Kerala High Court
New India Assurance Company Ltd vs Rugmani on 25 February, 2020
Author: Anil K.Narendran
Bench: Anil K.Narendran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
TUESDAY, THE 25TH DAY OF FEBRUARY 2020 / 6TH PHALGUNA, 1941
MACA.No.3972 OF 2019(B)
AGAINST THE AWARD IN O.P.(MV) NO.1268/2016 OF ADDITIONAL MOTOR
ACCIDENT CLAIMS TRIBUNAL, PALAKKAD.
APPELLANT/2ND RESPONDENT:
NEW INDIA ASSURANCE COMPANY LTD.,
N.S.TOWERS, 1ST FLOOR,
NEAR STADIUM BUS STAND,
COIMBATORE ROAD, PALAKKAD
REPRESENTED BY THE ASSISTANT MANAGER,
REGIONAL OFFICE, KOCHI-682 011.
BY ADV. SRI.RAJAN P.KALIYATH
RESPONDENTS/PETITIONERS &R1:
1 RUGMANI,
AGED 51 YEARS, W/O.LATE CHANDRAN,
PARAKKAMPALLAM,
NOCHULLY POST, KUZHALMANNAM,
PALAKKAD, PIN-678 702.
2 SHAINI,
AGED 25 YEARS, D/O.LATE CHANDRAN,
PARAKKAMPALLAM,
NOCHULLY POST, KUZHALMANNAM,
PALAKKAD, PIN-678 702.
3 SIVAN K.V.,
AGE NOT KNOWN, S/O.VASU,
8/102, KADAMPADIPURA HOUSE,
MUTTIKULANGARA POST, PUDUPARIYARAM,
PALAKKAD, PIN-578 594.
R1-R3 BY ADV. SRI.P.K.NIJOY
R1-R3 BY ADV. SMT.C.PRABITHA
R1-R3 BY ADV. SRI.REJOICE B.CHEMBAKASSERIL
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON
25.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
MACA No.3972 of 2019(B)
-2-
JUDGMENT
The appellant is the 2nd respondent insurer in O.P.(MV) No.1268 of 2016 on the file of the Additional Motor Accidents Claim Tribunal, Palakkad, a claim petition filed under Section 163A of the Motor Vehicles Act, 1988 by respondents 1 and 2, claiming compensation on account of death of one Shijesh, son of the 1st respondent and brother of the 2nd respondent, in a motor accident which occurred on 04.01.2012, while he was riding a motorcycle bearing registration No.KL-09/AA- 6821, owned by the 3rd respondent and insured with the appellant. At the place of accident, the motorcycle skidded and the deceased fell down, who sustained fatal injuries. He was taken to Paalana Hospital, from where he was referred to Jubilee Mission Hospital, where he succumbed to the injuries on 05.01.2012. Alleging that the deceased died on account of the injuries sustained in a motor accident involving motorcycle bearing registration No.KL-09/AA-6821, claim petition was filed before the Tribunal claiming a total compensation of Rs.8,20,000/- under various heads.
2. Before the Tribunal, the 3rd respondent owner of the motorcycle remained absent and he was set ex-parte. The MACA No.3972 of 2019(B) -3- appellant insurer filed written statement admitting insurance coverage of the motorcycle involved in the accident, however, disputing the liability. The insurer contended that the deceased was riding the motorcycle after borrowing the same from the its registered owner and therefore, he would step into the shoes of the owner and the claimants, who are the legal representatives of the deceased, cannot maintain a claim under Section 163A of the Motor Vehicles Act.
3. Before the Tribunal, Exts.A1 to A9 series were marked on the side of the claimants. Both sides have not chosen to adduce any oral evidence.
4. After considering the pleadings and materials on record, the Tribunal arrived at a conclusion that the deceased died due to the injuries sustained in the motor accident and therefore, the claim petition filed by his legal heirs is maintainable in law. The accident occurred while the deceased was riding a motorcycle bearing registration No.KL- 09/AA-6821. At the place of accident, the motorcycle skidded on the road and the deceased sustained injuries. The Tribunal held that, in view of the law laid down by the Apex Court in United India Insurance Company Ltd. v. Sunil Kumar MACA No.3972 of 2019(B) -4- [(2019) 12 SCC 398 : AIR 2017 5710], in a claim petition filed under Section 163A of the Motor Vehicles Act, it is not open to the respondents to raise any defence of negligence on the part of the victim and therefore, there is no merit in the contention of the insurer in this regard. Under various heads, the Tribunal awarded a total compensation of Rs.5,10,000/- together with interest at the rate of 7% per annum from the date of claim petition till realisation, with proportionate cost, and the appellant insurer was directed to satisfy the award. The amount of compensation was ordered to be apportioned among the claimants, respondents 1 and 2 herein, in the ratio 75:25.
5. Feeling aggrieved by the award, the appellant insurer is before this Court in this appeal.
6. On 06.11.2019, when this appeal came up for admission, this Court admitted the matter on file and issued notice to the respondents by speed post, returnable by four weeks. In I.A.No.2 of 2019, this Court granted interim stay of the execution of the impugned award, for a period of one month. Respondents 1 to 3, entered appearance through counsel and thereafter, the interim stay was extended for a MACA No.3972 of 2019(B) -5- period of two months, by the order dated 05.12.2019. On.04.2.2019, the interim order was revived and extended by one month.
7. The compensation awarded by the Tribunal under various heads reads thus;
SI. Head of claim Amount Amount Basis-vital details
No claimed awarded in a nutshell
(in Rs) (in Rs.)
1 Pain and suffering 5,000/- -- --
2 Funeral expenses 2,000/- 15,000/- National Insurance
Co. v. Pranay Sethi
[2017 (5) KHC
350]
3 Bystander 3,000/- -- --
expenses
4 Loss of estate 2,500/- 15,000/- National Insurance
Co. v. Pranay Sethi
[2017 (5) KHC
350]
5 Loss of 8,00,000/- 4,80,000/- Second Schedule
dependency and
love and affection
Total 8,20,000/- 5,12,000/-
8. During the course of arguments, the learned Standing Counsel for the appellant insurer would rely on the decision of the Apex Court in Ramkhiladi v. United India Insurance Company [2020 (1) KHC SN 13 : (2020) 2 SCC 550].
9. Section 163A of the Motor Vehicles Act, 1988 deals with special provisions as to compensation on structured formula basis. The said provision was inserted vide Section MACA No.3972 of 2019(B) -6- 51 of the Motor Vehicles (Amendment) Act, 1994, with effect from 14.11.1994. Sub-section (1) of Section 163A states that, notwithstanding anything contained in the Motor Vehicles Act or in any 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 liable to pay in the case of death or permanent disablement due to accident arising out of the use of motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs of the victim, as the case may be. As per the Explanation to sub- section (1) of Section 163A, for the purposes of sub-section (1), 'permanent disability' shall have the same meaning and extent as in the Workmen's Compensation Act, 1923. Sub- section (2) of Section 163A provides that, in any claim for compensation under sub-section (1), 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 any wrongful act or neglect or default of the owner of the vehicle or vehicles concerned or of any other person. Sub-section (3) of Section 163A provides further that, the Central Government may, keeping in view the cost of living, MACA No.3972 of 2019(B) -7- by notification in the Official Gazette, from time to time, amend the Second Schedule.
10. Chapter X of the Motor Vehicles Act deals with liability to pay compensation in certain cases on the principle of 'no fault'. As per sub-section (1) of Section 140, where death or permanent disablement of any person has 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 accordance with the provisions of this Section. As per sub-section (3) of Section 140, in any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
11. Chapter XI of the Motor Vehicles Act deals with insurance of motor vehicles against third party risks. Rule 147 of the Act deals with requirements of policies and limits of MACA No.3972 of 2019(B) -8- liability. As per sub-section (1) of Section 147, in order to comply with the requirements of Chapter XI, a policy of insurance must be a policy which - (a) is issued by a person who is an authorised insurer; and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) - (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.
12. In Oriental Insurance Company Ltd. v.
Sunitha Rathi [(1998) 1 SCC 365] a Three-Judge Bench of the Apex Court held that the liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance.
13. In National Insurance Company Ltd. v.
MACA No.3972 of 2019(B)-9- Sasilatha [1999 (3) KLT 519] a Division Bench of this Court, after referring to the judgment of the Apex Court in Sunitha Rathi held that, if the insured is not held liable, insurer cannot be directed to indemnify the insured. The only liability for the insurer is to indemnify the insured and not to pay any compensation for the alleged bodily injuries sustained by the insured. A reading of Section 140 of the Motor Vehicles Act makes it clear that no fault liability is cast on the owner of the vehicle and not directly on the insurer. If the owner of the vehicle is found liable under Section 140, naturally, the liability of the insurer also would arise.
14. In Sasilatha the Division Bench was dealing with a case in which the owner of a jeep herself has come forward for compensation under Section 140 of the Act against the insurer of her own vehicle, which was held to be the offending vehicle. On the basis of evidence, the Tribunal came to the conclusion that there was no negligence on the part of the driver of the KSRTC bus, but, on the other hand the accident happened only due to the negligence on the part of the driver of the jeep. The Division Bench, after referring to the judgment of the Apex Court in Sunitha Rathi, in which it MACA No.3972 of 2019(B) -10- was held that the liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance, held that such a claim made by the owner of the vehicle cannot be maintained under Section 140 of the Motor Vehicles Act.
15. In Yallwwa v. National Insurance Company Ltd. [(2007) 6 SCC 657] the question that came up for consideration before the Apex Court was as to whether an order passed by the Tribunal under Section 140 of the Motor Vehicles Act is an appealable one. In that context, the Apex Court held that Section 140 of the Act, which provides for no fault liability, uses the words 'accident arising out of the use of a motor vehicle', 'the owner of the vehicle' and when more than one vehicles are involved, 'the owners of the vehicles' shall jointly and severally be liable to pay compensation. The said provision, therefore makes the owners of the vehicle liable, but not the insurer per se.
16. Section 140 of the Motor Vehicles Act therefore makes the owner of the vehicle liable but not the insurer per se. The liability of the insurer under Section 140 of the Act MACA No.3972 of 2019(B) -11- arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. When the liability of the insurer is to indemnify the insured and not to pay compensation for the bodily injury or death of the insured, the claim made by the insured for that purpose cannot be sustained under Section 140 of the Act.
17. In Oriental Insurance Company Ltd. v. Jhuma Saha [(2007) 9 SCC 263] the Apex Court was dealing with a case in which the deceased was the owner of the insured Maruti van. While he was driving the said vehicle it dashed against a tree on the road side, when he attempted to save a goat which ran across the road. The deceased suffered injuries, who later on succumbed to injuries. The Apex Court noticed that, for the reasons stated in the claim petition or otherwise, the deceased himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which the deceased was driving. Therefore, the question before the Apex Court was as to the maintainability of the claim made under Section 166 of the Motor Vehicles Act. In that context, the Apex Court held that, the liability of MACA No.3972 of 2019(B) -12- the insurer is to the extent of indemnification of the insured against the injured person, a third person, or in respect of damages to property. Thus, if the insured cannot be fastened with any liability under the provisions of the Act, the question of the insurer being liable to indemnify the insured, does not arise.
18. In Jhuma Saha, the Apex Court relied on its earlier judgment in Dhanraj v. New India Assurance Company Ltd. [(2004) 8 SCC 553] in which it was held that, an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. Section 147 of the Motor Vehicles Act does not require an Insurance Company to assume risk for death or bodily injury to the owner of the vehicle.
19. In New India Assurance Company Ltd. v.
Sadanand Mukhi [(2009) 2 SCC 417], after considering the requirements of policies and limits of liability under Section 147 of the Motor Vehicles Act, the Apex Court held MACA No.3972 of 2019(B) -13- that, the said provision provides for two types of insurance; one statutory in nature and the other contractual in nature. Whereas the Insurance Company is bound to compensate the owner or the driver of the motor vehicle in case any person dies or suffers injury as a result of an accident; in case the owner of the vehicle or others are proposed to be covered, additional premium is required to be paid for covering their life and property. Therefore, by taking an 'act policy' the owner of the vehicle fulfills his statutory obligation as contained in Section 147 of the Motor Vehicles Act. If the liability of the insurer is contractual, its liability extends to the risk covered by the policy of insurance. If additional risks are sought to be covered, additional premium has to be paid.
20. In Sadanand Mukhi the Apex Court was dealing with a case in which the owner of the motorcycle got the said vehicle insured with the appellant insurer. On 08.09.2000, the son of the insured while riding the motorcycle met with an accident and he died. The accident took place as a stray dog came in front of the vehicle. The appellant insurer contended that the rider of the motorcycle is not a third party. Further, the accident occurred while the deceased himself was riding MACA No.3972 of 2019(B) -14- the motorcycle in uncontrollable speed and in a rash and negligent manner, which was the cause of accident. Therefore, in absence of negligence on the part of the owner of the vehicle, the claimants cannot seek compensation.
21. Section 147 of the Motor Vehicles Act provides for two types of insurance; one statutory in nature and the other contractual in nature. Section 147 of the Act does not require an insurer to assume risk for death or bodily injury to the owner of the vehicle. By taking an 'act only' policy the owner of the vehicle fulfills his statutory obligation as contained in Section 147 of the Motor Vehicles Act. If the liability of the insurer is contractual, the liability extends to the risk covered by the policy of insurance, for which additional premium has to be paid.
22. In Minu B. Mehta v. Balkrishna Ramchandra Nayan [(1977) 2 SCC 441] a Three-Judge Bench of the Apex Court considered the question whether in a claim under Section 110A of the Motor Vehicles Act, 1939, proof of negligence was essential to support the claim for compensation. On the facts in that case, the Apex Court found that the appeal was liable to be dismissed subject to MACA No.3972 of 2019(B) -15- certain directions issued therein. However, in the light of the fact that the High Court had discussed the law on the question, the Apex Court observed that the liability of the owner of the car to compensate the victim in a motor accident due to negligent driving of his servant is based on the law of tort. Regarding the view of the High Court that it was not necessary to prove negligence, the Apex Court held that, proof of negligence is necessary before the owner or the Insurance Company could be held to be liable for payment of compensation in a motor accident claim case.
23. In Oriental Insurance Company Ltd. v. Meena Variyal [(2007) 5 SCC 428] the Apex Court observed that, the law laid down in Minu B. Mehta was accepted by the Legislature while enacting the Motor Vehicles Act, 1988 by introducing Section 163A of the Act providing for payment of compensation notwithstanding anything contained in the Act or in any other law for the time being in force that the owner of a motor vehicle or the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out of the use of the motor vehicle, compensation, as indicated in the Second Schedule, to the MACA No.3972 of 2019(B) -16- legal heirs or the victim, as the case may be, and in a claim made under sub-section (1) of Section 163A of the Act, 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 any wrongful act or neglect or default of the owner of the vehicle concerned. Therefore, the victim of an accident or his dependents have an option either to proceed under Section 166 of the Act or under Section 163A of the Act. Once they approach the Tribunal under Section 166 of the Act, they have necessarily to take upon themselves the burden of establishing the negligence of the driver or owner of the vehicle concerned. But if they proceed under Section 163A of the Act, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependents to establish any negligence or default on the part of the owner of the vehicle or the driver of the vehicle.
24. In Deepal Girishbhai Soni v. United India Insurance Company Ltd. [(2004) 5 SCC 385] a Three- Judge Bench of the Apex Court held that, in Section 163A of the Motor Vehicles Act, the expression 'notwithstanding MACA No.3972 of 2019(B) -17- 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 163A would apply despite the contrary provisions existing in the said Act or any other law for the time being in force. Section 163A of the Act 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.
25. The judgment of the Apex Court in Deepal Girishbhai Soni arises out of a motor accident which occurred on 04.09.1998 involving a truck owned by Akbarbhai Bhikhabhai Ajmera, which was insured with National Insurance Company Ltd., and a Tempo Trax owned by Purankumar Popandas Bhatia, which was insured with United India Insurance Company Ltd. In the accident, both the parents of the claimants died. The claimants filed MAC Petition No.2133 of 1998 before the Motor Accidents Claims Tribunal, Kheda, claiming compensation for the death of their mother Prabhaben and MAC Petition No.2134 of 1998 was filed claiming compensation for the death of their father MACA No.3972 of 2019(B) -18- Girishbhai Soni. In both the petitions, orders were passed by the Tribunal granting interim compensation under Section 163A of the Act, by separate orders dated 24.03.2000. In MAC Petition No.2133 of 1998, the Tribunal awarded a compensation of Rs.4,20,500/- together with interest at the rate of 12% per annum from the date of petition till realisation. Similarly, in MAC Petition No.2134 of 1998, Tribunal awarded a compensation of Rs.11,74,500/- together with interest at the rate of 12% per annum. The said orders were under challenge in First Appeal Nos.2272 of 2000 and 2273 of 2000 filed by United India Insurance Company Ltd., before Gujarat High Court. Both the appeals were partly allowed by a Division Bench of Gujarat High Court, vide judgment dated 09.11.2000.
26. A reading of the judgment of Gujarat High Court in First Appeal Nos.2272 of 2000 and 2273 of 2000 would show that, the Tribunal passed the impugned orders dated 24.03.2000, while the main matter under Section 166 of the Act was pending consideration before the Tribunal. Therefore, the challenge in the First Appeals filed before the High Court was only against the compensation awarded by the Tribunal MACA No.3972 of 2019(B) -19- under Section 163A of the Act. The appellant insurer contended that, the Tribunal committed a serious error in awarding interim compensation beyond the scope of Section 163A of the Act, inasmuch as, the compensation amount awarded exceeded the limit indicated in the Second Schedule to the Act. According to the appellant, the Tribunal could have granted interim compensation under Section 163A of the Act only upto the annual income of Rs.40,000/-. The total annual income above Rs.40,000/- could be taken into consideration only at the time of passing the final order under Section 166 of the Act and therefore, the impugned orders dated 24.03.2000 of the Tribunal awarding interim compensation cannot be sustained in the eye of law.
27. As borne out from the judgment of Gujarat High Court, during the course of arguments, the learned counsel representing the claimants submitted that, the impugned orders of the Tribunal granting interim compensation may be modified to the extent that the claimants shall get the amount only to the extent permissible under the Second Schedule and that the claimants be paid only that part of the amount awarded which becomes due to them on the basis of MACA No.3972 of 2019(B) -20- the annual income limited upto Rs.40,000/-, without prejudice to their right to agitate their full claim at the time when the main claim petitions are considered on merits by the Tribunal. Accordingly, on the basis of the agreed position, the Division Bench partly allowed the appeals, by the judgment dated 09.11.2000, modifying the impugned orders of the Tribunal dated 24.03.2000, to the extent of limiting the interim compensation at Rs.3,78,500/- in First Appeal No.2272 of 2000 and at Rs.3,24,500/- in First Appeal No.2273 of 2000. The Division Bench has also made it clear that, in view of the agreed position between the parties, it has not embarked upon the question of interpreting Section 163A and the Second Schedule of the Act.
28. The above judgment of Gujarat High Court in First Appeal Nos.2272 of 2000 and 2273 of 2000 was under
challenge before the Apex Court in Civil Appeal Nos.3126 of 2002 and 3127 of 2002 filed by the claimants. A Two-Judge Bench of the Apex Court, by the order dated 19.04.2002, doubting the correctness of the Two-Judge Bench decision in Oriental Insurance Company Ltd. v. Hansrajbhai V. Kodala [(2001) 5 SCC 175], by which the proceedings MACA No.3972 of 2019(B) -21- under Section 163A of the Act have been held to be a final proceeding as a result whereof the claimants have been debarred from proceeding with their further claims made on the basis of fault liability in terms of Section 166 thereof, referred the matter to a Three-Judge Bench. Therefore, the issue before the Three-Judge Bench of the Apex Court in Deepal Girishbhai Soni was as to whether the proceedings under Section 163A of the Act is in the nature of interim relief or final relief. The Three-Judge Bench of the Apex Court, after analysing the provisions of Sections 140, 163A and 166 of the Act, approved the Two-Judge Bench decision in Hansrajbhai Kodala and held that, the determination of the compensation under Section 163A of the Act is in the nature of a final determination of the compensation and the claimant is not entitled to simultaneously move an application under Section 163A and Section 166 of the Act. The conclusion of the Three-Judge Bench in Para.67 of the judgment, reads thus;
"Conclusion:
67. We, therefore, are of the opinion that Kodala (supra) has correctly been decided. However, we do not agree with the findings in Kodala (supra) that if a person invokes provisions of Section 163A, the annual MACA No.3972 of 2019(B) -22- income of Rs.40,000/- per annual shall be treated as a cap. In our opinion, the proceeding under Section 163A being a social security provision, providing for a distinct scheme, only those whose annual income is upto Rs.40,000/- can take the benefit thereof. All other claims are required to be determined in terms of Chapter XII of the Act."
29. In Para 41 of the judgment in Deepal Girishbhai Soni the Three-Judge Bench of the Apex Court observed that, by inserting Section 163A of the Act, the Parliament intended to provide for making of an award consisting of a predetermined sum without insisting on a long-drawn trial or without proof of negligence in causing the accident. The 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. The heirs of the deceased 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. In Para.42 of the judgment, the Apex Court observed further that, by inserting Section 163A of the Act, the Parliament intended to lay a comprehensive scheme for the purpose of grant of adequate compensation to a section of victims who MACA No.3972 of 2019(B) -23- 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 of use of a motor vehicle. Para.42 of the judgment reads thus;
"42. Section 163A was, thus, enacted for grant of immediate relief to a section of the people whose annual income is not more than Rs.40,000 having regard to the fact that in terms of Section 163A of the Act read with the Second Schedule appended thereto, compensation is to be 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. 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 columns 2 to 6 thereof leaves no manner of doubt that 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 MACA No.3972 of 2019(B) -24- 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 of use of a motor vehicle."
30. In Meena Variyal [(2007) 5 SCC 428] the Apex Court held that, the victim of a motor accident or his dependents have an option either to proceed under Section 166 of the Motor Vehicles Act or under Section 163A of the said Act. Once they approach the Tribunal under Section 166 of the Act, they have necessarily to take upon themselves the burden of establishing the negligence of the driver or owner of the vehicle concerned. But if they proceed under Section 163A of the Act, the compensation will be awarded in terms of the Schedule without calling upon the victim or his dependents to establish any negligence or default on the part of the owner or driver of that vehicle.
31. In Oriental Insurance Company Ltd. v. Rajni Devi [(2008) 5 SCC 736] the Apex Court was dealing with a case in which the accident occurred while the deceased was riding a motorcycle. At the place of accident, the motorcycle gone out of control and he sustained fatal injuries. The legal MACA No.3972 of 2019(B) -25- heirs of the deceased filed a claim petition under Section 163A of the Motor Vehicles Act claiming compensation. The Apex Court held that the liability under Section 163A of the Act is on the owner of the vehicle, as a person cannot be both, a claimant as also a recipient, the legal heirs of the deceased could not have maintained a claim in terms of Section 163A of the Act.
32. In Ningamma v. United India Insurance Company Ltd. [(2009) 13 SCC 710] the Apex Court, after referring to Para.42 of the Three-Judge Bench decision in Deepal Girishbhai Soni held that, the Parliament by introducing Section 163A in the Motor Vehicles Act provided for payment of compensation on structured formula basis by mandating that the owner of a motor vehicle or the authorised insurer would be liable to pay compensation, as indicated in the Second Schedule in the case of death or permanent disablement due to accident arising out of the use of the motor vehicle, to the legal heirs or the victim, as the case may be, in a claim made under sub-section (1) of Section 163A of the Act. After referring to the judgment of a Two-Judge Bench in Rajni Devi the Apex Court held further MACA No.3972 of 2019(B) -26- that, Section 163A of the Act cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The liability under Section 163A of the Act is on the owner of the vehicle. So a person cannot be both, a claimant as also a recipient, with respect to the claim. A person who borrowed motor vehicle from its real owner, who was authorised to drive the said vehicle by its owner, would step into the shoes of the owner of that vehicle. Accordingly, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163A of the Act.
33. In National Insurance Company Ltd. v. Sinitha [(2012) 2 SCC 356] the main question that came up for consideration before the Apex Court was whether a claim for compensation made under Section 163A of the Motor Vehicles Act, can be defeated either by the owner or by the Insurance Company, by pleading and establishing, that the accident in question was based on the 'negligence' of the offending vehicle. After analysing the provisions under Section 140 and Section 163A of the Act, the Apex Court held that, sub- MACA No.3972 of 2019(B) -27- section (2) of Section 163A is in pari materia with sub-section (3) of Section 140 and 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. Under sub-section (4) of Section 140, there is a specific bar, whereby the concerned party (owner or Insurance Company) is precluded from defeating a claim raised under Section 140 of the Act, by 'pleading and establishing ''wrongful act', 'neglect' or 'default', there is no such or similar prohibiting clause in Section 163A of the Act. The additional negative bar, precluding the defence from defeating a claim for reasons of a 'fault' ('wrongful act', 'neglect' or 'default'), as has been expressly incorporated in Section 140 of the Act (through sub-section (4) thereof), having not been embodied in Section 163A of the Act, has to have a bearing on the interpretation of Section 163A of the Act. The Legislature designedly included the negative clause through sub-section (4) in Section 140 of the Act, yet consciously did not include the same in the scheme of Section 163A of the Act. The presence of sub-section (4) in Section 140 of the Act and the MACA No.3972 of 2019(B) -28- absence of a similar provision in Section 163A, leaves no room for any doubt that the only object of the Legislature in doing so was that the Legislature desired to afford liberty to the defence to defeat a claim for compensation raised under Section 163A of the Act, by pleading and establishing 'wrongful act', 'neglect' or 'default'. A claim which can be defeated on the basis of any of the aforesaid considerations is regulated under the 'fault' liability principle. Therefore, the Apex Court concluded, that Section 163A of the Act is founded on the 'fault' liability principle.
34. The principle laid down by the Apex Court in Sinitha was followed by a Full Bench of this Court in Oriental Insurance Company Ltd. v. Joseph V. V. @ Johny [2012 (2) KHC 1]. It was a case in which the deceased was the rider of the motorcycle at the time of accident, as permitted by the owner of that motorcycle which was covered by an 'act only' policy, and the Tribunal found the cause for the accident as the negligence of the rider himself. After referring to various judgments of the Apex Court and also the judgment of another Full Bench of this Court in National Insurance Company Ltd. v. V. Malathi MACA No.3972 of 2019(B) -29- C. Salian [2003 (3) KLT 460] the Full Bench held that in a case where, though a claim is raised under Section 163A of the Act, once the insurer or the insured comes up with the defence of absolving the liability to pay compensation on the ground that the deceased was responsible for the death or injury on account of either wrongful act, negligent act or default, then, the liability of the insurer can be absolved, if such plea or defence is established. After referring to the judgment of the Apex Court in Rajni Devi the Full Bench observed that, if the owner of the vehicle insures the vehicle by paying additional premium, as personal accident coverage, then by virtue of the terms of contract of insurance, the insurer would be liable to pay compensation depending upon the limits of liability.
35. The scope of Section 163A of the Motor Vehicles Act and the object behind the said provision introduced by Act 54 of 1994 came up for consideration before a Division Bench of the Karnataka High Court in Appaji v. M. Krishna [2004 ACJ 1289]. The Division Bench rendered the said judgment on 17.12.2003 (prior to the Three-Judge Bench decision of the Apex Court in Deepal Girishbhai Soni dated MACA No.3972 of 2019(B) -30- 18.03.2004) after examining in detail the provisions of Section 163A of the Act as well as the objects and reasons which led to the introduction of such a provision in the Act, by Act 54 of 1994. In the said case, the Division Bench was dealing with a case were the deceased Arun Kumar was riding a motorcycle and the accident occurred while the deceased was trying to avoid a cyclist who suddenly emerged on the road, i.e., without involving any other motor vehicle. The Division Bench held that, Section 163A of the Act was never intended to provide relief to those who suffered in a road accident not because of the negligence of another person making use of a motor vehicle, but only on account of their own rash, negligent or imprudent act resulting in death or personal injury to them. The objects and reasons underlying the introduction of the provision also envisaged adequate compensation to victims of road accidents without going into what was described as long drawn procedure. There is nothing to suggest that Section 163A of the Act was intended to be available even in a situation where the accident in question had caused death or physical injury to none except the person who was rash and negligent in using the motor MACA No.3972 of 2019(B) -31- vehicle. The Division Bench held further that, the right to receive compensation under Section 163A of the Act presupposes that the person who makes a claim is a victim or the legal heirs of a victim. One who is the victim of his own actions of rash or negligent driving cannot invoke Section 163A for making a claim. The concern of the Legislature and the jurists is understandably for the victim in contradistinction to the victimiser or one who falls a victim to his own action. The Parliament did not intend to provide for compensation to the person responsible for the accident on structured formula basis in such cases. The Division Bench held in categorical terms that, the 'non obstante' clause in Section 163A simply dispenses with proof of fault by the claimants against the driver or the owner of the vehicle involved in the accident. The claimant under Section 163A, therefore, need not prove that the driver or the owner of the vehicle was at fault in the sense that the accident had occurred on account of any negligence or rashness on their part. That does not, however, mean that claimant can maintain a claim on the basis of his own fault or negligence and argue that even when he himself may have caused the accident on account of his own rash and MACA No.3972 of 2019(B) -32- negligent driving, he can nevertheless made the insurance company pay for the same, inasmuch as, Section 163A of the Act dispenses with proof of fault, it does so only where the claimant is not solely responsible for the accident. The view expressed by the Division Bench of the Karnataka High Court in Appaji is in consonance with the law laid down by the Apex Court in Ningamma.
36. In United India Insurance Company v. Sunil Kumar [(2014) 1 SCC 680] a Two-Judge Bench of the Apex Court expressed its difficulty to accept the reasoning by the Two-Judge Bench in Sinitha, stating that the principle laid down in Hansrajbhai Kodala, which was accepted by the Three-Judge Bench in Deepal Girishbhai Soni has not been properly appreciated or applied in Sinitha. Consequently, the matter was ordered to be 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 163A of the Act.
37. In United India Insurance Company Ltd. v. Sunil Kumar [(2019) 12 SCC 398 : AIR 2017 5710] a Three-Judge Bench of the Apex Court held that the grant of MACA No.3972 of 2019(B) -33- compensation under Section 163A of the Motor Vehicles Act, on the basis of the structured formula, is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by sub-section (2) of Section 163A of the Act. Though the aforesaid section of the Act does not specifically exclude a possible defence of the insurer based on the negligence of the claimant as contemplated by sub- section (4) of Section 140, to permit such defence to be introduced by the insurer and/or to understand the provisions of Section 163A of the Act to be contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the insurer to raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which MACA No.3972 of 2019(B) -34- would not only be self-contradictory but also defeat the very legislative intention. In a proceeding under Section 163A of the Act it is not open for the insurer to raise any defence of negligence on the part of the victim. Paragraphs 5 to 8 of the said decision read thus;
5. In Deepal Girishbhai Soni v. United India Insurance Company Ltd., Baroda [(2004) 5 SCC 385] the issue before a three judge bench of this Court was with regard to the mutual exclusiveness of the provisions of Section 163A and Section 166 of the Act. While dealing with the said question, this Court had the occasion to go into the reasons and objects for the incorporation of Section 140 and 163A of the Act which came in by subsequent amendments, details of which are being noted separately herein below. The Bench also took the view that while Section 140 of the Act deals with cases of interim compensation leaving it open for the claimant to agitate for final compensation by resort to the provisions of Section 166 of the Act, Section 163A of the Act provides for award of final compensation on a structured formula following the provisions of Second Schedule appended to the Act. Both Sections i.e. Sections 140 and 163A are based on the concept of 'no fault liability' and have been enacted as measures of social security. It was further noted that in a proceeding under Section 163A of the Act the Tribunal may be required to adjudicate upon various disputed questions like age, income, etc. unlike in a MACA No.3972 of 2019(B) -35- proceeding under Section 140 of the Act.
6. Deepal Girishbhai Soni's case, in fact, arose out of a reference made for a decision on the correctness of the view expressed in Oriental Insurance Company Ltd. v. Hansrajbhai V. Kodala [(2001) 5 SCC 175] that determination of compensation in a proceeding under Section 163A of the Act is final and further proceedings under Section 166 of the Act is barred. The opinion rendered in Hansrajbhai V. Kodala contains an elaborate recapitulation of the reasons behind the enactment of Section 92A to 92E of the old Act (i.e. Motor Vehicles Act, 1939) (corresponding to Sections 140 to 144 of the present Act) introducing for the first time the concept of 'no fault liability' in departure from the usual common law principle that a claimant should establish negligence on the part of the owner or driver of the motor vehicle before claiming any compensation for death or permanent disablement caused on account of a motor vehicle accident. In the said report, there is a reference to the deliberations of the Committee constituted to review the provisions of the Motor Vehicles Act, 1988 and the suggestions of the Transport Development Council on the basis of which the draft Bill of 1994 was enacted, inter alia, to provide for:
(h) increase in the amount of compensation to the victims of hit-and-run cases;
(k) a new predetermined formula for payment of compensation to road accident victims MACA No.3972 of 2019(B) -36- on the basis of age/income, which is more liberal and rational.
7. As observed in Hansrajbhai v. Kodala one of the suggestions made by the Transport Development Council was "to provide adequate compensation to victims of road accidents without going into long drawn procedure." As a sequel to the recommendations made by the Committee and the Council, Section 140 was enacted in the present Act in place of Section 92A to 92E of the old Act. Compensation payable thereunder, as under the repealed provisions, continued to be on the basis of no fault liability though at an enhanced rate which was further enhanced by subsequent amendments. Sections 140 and 141 of the present Act makes it clear that compensation payable thereunder does not foreclose the liability to pay or the right to receive compensation under any other provision of the Act or any other law in force except compensation awarded under Section 163A of the Act. Compensation under Section 140 of the Act was thus understood to be in the nature of an interim payment pending the final award under Section 166 of the Act. Section 163A, on the other hand, was introduced in the New Act for the first time to remedy the situation where determination of final compensation on fault basis under Section 166 of the Act was progressively getting protracted. The Legislative intent and purpose was to provide for payment of final compensation to a class of claimants (whose income was below Rs. 40,000/- per annum) on the basis of a structured formula without MACA No.3972 of 2019(B) -37- any reference to fault liability. In fact, in Hansrajbhai V. Kodala the bench had occasion to observe that:
"Compensation amount is paid without pleading or proof of fault, on the principle of social justice as a social security measure because of ever-increasing motor vehicle accidents in a fast-moving society. Further, the law before insertion of Section 163A was giving limited benefit to the extent provided under Section 140 for no-
fault liability and determination of compensation amount on fault liability was taking a long time. That mischief is sought to be remedied by introducing Section 163A and the disease of delay is sought to be cured to a large extent by affording benefit to the victims on structured-
formula basis. Further, if the question of determining compensation on fault liability is kept alive it would result in additional litigation and complications in case claimants fail to establish liability of the owner of the defaulting vehicles."
8. From the above discussion, it is clear that grant of compensation under Section 163A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by MACA No.3972 of 2019(B) -38- Section 163A(2). Though the aforesaid Section of the Act does not specifically exclude a possible defence of the Insurer based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be introduced by the Insurer and/or to understand the provisions of Section 163A of the Act to be contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the Insurer to raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention.
9. For the aforesaid reasons, we answer the question arising by holding that in a proceeding under Section 163A of the Act it is not open for the Insurer to raise any defence of negligence on the part of the victim."
38. In Shivaji v. United India Insurance Company Ltd. [(2019) 12 SCC 395] a Three-Judge Bench of the Apex Court was dealing with a case in which the deceased was driving a car bearing registration No.MH-06/W-604. At the place of accident, the car dashed into a truck bearing MACA No.3972 of 2019(B) -39- registration No.KA-25/B-5363, resulting in his death. The parents of the deceased filed claim petition before the Additional Motor Accidents Claims Tribunal, Belagavi seeking compensation under Section 163A of the Motor Vehicles Act. The Tribunal noted that since the claim petition had been filed under Section 163A of the Act, the question of proving that the accident happened due to the rash and negligent act of the driver did not arise. The Tribunal allowed the claim and awarded Rs.4,60,800/- together with interest at the rate 9% per annum. The insurer preferred an appeal before the High Court of Karnataka. The claimants preferred an appeal for enhancement of compensation. The High Court allowed the appeal filed by the insurer and set aside the award of the Tribunal. The High Court opined that the idea behind enacting Section 163A of the Act is to ensure that even in the absence of any mistake on the part of the driver of the offending vehicle, the injured person or the legal heirs of the deceased person are compensated by the owner and the insurer. As a result, under Section 163A of the Act, since the victim has been contemplated to be an innocent third party, protection is extended only to the injured person or to the legal heirs of MACA No.3972 of 2019(B) -40- the deceased victim, and not to the driver who is responsible for causing the said accident. Since the deceased driver was the tortfeasor and responsible for causing the accident, the High Court held that compensation could not have been awarded to the claimants.
39. In Shivaji the Apex Court noticed that the issue which arises for consideration is no longer res integra and is covered by the judgment of the Three-Judge Bench in Sunil Kumar, wherein it was held that to permit a defence of negligence of the claimant by the insurer and/or to understand Section 163A of the Act as contemplating such a situation, would be inconsistent with the legislative object behind introduction of the said provision, which is "final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time". The Court observed that if an insurer was permitted to raise a defence of negligence under Section 163A of the Act, it would "bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also MACA No.3972 of 2019(B) -41- defeat the very legislative intention". Consequently, it was held that in a proceeding under Section 163A of the Act, the insurer cannot raise any defence of negligence on the part of the victim to counter a claim for compensation.
40. In Jiljet and another v. Stamphem George and others [2018 (5) KHC 206], this Court noticed that in Ningamma, it has been specifically held by the Apex Court that the insured/person riding the motorcycle will not be a 'third party' and that, such rider, who rides the motorcycle after borrowing it from the insured, will step into the shoes of the insured. What was required to be insured mandatorily as per Section 147 of the Motor Vehicles Act is the liability towards 'third party' and if at all anybody else is to be covered, particularly, the insured (whose liability towards 'third party' is agreed to be satisfied by the insurer), wider coverage has to be obtained paying additional premium. There is no concept of owner/insured becoming liable to pay compensation to himself under any circumstances and as such, no liability can be shifted to the shoulders of the insured (sic: insurer). A question arose for consideration before the Apex Court, as to whether the liability still can be MACA No.3972 of 2019(B) -42- mulcted upon the insurer under Section 163A of the Act, if the negligence on the part of the injured/deceased was specifically pleaded and proved by the insurer, notwithstanding the fact that there is no such burden on the part of the claimant to plead or prove negligence in getting compensation under Section 163A of the Act. The question was answered in the negative by the Apex Court as per the verdict in Sinitha holding that the specific bar under sub- section (4) of Section 140 of the Act (precluding the defence from defeating a claim for reason of fault) is conspicuously absent/omitted while drafting Section 163A of the Act by the law makers. However, the said decision was subsequently doubted by a coordinate Bench and it was referred to Larger Bench. The Larger Bench has answered the reference as per the verdict in Sunil Kumar that insurance company cannot raise or establish a defence with reference to negligence in a claim under Section 163A of the Act. Be that as it may, the question involved in the present appeal is not with reference to the scope of Section 163A, but as to the status of a person riding the vehicle and gets himself injured. It is in respect of this situation, that the legal position has been made clear by MACA No.3972 of 2019(B) -43- the Apex Court in Ningamma holding that such rider will step into the shoes of the insured and that, the insurer is not liable to compensate him. As held by the Apex Court in New India Assurance Company Ltd. v. Prabhadevi [(2013) 14 SCC 719], after referring to the dictum laid down in Dhanraj v. New India Assurance Company Ltd. [(2004) 8 SCC 553] and Oriental Insurance Company Ltd. v. Sunitha Rathi [(1998) 1 SCC 365], no liability could be shifted to the shoulders of the insurance company, in the absence of wider coverage, if any, on payment of additional premium.
41. In Ramkhiladi v. United India Insurance Company [(2020) 2 SCC 550] the Apex Court was dealing with a case in which the deceased was riding a motorcycle bearing registration No.RJ-02/SA-7811. At the place of accident the said motorcycle was hit by another motorcycle bearing registration No.RJ-29/2M-9223. According to the claimants, the accident occurred on account of rash and negligent riding of motorcycle bearing No.RJ-29/2M-9223 by its rider. The claimants filed a claim petition before the Motor Accident Claims Tribunal, Laxmangarh (Alwar), Rajasthan, MACA No.3972 of 2019(B) -44- under Section 163A of the Motor Vehicles Act. The claim petition was preferred only against the owner and the insurer of motorcycle bearing No.RJ-02/SA-7811. The rider, owner and the insurer of motorcycle bearing No.RJ-29/2M-9223 were not joined as opponents in the claim petition. The Tribunal held that the death of the deceased had occurred from motorcycle bearing No.RJ-02/SA-7811 involved in the accident and the said motorcycle was insured with the respondent-insurer, the insurer is liable to pay the compensation under Section 163A of the Act. The respondent-insurer preferred an appeal before the High Court of Rajasthan (Jaipur Bench). The High Court allowed the appeal and set aside the award passed by the Tribunal and consequently dismissed the claim petition on the ground that even as per the informant, who lodged the FIR, the accident had occurred on account of rash and negligent riding of motorcycle bearing No.RJ-29/2M-9223 by its rider, however, the claimants have not filed the claim petition against the owner of the said vehicle and in fact, the claim petition should have been filed by the claimants against the owner of motorcycle bearing No.RJ-29/2M-9223. Aggrieved with the MACA No.3972 of 2019(B) -45- judgment of the High Court, the claimants approached the Apex Court.
42. In Ramkhiladi the question which came up for consideration of the Apex Court was whether, in a case where the driver, owner and the insurer of motorcycle No.RJ-29/2M- 9223 involved in an accident and whose rider was negligent are not joined as parties to the claim petition, and the claim petition was filed only against the owner and the insurer of motorcycle bearing No.RJ-02/SA-7811, which was ridden by the deceased himself and the deceased being in the shoes of the owner of the vehicle ridden by himself, whether the insurer of the vehicle driven by the deceased himself would be liable to pay the compensation under Section 163A of the Motor Vehicles Act? Another question was whether the deceased not being a third party to motorcycle bearing No.RJ-02/SA-7811, being in the shoes of the owner can maintain the claim under Section 163A of the Act from the owner of the said vehicle?
43. In Ramkhiladi, the Apex Court noticed that, in the award passed by the the Tribunal, while answering Issue No.2 [Whether the deceased - rider was riding motorcycle MACA No.3972 of 2019(B) -46- bearing No.RJ-02/SA-7811 being in employment of the owner of the said vehicle, in his interest or with his permission/knowledge?] there is no specific finding whether the deceased - rider was in employment of the respondent - owner or not. Even otherwise, no evidence was led by the claimants to prove that the deceased - rider was in employment of the respondent - owner. Despite the above, while answering Issue No.4 there is some observation made by the Tribunal that the deceased - rider was in employment of the respondent - owner, which is not supported by any evidence on record. Under the circumstances, the deceased - rider cannot be said to be in employment of the respondent - owner and, therefore, he can be said to be permissible user and/or borrower of motor vehicle owned by the respondent - owner.
44. In Ramkhiladi, the Apex Court noticed that, an identical question came to be considered in Ningamma [(2009) 13 SCC 710]. In that case, the deceased was riding a motorcycle which was borrowed from its real owner and met with an accident by dashing against a bullock cart, i.e., without involving any other vehicle. The claim petition was MACA No.3972 of 2019(B) -47- filed under Section 163A of the Act, by the legal representatives of the deceased, against the real owner of the motorcycle, which was being driven by the deceased. To that, the Court has observed and held that, since the deceased has stepped into the shoes of the owner of the vehicle, Section 163A of the Act cannot apply, wherein the owner of the vehicle himself is involved. Consequently, it was held that the legal representatives of the deceased could not have claimed compensation under Section 163A of the Act.
45. In Ramkhiladi the Apex Court opined that the claimants could have even claimed compensation and/or filed the claim petition under Section 163A of the Act against the driver, owner and insurer of the offending vehicle, i.e., motorcycle bearing No.RJ-29/2M-9223, the deceased being a third party with respect to the offending vehicle. However, no claim under Section 163A of the Act was filed against the driver, owner and/or insurer of motorcycle bearing No.RJ- 29/2M-9223. It is an admitted position that the claim under Section 163A of the Act was only against the owner and the insurer of motorcycle bearing No.RJ-02/SA-7811 which was borrowed by the deceased from the respondent - owner. MACA No.3972 of 2019(B) -48- Therefore, applying the law laid down in the case of Ningamma, and as the deceased has stepped into the shoes of the owner of motorcycle bearing No.RJ-02/SA-7811, as rightly held by the High Court, the claim petition under Section 163A of the Act against the owner and insurer of motorcycle bearing No.RJ-02/SA-7811 shall not be maintainable.
46. In Ramkhiladi the Apex Court held that, in a claim under Section 163A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim is sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned. It is also true that the claim petition under Section 163A of the Act is based on the principle of no fault liability. However, at the same time, the deceased has to be a third party and cannot maintain a claim under Section 163A of the Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner and he cannot maintain a claim under Section 163A of the Act against the owner and insurer of motorcycle bearing No.RJ-02/SA-7811. The parties are MACA No.3972 of 2019(B) -49- governed by the contract of insurance and under the contract of insurance the liability of the insurance company would be qua third party only. The deceased cannot be said to be a third party with respect to the insured vehicle bearing No.RJ- 02/SA-7811. There cannot be any dispute that the liability of the insurance company would be as per the terms and conditions of the contract of insurance. As held in the case of Dhanraj [(2004) 8 SCC 553], an insurance policy covers the liability incurred by the insured in respect of death of or bodily injury to any person (including an owner of the goods or his authorised representative) carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle. In the said decision, it is further held that Section 147 does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle. In view of the above and for the reasons stated above, as the claim under Section 163A of the Act was made only against the owner and insurer of the vehicle which was being driven by the deceased himself as borrower of the vehicle from the owner of the vehicle and he would be in the shoes of the owner, the High Court has rightly observed and MACA No.3972 of 2019(B) -50- held that such a claim was not maintainable and the claimants ought to have joined and/or ought to have made the claim under Section 163A of the Act against the driver, owner and/or the insurer of the offending vehicle, i.e., vehicle bearing No.RJ-29/2M-9223 being a third party to the said vehicle.
47. In Ramkhiladi, it was contended before the Apex Court that, in a claim under Section 163A of the Act mere use of the vehicle is enough and despite the compensation claimed by the heirs of the owner of the motorcycle which was involved in the accident resulting in his death, the claim under Section 163A of the Act would be maintainable. The Apex Court held that, the said contention cannot be accepted, in view of the decision in Rajni Devi [(2008) 5 SCC 736]. In Rajni Devi, it has been specifically observed and held that the provisions of Section 163A of the Act cannot be said to have any application with regard to an accident wherein the owner of the motor vehicle himself is involved. After considering the decisions in Oriental Insurance Company Ltd. v. Jhuma Saha [(2007) 9 SCC 263], Dhanraj v. New India Assurance Company Ltd. [(2004) 8 SCC MACA No.3972 of 2019(B) -51- 553], National Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700] and Premkumari v. Prahlad Dev [(2008) 3 SCC 193], it is ultimately concluded that the liability under Section 163A of the Act is on the owner of the vehicle, as a person cannot be both, a claimant as also a recipient and, therefore, the heirs of the owner could not have maintained the claim in terms of Section 163A of the Act. It is further observed that, for the said purpose, only the terms of the contract of insurance could be taken recourse to. In National Insurance Co. Ltd. v. Ashalata Bhowmik [(2018) 9 SCC 801], it is specifically held that the parties shall be governed by the terms and conditions of the contract of insurance. Therefore, as per the contract of insurance, the insurance company shall be liable to pay compensation to a third party and not to the owner, except to the extent of Rs.1,00,000/- as per the terms of the contract of insurance [personal accident cover of owner-cum-driver], the rider being in the shoes of the owner of the vehicle
48. In Ningamma [(2009) 13 SCC 710], after referring to the judgment in Rajni Devi [(2008) 5 SCC 736], the Apex Court held that, Section 163A of the Motor MACA No.3972 of 2019(B) -52- Vehicles Act cannot be said to have any application in respect of an accident wherein the owner of the motor vehicle himself is involved. The liability under Section 163A of the Act is on the owner of the vehicle. So a person cannot be both, a claimant as also a recipient, with respect to the claim. A person who borrowed motor vehicle from its real owner, who was authorised to drive the said vehicle by its owner, would step into the shoes of the owner of that vehicle. Therefore, the legal representatives of the deceased who have stepped into the shoes of the owner of the motor vehicle could not have claimed compensation under Section 163A of the Act.
49. The law laid down in Ningamma has been reiterated by the Apex Court in Ramkhiladi [(2020) 2 SCC 550]. In Ramkhiladi the Apex Court held that, in a claim under Section 163A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim is sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned. Though a claim petition under Section 163A of the Act is based on the principle of no fault liability, the deceased has to be a third party, and a MACA No.3972 of 2019(B) -53- claim under Section 163A of the Act cannot be maintained against the owner/insurer of the vehicle which was borrowed by the deceased, as he will be in the shoes of the owner. In Ramkhiladi the Apex Court has also reiterated the law laid down in Dhanraj [(2004) 8 SCC 553] that Section 147 of the Act does not require an insurance company to assume risk for death or bodily injury to the owner of the vehicle.
50. In the instant case, the accident occurred on 04.01.2012, while the deceased was riding the motorcycle owned by the 3rd respondent and insured with the appellant. At the place of accident, the motorcycle skidded and the deceased fell down, who sustained fatal injuries. No other motor vehicle was involved in the accident. The deceased, who borrowed the motorcycle from the 3 rd respondent owner, who was authorised to ride the said vehicle by its owner, stepped into the shoes of the owner of that vehicle. By taking Ext.B2 'act only' policy the 3 rd respondent owner only fulfilled his statutory obligation, as contained in Section 147 of the Motor Vehicles Act, which does not require an insurer to assume risk for death or bodily injury to the owner of the vehicle. Therefore, respondents 1 and 2/claimants, who are MACA No.3972 of 2019(B) -54- the mother and sister of the deceased, could not have claimed compensation under Section 163A of the Motor Vehicles Act.
In the result, this appeal is allowed by setting aside the impugned award passed by the Additional Motor Accidents Claim Tribunal, Palakkad, thereby dismissing O.P.(MV) No.1268 of 2016 as not maintainable under Section 163A of the Motor Vehicles Act. No order as to costs.
Sd/-
ANIL K. NARENDRAN JUDGE bpr