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Eshwarappa @ Maheshwarappa and Anr vs. C. S. Gurushanthappa and Anr dated 2010-08-18

                                                       REPORTABLE

 

                     IN THE SUPREME COURT OF INDIA

                      CIVIL APPELLATE JURISDICTION

 

                      CIVIL APPEAL NO. 7049 OF 2002

 
Eshwarappa @ Maheshwarappa and Anr.                        Appellants
 
                                 Versus
 
C. S. Gurushanthappa and Anr.                              Respondents
 
 
 
                                 JUDGMENT
 
AFTAB ALAM,J.
 

1.    A certain Basavaraj was the driver of a privately owned car. In the

 

night of October 28, 1992 he took out the car for a joyride and along with

 

five persons, who were his neighbours, proceeded for the nearby Anjaneya

 

temple for offering pooja. On way to the temple the car met with a fatal

 

accident in which Basavaraj and four other occupants of the car died; the

 

fifth passenger sustained injuries but escaped death. One of the persons

 

dying in that motor accident was Nagaraj, whose parents are the appellants

 
before this Court.
 

2.    The heirs and legal representatives of the deceased driver, Basavaraj

 

filed a claim for compensation under the Workmen's Compensation Act,

 
1923. They got nothing. The Commissioner under the Workmen's

                                                                              2

 
 

Compensation Act found and held that the accident did not take place in

 

course of employment and rejected the claim for compensation.

 

3.    The heirs of the four occupants of the car, dying in the accident

 

(including the present appellants) and the fifth passenger suffering injuries in

 

the accident sought compensation before the Motor Accidents Claims

 
Tribunal. Their claims proved to be equally barren.
 

4.    The appellants took the matter in appeal before the High Court where

 

they were equally unsuccessful. They are now in appeal before this Court by

 
special leave.
 

5.    The counsel appearing on behalf of the appellants raised a very

 

limited issue. He submitted that in any event the appellants were entitled to

 

the `no fault compensation' as provided under section 140 of the Motor

 

Vehicles Act, 1988 but they were denied even that by the Tribunal for

 
reasons that are totally unsustainable in law.
 

6.    We are, therefore, required to see how and why the appellants were

 

denied compensation under section 140 of the Act and how far the denial

 

was justified. The appellants filed a claim petition (MVC 1404/92) before

 

the District Judge and MACT, Chitrandurga under section 166 of the Motor

 

Vehicles Act seeking compensation for the death of Nagaraj. The appellants'

 

petition, along with four other claim petitions (filed by the heirs of the other


                                                                               3

 
 

three occupants dying in that car accident and the fifth occupant who

 

suffered injuries in that accident), was disposed of by the Tribunal by a

 

common order dated May 9, 1996. From the order of the Tribunal, it appears

 

that in four of the five cases before it, including MVC 1404/92, IAs were

 

filed seeking interim compensation of rupees twenty five thousand

 

(Rs.25,000.00) only (as the law stood at that time) in terms of section 140 of

 

the Act. For some reason, however, no order was passed on the IAs and the

 

Tribunal proceeded to examine the claimants' claim on merits under section

 
166 of the Act.
 

7.    The Tribunal, in its order summarized the cases of each of the five

 

claimants separately, noting the facts peculiar to the four deceased and the

 

fifth injured occupant of the ill fated car. It also framed the issues arising in

 

each case separately. In regard to Nagaraj, the son of the appellants, it noted

 

that at the time of his death he was eighteen years old. According to the

 

appellants, he worked at a sweetmeat stall and earned rupees eight hundred

 

(Rs.800.00) only per month. He was going to Anjaneya temple in the car

 

being driven by Basavaraj and in the accident he died on the spot. The

 

appellants claimed compensation of rupees one lakh (Rs.1,00,000.00) only.

 

In his case the Tribunal framed four issues which are as under:


                                                                            4

 
 

      1. Whether the petitioners prove that Nagaraj died due to

 

         injuries sustained in a motor accident that occurred on

         28.10.92 at 11:45pm near Bheemasamudra Cross on

         Holalkere road due to rash and negligent driving of the car

         MYG 1624 by its driver?

      2. Whether the petitioners prove that they are the legal

 

         representatives of Nagaraj, the deceased and are entitled to

         compensation?

      3. What is the quantum of compensation to which the

 

         petitioners are entitled and from which of the respondents?

      4. Whether the respondents prove that the accident did not

         occur during the course of employment of the driver of the

         car MYG 1624 and that they are not vicariously liable to pay

         compensation?
 
 

8.    The first two issues in the case of Nagaraj, as in all the other cases,

 

were answered by the Tribunal in the affirmative. On issue no.3 appellant

 

no.1, the father of the deceased Nagaraj stated on oath that his son was aged

 

eighteen years and used to work in the hotel of one Siddappa who paid him

 

rupees thirty (Rs.30.00) only per day, but the Tribunal disbelieved him and

 

rejected his testimony. On the basis of the post mortem report, the Tribunal

 

held that Nagaraj, at the time of his death, was aged about fifteen years. It

 

further held that there was no evidence to show that at the time of his death

 

Nagaraj earned anything, pointing out that in paragraph 22 of the claim


                                                                           5

 
 

petition nothing material was mentioned about the loss of earning due to his

 

death. Then, rather gratuitously it fixed the amount of compensation at

 

rupees thirty thousand plus two thousand (Rs.30,000.00 + Rs.2,000.00)

 
observing as follows:
 

      "Hence the maximum compensation that can be granted to the

      petitioner herein would be only about Rs.30,000-00 as being

      just and reasonable and a sum of Rs.2,000-00 toward funeral

      and obsequious expenses etc. and therefore the petitioners are

      granted sum total compensation amount of Rs.32,000-00."

 

9.    Having, thus, put the worth of the life of Nagaraj at rupees thirty

 

thousand (Rs.30,000.00) only the Tribunal proceeded to consider whether

 

the appellants were entitled to receive even this amount from the owner of

 

the car or the insurance company (second part of issue no.3 and issue no.4).

 

It held that neither the owner of the car nor the insurance company was

 

liable to pay anything to any of the claimants, including the appellants,

 

because Basavaraj had taken out the car of his employer unauthorisedly and

 

against his express instructions and had caused the accident by driving the

 

car very rashly after consuming liquor. At the time of accident the car had

 

been taken completely away from the control of its owner. In a sense it was

 

stolen by the driver, even though temporarily. The accident was, thus,

 

completely outside the insurance policy. No compensation was, therefore,

 

payable to any of the claimants under section 166 of the Motor Vehicles Act.


                                                                              6

 
 

10.   Up to this stage no exception can be taken to the view taken by the

 

Tribunal. But surprisingly the Tribunal also rejected the express prayer made

 

on behalf of the appellants and other claimants to at least grant the `no fault

 

compensation' as provided under section 140 of the Act. The Tribunal

 

discussed the issue over six pages in its judgment before turning down the

 

claim. It seems to have taken the view, that had the claim for `no fault

 

compensation' been made at the beginning of the proceeding, it might have

 

considered it favourably. But the claim was pressed at a belated stage when

 

it was considering the claim for compensation under section 166 of the Act

 

and more importantly had found that the owner of the car had no

 

responsibility for the accident. In this connection, the Tribunal observed as

 
follows:
 

      "However, in these cases as already referred to above, if at the

      initial stage itself if the learned counsel Sri. M. Gnana Swamy

      had pressed the Tribunal to pass interim award on I.A.I in all

      the four cases, then the I.A.I filed in all four cases would have

      been definitely allowed and this Tribunal would have directed

      both the respondents 1 & 2 and more particularly respondent

      No.2 to deposit the interim compensation amount leaving open

      the liability aspect at the fag end of these cases i.e., at the

      arguments stage. Now that stage is already over and as such

      now this Tribunal has to consider equally as to whether at this

      stage as per the principle of no fault liability under s.140 of the

      Motor Vehicles Act, 1988, these petitioners are entitled for the

      interim in compensation amount."

      ...................


                                                                               7

 
 

      "Now as regards the no fault liability as already referred to

      above, perhaps the petitioners would have been granted the

      interim compensation amount at the initial stage, but now it

      cannot be done, since the merits of the cases are being dealt

      with after hearing the arguments at the final stage and the main

      cases are being disposed of on merits as such."

      .........................

      "Hence in view of my finding that the car was being used

     totally outside the course of the employment of the driver of the

      car and totally without the knowledge and consent of the 1st

      respondent, I hold that even as regards this no fault liability

      claim also, the 1st respondent or for the matter 2nd respondent

      amount to any of the petitioner's hearing. Hence this being the

      position, I am constrained to observe and hold that although as

      per the available evidence on record the petitioners are entitled

      for compensation amount as granted to them, in view of my

      earlier finding on issue No.3 in all the petitions, but all the same

      these petitions have got to be dismissed on account of the fact

      that neither the first respondent nor the second respondent is

      liable to pay compensation amount to any other petitioners

      herein."
 

11.   The appellants took the matter in appeal but the High Court in its brief

 
order did not at all advert to this aspect of the matter.
 

12.   Coming back to the order passed by the Tribunal, we are completely

 

unable to appreciate the reasons assigned for denying the appellants the `no

 

fault compensation' as provided under section 140 of the Act. The Tribunal

 

was gravely in error in taking the view that a claim for compensation under

 

section 140 of the Act can succeed only in case it is raised at the initial stage

 

of the proceedings and further that the claim must fail if the accident had

 

taken place by using the car without the consent or knowledge of its owner.


                                                                             8
 
 

Section 140 is the first section of chapter X of the Act. It is a small chapter

 

consisting of only five sections (from 140 to 144) and has the marginal

 

heading "Liability without Fault in Certain Cases". Section 140 reads as

 
under:
 

         "140. Liability to pay compensation in certain cases on the

         principle of no fault.

         (1) 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.
 

         (2) The amount of compensation which shall be payable under

         sub-section (1) in respect of the death of any person shall be a

         fixed sum of fifty thousand rupees and the amount of

         compensation payable under that sub-section in respect of the

         permanent disablement of any person shall be a fixed sum of

         twenty-five thousand rupees.

 

         (3) 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.

 

         (4) A claim for compensation under sub-section (1) shall not be

         defeated by reason of any wrongful act, neglect or default of the

         person in respect of whose death or permanent disablement the

         claim has been made nor shall the quantum of compensation

         recoverable in respect of such death or permanent disablement

         be reduced on the basis of the share of such person in the

         responsibility for such death or permanent disablement.


                                                                                9

 
 
 

      (5) Notwithstanding anything contained in sub-section (2)

      regarding death or bodily injury to any person, for which the

      owner of the vehicle is liable to give compensation for relief, he

      is also liable to pay compensation under any other law for the

      time being in force:

 

             Provided that the amount of such compensation to be

      given under any other law shall be reduced from the amount of

      compensation payable under this section or under section

      163A."
 

On a plain reading of the provisions it is evident that all that is required to

 

attract the liability under section 140 is an accident arising out of the use of a

 

motor vehicle(s) leading to the death or permanent disablement of any

 

person. Sub-section (2) provides for a fixed amount as compensation. [In

 

case of death, currently it is rupees fifty thousand (Rs.50,000.00) only; at the

 

time the accident from which the appeal arises took place the fixed amount

 

in case of death was rupees twenty five thousand (Rs.25,000.00) only]. Sub-

 

section (3) provides that even though the death or permanent disablement

 

resulting from the motor accident might not be due to any wrongful act,

 

neglect or default of the owner of the vehicle, it would have no effect either

 

on his liability or on the amount of compensation. Sub-section (4)

 

conversely provides that the motor accident resulting in the death or

 

permanent disablement might be entirely due to the wrongful act, neglect or

 

default of the person in respect of whose death or permanent disablement the


                                                                            10

 
 

claim is made but that too would have no effect either on the right to receive

 

the compensation or the amount of compensation. Sub-section (5) which

 

begins with a non obstante clause makes it further clear that the liability

 

under section 140 is independent of the liability of the owner of the vehicle

 

to pay compensation under any other law for the time being in force. The

 

proviso to sub-section (5), of course, provides that the amount of

 

compensation under any other law would be reduced from the amount of

 

compensation payable under section 140 or under section 163A of the Act.

 

13.   Then there is section 141 which reads as under:

 

      "141. Provisions as to other right to claim compensation for

      death or permanent disablement.

      (1) The right to claim compensation under section 140 in

      respect of death or permanent disablement of any person shall

      be in addition to any other right, except the right to claim under

      the scheme referred to in section 163A (such other right

      hereafter in this section referred to as the right on the principle

      of fault) to claim compensation in respect thereof under any

      other provision of this Act or of any other law for the time

      being in force.
 

      (2) A claim for compensation under section 140 in respect of

      death or permanent disablement of any person shall be disposed

      of as expeditiously as possible and where compensation is

      claimed in respect of such death or permanent disablement

      under section 140 and also in pursuance of any right on the

      principle of fault, the claim for compensation under section 140

      shall be disposed of as aforesaid in the first place.

 

      (3) Notwithstanding anything contained in sub-section (1),

      where in respect of the death or permanent disablement of any

      person, the person liable to pay compensation under section 140


                                                                             11

 
 

      is also liable to pay compensation in accordance with the right

      on the principle of fault, the person so liable shall pay the first-

      mentioned compensation and-

 

             (a) if the amount of the first-mentioned compensation is

             less than the amount of the second-mentioned

             compensation, he shall be liable to pay (in addition to the

             first-mentioned compensation) only so much of the

             second-mentioned compensation as is equal to the

             amount by which it exceeds the first mentioned

             compensation;

 

             (b) if the amount of the first-mentioned compensation is

             equal to or more than the amount of the second-

             mentioned compensation, he shall not be liable to pay the

             second-mentioned compensation."

 

Sub-section (1) of section 141 makes the compensation under section 140

 

independent of any claim of compensation based on the principle of fault

 

under any other provision of the Motor Vehicles Act or under any other law

 

but subject to any claim of compensation under section 163A of the Act.

 

Sub-sections (2) and (3) further provide that even while claiming

 

compensation under the principle of fault (under section 166) one may claim

 

no fault compensation under section 140 and in that case the claim of no

 

fault compensation shall be disposed of in the first place and the amount of

 

compensation paid under section 140 would be later adjusted if the amount

 

payable as compensation on the principle of fault is higher than it.

 

14.   Finally, section 144 gives overriding effect to the provisions of

 
Chapter X. Section 144 reads as follows:

                                                                            12

 
 

      "144. Overriding effect.-The provisions of this Chapter shall

      have effect notwithstanding anything contained in any other

      provision of this Act or of any other law for the time being in

      force."
 

15.   Seen in isolation the above provisions might appear harsh,

 

unreasonable and arbitrary in as much as these create the liability of the

 

vehicle(s) owner(s) even where the accident did not take place due to any

 

wrongful act, neglect or default of the owner or owners of the vehicle or

 

vehicles concerned but entirely due to the wrongful act, neglect or default of

 

the person in respect of whose death or permanent disablement the claim has

 

been made but the above provisions must be seen along with certain

 

provisions of Chapter XI. Section 146 forbids the use of the vehicle in a

 

public place unless there is in force, in relation to the use of the vehicle, a

 

policy of insurance complying with the provisions of that chapter. Section

 

147 contains the provisions that are commonly referred to as `Act only

 

insurance'. The provisions of sections 146 and 147 are meant to create the

 

large pool of money for making payments of no fault compensation. Thus

 

the liability arising from section 140 would almost invariably be passed on

 

to the insurer to be paid off from the vast fund created by virtue of sections

 

146 and 147 of the Act unless the owner of the vehicle causing accident is

 
guilty of some flagrant violation of the law.

                                                                            13

 
 

16.   Seen thus, the provisions of chapter X together with sections 146 and

 

147 would appear to be in furtherance of the public policy that in case of

 

death or permanent disablement of any person resulting from a motor

 

accident a minimum amount must be paid to the injured or the heirs of the

 

deceased, as the case may be, without any questions being asked and

 
independently of the compensation on the principle of fault.
 

17.   The provisions of section 140 are indeed intended to provide

 

immediate succour to the injured or the heirs and legal representatives of the

 

deceased. Hence, normally a claim under section 140 is made at the

 

threshold of the proceeding and the payment of compensation under section

 

140 is directed to be made by an interim award of the Tribunal which may

 

be adjusted if in the final award the claimants are held entitled to any larger

 

amounts. But that does not mean, that in case a claim under section 140 was

 

not made at the beginning of the proceedings due to the ignorance of the

 

claimant or no direction to make payment of the compensation under section

 

140 was issued due to the over-sight of the Tribunal, the door would be

 

permanently closed. Such a view would be contrary to the legal provisions

 
and would be opposed to the public policy.
 

18.   In light of the discussions made above, we are unhesitatingly of the

 

view, that the Tribunal was completely wrong in denying to the appellant,


                                                                                      14

 
 

the compensation in terms of section 140 of the Act. We find and hold that

 

the appellant (as well as the other 3 claimants) were fully entitled to no fault

 

compensation under section 140 of the Act. We, accordingly, direct the

 

insurance company to pay to the appellant Rs.25,000/- along with simple

 

interest @ 6% p.a. from the date of the order of the Tribunal till the date of

 

payment. The other 3 claimants are not before this Court, but that is

 

presumably because they are too poor to come to this Court. Since, we have

 

allowed the claim of the appellants, there is no reason why this order should

 

not be extended to the other 3 claimants as well. We, accordingly, do so. The

 

insurance company is directed to make the payment as directed in this

 
judgment within 3 months.
 

19.   In the result, the appeal is allowed but with no order as to costs.

 
 
 
 

                                                  .....................................J

                                                  (AFTAB ALAM)

 
 
 
                                                 .......................................J

                                                    (R.M. LODHA)

New Delhi
August 18, 2010.

 


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