Allahabad High Court
Shriram General Insurance Co. Ltd vs Asif And 7 Others on 18 February, 2020
Equivalent citations: AIRONLINE 2020 ALL 576
Author: Vivek Agarwal
Bench: Vivek Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 53 AFR Case :- FIRST APPEAL FROM ORDER No. - 2434 of 2018 Appellant :- Shriram General Insurance Co. Ltd Respondent :- Asif And 7 Others Counsel for Appellant :- Pawan Kumar Singh Counsel for Respondent :- Ram Singh Hon'ble Vivek Agarwal,J.
Heard Sri Pawan Kumar Singh, learned counsel for the appellant and Sri Ram Singh, learned counsel for the respondents.
This appeal has been filed by the insurance company being aggrieved by award dated 21.08.2014 passed by learned Motor Accident Claims Tribunal/Additional District Judge, Court No. 1, Aligarh on the following grounds namely:-
(i) That claim petition was filed under the provisions of Section 163-A of the Motor Vehicles Act and therefore, tribunal was bound to follow the provisions contained in schedule 2 of the Act.
(ii) That learned claims tribunal arbitrarily made a deduction of 1/5th from the income of the deceased whereas as per the second schedule only 1/3rd deduction is permissible.
(iii) That learned claims tribunal has added 50% towards future prospects whereas no future prospect could have been awarded in a case filed under Section 163-A. Learned counsel for the appellant- insurance company has place reliance on the judgment of the Hon'ble Supreme Court in case of Deepal Girishbhai Soni and others vs. United India Insurance Co. Ltd., Baroada as reported in AIR 2004 SC 2107 wherein it has been held that by reason of Section 163-A, 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. It has been further held that a provision of law providing for compensation is presumed to be final in nature unless a contra is indicated, in the statutes either expressly or by necessary implication. Similarly, reliance has been placed on the judgment of United India Insurance Co. Ltd. vs. Kaushalya Devi and others decided by High Court of Delhi in M.A.C. Appeal No. 898 of 2006 decided on 14.03.2007 and as reproduced from MANU/DE/7345/2007 wherein it has been held that the tribunal cannot assess compensation in excess of annual income of Rs. 40,000/- as stipulated in the second schedule to the Motor Vehicles Act, 1988. Reliance is also placed on the judgment of Hon'ble Supreme Court in case of United Indian Insurance Co. Ltd. vs. Sunil Kumar and others as reported in 2018 (1) TAC 3 (SC) wherein it has been held that grant of compensation under Section 163-A on the basis of structured formula is in nature of final award and adjudication thereunder is required to be made without any requirement of any proof of negligence of driver/owner of vehicle involved.
Sri Ram Singh, learned counsel for the respondent-claimants, on the other hand, submits that he is not pressing para-1 of his cross-objection, but in the light of the law laid down in case of Magma General Insurance Co. Ltd. vs. Nanu Ram @ Chuhru Ram and others as reported in 2019 (132) ALR 745 (SC), each of the claimants is entitled to loss of consortium and learned claims tribunal has erred in not awarding consortium to each of the claimants. It is also submitted that claims tribunal erred in reducing the income from Rs. 3,500/- per month to Rs. 3,000/- per month and in fact, it should have restricted the income to Rs. 40,000/- because even if minimum wages are taken into consideration on the date of the accident i.e., 28.01.2012, then for a truck driver, minimum wages were to the tune of more than Rs. 4,000/- per month. He supports remaining award and submits that no further indulgence is required. He further submits that even in a claim petition under Section 163-A, future prospects can be awarded and in support of his contention, he places reliance on Division Bench's judgment of this Hon'ble Court in case of National Insurance Company Ltd. vs. Smt. Gayatri Devi and others as reported in 2015 (1) AICC 580, wherein Insurance Company had challenged the award, wherein Division bench of this Court held that even in a claim under Section 163-A, future prospects can be awarded in as much as it is open to the tribunal to consider granting compensation under other heads as specified under Rule 220-A of the U.P. Rules, 1998.
Similarly, reliance has been placed on another Division Bench judgment of this Court in case of the Oriental Insurance Company Ltd. vs. Sadhna and others as reported in 2015 (2) AICC 1089 where Hon'ble Division Bench of this High Court held that schedule was amended more than two decades ago and tribunal has determined monthly income to be Rs. 4,000/- which is justified in holding that there is no scope for interference and dismissed the appeal. Referring to the judgment of Hon'ble Supreme Court in case of R.K. Malik and another vs. Kiran Pal and others as reported in 2009 TAC (3) 1 (SC) which is a case of 29 school children dying in an accident. It is held that it is appropriate to grant Rs. 75,000/- to each of the claimants as compensation for future prospect of the children over and above awarded by the High Court.
A perusal of judgment in case of R.K. Malik (supra) noted that compensation has been awarded by the tribunal as well as the High Court on the basis of second schedule and relevant multiplier under the Act. Thereafter, Supreme Court noted that as far as non-pecuniary damages are concerned, the tribunal had not awarded any compensation under the head of non-pecuniary damages, however, in appeal, High Court elaborately discussed this aspect of the matter and awarded non-pecuniary damages of Rs. 75,000/-. However, in para 16, it is observed as under:-
"...........16. Then, how does one calculate pecuniary compensation for loss of future earnings and loss of dependency of the parents, grand parents etc. in the case of non-working student? Under the Second Schedule of the Act in case of a non earning person, his income is notionally estimated at Rs. 15,000/- per annum. The Second Schedule is applicable to claim petitions filed under Section 163 A of the Act. The Second Schedule provides for the multiplier to be applied in cases where the age of the victim was less than 15 years and between 15 years but not exceeding 20 years. Even when compensation is payable under Section 166 read with 168 of the Act, deviation from the structured formula as provided in the Second Schedule is not ordinarily permissible, except in exceptional cases. [see Abati Bezbaruah v. Dy. Director General, Geological Survey of India, (2003) 3 SCC 148); 2003 (2) T.A.C. 18; United India Insurance Company Ltd. vs. Patricia Jean Mahajan, (2002) 6 SCC 281: 2002 (2) T.A.C. 335 and U.P. State Road Transport Corp. v. Trilok Chandra, (1996) 4 SCC 362 : 1996 (2) T.A.C. 286.
In First Appeal From Order No. 199 of 2017, National Insurance Co. Ltd., Lucknow vs. Luvkush and others, the Division Bench of this Hon'ble High Court has visited the aspect of rule making wherein Rule 220-A of U.P. Rules, 1998 too has been discussed.
Relying on different sections of the Motor Vehicles Act, it has been pointed out that each of the section of the Motor Vehicles Act confers power of making rules upon State Government for the purpose of carrying into effect provisions of particular chapter/ chapters. In this regard, Section 28 confers power of making rules upon State Government for the purpose of carrying into effect provisions of Chapter II other than the matters specified in Section 27. Chapter II, contemplates provisions of licensing of drivers of motor vehicles. In sub-section (2) of Section 28 certain specific subjects are mentioned but the same are also in the context of licensing of connected matters therewith.
Similarly, Section 38 confers power upon State Government to make rules for the purpose of carrying into effect provisions of Chapter III. Sub-section (2) specifies certain subjects which also relates to matters concerned with Chapter III which deals with provisions of licensing of conductors of stage carriages.
Then comes Section 65 which confers similar power upon State Government for framing rules for carrying into effect the provisions of Chapter IV relating to registration of motor vehicles.
Next is Section 95 which confers power upon State Government to frame rules as to Stage Carriages and Contract Carriages and conduct of passengers in such vehicles. This Section 95 is part of Chapter V which contains provisions relating to control of transport vehicles.
Section 96 confers power upon State Government to frame rules for the purpose of carrying into effect, provisions of Chapter V. Section 107 confers power to frame rule for carrying into effect the provisions of Chapter VI which deals with special provisions relating to State transport undertakings.
Section 111 confers power upon State Government to frame rules regulating construction, equipment and maintenance of motor vehicles and Trailers, with respect to all matters other than the matters specified in sub-section (1) of Section 110. This Section 111 is part of Chapter VII which contains provisions of construction, equipment and maintenance of motor vehicles.
Section 138 confers power to frame rules upon State Government for the purpose of carrying into effect the provisions of Chapter VIII which contains provisions relating to control of traffic.
Section 176 is the only relevant provision which takes into its ambit Sections 165 to 174 which are part of Chapter XII relating to Claims Tribunal. Section 176 reads as under:
"176. Power of State Government to make rules.--A State Government may make rules for the purpose of carrying into effect the provisions of sections 165 to 174, and in particular, such rules may provide for all or any of the following matters, namely:-
(a) the form of application for claims for compensation and the particulars it may contain, and the fees, if any, to be paid in respect of such applications;
(b) the procedure to be followed by a Claims Tribunal in holding an inquiry under this Chapter;
(c) the powers vested in a Civil Court which may be exercised by a Claims Tribunal;
(d) the form and the manner in which and the fees (if any) on payment of which an appeal may by preferred against an award of a Claims Tribunal; and
(e) any other matter which is to be, or may be, prescribed."
Lastly, it is Section 213 which is part of Chapter XIV, i.e., "Miscellaneous". Section 213 confers power upon State Government to establish a Motor Vehicles Department and appoint officers therefor as it thinks fit.
Thereafter, Para 82, 83 and 84 reads as under:-
"................82. A delegated/ subordinate legislation neither can create substantive rights and obligations nor can enhance efficacy or reduce normal functional ambit of principal legislation. A Full Bench of this Court in Chandra Kumar Sah and another Vs. The District Judge and others, AIR 1976 All 328 held that when a rule framing power is conferred upon State Government to make rules to carry out the purposes of this Act, it does not give carte blanche to enact independent legislation. The expression "to carry out the purposes of the Act" means to enable its provisions to be effectively administered. They connote that rules are to be confined to the same field of operation as that marked out by Act itself. Court further observed in para 11 as under:
"11. .... This power will authorise the provision of subsidiary means of carrying into effect what is incidental to the execution of its specific provisions. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislature has adopted to attain its ends Shanahan v. Scott (96 Com WLR 245). In other words a subordinate law cannot substantially modify the scheme or policy of the Act." (emphasis added)
83. In Global Energy Limited and another Vs. Central Electricity Regulatory Commission, 2009(15) SCC 570, Court in para 25 of judgment, with regard to power of delegated legislation, said as under:
"25. It is now a well settled principle of law that the rule making power "for carrying out the purpose of the Act" is a general delegation. Such a general delegation may not be held to be laying down any guidelines. Thus, by reason of such a provision alone, the regulation making power cannot be exercised so as to bring into existence substantive rights or obligations or disabilities which are not contemplated in terms of the provisions of the said Act." (emphasis added)
84. In Kunj Behari Lal Butail vs. State of H.P., 2000(3) SCC 40, a three Judge Bench of Court, said:
"14. We are also of the opinion that a delegated power to legislate by making rules "for carrying out the purposes of the Act" is a general delegation without laying down any guidelines; it cannot be so exercised as to bring into existence substantive rights or obligations or disabilities not contemplated by the provisions of the Act itself."
Therefore, it is apparent that Rule 220-A of the U.P. Motor Vehicles Rules, 1998 has been framed under Section 176 of the Motor Vehicles Act.
Section 176 of the Motor Vehicles Act deals with the Power of State Government to make rules for the purpose of carrying into effect the provisions of Sections 165 to 174. Thus, Section 163(A), which is part of Chapter 11 has not been included in the ambit of rule making under Section 176 and therefore, Rule 220-A will not be applicable to the statutory provisions contained in Section 163-A of the Motor Vehicles Act which specifically provides for special provisions as to payment of compensation on structured formula basis. It clearly provides that compensation as indicated in the second schedule is to be paid.
Recently, vide Ministry of Road and Transport notification dated May 22nd, 2018, Second Schedule under Section 163-A of the Motor Vehicles Act, 1988 has been amended and it has held as under:-
"1. (a) Fatal Accidents:
Compensation payable in case of Death shall be five lakh rupees.
(b) Accidents resulting in permanent disability:
Compensation payable shall be = [Rs. 5,00,000/- × percentage disability as per Schedule I of the Employee's Compensation Act, 1923 (8 of 1923)] :
Provided that the minimum compensation in case of permanent disability of any kind shall not be less than fifty thousand rupees.
(c) Accidents resulting in minor injury:
A fixed compensation of twenty five thousand rupees shall be payable:
2. On and from the date of 1st day of January, 2019 the amount of compensation specified in the clauses (a) to (c) of paragraph (1) shall stand increased by 5 per cent annually".
3. This notification shall come into form on the date of its publication in the Official Gazette."
Recently, Hon'ble Supreme Court in case of Civil Appeal No. 9393 of 2019, Ramkhiladi and others vs. United India Insurance Co. Ltd. and others decided on 07.01.2020 (AIR 2020 SC 527) wherein it has been held that this amendment in second schedule is prospective and not retrospective.
In view of such facts, it is apparent that compensation in terms of a claim under Section 163-A will not include future prospects and this aspect of the matter as to the applicability of Rule 220-A has not been considered in case of National Insurance Co. Ltd. vs. Gayatri Devi and others as well as in case of Oriental Insurance Co. Ltd. vs. Sadhna and others. As far as judgment of Hon'ble Supreme Court is concerned, R.K. Mailik is not a case decided in reference to Section 163-A. In fact, Hon'ble Supreme Court in case of Raj Rani and others vs. Oriental Insurance Co. Ltd. and others as reported in MACD 2009 SC 345 in para-12 has observed that the counsel may be correct to some extent that for the purpose of computation of the total amount of compensation under Section 163-A of the Motor Vehicles Act, the future prospects may not be of much relevance. Same is the ratio of the law laid down by Madhya Pradesh High Court in case of United India Insurance Co. Ltd. vs. Rajkumari and others as decided in M.A. No. 476 of 2012 on 25.02.2019. This when read in terms of para 16 of the judgment of Hon'ble Supreme Court in case of R.K. Malik vs. Kiran Pal, then it is crystal clear that Supreme Court has also observed that in a claim under Section 163(A) of the Motor Vehicles Act, 1988, compensation is to be awarded on structured formula basis.
In view of such facts, this Court is of the opinion that arguments put-forth by the learned counsel for the respondent in support of their entitlement to payment of compensation in deviation of the provisions contained in second schedule is not sustainable, it deserves to be rejected and is rejected.
As far as the contention of the counsel for the claimants that each of the claimant is entitled to loss of consortium in the light of the law laid down by Hon'ble Supreme Court in case of Magma General Insurance Co. Ltd. vs. Nanu Ram @ Chuhru Ram and others (supra) is concerned, ratio of that judgment will not be applicable to the facts of the present case inasmuch as that was a case under the provisions of Sections 166, 168 and 173 of the Motor Vehicles Act and not under Section 163-A of the Motor Vehicles Act.
In view of such legal pronouncements, I have no hesitation to hold that tribunal erred in passing the impugned award by adopting incorrect and faulty methodology of making 1/5th deduction and adding 50% towards future prospects. Similarly, it erred in arbitrarily treating the income of the deceased at Rs. 3,000/- per month against the submission of the appellant that the income of the deceased was to the tune of Rs. 3,500-4,000/- per month. Therefore, as per the provisions contained in schedule 2 of the Motor Vehicles Act, compensation will be recomputed as under; annual income Rs. 40,000/-, 1/3rd to be deducted towards personal expenses, therefore, dependency will come out to Rs. 26,667/- on which a multiplier of 16 will be applicable as the victim was between the age of 35-40 years, taking total compensation to Rs. 4,26,672/-. Over and above, other claimants are entitled to a sum of Rs. 2,000/- under the head of funeral expenses, a sum of Rs. 5,000/- under the head of loss of consortium as one of the beneficiary is wife of the deceased and Rs. 2,500/- towards the loss of estate. Besides this, claimants are entitled to a sum of Rs. 10,556/- towards the amount spent by them on treatment of the deceased as has been awarded by learned claims tribunal. Thus, total compensation will come out to Rs. 4,46,728/- in place of Rs. 7,21,756/- (seven lakhs twenty one thousand seven hundred and fifty six rupees) awarded by learned claims tribunal.
This amount will be appropriated in the same ratio as has been directed by learned claims tribunal. The claim amount will carry interest @ 7% from the date of filing of the claim petition till the date of actual payment.
In above terms appeal is disposed off.
Order Date :- 18.2.2020 Vikram/-