REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.  3538      OF 2009 (Arising out of SLP (C) No. 24236 of 2008)

Ningamma & Anr.                                                     ..…Appellants

Versus

United India Insurance Co. Ltd.                                .….Respondent

With

CIVIL APPEAL No.      3540          OF 2009 (Arising out of SLP (C) No. 25497of 2008)

JUDGMENT

Dr. Mukundakam Sharma, J.   

1. Leave granted.

2. Since both these appeals arise out of the same set of facts and  

involve similar questions of law, we propose to dispose of both  

these appeals by this common judgment.    

3. The present appeals arise out of a motor accident claim.  The  

claimant no. 1 and 2 are the wife and son respectively of the  

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deceased-Ramappa. On 09.09.2000, the deceased was traveling  

on Hero Honda Motor Cycle,  which he borrowed from its  real  

owner for going from Ilkal to his native place Gudur.  When the  

said  motor  cycle  was  proceeding  on  Ilkal-Kustagl,  National  

Highway, a bullock cart proceeding ahead of the said motor cycle  

carrying  iron-sheet  suddenly  stopped  and  consequently  

deceased-Ramappa who was proceeding on the said motor cycle  

dashed  against  it.   Consequent  to  the  aforesaid  incident,  he  

sustained fatal injuries over his vital part of body and on the way  

to  Govt.  Hospital,  Ilkal,  he  died.  The  doctor  of  the  general  

hospital,  Ilkal  conducted  post  mortem examination  over  dead  

body of the deceased and gave his opinion that the death of the  

deceased was caused due to hemorrhage and shock due to the  

injury  to  his  liver.  The  aforesaid  motor  cycle  in  which  the  

deceased was traveling at the time of accident was insured with  

the Insurance Company, namely, the United India Insurance Co.  

Ltd. and the said motor cycle was owned by one Paranagouda.

4. On 04.10.2000 Appellant No. 1, the wife of the deceased and  

Appellant No. 2 – minor son of the deceased filed a claim petition  

under Section 163-A of Motor Vehicles Act, 1988 (in short  ‘the  

MVA’) before the Motor Accident Claims Tribunal No. VI, Bijapur,  

Karnataka (in short ‘the Tribunal’)  being M.V.C. No. 896/2000  

praying  for  compensation  of  Rs.  8,10,000/-  along  with  future  

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interest  etc.  on  the  ground  that  at  the  time  of  accident  the  

deceased  was  a  healthy  person,  aged  about  32  years  and  

engaged in agriculture, earning Rs. 5,000/- per month and was  

the sole earning member in their family.  

5. The  Tribunal  received  evidence  and  tested  the  claim.  The  

Tribunal  held  that  in  absence  of  definite  and  cogent  proof  of  

income, the income of the deceased was to be considered as Rs.  

60/- per day as per the provisions of the Minimum Wages Act.  

Accordingly,  the  monthly  income  of  the  deceased  was  

ascertained as Rs. 1,800/- and yearly income as Rs. 21,600/-  

from which 1/3 was to be deducted leaving thereby Rs. 14,400/-  

as  the  net  income  of  the  deceased.  Since  the  age  of  the  

deceased  was  found  to  be  in  between  30  to  35  years,  the  

relevant multiplier to be applied was ‘17’.

6. Accordingly,  the  Tribunal  under  its  award  dated  09.02.2005  

partly allowed the claim petition filed by the appellants holding  

that  the  said  appellants  are  entitled  to  receive  a  total  

compensation amount of Rs. 2,59,800/-  along with interest at  

the rate of 8% p.a. from the respondent – Insurance Company.  

It is required to be stated at this stage that compensation as  

determined by the Tribunal was paid and received by the legal  

representatives  of  the  deceased,  namely  the  widow  and  the  

minor son.

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7. Aggrieved  by  the  said  decision,  the  Insurance  Company  

preferred  an  appeal  being  Miscellaneous  First  Appeal  No.  

4152/2005 before the High Court of  Karnataka on the ground  

that the accident occurred due to the fault of the deceased and  

claim  petition  before  the  Tribunal  was  not  maintainable  as  

Section  163-A  of  the  Act  is  not  applicable  unless  there  was  

another vehicle involved in the accident.  The other ground of  

challenge  was  that  the  Tribunal  erred  in  allowing  the  claim  

petition when the total income of the deceased was stated to be  

more than Rs. 40, 000/- per annum.

8. The  High  Court  by  its  judgment  and  order  dated  08.08.2007  

allowed  the  appeal  holding  that  the  claim petition  before  the  

Tribunal  was  not  maintainable  as  there  was  no  tort-feasor  

involved.  It was also held that the claim Section 163-A of the  

Act was barred when the income of the claimant is stated to be  

above Rs. 40,000/- per annum.  Consequently, the High Court  

set aside the judgment and award passed by the Tribunal and  

directed  the  appellants  herein  to  refund  the  amount  of  

compensation to the Insurance Company.    

9. Aggrieved by the aforesaid decision, the appellants filed a review  

petition bearing no. 337/2007. However the same was dismissed  

on 19.11.2007 by the High Court with costs of Rs. 500/-.  

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10.Consequently,  the  appellants  preferred  two  Special  Leave  

Petitions, one bearing No. 25497/2008 against the judgment and  

order dated 08.08.2007 passed in Miscellaneous First Appeal No.  

4152/2005  by  the  High  Court  of  Karnataka,  Bangalore  and  

another bearing No. 24236/2008 which is against the judgment  

and  order  dated  19.11.2007  passed  in  Review  Petition  No.  

337/2007.

11.The counsel  appearing for the appellants contended before us  

that the  High Court  erred in setting aside the judgment and  

order of the Tribunal as the Tribunal acted within its jurisdiction  

in  directing  payment  of  compensation  on  structured  formula  

basis under Section 163-A of the MVA.  It was also submitted  

that  the  High  Court  erred  in  ignoring  the  jurisdiction  of  the  

Tribunal to determine the “Just Compensation” which must be  

done in accordance with law and not on the basis of the pleading  

of a party who invoked its jurisdiction.   It was also contended  

that the High Court erroneously held that the Tribunal erred in  

law in not deciding the claim petition as one under Section 166  

of the MVA.  

12.On the other hand, the counsel for the respondent has argued  

that the High Court rightly set aside the judgment and order of  

the Tribunal since in order to become eligible for compensation  

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for the loss caused due to the use of motor vehicle as provided  

under Section 163-A of the MVA, the person who has suffered  

the loss must be a third party under the MVA and since in the  

present case the deceased or the appellants are not the third  

party, therefore, judgment rendered by the High Court did not  

call for any interference.  It was further submitted that the driver  

is  a  representative  of  the  owner  if  he  was  driving  under  the  

owner’s  instructions  or  permission  and  is  thus  owner  qua  

insurance company and not a third party.

13.In the light of the aforesaid submissions, the question that falls  

for our consideration is whether the legal representatives of a  

person, who was driving a motor vehicle, after borrowing it from  

the  real  owner  meets  with  an  accident  without  involving  any  

other vehicle, would be entitled to compensation under Section  

163-A of MVA or under any other provision(s) of law and also  

whether the insurer who issued the insurance policy would be  

bound to  indemnify  the  deceased  or  his  legal  representative?  

Before dwelling further, it would be useful to discuss the relevant  

paras of  Section 163-A and 166 of the MVA applicable  in  the  

present case.

“163-A.  Special  provisions  as  to  payment  of  compensation on structured formula basis.—

(1) Notwithstanding anything contained in this Act or in  any other law for the time being in force or instrument  having the force of law, the owner of the motor vehicle  of the authorised insurer shall be liable to pay in the  

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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 or the victim, as the case may be.

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(2)  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.

(3) The Central Government may, keeping in view the  cost of living by notification in the Official Gazette, from  time to time amend the Second Schedule.”

166.  Application  for  compensation-  (1)  An  application for compensation arising out of an accident  of the nature specified in sub-section (1) of section 165  may be made-

(a) by the person who has sustained the injury;  or

(b) by the owner of the property; or (c) where death has resulted from the accident,        by all or any of the legal representatives of  

the      deceased; or (d) by any agent duly authorised by the person        injured or all or any of the legal               representatives of the deceased, as the case        may be:

Provided that where all the legal representatives of the  deceased have not joined in any such application for  compensation, the application shall be made on behalf  of or for the benefit of all the legal representatives of  the deceased and the legal representatives who have  not so joined, shall be impleaded as respondents to the  application.

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   14.Section 163-A of the MVA was inserted by Act 54 of 1994 by way  

of a social security scheme. It is needless to say that the said  

provision is a code by itself. The said provision has been inserted  

to  provide  for  a  new  predetermined  structured  formula  for  

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payment of compensation to road accident victims on the basis  

of  age/income  of  the  deceased  or  the  person  suffering  

permanent  disablement.  In view of  the language used in said  

section there could be no manner of doubt that the said provision  

has an overriding effect as it contains a non obstante clause in  

terms whereof the owner of the motor vehicle or the authorised  

insurer  is  liable  to  pay compensation  in the case of  death or  

permanent disablement due to accident arising out of the use of  

motor vehicle, as indicated in the Second Schedule, to the legal  

heirs or the victim, as the case may be.

15. A  number  of  decisions  have  been  rendered  by  this  Court  in  

respect of the Section 163A of the MVA.  In Deepal Girishbhai  

Soni v. United India Insurance Co. Ltd.,(2004) 5 SCC 385, at  

page 402, one of us (Hon’ble Justice S. B. Sinha) has observed  

as follows:  

“42. Section  163-A  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 163-A 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  

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the purpose of  grant  of  adequate  compensation  to  a  section  of  victims  who  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.

This Court further observed in Oriental Insurance Co. Ltd.  

v. Meena Variyal, (2007) 5 SCC 428, at page 428:  

”18. In New India Assurance Co. Ltd. v. Asha Rani this  Court  had  occasion  to  consider  the  scope  of  the  expression “any person” occurring in Section 147 of the  Act. This Court held: (SCC p. 235, para 26)

“…  that  the  meaning  of  the  words  ‘any  person’  must  also  be  attributed  having  regard  to  the  context in which they have been used i.e. ‘a third  party’. Keeping in view the provisions of the 1988  Act, we are of the opinion that as the provisions  thereof do not enjoin any statutory liability on the  owner of a vehicle to get his  vehicle insured for  any passenger  travelling  in  a  goods  vehicle,  the  insurers would not be liable therefor.”

In  other  words,  this  Court  clearly  held  that  the  apparently wide words “any person” are qualified by the  setting in which they occur and that “any person” is to  be understood as a third party.

27. We think that the law laid down in Minu B. Mehta v.  Balkrishna  Ramchandra  Nayan was  accepted  by  the  legislature while enacting the Motor Vehicles Act, 1988  by introducing Section 163-A 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 legal heirs or  the victim, as the case may be, and in a claim made  under sub-section (1) of Section 163-A 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  dependants  have  an  option  either  to  proceed  under  Section 166 of the Act or under Section 163-A of the  Act.  Once  they  approach  the  Tribunal  under  Section  166  of  the  Act,  they  have  necessarily  to  take  upon  

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themselves the burden of establishing the negligence of  the driver or owner of the vehicle concerned. But if they  proceed  under  Section  163-A  of  the  Act,  the  compensation will be awarded in terms of the Schedule  without  calling  upon the victim or  his  dependants  to  establish any negligence or default on the part of the  owner of the vehicle or the driver of the vehicle.

28. In Pushpabai Purshottam Udeshi v. Ranjit Ginning &  Pressing Co. (P) Ltd., two of the learned Judges who  constituted the Bench in Minu B. Mehta held that when  a car  is  driven by the  owner’s  employee on owner’s  business,  the  normal  rule  was  that  it  was  for  the  claimant for compensation to prove negligence. When  the Manager of the owner while driving the car on the  business of the owner took in a passenger, it would be  taken that he had the authority to do so, considering  his  position  unless  otherwise  shown.  If  due  to  his  negligent  driving  an  accident  occurred  and  the  passenger  died,  the  owner  would  be  liable  for  compensation. The Court noticed that the modern trend  was to make the master liable for acts of his servant  which may not fall within the expression “in the course  of  his  employment”  as  formerly  understood.  With  respect, we think that the extensions to the principle of  liability have been rightly indicated in this decision”.

16. The aforesaid decisions make it quite clear that the Parliament  

by introducing Section 163-A in the MVA 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 163-A of the MVA. In order to prove a  

claim of this nature the claimant would not be required to plead  

or establish that the death or permanent disablement in respect  

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of which the claim has been made was due to any wrongful act  

or neglect or default of the owner of the vehicle concerned.  

17. However,  in  the  facts  of  the  present  case,  it  was  forcefully  

argued by the  counsel  appearing  for  the  respondent  that  the  

claimants are not the ‘third party’, and therefore, they are not  

entitled to claim any benefit under Section 163-A of the MVA.  In  

support of the said contention, the counsel relied on the decision  

of  this  Court  in  the  case of  Oriental  Insurance Co.  Ltd.  v.  

Rajni Devi, (2008) 5 SCC 736; and New India Assurance Co.  

Ltd. v. Sadanand Mukhi and Ors., (2009) 2 SCC 417.

18. In the case of  Oriental Insurance Company Ltd.  v. Rajni  

Devi  and  Others,  (2008)  5  SCC  736,  wherein  one  of  us,  

namely,  Hon’ble  Justice  S.B.  Sinha  is  a  party,  it  has  been  

categorically held that in a case where third party is involved, the  

liability of the insurance company would be unlimited.  It was  

also held in the said decision that where, however, compensation  

is claimed for the death of the owner or another passenger of the  

vehicle, the contract of insurance being governed by the contract  

qua contract,  the claim of  the  claimant  against  the  insurance  

company would depend upon the terms thereof.   It was held in  

the said decision that Section 163-A of the MVA cannot be said to  

have any application in respect of an accident wherein the owner  

of the motor vehicle himself  is involved.  The decision further  

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held  that  the  question  is  no  longer  res  integra.   The  liability  

under section 163-A of the MVA is on the owner of the vehicle.  

So a person cannot be both, a claimant as also a recipient, with  

respect to claim. Therefore, the heirs of the deceased could not  

have maintained a claim in terms of Section 163-A of the MVA.  

In our considered opinion, the ratio of the aforesaid decision is  

clearly applicable to the facts of the present case.  In the present  

case,  the  deceased  was  not  the  owner  of  the  motorbike  in  

question. He borrowed the said motorbike from its real owner.  

The deceased cannot be held to be employee of the owner of the  

motorbike although he was authorised to drive the said vehicle  

by its owner, and therefore, he would step into the shoes of the  

owner of the motorbike.

19.We  have  already  extracted  Section  163-A  of  the  MVA  

hereinbefore.  A bare perusal of the said provision would make it  

explicitly clear that persons like the deceased in the present case  

would step into the shoes of the owner of the vehicle. In a case  

wherein the victim died or where he was permanently disabled  

due to an accident arising out of the aforesaid motor vehicle in  

that event the liability to make payment of the compensation is  

on the insurance company or the owner, as the case may be as  

provided under Section 163-A. But if it is proved that the driver  

is the owner of the motor vehicle, in that case the owner could  

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not himself be a recipient of compensation as the liability to pay  

the same is on him.  This proposition is absolutely clear on a  

reading  of  Section  163-A  of  the  MVA.  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 163-A of the MVA.   

20.When we apply the said principle into the facts of the present  

case we are of the view that the claimants were not entitled to  

claim compensation under Section 163-A of the MVA and to that  

extent the High Court was justified in coming to the conclusion  

that  the  said  provision  is  not  applicable  to  the  facts  and  

circumstances  of  the  present  case.   However,  the  question  

remains  as  to  whether  an  application  for  demand  of  

compensation  could  have  been  made  by  the  legal  

representatives of the deceased as provided in Section 166 of  

the  MVA.   The  said  provision  specifically  provides  that  an  

application for  compensation arising out  of  an accident  of  the  

nature specified in sub-section (1) of section 165 may be made  

by the person who has sustained the injury; or by the owner of  

the property; or where death has resulted from the accident, by  

all or any of the legal representatives of the deceased; or by any  

agent duly authorised by the person injured or all or any of the  

legal  representatives  of  the  deceased,  as  the  case  may  be.  

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When  an  application  of  the  aforesaid  nature  claiming  

compensation under the provisions of Section 166 is received,  

the Tribunal is required to hold an enquiry into the claim and  

then  proceed  to  make  an  award  which,  however,  would  be  

subject  to  the  provisions  of  Section  162,  by  determining  the  

amount of compensation, which is found to be just. Person or  

persons who made claim for compensation would thereafter be  

paid such amount.   When such a claim is  made by the legal  

representatives of  the deceased, it  has to be proved that the  

deceased was not himself responsible for the accident by his rash  

and negligent driving. It would also be necessary to prove that  

the deceased would be covered under the policy so as to make  

the insurance company liable to make the payment to the heirs.  

In  this  context  reference  could  be made to  relevant  paras  of  

Section 147 of the MVA which reads as follows:-

147.  Requirements  of  policies  and  limits  of  liability- (1) In order to comply with the requirement  of this Chapter, a policy of insurance must be a policy  which-

(a) is  issued by a person who is  an authorised  insurer; or (b) insurer 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:

Provided that a policy shall not be required- (i)  to  cover  liability  in  respect  of  the  death,  

arising out of and in the course of his employment,  

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of the employee of a person insured by the policy  or in respect  of  bodily  injury  sustained  by  such  an   

employee arising out of and in the course of his  employment other than a liability arising under   the  Workmen’s  Compensation  Act,  1923 (8  of   1923) in respect of his death of, or bodily injury  to, any such employee-  (a) engaged in driving the vehicle, or  (b) if  it  is a public service vehicle engaged as  

conductor  of  the  vehicle  or  in  examining  tickets on the vehicle, or

(c) if its is a goods carriage, being carried in the  vehicle, or  

(ii) to cover any contractual liability.

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(2) Subject to the proviso to sub-section (1), a  policy of insurance referred to in sub-section (1), shall  cover any liability incurred in respect of any accident,  up to the following limits, namely:-

    (a) save as provided in clause (b), the amount        of liability incurred;

    (b) in respect of damage to any property of a    third party, a limit of rupees six thousand:

Provided that any policy of insurance issued with  any limited liability and in force, immediately before the  commencement  of  this  Act,  shall  continue  to  be  effective  for  a  period  of  four  months  after  such  commencement or till the date of expiry of such policy  whichever is earlier.  

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

(5)  Notwithstanding  anything  contained  in  any  law for  the time being in force,  an insurer  issuing a  policy of insurance under this section shall be liable to  indemnify the person or classes of persons specified in  the policy  in  respect  of  any liability  which  the  policy  purports to cover in the case of that person or those  classes of persons.  

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21.Section 147 of  the MVA provides that the policy of  insurance  

could  also  cover  cases  against  any  liability  which  may  be  

incurred by the insurer in respect of death or fatal injury to any  

person  including  owner  of  the  vehicle  or  his  authorised  

representative carried in the vehicle or arising out of the use of  

vehicle in the public place.  

22. When we analyze the impugned judgment of the High Court in  

terms of aforesaid discussion, we find that the counsel for the  

insurance company himself contended before the High Court that  

the policy of  insurance was an Act policy and the risk that is  

covered is only in respect of persons contemplated under Section  

147 of the MVA.  It is the finding of fact which we have also  

upheld in this Judgment that the deceased was authorised by the  

owner of the vehicle to drive the vehicle.  When we examined  

the facts of the present case in view of the aforesaid submission  

made, we are of the opinion that such an issue was required to  

be considered by the High Court  in the light  of  the facts and  

evidence adduced in the case.  On consideration of the Judgment  

and Order passed by the High Court  we find the same to be  

sketchy on the aforesaid issue as to whether the claim could be  

considered under the provisions of Section 166 of the MVA.  In  

this connection, reference can be made to a judgment of this  

Court in the case of  Oriental Insurance Company Ltd.  vs.  

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Rajni Devi and Others (supra), wherein, it was held that where  

compensation is claimed for the death of the owner or another  

passenger  of  the  vehicle,  the  contract  of  insurance  being  

governed  by  the  contract  qua  contract,  the  claim  of  the  

insurance company would depend upon the terms thereof.   

23. Recently, this Court in the case of Raj Rani & Ors. v. Oriental  

Insurance Co. Ltd. & Ors., [C.A. Nos. 3317-3318 of 2009 @  

SLP(C) Nos. 27792-27793 of 2008 pronounced on 06.05.2009],  

wherein one of us (Hon’ble Justice S. B. Sinha) has taken the  

view that it is not necessary in a proceeding under the MVA to go  

by any rules of pleadings or evidence. Section 166 of the MVA  

speaks  about  “Just  Compensation”.  The  court’s  duty  being  to  

award “Just Compensation”, it will try to arrive  at  the  said  

finding irrespective of the fact as to whether any plea in that  

behalf was raised by the claimant or not. It was further observed  

in the aforesaid case that although the multiplier specified in the  

Second  Schedule  appended  to  the  MVA are  stricto  sensu  not  

applicable in a case under Section 166 of the MVA, it is not of  

much  dispute  that  wherever  the  court  has  to  apply  the  

appropriate multiplier having regard to several factors in mind.  

The Court has placed reliance on earlier judgment of this Court in  

Nagappa v. Gurudayal & Ors., (2003) 2 SCC 274, wherein it  

was observed as follows in para 7:

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“7. Firstly, under the provisions of the Motor Vehicles  Act,  1988,  (hereinafter  referred  to  as  “the  MV Act”)  there  is  no  restriction  that  compensation  could  be  awarded  only  up  to  the  amount  claimed  by  the  claimant.  In  an  appropriate  case,  where  from  the  evidence  brought  on  record  if  the  Tribunal/court  considers  that  the  claimant  is  entitled  to  get  more  compensation than claimed, the Tribunal may pass such  award.  The  only  embargo  is  —  it  should  be  “just”  compensation,  that  is  to  say,  it  should  be  neither  arbitrary, fanciful  nor unjustifiable from the evidence.  This  would  be  clear  by  reference  to  the  relevant  provisions of the MV Act. Section 166 provides that an  application for compensation arising out of an accident  involving  the  death  of,  or  bodily  injury  to,  persons  arising out of the use of motor vehicles, or damages to  any property of a third party so arising, or both, could  be  made  (a)  by  the  person  who  has  sustained  the  injury;  or  (b)  by  the  owner  of  the  property;  or  (c)  where death has resulted from the accident, by all or  any of the legal representatives of the deceased; or (d)  by any agent duly authorised by the person injured or  all or any of the legal representatives of the deceased,  as the case may be. Under the proviso to sub-section  (1), all the legal representatives of the deceased who  have not joined as the claimants are to be impleaded as  respondents to the application for  compensation.  The  other important part of the said section is sub-section  (4) which provides that “the Claims Tribunal shall treat  any  report  of  accidents  forwarded  to  it  under  sub- section  (6)  of  Section  158  as  an  application  for  compensation  under  this  Act”.  Hence,  the  Claims  Tribunal  in  an  appropriate  case  can  treat  the  report  forwarded to it as an application for compensation even  though no such claim is made or no specified amount is  claimed.”

24. There are indeed cases like  New India Assurance Company  

Limited vs. Sadanand Mukhi and Others, (2009) 2 SCC 417,  

wherein, the son of the owner was driving the vehicle, who died  

in the accident, was not regarded as third party.  In the said  

case the court held that neither Section 163-A nor Section 166  

would be applicable.

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25.Undoubtedly,  Section  166  of  the  MVA  deals  with  “Just  

Compensation” and even if in the pleadings no specific claim was  

made under Section 166 of the MVA, in our considered opinion a  

party should not be deprived from getting “Just Compensation”  

in  case  the  claimant  is  able  to  make  out  a  case  under  any  

provision  of  law.   Needless to  say,  the MVA is  beneficial  and  

welfare legislation. In fact, the court is duty bound and entitled  

to award “Just Compensation” irrespective of the fact whether  

any  plea  in  that  behalf  was  raised  by  the  claimant  or  not.  

However, whether or not the claimants would be governed with  

the terms and conditions of the insurance policy and whether or  

not the provisions of Section 147 of the MVA would be applicable  

in the present case and also whether or not there was rash and  

negligent driving on the part of the deceased, are essentially a  

matter of fact which was required to be considered and answered  

at least by the High Court.

26.While entertaining the appeal, no effort was made by the High  

Court to deal with the aforesaid issues, and therefore, we are of  

the  considered  opinion  that  the  present  case  should  be  

remanded back  to  the  High Court  to  give  its  decision  on the  

aforesaid issues.  The High Court was required to consider the  

aforesaid issues even if  it  found that the provision of  Section  

163-A of MVA was not applicable to the facts and circumstances  

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of  the  present  case.  Since  all  the aforesaid  issues  are  purely  

questions of fact, we do not propose to deal with these issues  

and we send the matter back to the High Court for dealing with  

the said issues and to render its decision in accordance with law.  

The High Court  will  also  consider  the question of  quantum of  

compensation, if any, to which the claimants might be entitled  

to, having regard to the earning capacity of the deceased and  

“Just Compensation”, if any. Since the claim is a very old claim,  

we  request  the  High  Court  to  consider  the  matter  as  

expeditiously as possible.   

22. In terms of  the aforesaid order,  we remand back both the  

matters to the High Court to dispose of the same. The appeals are  

disposed of in terms of the aforesaid order.

   …................………………..J.                      [S.B. Sinha]

  ...............………………………J.         [Dr. Mukundakam Sharma]

New Delhi, May 13, 2009

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