted, the Motor Accidents Claim Tribunal in
MAC Petition No. "2133/1998 and M.A.C. Petition No. 2134/1998 vide its
order dated 24.3.2000 awarded a sum of Rs. 4,20,500 and Rs. 11,74,500/- H
220 SUPREME COURT REPORTS [2004] 3 S.C.R.

A respectively with interest at the rate of 12% per annum from the date of the
application till realisation. It is not in dispute that although while passing the
said order the learned Tribunal considered the matter also on their own merits
but directed that the applications filed by the appellants herein purported to
be under Section 166 of the Act would be determined separately.

B The respondent - Insurance Company being aggrieved by and dissatisfied
with the said order dated 24.3.2000 pr~ferred appeals before the High Court
of Gujarat at Ahmedabad. By reason of the impugned judgment, the High
Court having regard to the concession made at the bar to the effect that in
view of the cap of annual income of Rs. 40,000/- as contained in the Second
C Schedule appended to the Act, the awarded amount should be reduced to Rs.
3,24,500 from Rs. 4,20,500 and to Rs. 3,78,500 from Rs. I 1,74,500
respectively.

While modifying the order of the Tribunal in each of the said appeals,
the High Court clarified that the said sum would be paid to the appellants
D herein by way of interim compensation observing:

"It is also observed that as has been agreed between the parties th is
whole amount as indicated above shall be disbursed to the respondents
at this stage itself as per the apportionment ordered by the Tribunal
for respective respondents and there is no need to invest 70% of the
E amount in the fixed deposit etc., as has been ordered by the Tribunal
and l 00% of this amount i.e., Rs. 3,24,500 in First Appeal No. 2272
of 2000 and Rs. 3,78,500 in First Appeal No. 2273 of 2000, shall be
disbursed to the respondents in each of these two matters respectively.
It may also be made very clear that in view of the agreed position
between the parties, we have not embarked upon the question of
F interpreting Section 163-A and the Schedule and without entering
into the exercise of interpreting the relevant provisions we have passed
this order only because both the sides h~ve shown a good gesture
before us. At the time of awarding of compensation under section
166 of the Act all the contentions factual and legal as may be available
to the respective parties are open to be agitated when the main petitions
G are considered by the Tribunal."

Submissions :
Mr. Gaurab Banerjee, learned senior counsel appearing on behalf of the ..,.. '
appellants and Mr. G.L. Sanghi, learned sehior counsel appearing on behalf
H of the review petitioners would take us through the legislative history leading
D.G SONI v. UNITED INDIA ASSURANCE CO .. LTD. [SINHA,J.] 22 J

> I -\
to enactment of Section 163-A of the Motor Vehicles Act and submit that the
same is indicative of the fact that an order passed thereunder is interim in
A

nature.

The learned counsel would urge that the said Act being a beneficent
legislation deserves liberal construction and in that view of the matter the
remedy available to a claimant against a tort feasor for obtaining a 'just' B
compensation in terms of Section 166 of the Act cannot be taken away only
because an interim award has been made in terms of Section 163-A of the
->t Act as in the said proceeding actual loss suffered by the victim is not
adjudicated upon and merely 'adequate compensation' on a structured formula
is to be paid thereunder. C
The learned counsel would point -otlt that the said Act provides for
exercise of an option limited only to filing of a claim application under
'I
Section 140 and Section 163-A, and, thus, the remedy under Section 166 is
not barred.
D
The learned counsel would contend that a ceiling has been provided in
the Second Scheduled so far _as income of the victim is concerned to the
extent of Rs. 40,000 per annum is also indicative of the fact that the
compensation payable thereunder is only interim in nature and the sum
awarded in the said proceeding is to be adjusted as and when a final award
is passed in terms of Section 168 of the Act The learned counsel would E
submit that it is judicially accepted that the Second Schedule appended to the
Act contains a large number of anomalies and in that view of the matter a
proceeding under Section 163-A should not be held to be a final one.

Mr. Banerjee would urge that upon a proper analysis of the scheme of
the Act it would appear that the concept of 'no fault liability' is envisaged F
both under Section 140 of the Act and Section 163-A thereof and the
' ' proceeding thereunder being alternative to each other providing for identi.cal
rights and liabilities, an order under Section 140 being not final; there is no
reason as to why an award made under Section 163-A thereof should be
treated to be final. G
The learned counsel would contend that the Bench in deciding Koda/a
(supra) not only failed to take into consideration the legislative history of the
Act but also mis-interpreted the scheme and structure thereof. The Bench in
KDdala (supra), the learned counsel would argue, furthermore failed t<1 consider
the effect of the Act which is beneficent in nature and, thus, was required to H
I

~

222 SUPREME COURT REPORTS [2004] 3 S.C.R.

A be construed liberally. Right to prosecute a remedy under common law must
be barred either expressly or by necessary implication and such a bar having
not been provided as regard a proceeding under Section 163-A of the Act, it
is inconceivable, the learned counsel would submit, that a remedy provided
for under the statute would not be made available to the suitor.

B The learned counsel would contend that the Bench deciding Koda/a
(supra) misinterpreted and misconstrued the expression "any other law"
appearing in Sub-Section (5) of Section 140 to mean ·'any other law for the
time being in force as, for example, the Workmen's Compensation Act, 1923".
The said expression, the learned counsel would contend, would embrace also
C the other provisions of the said Act. According to the learned counsel, the
expressions "any other law" would by necessary implication include the other
provisions of the Motor Vehicles Act having regard to the fact that the
remedies provided for under Sections 163-A and 166 are distinct and separate
and are based on different legal regimes. It was pointed out that whereas
under the former "adequate and rational compensation" is provided for, the
D latter provides for "just compensation".
Mr. Jitendra Sharma, learned senior counsel appearing on behalf of the
respondents, on the other hand, would submit that Section 163-A which was
introduced by the Parliament in the year 1994 carries absolutely a different
scheme vis-a-vis 'no-fault liability' introduced in the year 1982 in Motor
E Vehicles Act, 1939 which was in pari materia with Section 140 in the 1988
Act. By enacting Section 163-A, Mr. Sharma would contend, an exception
to the provisions of Section 166 was made out for the purpose of implementing
the principles of social justice.

Drawing our attention to the Second Schedule appended to the Act, the
F
learned counsel would submit that the very fact that in terms thereof, one-
third of the total income is to be excluded from the total amount of
compensation and further certain provisions relevant for computation of total
amount of compensation payable thereunder have been provided for, is not
itself suggestive of the fact that thereby the payment directed thereunder is
G not by way of an interim or on account payment but is a final one.
LEGISLATIVE HISTORY:

A claim for damages owing to injuries suffered by reason of negligence
on the part of the driver of a motor vehicle used to be governed only by law
H of tort. The Indian Motor Vehicles Act, l 914 is the first enactment relating
D.G. SONI 1· UNITED INDIA ASSURANCE CO. LTD. !SINHA. IJ 223

\ I .I;
to motor vehicles. The Motor Vehicles Act, 1939 which replaced the 1914 A
Act consolidated and amended the law .relating to motor vehicles in Jndia.
Under the 1939 Act as also the Fatal Accidents Act, 1855 compensation was
solely based on law of tort. The civil courts had the jurisdiction to try a suit
claiming compensation by the plaintiffs for injuries or damages suffered by
them by a party whose action had inflicted the injury. In the year 1956, the
Motor Vehicle Accidents Claims- Tribunals were established to deal with B
such claims purported to be for providing speedy trial. However, proof of
negligence was a condition precedent for grant of compensation under the
1939 Act.

The 85th Law Commission in its report submitted in May, 1980, C
proposed two new measures, i.e. (i) introduction of Section 92-A in the
Motor Vehicles Act, 1939 by which the doctrine of liability without fault was
to be introduced and, (ii) the imposition of strict liability as regard death or
bodily injury caused by an accident of the nature specified in Section 110(1)
thereof. Recommendations were also made by the Law Commission to the
effect that claim on fault basis should be barred but the same had not been D
accepted by the Parliament.

While making the aforementioned recommendations, the Commission
referred to the foliowing observations made by this Court in Bishan Devi and
Ors. v. Sirbaksh Singh and Anr., [1980] I SCC 273,
E
"the law as it stands requires that the claimant should prove that the
driver of the vehicle was guilty of rash and negligent driving."

By reason of Section 92-A, 92-B in Motor Vehicles Act, 1939 inserted
in the year 1982, a sum of Rs: 15,000/- was to be provided in case of death
and a sum of Rs. 75,000/- in respect of permanent disablement by introducing F
the concept of "no-fau It liability''. The amount of compensation, however,
had been revised from time to time.

The Law Commission furthermore recommended for laying of a scheme
m terms whereof the victims of 'hit and run accident' could claim
compensation where the identity of the vehicle involved in the accident was G
unknown. Yet again, the l 99th Law Commission in its report submitted in
1987 stated the law as it stood then in the following terms:

"the law as it stands present, save the provisions in chapter VIIA
inserted by the Motor Vehicles (Amendment) Act, 1982, enables the H
r
224 SUPREME COURT REPORTS r2004J 3 S.C.R.

A victim or the dependants of the victim in the event of death to recover
compensation on proof of fault of the person liable to pay the f ' '
compensation and which fault caused the harm."

The present Act came into force thereafter in terms whereof inter alia
Sections 92-A to 92-E of the 1939 Act were replaced by Sections 140 to 144
B whereby and whereunder the amount of compensation in case of death was
raised to Rs. 50,000 and for permanent disablement to Rs.25,000. However,
having regard to number of representations received from various quarters,
a review committee was constituted by the Government of India in the year
1990 to examine the same and review such provisions of the said Act, as may
C be found necessary. In terms of the recommendations of the Review
Committee as also the Transport Development Council, the Act was thereafter
amended in the year 1994 in terms whereof a new pre-detennined formula
in the form of Section 163-A for payment of compensation to road accident
victims on the basis of age and income on a no-fault basis was provided.

D STATUTORY PROVISIONS:
Chapter X of the said Act provides for liability without fault in certain
cases. Section 140 provides for liability upon the owner of the vehicle to pay
compensation on the principle of no fault. The said provision reads thus:

E "140. Liability to pay compensation in certain cases on the principle
of no fault. - (I) Where death or permanent disablement of any person
bas resulted from an accident arising out of the use of a motor vehicle
or motor vehicles, the owner of the vehicle shall, or, as the case may
be, the owners of the vehicles shall, jointly and severally, be liable
to pay compensation in respect of such death or disablement in
F accordance with the provisions of this section.

(2) The amount of compensation which shall be payable under sub-
section ·o) in respect of the death of any person shall be a fixed sum
of fifty thousand rupees and the amount of compensation payable
under that sub-section in respect of the permanent disablement of any
G person shall be a fixed sum of twenty-five thousand rupees.

(3) In any claim for compensation under sub-section (I), the claimant
shall not be required to plead and establish that the death or pennanent
disablement in respect of which the claim has been made was due to
a~y wrongful act, neglect or default of the owner or owners of the
H vehicle or vehicles concerned or of any other person.
D.G. SONI v. UNITED INDIA ASSURANCE CO. LTD. [SINHA. J] 225
(4) A claim for compensation under sub-section (l) shall not be A
defeated by reason of any wrongfu I act, neglect or default of the
person in respect of whose death or permanent disablement the claim
has been made nor shall the quantum of compensation recoverable in
respect of such death or permanent disablement be reduced on the
basis of the share of such person in the responsibility for such death B
or permanent disablement

(5) Notwithstanding anything contained in sub-section (2) regarding
death or bodily injury to any person, for which the owner of the
vehicle is liable to give compensation for relief, he is also liable to
pay compensation under any other law for the time being in force : C
Provided that the amount of such compensation to be given under
any other law shall be reduced from the amount of compensation
payable under this section or under Section 163-A."

Sections 141 and 142 of the said Act read as under:
D
"141. Provisions as to other right to claim compensation for death or
permanent disablement - (I) The right to claim compensation under
Section 140 in respect of death or permanent disablement of any
person shall be in addition to any other right, except the right to
claim under the scheme referred to in Section 163-A (such other right
hereafter in this section referred to as the right on the principle of E
fault) to claim compensation in respect thereof under any other
provision of this Act or of any other law for the time being in force.

(2) A claim for compensation under Section 140 in respect of death.
or permanent disablement of any person shall be disposed of as F
expeditiously as possible and where compensation is claimed in respect
of such death or pennanent disablement under Section 140 and also
in pursuance of any right on -the principle of fault, the claim for
compensation under Section 140 shall be disposed of as aforesaid in
the first place.
G
(3) Notwithstanding anything contained in sub-section (l ), where in
respect of the death or permanent disablement of any person, the
person liable to pay compensation under Section 140 is also liable to
pay compensation in accordance with the right on the principle of
fault, the person so liable" shall pay the first-mentioned compensation
H
226 SUPREME COURT REPORTS [2004] 3 S.C.R.

A and - ~ ' (
(a) if the amount of the first-mentioned compensation is less than the
amount of the second-mentioned compensation, he shall be liable to
pay (in addition to the first-mentioned compensation) only so much
of the second-mentioned compensation as is equal to the amount by
B which it exceeds the first-mentioned compensation;

(b) if the amount of the first-mentioned compensation is equal to or
more than the amount of the second-mentioned compensation, he
shall not be liable to pay the second-mentioned compensation.

C 142. Permanent disablement. -For the purposes of this Chapter,
permanent disablement of a person shall be deemed to have resulted
from an accident of the nature referred to in sub-section ( 1) of section
140 if such person has suffered by reason of the accident, any injury
or injuries involving:-
D (a) permanent privation of the sight of either eye or the hearing of
either ear, or privation of any member or joint; or
(b) destruction or permanent impairing of the powers of any member
or joint; or
(c) permanent disfiguration of the head or face."
E
Section 144 provides for a non-obstante clause.

Section 163-A was inserted by Act 54 of I994 which came into force
from I4.1 I .1994. The said provision has been inserted to provide for a new
pre-determined structured formula for payment of compensation to road
F accident victims on the basis of age/ income of the deceased or the person
suffering permanent disablement. _..

Sections 163-A and I63-B read thus:

"163-A. Special provisions. as to payment of compensation on
G structured-formula basis. - (I) Notwithstanding anything contained in
this Act or in any other law for the time being in force or instrument
having the force of law, the owner of the motor vehicle or the
authorised insurer shall be Ii.able to pay in the case of death or )I. •
permanent disablement due to accident arising out of the use of motor
vehicle, compensation, as indicated in the Second Schedule, to the
H legal heirs or the victim, as the case may be.
D.G. SONI v. UNITED INDIA ASSURANCE CO,. LTD. [SINHA. J.] 227

Explanation. - For the purposes of this sub-section, 'permanent A
disability' shall have the same meaning and extent as in the Workmen's
Compensation Act, 1923 (8 of 1923 ).

(2) In any clail)l for compensation under sub-section (I), the claimant
shall not be required to plead or establish that the death or permanent
disablement in respect of which the claim has been made was due to B
any wrongful act or neglect or default of the owner of the vehicle or
vehicles concerned or of any other person.

(3) The Central Government may, keeping in view the cost of living
by notification in the Official Gazette, from time to time amend the
Second Schedule. C
163-B. Option to file claim in certain cases. - Where a person is
entitled to claim compensation under Section 140 and Section 163-
A, he shall file the claim under either of the said sections and not
under both."
D
The second schedule referred to in Section 140 of the Act provides for
a structured formula for the purpose of grant of compensation to a third party
" involved in fatal accident/injury. By reason thereof a multiplier system is
introduced pursuant whereto and in furtherance whereof the amount of
compensation is required to be calculated having regard to the age of the E
victim and his annual income. However, in terms of the note appended to
the said Schedule the amount of compensation so arrived at in the case of
fatal accident, the claims is to be reduced by one-third, in consideration of
the expenses which the victim would have incurred towards maintaining
himself, had he been alive.
F
Clause (2) of the said Second Schedule provides that the amount of
compensation shall not be less than Rs. 50,000. lt also provides for grant of
compensation under several heads, namely, (3) General Damages in case of
death, (4). General Damages in case of injuries and disabilities, (5). Disability
in non-fatal accidents and (6) notional income for compensation to those who G
had no income prior to accident. However, the maximum amount which is
to be paid under the different heads had also been specified.

Chapter XII deals with constitution of claims tribunals, application for
\ compensation, option regarding claims for compensation in certain cases,
award of the claims tribunal etc. Sections 166, 167 and 168 read thus: H
228 SUPREME COURT REPORTS (2004] 3 S.C.R.

A "166. Application for compensation. - (I) An application for
compensation arising out of an accident of the nature specified in
sub-section (I) of section 165 may be made-

(a) by the person who has sustained the injury; or
(b) by the owner of the property; or
B
(c) where death has resulted from the accident, by all or any of the
legal representatives of the deceased; or
(d) by any agent duly authorised by the person injured or all or any
of the legal representatives of the deceased, as the case may be:
c Provided that where all the legal representatives of the deceased have
not joined in any such application for compensation, the application
shall be made on behalf of or for the benefit of all the legal
representatives of the deceased and the legal representatives who
have not so joined, shall be impleaded as respondents to the
D application.

(2) Every application under sub-section (I) shall be made, at the
option of the claimant, either to the Claims Tribunal having jurisdiction
over the area in which the accident occurred or to the Claims Tribunal
within the local limits of whose jurisdiction the claimant resides or
E carries on business or within the local limits of whose jurisdiction the
defendant resides, and shall be in such form and contain such
particulars as may be prescribed:

Provided that where no claim for compensation under section 140 ·is
made in such application, the application shall contain a separate
F statement to that effect immediately before the signature of the
applicant.

(3) ***

(4) The Claims Tribunal shall treat any report of accidents forwarded
G to it under sub-section (6) of section 158 as an application for
compensation under this Act.

167. Option regarding claims for compensation in certain cases.
-Notwithstanding anything contained in the Workmen's Compensation
f .J.
Act, 1923 (8 of 1923) where the death of, or bodily injury to, any
H person gives rise to a claim for compensation under this Act and also
I
~
D.G. SONI''· UNITED INDIA ASSURANCE CO, LTD. [SINHA, .I] 229
under the Workmen's Compensation Act, 1923, ihe person entitled to A
compensation may without prejudice to the provisions of Chapter X
claim such compensation under either of those Acts but not under
. both .

168. Award of the Claims Tribunal. - On receipt of an application
for compensation made under section 166, the Claims Tribunal shall, B
after giving notice of the application to the insurer dild after giving
the parties (including the insurer) an opportunity cfbeing heard, hold
an inquiry into the claim or, as the case may be, each of the claims
and, subject to the provisions of section 162 may make an award
determining the amount of compensation which appears to it to be C
just and specifying the person or persons to whom compensation
shall be paid and in making the award the Claims Tribunal shall
specify the amount which shall be paid by the insurer or owner or
driver of the vehicle involved in the accident or by all or any of them,
as the case may be:
D
Provided that where such application makes a claim for compensation
under section 140 in respect of the death or permanent disablement
of any person, such claim and any other claim (whether made in such
application or otherwise) for compensation in respect of such death
or permanent disablement shall be disposed of in accordance with the
provisions of Chapter X. E
(2) The Claims Tribunal shall arrange to deliver copies of the award
to the parties concerned expeditiously and in any case within a period
of fifteen days from the date of the award.

(3) When an award is made under this section, the person who is F
required to pay any amount in terms of such award shall, within
thirty days of the date of announcing the award by the Claims Tribunal,
deposit the entire amount awarded in such manner as the Claims
Tribunal may d.irect."

Section 176 provides for the rule making power. The State of Gujarat G
in exercise of the said power made rules known as Gujarat Motor Vehicle
Rules. Rule 211 provides for the procedure regarding compensation arising
out of accident. Sub-rule ( 1) of the said rule reads thus:

"( 1) An application for compensation under sub-section (I) of section
166 shall be made to the Claims Tribunal in Form Comp. A, and shall H
230 SUPREME COURT REPORTS (2004] 3 S. C.R.

A contain· the particulars specified in that form."
1- '
The rules framed by the State of Gujarat also provide for the fonns in
tenns whereof the applications for claim are required to be filed. Fonn
•
Comp. A is the fonnat for filing application for compensation arising out of
the use of motor vehicles. The following columns inter alia.are required to
B be filled up:

"IO. Brief particulars of the accident... ........ .

11. Quantum of compensation claimed and basis thereof ......... "

C However, Rule 231 provides for procedure regarding compensation on
the principle of no-fault which is in the following tenns:

"231. Procedure regarding compensation on the principal of no fault:-
Notwithstanding anything contained in rules 211 to 230 and 232 in
che case of a claim for compensation under Chapter X -of the Act, the
D procedure shall be as follows, namely:-

(I) An application for compensation shall be made to the Claims
Tribunal in Fonn CWF, in triplicace, anJ shall contain the particulars
specified in that fonn.

(2) The application shall-be accompanied by a fee of ten rupees in the
E fonn of Court fee stamps, and the following documents, namely:
(i) First Information Report;
(ii) Injury certificate or Post-mortem report in case of death;
(iii) Heirship certificate in case of death;
F
(iv) Certificate from the registering authority regarding ownership of
the vehicle· involved in the accident;
(v) . Particulars of insurance of the vehicle invel'IY@d in the accident.
(3.) No fees shall be charged for process of application for
G compensation made 1mEl@r this rule.

(4) The Claims Tribunal shall dispose of the application for
compensation within six weeks from the date of receipt of such
application.

H (5) For the purpose of adjudicating and awarding the claim, the Claims
D.G. SONI"· UNITED INDIA ASSURANCE CO,. LTD. [SINHA, .I.] 231

Tribunal shall follow the procedure of summary trial as contained in A
Chapter XXI of the Code of Criminal Procedure, 1973.

(6) The Claims Tribunal shall not reject any application made under
this rule on the ground of any technical defect, but shall give notice
to the applicant and get the defect rectified.
B
(7) For the purpose of adjudicating and award mg the claim, the Claims
Tribunal shall obtain whatever information and document considered
necessary by it from the police, medical and other authorities.

(8) On receipt of the application for compensation, the Claims Tribunal
shall give notice to the owner, and the insurer, if any, of the vehicle C
involved in the accidel)t, directing them to appear on a date not later
than ten days from the date of issue of such notice. The date so fixed
for such appearance shall also be not later than fifteen days from the
receipt of the application for compensation. The Claims Tribunal
shall state in such notice that, in case they fail to appear on such
appointed date, the Tribunal shall proceed exparte on the presumption D
that they have no contention to make against the award of
compensation.

(9) The Claims Tribunal shall proceed with the application for
compensation, on the basis of -
E
(i) First Information Report;
(ii) Injury certificate or Post-mortem report in case of death;
(iii) Registration certificate of the motor vehicle involved in the
accident;
F
(iv) Cover note, certificate of insurance or the policy, relating to the
insurance of the vehicle against third party risks;
(v) The nature of the treatment given by the medical officer who has
treated the victim.
(I 0) The Claims Tribunal, in passing the orders, shall make an award G
of compensation of twenty five thousand rupees in respect of the
death, and of twelve thousand rupees in respect of the permanent
disablement, to be paid by the owner or insurer, of the vehicle involved
in the accident.

(11) Where compensation is awarded to two or more persons, the H
232 SUPREME COURT REPORTS [2004] 3 S.C.R.

A Claims Tribunal shall also specify the amount payable to each of t •
them.

( 12) The Claims Tribunal, in passing the orders, shall also direct the
owner or insurer, of the vehicle involved i;i the accident, to pay the
amount of compensation to the claimant within thirty days from the
B date of the said orders.

(13) Where the Claims Tribunal thinks that the actual payment to the
claimant is likely to take time because of the identification and the
fixation of the legal heirs of the deceased, the Claims Tribunal may
call for the amount of compensation awarded, to be deposited with
C the Tribunal and then proceed with the identification of the legal
heirs for deciding the payment of compensation to each of the legal
heirs."

In terms of the aforementioned rule, an application for compensation in
respect of liability without fault is required to be filed without any particular
D as regard the accident having regard to the fact that by reason thereof, fault
on the part of the driver of the motor vehicle is required to be pleaded or
proved.

ANALYSIS OF THE RE LEVANT PROVISIONS:
E The relevant provisions of the Act are beneficial in nature. The Act
indisputably is in the nature of a social welfare legislation.

The provisions as regard no fault liability evidently were inserted having
regard to the fact that the road accidents in India had touched a new height
F and at least in some of the cases it was found that rash or negligent driving
causing death or injury to the innocent persons could not be proved. Whereas
in terms of Section 140 of the Act a statutory liability has been cast upon the
owner in case of death or permanent disablement; both under Section 163-
A as also Section 166 of the Act, the insurer had been made responsible.

G It is true that in terms of Section 163-B of the Act an option had been
provided for so as to enable a person to lay a claim for compensation either
under Section 140 or Section 163-A and not under both but having regard to
the scheme of the Act, the same was not necessary.

Section J63-A was introduced in the Act by way of a social security
H scheme. It is a code by itself. It appears from the Objects and Reasons of
D.G. SONI v. UNITED INDIA ASSURANCE CO LTD. [SINHA. J J 233

_,_ the Motor Vehicles (Amendment) Act, 1994 that after enactment of the 1988 A
Act several representations and suggestions were made from the State
Governments, transport operators and members of public in relation to certain
provisions thereof Taking note of the observations made by the various
Courts and the difficulties experienced in implementing the various provisions
of the Motor Vehicles Act, the Government of India appointed a Review B
Committee. The Review Committee in its report made the following
recom men dati on s:

"The 1988 Act provides for enhanced compensation for hit and run
cases as well as for no fault liability cases. It also provides for
payment of compensation on proof-of-fault basis to the extent of C
actual liability incurred which ultimately means an unlimited liability
in accident cases. It is found that the determination of compensation
takes a long time. According to information available, in Delhi alone
there are 11214 claims pending before the Motor Vehicle Accidents
Tribunals, as on 31.3.1990. Proposals have-been made from time to
time that the finalisation of compensation claims would be greatly D
facilitated to the advantage of the claimant, the vehicle owner as well
as the Insurance Company if a system of structured compensation can
be introduced. Under such a system of structured compensation that
is payable for different clauses of cases depending upon the age of
the deceased, the monthly income at the time of death, the earning E
potential in the case of the minor, loss of income on account of loss
of limb etc., can be notified. The affected party can then have the
option of either accepting the lump sum compensation as is notified
in that scheme of structured compensation or of pursuing his claim
through the nonnal channels.

The General Insurance Company with whom the matter was taken
F
up, is agreeable in principle to a scheme of structured compensation
for settlement of claims on "fault liability" in respect of third party
liability under Chapter XI of M.V. Act, l 988. They have suggested
that the claimants should first file their Claims with Motor Accident
Claims Tribunals and then the insurers may be allowed six months G
time to confirm their prima facie liability subject to the defences
available under Motor Vehicles Act, 1988. After such confirmations
of primafacie liability by the insurers the claimants should be required
to exercise their option (or conciliation under structured compensation
formula within a stipulated time."
H
234 SUPREME COURT REPORTS [2004] 3 S.C.R.

A The recommendations of the Review Committee and representations
from public were placed before the Transport Development Council for seeking
their views pursuant whereto several sections were amended. Section 163-
A was inserted in the Act to provide for payment of compensation in motor
accident cases in accordance with the Second Schedule providing for the
B structured formula which may be amended by the Central Government from
time to time.

Section 140 of the Act dealt with interim compensation but by inserting
Section 163-A, the Parliament intended to provide for making of an award
consisting of a pre-determined sum without insisting on a long-drawn trial or
C without proof of negligence in causing the accident. The Amendment was,
thus, a deviation from the common Jaw liability under the Law of Torts and
was also in derogation of the provisions of the Fatal Accidents Act. The Act
and the Rules framed by the State in no uncertain terms suggest that a new
device was sought to be evolved so as to grant a quick and efficacious relief
to the victims falling within the specified category. The heirs of the deceased
D or the victim in terms of the said provisions were assured of a speedy and
effective remedy which was not available to the claimants under Section 166
of the Act.

Section 163-A was, thus, enacted for grant of immediate relief to a
section of people whose annual income is not more than Rs. 40,000/- having
E regard to the fact that in terms of Section 163-A of the Act read with the
Second Schedule appended thereto; compensation is to be paid on a structured
fonnula not only having regard to the age of the victim and his income but
also the other factors relevant therefor. An award made thereunder, therefore,
shall be in full and final settlement of the claim as. would appear from the
F different columns contained in the Second Schedule appended to the Act.
The same is not interim in nature. The note appended to column I which
deals with fatal accidents makes the position furthermore clear stating that
from the total amount of compensation one-third thereof is to' be reduced in
consideration of the expenses which the victim would have incurred towards
maintaining himself had he been alive. This together with the other heads
G of compensation as contained in column Nos. 2 to 6 thereof leaves no manner
of doubt that the Parliament intended to lay a comprehensive scheme for the
purpose of grant of adequate compensation to a section of victims who would
require the amount of compensation without fighting any protracted litigation
for proving that the accident occurred owing to negligence on the part of the
H driver of the motor .vehicle or any other fault arising out of use of a motor
D.G. SONI v. UNITED INDIA ASSURANCE CO. LTD. [SINHA. l] 235

I .}. vehicle. A
The submission of learned counsel appearing on behalfofthe appellants
to the effect that Sections 140 and 163-A provide for similar scheme cannot
be accepted for more than one reason. Payment of the amount in terms of
Section 140 of the Act is ad hoc in nature. A claim made thereunder, as has
been noticed hereinbefore, is in addition to any other claim which may be B
made under any other law for the time being in force. Section 163-A of the
Act does not contain any such provision.

Section 163-A of the Act is interlinked with several sections of Chapters
XI and XII thereof. Section 140 imposes a liability upon the owner of the C
vehicle to pay compensation where death or permanent disablement of any
person has resulted from accident arising out of the use of a motor vehicle.
By reason of the said provision a fixed sum is to be paid.

Sub-Section (4) of Section 140 provides that the claim for compensation
under sub-section ( 1) thereof shall not be defeated by reason of any wrongful D
act, neglect or default of the person in respect of whose death or permanent
disablement the claim has been made nor the quantum of compensation
recoverable in respect of such death or permanent disablement be reduced on
the basis of the share of such person in the responsibility for such death or
pennanent disablement. Sub-section (5) of Section 140 of the Act categorically
provides that the obligation of the owner of the vehicle shall not be in E
derogatioc. of any statutory duty cast upon the owner of the vehicle to pay
compensation under any other law for the time being in force subject, however,
to the condition as has been laid down in the proviso appended thereto that
the amount of such compensation to be given under any other law should be
reduced from the amount of compensation payable thereunder or Section F
163-A.

Section 163-A. which has an overriding effect provides for special
provisions as to payment of compensation on structured formula basis. Sub-
section (I) of Section 163-A contains non-obstante clause in terms whereof
the owner of the motor vehicle or the authorised insurer is liable to pay in G
the case of death or pennanent disablement due to accident arising out of the
use of motor vehicle, compensation, as indicated in the Second Schedule, to
the legal heirs or the victim, as the case may be. Sub-Section (2) of Section
l63-A is in pari materia with Sub-Section (3) of Section 140 of the Act.

Section 163-A does not contain any provision identical to Sub-Section H
236 SUPREME COURT REPORTS [2004] 3 S.C.R.

A (5) of Section 140 which is also indicative of the fact that whereas in terms
of the latter, the liability of the owner of the vehicle to give compensation
or relief under any other law for the time being in force continues subject of
course to the effect that the amount paid thereunder shall be reduced from the
amount of compensation payable under the said Section or Section 163-A.

B By reason of the Section 163-A, therefore, the compensation is required
to be determined on the basis of a structured formula whereas in terms of
Section 140 only a fixed amount is to be given. A provision of law providing
for compensation is presumed to be final in nature unless a contra indication
therefor is found to be in the statute either expressly or by necessary
C implication. While granting compensation, the Tribunal is required to
adjudicate upon the disputed question as regard age and income of the deceased
or the victim, as the case may be. Unlike Section 140 of the Act, adjudication
on several issues arising between the parties is necessary in a proceeding
under Section 163-A of the Act.

D Decisions rendered by this Court are galore where computation as regard
the amount of compensation has been related to multiplier method involving
ascertainment of loss of dependency and capitalizing the same by appropriate
multiplier. See General Manager, Kera/a State Road Transport Corporation,
Trivandrum v. Mrs. Susamma Thomas and Ors., [1994) 2 SCC 176. The
structured formula provided for in the Second Schedule also provides for
E similar concept as regard determination of the amount of compensation.

Apart from the fact that compensation is to be paid by applying multiplier
method under the Second Schedule other relevant factors, ~amely, reduction
of one-third in consideration of the expenses which the victim would hJve
incurred towards maintaining himself, general damages in case of death as
F
also in the case of injuries and disabilities as also the disability in non-fatal
accidents, a notional income for compensation to those who had no income
prior to accident are provided for, are required to be considered which is also
a clear pointer to the fact that thereby the Parliament intended to provide for
a final amount of compensation and not an interim one.
G
The scheme envisaged under Section 163-A, in our opinion, leaves no
manner of doubt that by reason thereof the rights and obligations of the
parties are to be determined finally. The amount of compensation payable
under the aforementioned provisions is not to be altered or varied in any
other proceedings. It does not contain any provision. providing for set off
H against a higher compensation unlike Section 140. In terms of the said
D.G. SONI v. UNITED iNDIA ASSURANCE CO, LTD. [SINHA, .I.] 237
provision, a distinct and specified class of citizens, namely, persons whose A
income per annum is Rs. 40,000 or less is covered thereunder whereas Sections
140 and 166 cater to all sections of society.

It may be true that Section 163-B provides for an option to a claimant
to either go for a claim under Section 140 or Section 163-A of the Act, as
the case may be, but the same was inserted 'ex-abundanti caute/a' so as to B
remove any misconception in the mind of the parties to the !is having regard
to the fact that both relate to the claim on the basis of no-fault liability.
Having regard to the fact that Section 166 of the Act provides for a complete
.-+ machinery for laying a claim on fault liability, the question of giving an
option to the claimant to pursue their claims both under Section 163-A and C
Section 166 does not arise. If the submission of the learned counsel is
•
accepted the same wou.ld lead to an incongruity.

Although the Act is a beneficial one and, thus, deserves liberal
construction with a view to implementing the legislative intent but it is trite
that where such beneficial legislation has a scheme of its own and there is no D
vagueness or doubt therein, the court would not travel beyond the same and
extend the scope of the statute on the pretext of extending the statutory
benefit to those who are not covered thereby. See Regional Director,
Employees' State Insurance Corporation, Trichur v. Ramanuja Match
Industries, AIR (1985) SC 278 - (1985] I SCC 218.
E
The decision of this Court in Kuna/ Singh v. Union of India and Anr.,
(2003] 4 SCC 524 relied upon by Mr. Banerjee cannot be said to have any
application whatsoever in the instant case as therein this Court while
considering the provisions of Section 47 of the Persons with Disabilities
(Equal Opportunities, Protection of Rights and Full Participation) Act, 1995
F
held that the language thereof is plain and certain statutory obligation on the
employer was cast to protect an employee acquiring disability during service
and only in that situation, it was observed:

"9 ... ln construing a provision of a social beneficial enactment that too
dealing with disabled persons intended to give them equal G
opportunities, protection of rights and full participation, the view that
advances the object of the Act and serves its purpose must be preferred
to the one which obstructs the object and paralyses the purpose of the
Act..."

It is also not a case where an exception or exclusion clause in a beneficial H
238 SUPREME COURT REPORTS [2004] 3 S.C.R.

A legislation has been provided for and, therefore, the decision of this Court in ... ' .
State of Tripura and Anr. v. Roopchand Das and Ors., (2003) l SCC 421
cannot also be said to have any application.

It is now well-settled that for the purpose of interpretation of statute,
same is to be read in its entirety. The purport and object of the Act must be
B given its full effect. See High Court of Gujarat and Anr. v. Gujarat Kishan
Mazdoor Panchayat and Ors., JT (2003) 3 SC 50; Indian Handicrafts
Emporium and Ors. v. Union of India and Ors., (2003) 7 SCC 589; Ameer
Trading Corporation Ltd v. Shapoorji Data Processing Ltd, JT (2003) 9 SC
109 = (2003) 9 SCALE 713 and Ashok Leyland v. State of Tamil Nadu and
C Anr., (2004) I SCALE 224. The object underlying the statute is required to
be given effect to by applying the principles of purposive construction.

We, therefore, are of the opinion that remedy for payment of
compensation both under Sections 163-A and 166 being final and independent
of each other as statutorily provided, a claimant cannot pursue his remedies
D thereunder simultaneously. One, thus, must opt/elect to go either for a
proceeding under Section 163-A or under Section 166 of the Act, but not
under both.

In Koda/a (supra) the contention of the claimant that right to get
compensation is in addition to the no-fault liability was, thus, rightly rejecteq.
E In agreement with Koda/a (supra) we are also of the opinion that unlike
Sections 140 and 141 of the Act the Parliament did not want to. provide
additional compensation in terms of Section 163-A of the Act.

The question may be considered from different angles. As for example,
if in the proceedings under Section 166 of the Act, after obtaining
F compensation under Section 163-A, the awardee fails to prove that the accident
took place owing to negligence on the part of the driver or if it is found as
of fact that the deceased or the victim himself was responsible therefor as a
consequence whereto the Tribunal refuses to grant any compensation; would
it be within its jurisdiction to direct refund either in whole or in part the
G amount of compensation already paid on the basis of structured formula?
Furthermore, if in a case the Tribunal upon considering the relevant materials
comes to the conclusion that no case has been made out for awarding the
compensation under Section l 66 of the Act, would it be at liberty to award
compensation in terms of Section 163-A thereof.

H The answer to both the aforementioned questions must be rendered in
D G. SONI" UNITED INDIA ASSURANCE CO, LTD. [SINHA.J.j 239

the negative. In other words, the question of adjustment or refund will A
invariably arise in the event if it is held that the amount of compensation paid
in the proceedings under Section 163-A of the Act is interim in nature.

It is, therefore, evident that whenever the Parliament intended to provide
for adjustment or refund of the compensation payable on the basis of no-fault
liability, as for example, Sections 140 and 161 in case of hit and run motor B
accident, from the amount of compensation payable under the award on the
basis of fault liability under Section 166 of the Act, the same has expressly
been provided for and having regard to the fact that no such procedure for
refund or adjustment of compensation has been provided for in relation to the
proceedings under Section 163-A of the Act, it must be held that the scheme C
of the provisions under Sections 163-A and 166 are distinct and separate in
nature.

It is also not of much relevance that in terms of Section 140 of the Act,
the owner of the vehicle has been fastened with the statutory liability and in
Section 163-A thereof both the owner as also his authorised insurer has been D
made so liable.

In Sub-Section (5) of Section 140 of the Act the expression "also" has
been used which is indicative of the fact that the owner of the vehicle would
be additionally liable to pay compensation under any other law for the time
being in force. Proviso appended to Sub-Section (5) of Section 140 states E
that the amount of compensation payable under any other law for the time
being in force is to be reduced from the amount of the compensation payable
under.Sub-Section (2) thereof or under Section 163-A of the Act. Right to
claim compensation under Section 140, having regard to the provisions
contained in Section 141 is i11 addition to any other right to claim compensation F
on the principle of fault liability. Such a provision does not exist in Section
163-A. lfno amount is payable under the fault liability or the compensation
which may be received from any other law, no refund of the amount received
by the claimant under Section 140 is postulated in the Scheme. Section 163-
A, on the other hand, nowhere provides that the payment of compensation of
no-fault liability in terms of the structured formula is in addition to the G
liability to pay compensation in accordance with the right to get compensation
on the principle of fault liability. It is also not correct to contend that the
expression "any other law for the time being in force" used in Section 140(5)
would include any other provisions of the Motor Vehicles Act. Had the
intention of the Parliament been to include the other provisions of Motor H
r
240 SUPREME COURT REPORTS (2004 I 3 S.C.R.

A Vehicles Act within the meaning of the expression "any other Jaw for the .... ' '
time J:>eing in force", it could have said so expressly. The very fact that the
Parliament has chosen to use the expression "any other law", the same, in our
considered opinion, would mean a Jaw other than the provisions of the Motor
Vehicles Act. The proviso appended to Sub-Section (5) of Section 140 of the
B Act is required to be given a purposive meaning.

It is not in dispute that the claim of compensation irrespective of the
death or bodily injury may arise under other statutes as, for example,
Workmen's Compensation Act, Factories Act, Fatal Accidents Act and other
acts governing various industries including hazardous industries.
c Jn the event, the motor vehicle in question is insured, ultimately the
liability would also be fastened upon the insurer having regard to the provision
laid down in Chapter XI of the Act. We may also notice that Rule 211(1)
of Gujarat Motor Vehicle Rules provides for the application for compensation
in terms of Sub-Section (I) of Section 166 of the Act. A·claim application
D is to be filed in Form Comp. A. Rule 231 thereof provides for an application
for compensation in respect of liability without fault and for the said purpose
the claim application prescribed therefor is to be filed in Form No. CWF.
The very fact that different forms had been prescribed as regard determination
of the final compensation is also suggestive of the fact that both proceedings
are meant to be final in nature. Column No. 10 in Form Comp. A requires
E the claimant to give brief particulars of the accident which would include the
nature and extent of fault on the part of the driver of the vehicle, but no such
column is provided for in Form CWF. Subject to the said distinction, all
other particulars required to be furnished are almost identical.

We may notice that Section 167 of the Act provides that where death
F of, or bodily injury to, any person gives rise to claim of compensation under
the Act and also under the Workmen's Compensation Act, 1923, he cannot
claim compensation under both the Acts. The Motor Vehicles Act contains
different expressions as, for example, "under the provision of the Act",
"provisions of this Act", "under any other provisions of this Act" or "any
G other law or otherwise". In Section 163-A, the expression "notwithstanding
anything contained in this Act or in any other law for the time being in force"
has been used, which goes to show that the Parliament intended to insert a
non-obstante clause of wide nature which would mean that the provisions of
)r
Section 163-A would apply despite the contrary provisions existing_ in the
H said Act or any other law for the time being in force. Section 163-A of the
D.G. SONI 1· UNITED INDIA ASSURANCE CO, LTD. [SINHA . .I] 24 J

Act covers cases where even negligence is on the part of the victim. It is by A
way of an exception to Section 166 and the concept of social justice has been
duly taken care of.

Conclusion :

We, therefore, are of the opinion that Koda/a (supra) has correctly been B
decided. However, we do not agree with the findings in Koda/a (supra) that
if a person invokes provisions of Section 163-A, the annual income of Rs.
40,000 per annum shall be treated as a cap. In our opinion, the proceeding
under Section 163-A being a social security provision, providing for a distinct
scheme, only those whose annual income is upto Rs. 40,000 can take the C
benefit thereof. All other claims are required to be determined in terms of
Chapter XII of the Act.

However, in this case, we may notice that the parties have proceeded
to file two applications - one, under Section 163-A and another under Section
166 of the Act. Both have been entertained. Both the Tribunal as also the D
High Court have proceeded on the basis that the amount of compensation
under Section 163-A is by way of an interim award and the same would not
'1'. preclude the claimants to proceed with his claim made in terms of Section
166 of the Act. It is submitted at the Bar that the appellants have withdrawn
50% of the amount and rest of the amount has been invested. The appellants
have lost both of thei~ parents in the accident. Only one of the appellants at E
the relevant time was a major. It appears that 70% of the amount permitted
to be.withdrawn has been deposited in the Fixed Deposit. We agree with the
submission of Mr. Banerjee that the Claim of the appellants made under
Section 163-A be treated to be one under Section 140 of the Act and upon
adjusting the amounts provided for thereunder, the appellants may refund the F
rest thereof to the insurer.

Keeping in view of the limited questions posed before us, in our opinion,
it is not necessary to go into the purported discrepancies existing in the
Second Schedule of the Act.
G
We, for the reasons aforementioned, do not find any merit in the review
applications which are dismissed.

So far as Civil Appeal Nos. 3126/2002 and 3127/2002 are concerned,
we in exercise of our jurisdiction under Article 142 of the Constitution direct
that the claim applications of the appellants under Section 163-A of the AC:t H
242 SUPREME COURT REPORTS [2004] 3 S.C.R.

A be treated to be applications under Section 140 thereof. The amount invested
by the Tribunal may be allowed to be withdrawn by the respondent - Insurance
Company. The appellants shall refund the excess amount withdrawn by them
after adjusting the amount payable in terms of Section 140 of the Act and the
interest which would have accrued thereon shall be adjusted towards· the
compensation received by the claimant within four weeks from the date of
B communication of this order whereafter, the Motor Vehicles Accident Claims
Tribunal shall proceed to determine their claim petitions filed under Section
166 of the Act in accordance with law. This order shall not be treated as a
precedent.

C Section 163-A was introduced in the year 1994. The executive authority
of the Central Government has the requisite jurisdiction to amend the Second
Schedule from time to time. Having regard to the inflation and fall in the
rate of bank interest; it is desirable that the Central Government bestows
serious consideration to this aspect of the matter.

D Subject to the aforementioned directions, the appeals and the review
petitions are dismissed. No Costs.

Appeals/Petitions dismissed. ·~

I