In UNITED INDIA INSURANCE CO. LTD. vs SUNIL KUMAR & ANR, unable to agree with the reasoning and the conclusion of a two judge bench of this Court in National Insurance Company Limited vs. Sinitha and others, a coordinate bench of the Supreme Court by order dated 29th October, 2013 has referred the instant matter for a resolution of what appears to be the following question of law.
"Whether in a claim proceeding under Section 163 A of the Motor Vehicles Act, 1988 it is open for the Insurer to raise the defence/plea of negligence?”
In Sinitha's case (supra), a two judge bench of this Court understood the scope of Section 163A of the Act to be enabling an Insurer to raise the defence of negligence to counter a claim for compensation.
The principal basis on which the conclusion in Sinitha's case (supra) was reached and recorded is the absence of a provision similar to sub-section (4) of Section 140 of the Act in Section 163A of the Act. Such absence has been understood by the Bench to be a manifestation of a clear legislative intention that unlike in a proceeding under Section 140 of the Act where the defence of the Insurer based on negligence is shut out, the same is not be the position in a proceeding under Section 163A of the Act.
The Supreme Court in this instance while referring to Deepal Girishbhai Soni and others vs. United India Insurance Co. Ltd., Baroda and Oriental Insurance Co. Ltd. vs. Hansrajbhai V. Kodala and other said, "As observed in Hansrajbhai V. Kodala (supra) 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 Compensation payable thereunder, as under the repealed provisions, continued to be on the basis of no fault liability though at an enhanced rate which was further enhanced by subsequent amendments.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 163-A, 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 any reference to fault liability.
And the court concluded 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.
"Whether in a claim proceeding under Section 163 A of the Motor Vehicles Act, 1988 it is open for the Insurer to raise the defence/plea of negligence?”
In Sinitha's case (supra), a two judge bench of this Court understood the scope of Section 163A of the Act to be enabling an Insurer to raise the defence of negligence to counter a claim for compensation.
The principal basis on which the conclusion in Sinitha's case (supra) was reached and recorded is the absence of a provision similar to sub-section (4) of Section 140 of the Act in Section 163A of the Act. Such absence has been understood by the Bench to be a manifestation of a clear legislative intention that unlike in a proceeding under Section 140 of the Act where the defence of the Insurer based on negligence is shut out, the same is not be the position in a proceeding under Section 163A of the Act.
The Supreme Court in this instance while referring to Deepal Girishbhai Soni and others vs. United India Insurance Co. Ltd., Baroda and Oriental Insurance Co. Ltd. vs. Hansrajbhai V. Kodala and other said, "As observed in Hansrajbhai V. Kodala (supra) 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 163-A, 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 any reference to fault liability.
And the court concluded 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.
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