UNITED INDIA INSURANCE COMPANY LTD.versusSUNIL KUMAR & ANR.

                    [2013) 12 S.C.R. 223


       UNITED INDIA INSURANCE COMPANY LTD.                          A
                           v.
                 SUNIL KUMAR & ANR.
            (Civil Appeal No. 9694 of 2013)
                    OCTOBER 29, 2013
                                                                    B
     [K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]

    MOTOR VEHICLES ACT, 1988:

    s. 163-A rlw s. 170 and 173 - Special provisions as to          c
payment of compensation on structured formula basis -
Appeal by insurer - Held: In view of points (iii) to (v) in Shila
Datta's case having been referred to larger Bench as also the
view in Sinitha's case that it is.-open to the owner or insurance
company, as the case may be, 'to defeat a claim u/s 163-A of        0
the Act by pleading and establishing a fault ground (wrongful
act or neglect or default), matrek referred to larger Bench.

     s. 163-A - Petition for compensation - Held: Liability to
make compensation u/s 163-A is on the principle of no fault
and, therefore, the question as to who is at fault is immaterial    E
and foreign to an enquiry uls 163-A -- Once it is established
that death or permanent disablement occurred during the
course of user of vehicle and the vehicle is insured, insurance
company or owner, as the case may be, shall be liable to pay
compensation, which is a statutory obligation.                          F
     The respondent filed a claim petition uls 163-A of the
 Motor Vehicles Act, 1988 (the Act), claiming
 compensation for the injury sustained by him in a road
 accident. The award passed by the Tribunal was                     G
 challenged by the Insurance Company in an appeal
 before the High Court, which, placing reliance on the
 judgment in Nicolletta Rohtagi's case; dismissed the


                               223                                      H
    224       SUPREME COURT REPORTS            [2013] 12 S.C.R.


A appeal holding that the Insurance Company failed to
  comply with s. 170 of the Act.

          Referring the matter to larger Bench, the Court

      HELD: 1.1 The impugned order is based on the
B principle laid down in Nicolletta Rohtagi's case, the
  correctness of which is doubted in Shila Datta's case, in
  which points (iii) to (v) have been referred to a larger
  Bench. [para 2] [226-0-E]

c        United India Insurance Company Ltd. v. Shila Datta and
    Others 2011 (14) SCR 763    =    (2011) 10 SCC 509; National
    Insurance Co. Ltd. v. Nico/Jetta Rohtagi 2002 ( 2) Suppl. SCR
    456   =(2002) 7 sec 456 - referred to.
       1.2 Besides, in the instant case, claim petition was
D filed u/se 163-A of the Act, which was resisted by the
   Insurance Company contending that the same was not
  maintainable since the injured himself was driving the
  vehicle and that no disability certificate was produced.
  Interpreting s. 163-A of the Act, in Sinitha's case it has
E been held that it is open to the owner or the insurance
  company, as the case may be, to defeat a claim u/s 163-
  A of the Act by pleading and establishing through cogent
  evidence a fault ground (wrongful act or neglect or
  default). The Court concluded that s.163 of the Act is
F founded under the fault liability principle. The Three-
  Judge Bench of this Court in Deepal Girishbhai Soni's
  case was not placed before the Bench deciding Sinitha's
  case. [para 3-5] [227-A-B; 228-C-D, F-G; 229-G]

G        National Insurance Company Limited v. Sinitha and
    others 2011 (16) SCR 166    =   (2012) 2 SCC 356; Oriental
    ln,surance Co. Ltd. v. Hansrajbhai V. Koda/a 2001 (2) SCR
          =
    999 (2001) 5 SCC 175; Deepal Girishbhai Soni & Ors. v.
    United India Insurance Co. Ltd., Baroda (2004) 5 SCC 385 -
H referred to.
UNITED INDIA INSURANCE COMPANY LTD. v. SUNIL 225
                KUMAR & ANR.
     1.3 This Court is, therefore, of the view that liability A
to make compensation u/s 163-A is on the principle of no
fault and, therefore, the question as to who is at fault is
immaterial and foreign to an enquiry u/s 163-A. Once it is
established that death or permanent disablement
occurred during the course of the user of the vehicle and B
the vehicle is insured, the insurance company or the
owner, as the case may be, shall be liable to pay the
compensation, which is a statutory obligation. Section
 163-A does not make any provision for apportionment of
 the liability. If the owner of the vehicle or the insurance c
 company is permitted to prove contributory negligence
 or default or wrongful act on the part of the victim or
 claimant, it would defeat the very object and purpose of
 s. 163-A of the Act. Legislature never wanted the claimant
 to plead or establish negligence on the part of the owner D
 or the driver. In this view of the matter, the view in
 Sinitha's case cannot be concurred with. [para 8-9] [231-
  C-F]

    1.4 Consequently, the matter is referred to a larger
Bench for a correct interpretation of the scope of s.163-         E
A of Act as well as points no.(iii) to (v) referred to in Shila
Datta's case. [para 9] [231-F-G]

                     Case Law Reference:
      2011 (14) SCR 763           referred to       para 2        F
      2002 (2) Suppl. SCR 456 referred to           para 2
      2011 (16) SCR 166           referred to        para 3
      2001 (2) SCR 999            referred to        para 3       G
      (2004) s sec 385            referred to        para 5
     CIVIL APPELLATE JURISDICTION : Civil Appeal No.
 9694 of 2013.
      From the Judgment and Order dated 10.10.2011 of the         H
     226       SUPREME COURT REPORTS                  [2013] 12 S.C.R.


A   High Court of Delhi at New Delhi in MAC Appeal No. 900 of
    2011.

           A.K. Raina, A.K. Kaul. Dr. Kailash Chand for the Appellant.

           Nidhi, Ajay Kumar Talesara for the Respondents.
B
           The Order of the Court was delivered by

           K.S. RADHAKRISHNAN, J. 1. Leave granted.

        2. Heard learned counsel for the parties. Learned counsel
C appearing for the Respondent submitted that in view of the
   judgment of this Court in United India Insurance Company Ltd.
   v. Shila Datta and others [(2011) 10 SCC 509], this matter will
   have to be referred to a larger Bench, especially with regard
   to points no.(iii) to (v) referred to in thei above-mentioned
D judgment, which are in conflict with the judgment of this Court
   in National Insurance Co. Ltd. v. Nico/Jetta Rohtagi [(2002) 7
   SCC 456]. The impugned order, we notice, is based on the
   principle laid down in Nico/Jetta Rohtagi's case (supra), the
   correctness of which is doubted in Shila Datta's case (supra).
E In the present case, the claim petition was filed by the
   Respondent under Section 163-A of the Motor Vehicles Act,
   1988, claiming compensation for the injury sustained by him in
   a road accident occurred on 20.11.2006. The Tribunal after
   recording the evidence and after hearing the parties, vide its
  order dated 16.8.2011 passed an award for a sum of
F Rs.3,50,0001- along with interest at the rate of 7% per annum
  from the date of the filing of the petition till realization. Aggrieved   ~
  by the same, the Insurance Company filed an appeal before                 ~
  the High Court of Delhi. The High Court placing reliance on the
  judgment in Nico/Jetta Rohtagi's case (supra) dismissed the
G appeal since the Insurance Company failed to comply with
  Section 170 of the Motor Vehicles Act and the Insurance
  Company has come up with this appeal. Learned counsel for
  the Respondent contended that the question whether
  permission is required or not under Section 170 stands referred
H to a larger Bench.
UNITED INDIA INSURANCE COMPANY LTD. v. SUNIL 227
    KUMAR & ANR. [K.S. RADHAKRISHNAN, J.]
       3. We have yet another issue to be examined. As already A
indicated that in the instant case, claim petition was filed under
Section 163-A of the Motor Vehicles Act, which was resisted
by the Insurance Company contending that the same is not
maintainable since the injured himself was driving the vehicle
and that no disability certificate was produced. A Two-Judge B
Bench of this Court in National Insurance Company Limited
v. Sinitha and Others [(2012) 2 SCC 356] examined the scope
of Section 163-A of the Motor Vehicles Act and took the view
that Section 163-A of the Act has been founded under "fault
 liability principle". Referring to another judgment of a co-equal c
 Bench in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Koda/a
 [(2001) 5 sec 175), the learned Judges took the view that while
 determining whether Section 163-A of the Motor Vehicles Act,
 1988 is governed by the fault or the no-fault liability principle,
 Sections 140(3) and (4) are relevant. The Bench noticed under D
 Section 140(3), the burden of pleading and establishing
 whether or not wrongful act, neglect or default was committed
 by the person (for or on whose behalf) compensation is claimed
 under Section 140, would not rest on the shoulders of the.
 claimant. The Court also noticed that Section 140(4) of the E
  Motor Vehicles Act further reveals that a claim for
 compensation under Section 140 of the Act cannot be defeated
  because of any of the fault grounds (wrongful act, neglect or
 default).

     4. The Division Bench in Sinitha's case (supra), then took     F
the view that under Section 140 of the Act so also under Section
163-A of the Act, it is not essential for a claimant seeking
compensation to plead or establish that the accident out of
which the claim arises suffers from wrongful act or neglect or
default of the offending vehicle. The Bench then expressed the      G
view that the legislature designedly included the negative clause
through Section 140(4) of the Motor Vehicles Act, but
consciously omitted the same in the scheme of Section 163-A
 of the Act intentionally and purposefully. The Court also
concluded, on a conjoint reading of Sections 140 and 163-A,         H
    228     SUPREME COURT REPORTS                (2013] 12 S.C.R.

A the legislative intent is clear, namely, that a claim for
  compensation raised under Section 163-A of the Act need not
  be based on pleadings or proof at the hands of the claimants
  showing absence of wrongful act, being neglect or default, but
  the Bench concluded that it is not sufficient to determine whether
B the provision falls under the fault liability principle. The Court
  held that to decide whether the provision is governed by the
  fault liability principle, the converse has to be established i.e.
  whether a claim raised thereunder can be defeated by the party
  concerned (the owner or the insurance company) by pleading
c and proving wrongful act, neglect or default. Interpreting Section
  163-A of the Act, the Judges in Sinitha's case (supra) held that
  it is open to the owner or the insurance company, as the case
  may be, to defeat a claim under Section 163-A of the Act by
  pleading and establishing through cogent evidence a fault
  ground (wrongful act or neglect or default). The Court concluded
0
  that Section 163 of the Act is founded under the fault liability
  principle.

          5. We find difficult to accept the reasoning expressed by
    the Two-Judge Bench in Sinitha's case (supra). In our view, the
E   principle laid down in Hansrajbhai V. Kodala's case (supra)
    has not been properly appreciated or applied by the Bench. In
    fact, another Division Bench of this Court vide its order dated
    19.4.2002 had doubted the correctness of the judgment in
    Hansrajbhai V. Kodala's case (supra) and referred the matter
F   to a Three-Judge Bench to examine the question whether
    claimant could pursue the remedies simultaneously under
    Sections 166 and 163-A of the Act. The Three-Judge Bench
    of this Court in Deepal Girishbhai Soni & Ors. v. United India
    Insurance Co. Ltd., Baroda ((2004) 5 SCC 385] made a
G   detailed analysiS of the scope of Sections ·166 arid 163-A and
    held that the 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 thereunder simultaneously. The Court also extensively
H   examined the scope of Section 163-A and held that Section
UNITED INDIA INSURANCE COMPANY LTD. v. SUNIL 229
    KUMAR & ANR. [K.S. RADHAKRISHNAN, J.]

163-A was introduced in the Act by way of a social security A
scheme and is a Code by itself. The Court also held that Section
140 of the Act deals 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 without proof of negligence in B
causing the accident. The Court noticed that Section 163-A
was inserted making a deviation from the common law liability
under the Law of Torts and also in derogation of the provisions
of the Fatal Accidents Act. The Three-Judge Bench also held
that Section 163-A has an overriding effect and provides for    c
special provisions as to payment of compensation on structured
formula basis. Sub-section (1) of Section 163-A contains a non-
 obstante clause, in terms whereof the owner of the motor vehicle
 or the authorized insurer is liable to pay, in the case of death
 or permanent disablement due to accident arising out of the D
 use of motor vehicle, compensation, as indicated in the Second
 Schedule, to the legal heirs or the victim, as the case may be.
 The Court also held that the scheme of the provisions of Section
 163-A and Section 166 are distinct and separate in nature. In
 Section 163-A, the expression "notwithstanding anything E
 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 163-A of the Act F
 covers cases where even negligence is on the part of the
 victim. It is by way of an exception to Section 166 and the
 concept of social justice has been duly taken care of. The
 above-mentioned Three-Judge Bench judgment was not placed
 before the learned Judges who decided the Sinitha's case G
 (supra).

    6. We find, both Sections 140 and 163-A deal with the
case of death and permanent disablement. The expression
"permanent disablement" has been defined under Section 142,      H
                                                     I




    230      SUPREME COURT REPORTS                 (2013] 12 S.C.R.


A so far as Section 140 is concerned. So far as Section 163-A
  is concerned, the expression "permanent disability" shall have
  the same meaning and extent as in the Workmen's
  Compensation Act, 1923. Both Sections 140 and 163-A deal
  with cases of no fault liability. In order to prefer a claim under
B Section 140(2), claimant need not plead or establish that death
  or permanent disablement, in respect of which claim has been
  made, was due to any wrongful act, neglect or default of the
  deceased or the disabled person. Similarly, under Section 163-
  A also, claimant shall not be required to plead or establish that
c death or permanent disablement, in respect of which claim has
  been made, was due to any wrongful act, neglect or default of
  the deceased or the injured, as the case may be. In other words,
  an enquiry as to who is at fault is foreign to the determination
  of a claim under Section 140 as well as Section 163-A. Claim
  under Section 140 as well as Section 163-A shall not be
0
  defeated by the Insurance Company or the owner of the vehicle,
  as the case may be, by reason of any wrongful act, neglect or
  default of the person in respect of whose death or permanent
  disablement claim has been made. So also, the quantum of
  compensation recoverable in respect of such death or
E permanent disablement be reduced on the basis of share of
  such person in the responsibility for his death or permanent
  disablement.

         7. We find, in Sinitha's case (supra), one of the factors
F which weighed with the learned Judges was the absence of a
  similar provision like sub-section (4) of Section 140 in Section
  163-A which, according to the learned Judges, has been
  intentionally and purposefully done by the legislature. We find
  it difficult to accept that view. We are of the view that if such an
G interpretation is given, the very purpose and object of Section
  163-A would be defeated and render the provision otiose and
  a claimant would prefer to make a claim under Section 140,
  rather than under Section 163-A of the Act by exercising option
  under Section 163-B of the Act. Because, if a claim under
H Section 140, is raised because of Section 140(4), such a claim
UNITED INDIA INSURANCE COMPANY LTD. v. SUNIL 231
    KUMAR & ANR. [K.S. RADHAKRISHNAN, J.]
would not be defeated by the owner of the vehicle or the             A
insurance company, as the case may be, and the claimant may
get a fixed sum prescribed under Section 140(2). Sub-section
(4) of Section 140 has been introduced by the legislature since
claim under Section 140 would be followed by Section 166. So
far as Section 163-A is concerned, claim is restricted on the        B
basis of pre-determined formula, unlike in the case of
application under Section 166.

     8. We are, therefore, of the view that liability to make
compensation under Section 163-A is on the principle of no C
fault and, therefore, the question as to who is at fault is
immaterial and foreign to an enquiry under Section 163-A.
Section 163-A does not make any provision for apportionment
of the liability. If the owner of the vehicle or the insurance
company is permitted to prove contributory negligence or
default or wrongful act on the part of the victim or claimant, D
naturally it would defeat the very object and purpose of Section
 163-A of the Act. Legislature never wanted the claimant to
 plead or establish negligence on the part of the owner or the
driver. Once it is established that death or permanent
 disablement occurred during the course of the user of the E
 vehicle and the vehicle is insured, the insurance company or
 the owner, as the case may be, shall be liable to pay the
 compensation, which is a statutory obligation.

      9. We, therefore, find ourselves unable to agree with the      F
 reasoning of the Two-Judge Bench in Sinitha's case (supra).
 Consequently, the matter is placed before the learned Chief
 Justice of India for referring the matter to a larger Bench for a
 correct interpretation of the scope of Section 163-A of the
 Motor Vehicles Act, 1988, as well as the points no.(iii) to {v)     G
 referred to in Shila Datta's case (supra)

 RP.                           Matter referred to Larger Bench.