REORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1508 OF 2004

Indra Devi & Ors.                     Appellants

Versus

Bagada Ram & Anr.           Respondents

JUDGMENT

AFTAB ALAM,J.

1. This is the claimant’s appeal from a motor accident claim case.  

2. On  March  31,  1999,  one  Ramniwas  while  going  on  a  motorcycle  

dashed against the rear side of a truck that was headed in the same direction  

as  the  motorcycle.  Ramniwas  died  in  the  accident.  His  heirs  and  legal  

representatives, the appellants before this Court, moved the MACT, Sojat,  

Branch Jaitaran,  District  Pali  in  MACT Case  No.59 of  1999 against  the  

owner of the truck and its insurer, the New India Assurance Company Ltd.  

for compensation in terms of section 166 of the Motor Vehicles Act, 1988.  

In course of the proceedings, the appellants claimed no fault compensation  

under section 140 of the Motor Vehicles Act which was granted to them by

the Tribunal and the compensation amount was duly paid by the insurance  

company. In the main proceeding, however, the Tribunal came to find and  

hold that insofar as the accident is concerned there was no lapse on the part  

of the driver of the truck nor was it due to any mechanical fault in the truck.  

The accident was caused due to the careless and negligent driving of the  

deceased himself. On that finding, the Tribunal naturally rejected the claim  

of compensation on the principle of fault. But it did not stop there and went  

on to  hold that  the  insurance  company was entitled  to  the  refund of  the  

amount  of  no  fault  compensation  along  with  interest  @ 9% p.a.  In  the  

operative portion of the judgment, the tribunal ordered as follows:

“According to the above analysis, this claim is dismissed. An  amount of Rs.50,000/- has been given to the applicants by The  New India  Assurance  Co.  Ltd.  as  an  interim relief  and  The  India Assurance Co. Ltd. will be entitled to have it back with  9% interest p.a.”

3. The  claimants  took  the  matter  to  the  High  Court  in  appeal  (Civil  

Miscellaneous  Appeal  No.323  of  2002).  The  High  Court  dismissed  the  

appeal  by  judgment  and  order  dated  August  20,  2002.  The  High  Court  

agreed with the Tribunal’s finding that the deceased alone was responsible  

for  the  accident  and  hence,  the  claimants  were  not  entitled  to  any  

compensation. Unfortunately, the High Court did not address the issue of no  

fault compensation and overlooked the direction of the Tribunal for refund  

of the amount of interim compensation alongwith interest @ 9% p.a.

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4. The claimants are now before this Court aggrieved by the direction to  

refund  the  amount  of  interim  compensation  to  the  insurance  company  

alongwith interest.

5. The impugned direction is clearly erroneous and unsustainable in law.  

The Tribunal has completely failed to realize the true nature and character of  

the compensation in terms of section 140 of the Act. The marginal heading  

to section 140 describes it as based ‘on the principle of no fault’. As the  

expression  ‘no  fault’  suggests  the  compensation  under  section  140  is  

regardless of any wrongful act, neglect or default of the person in respect of  

whose death the claim is made.  

6. We have examined the nature of the ‘no fault compensation’ payable  

under section 140 of the Act in  Eshwarappa @ Maheshwarappa and Anr.   

vs.  C.S.  Gurushanthappa  and  Anr.  (Civil  Appeal  No.7049  of  2002),  the  

judgment  in  which  is  pronounced  today.  We,  therefore,  do  not  wish  to  

elaborate the point further. Suffice to say that in view of our judgment in  

Civil  Appeal  No.7049  of  2002,  the  Tribunal  was  patently  in  error,  in  

directing for the refund of the amount of ‘no fault compensation’ already  

paid  to  the  claimants,  to  the  insurance  company.  The  High  Court  was  

equally in error in missing out this grave mistake in the judgment and order  

passed by the Tribunal and not setting it right.  

7. The  present  appeal  must,  therefore,  be  allowed.  The  order  of  the  

Tribunal insofar as it permits the insurance company (respondent no.2) to  

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recover the amount of interim compensation alongwith the interest from the  

claimants/appellants is set aside.  

8. 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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