1. This appeal is filed by the Insurance Company assailing the Award, dt.17.02.2022, in MVOP.No.72 of 2017 on the file of the Chairman, Motor Accidents Claims Tribunal-cum-IX Additional District Judge at Kamareddy (for short ‘the Tribunal’).

Brief facts of the Case :

2. The claimants, who are wife, parents and children of the deceased-Janagama Balakishan Goud, filed a petition under Section 163(A) of the Motor Vehicles Act, 1988 (for short ‘the Act’), claiming compensation of Rs.8,00,000/- for the death of their son in a motor accident that took place on 28.01.2016. On the fateful day, after completion of work, while the deceased was returning from Kamareddy to Kyasampally Village on Motorcycle bearing No.AP-36-Q-2845, when he reached near TTD Kalyana Mandampam, Sircilla Road, Kamareddy town, at about 04.00 am., he lost control over the vehicle, fell down on the road and sustained head injury. Immediately after the accident, the deceased was shifted to Rudra Multi Special Hospital, Kamareddy, and from there he was shifted to Sree Balaji Hospital, Secunderabad, for better treatment and due to his precarious condition, he was shifted to Osmania General Hospital, Hyderabad, and while undergoing treatment, he succumbed to injuries on 06.02.2016.

3. On the complaint made by the father of the deceased i.e., 2nd claimant, a case in Cr.No.24/2016 was registered and after completion of investigation, final report was also laid before the Competent Court.

4. The claimants contend that the deceased was hale & healthy and working as Mechanic on contract basis at TSRTC, Kamareddy Depot and also working as Bus Driver at Prathibha High School and in all, used to earning Rs.25,000/- p.m., and on account of death of the deceased, the petitioners lost their sole breadwinner, and that the 1st respondent being the owner and 2nd respondent being the insurer of the offending vehicle are jointly and severally liable to pay compensation.

5. The Tribunal after due enquiry and examining the evidence available on record, held that the accident has occurred due to the use of the subject vehicle, however, in the manner of accident held that the deceased had contributed to the accident and assessed it at 50%, and on arriving at a total compensation of Rs.16,00,559/-, awarded an amount of Rs.8,00,000/- with interest @ 7.5% per annum from the date of petition till the date of realization against the respondents No.1 & 2 therein, as jointly and severally liable. Aggrieved by the said Award, the present appeal is filed by the Insurance- Company.

6. Heard Sri A.Rama Krishna Reddy, learned Standing Counsel for appellant-Insurance Company and Sri Nambi Krishna, learned counsel for respondents-claimants.

7. Learned counsel for the appellant-Insurance Company would submit that the Tribunal proceeded with wrong presumption that once involvement of vehicle in an accident is established, in view of the wording used in Section 163-A “arising out of the use of the vehicle”, the claimants can maintain petition under Section 163A of the Act. He further contended that since the vehicle was driven by the deceased at the material time of accident, he steps into the shoes of the owner and therefore, claim petition itself is not maintainable, as he himself was the tortfeasor as the accident occurred due to his negligence, and the Tribunal under misconception of facts and law, failed to appreciate the fact that even for the claims under Section 163-A, the compensation is based on ‘fault liability’ and the Tribunal erred in allowing the claim petition and awarding compensation u/S.163-A of the Act.

8. Learned counsel for the appellant further contended that since the petition was filed under 163A of the Act, the maximum earnings can be taken as per Schedule-II of the Act i.e., Rs.40,000/-p.m., but the Tribunal has erroneously taken the income of the deceased as Rs.7,331/- p.m., i.e., Rs.87,972/- per annum and has also contended that under the head of non pecuniary damages under Section 163A of the Act, does not cross Rs.15,000/- and the Tribunal erred in awarding Rs.2,15,000/- and though only 1/3rd has to be deducted towards personal expenditure, the Tribunal erred in deducting 1/4th, and under Section 163-A, the principle is of ‘fault liability’ and failure to show that there is negligence on the part of the vehicle, the question of awarding compensation to the claimants is bad in law.

9. The learned Standing Counsel for appellant-Insurance Company further disputed the findings of the Tribunal in awarding the compensation by deducting 50% of the amount towards contributory negligence on the part of the deceased and contended that the Tribunal grossly erred in not appreciating the fact that the claimants are not entitled for the compensation as the deceased himself a tortfeasor.

10. The learned Standing Counsel for the appellant-Insurance Company further contended that at the time of accident, the deceased was not holding any valid driving license and the vehicle was not road worthy to ply, and more so, as the accident occurred due to the rash and negligent driving of the deceased himself.

11. On the other hand, learned counsel appearing for the claimants contended that the Tribunal was justified in awarding the compensation and interference of this Court with the well- considered order of the Tribunal is unwarranted, and prayed to dismiss the instant appeal.

12. I have given earnest consideration to the submissions made on either side and perused the material on record.

13. Before delving into the facts of the case, the provision of Section 163A of the Act are extracted hereunder:

               “163A - 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 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 motor vehicle, compensation, as indicated in the Second Schedule, to the legal heirs or the victim, as the case may be.

               Explanation.—For the purposes of this sub-section, “permanent disability” shall have the same meaning and extent as in the Workmen’s Compensation Act, 1923 (8 of 1923).

               (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

14. The basic grievance of the learned counsel for the appellant-Insurance Company that Section 163-A of the Act is based on ‘fault liability’ principle and as the deceased himself was the tortfeasor as he stepped into the shoes of the owner, the claimants are not entitled for compensation. The Hon’ble Supreme Court in National Insurance Company Limited v. Sinitha and Others ((2012) 2 Supreme Court Cases 356), held that the claimants are not required to plead or prove negligence and it is for the owner or insurance company to plead and establish through cogent and proper evidence to defeat the claim. The relevant portion of the said judgment is extracted hereunder:

               “39. It has already been concluded hereinabove that in a claim raised under Section 163-A of the Act, the claimants have neither to plead nor to establish negligence. We have also held that negligence (as also, “wrongful act” and “default”) can be established by the owner or the insurance company (as the case may be) to defeat a claim under Section 163-A of the Act. It was therefore imperative for the petitioner Insurance Company to have pleaded negligence, and to have established the same through cogent evidence. This procedure would have afforded an opportunity to the claimants to repudiate the same. Has the petitioner discharged this onus?”

15. Thus, under Section 163-A, the claimants are not required to plead or establish negligence on the part of the driver or owner of the vehicle.

16. Further, in a subsequent judgment rendered in United India Insurance Co. Ltd. v. Sunil Kumar (Civil Appeal No. 9694 of 2013, dt.24.11.2017), the Hon’ble Supreme Court has categorically held that under the provisions of Section 163-A, the insurer cannot be permitted to raise the defence of negligence on the part of the deceased and permitting such defence would defeat the very object of introducing Section 163-A, which is to provide expeditious and final compensation to the victims or their legal representatives, irrespective of question of fault. The relevant portion of the said judgment is hereby extracted for better understanding of the said binding precedent as under:

               “8. From the above discussion, it is clear that grant of compensation under Section 163-A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by Section 163-A(2). Though the aforesaid section of the Act does not specifically exclude a possible defence of the insurer based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be introduced by the insurer and/or to understand the provisions of Section 163-A of the Act to be contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163-A of the Act, namely, final compensation within a limited time- frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability were taking an unduly long time. In fact, to understand Section 163-A of the Act to permit the insurer to raise the defence of negligence would be to bring a proceeding under Section 163-A of the Act on a par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention.

               9. For the aforesaid reasons, we answer the question arising by holding that in a proceeding under Section 163-A of the Act, it is not open for the insurer to raise any defence of negligence on the part of the victim.”

17. Further, on the fateful day, the deceased was riding the motorcycle belonging to the 6th respondent/owner. For the deceased to be treated as having stepped into the shoes of the owner, onus was upon the appellant-Insurance Company to establish the nature of the relationship between the deceased and the 6th respondent, as held by the Hon’ble Supreme Court in Sinitha’s case(supra). However in the instant case, no evidence of the 6th respondent/owner was adduced by the appellant-Insurance Company to demonstrate whether the deceased was an employee, representative, or agent of the owner or related in any way to draw such a legal inference. The appellant having taken such a plea, ought to have taken steps for adducing the evidence of the 6th respondent-owner or at least filed a petition for summoning the owner of the offending vehicle, but no such attempt was made by the appellant- Insurance Company.

18. Thus, in the light of the judgment of the Hon’ble Supreme Court in Sinitha’s case(supra), as the burden lies on the appellant-Insurance Company to establish it by cogent evidence that the deceased-rider stepped into the shoes of the owner so as to prove that the claimants are not entitled to the compensation, and in the absence of such material, the appellant has failed to discharge the onus upon it to prove the relationship between the deceased and the owner of the offending vehicle.

19. Further, in the absence of any evidence adduced as to the deceased possessing valid driving license as on the date of accident by the claimants or to the contrary by the appellant- Insurance Company, the benefit should be given to the victim because the Courts aim for ‘just compensation’ and on the basis of policy validity only, the claims are granted. The onus was on the insurer to disprove it, not the victim to prove the rider was licensed to drive. In the absence of any evidence to prove that the deceased was not holding a valid driving license, the claimants cannot be held disentitled to the claim, particularly under the social welfare and beneficial principle of MV Act, even assuming the deceased has no driving license, in view of the settled legal position as laid down by the Hon'ble Supreme Court in the case National Insurance Co. Ltd. vs. Swaran Singh and others ((2004) 3 SCC 297), wherein it was held under:

               "110.(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time."

20. The burden, therefore, lies on the Insurance Company to establish that the insured i.e., the 6th respondent-owner was guilty of committing such a fundamental breach in terms of the policy. As, the Insurance Company has failed to discharge this burden by leading any reliable or cogent evidence to establish that the owner knowingly allowed a person without a valid Driving License to drive a vehicle or acted in conscious disregard of the policy conditions and in these circumstances, the appellant-Insurance Company cannot escape from the liability.

21. In view of the above findings, this Court holds that the Tribunal committed no error in holding that the claimants are entitled to be awarded compensation under 163-A of the Act. Thus, the very contention of the appellant on maintainability of the claim, stands negated and answered accordingly.

22. Further, the finding of the Tribunal as to deduction of 50% towards contributory negligence on the part of the deceased is erroneous as the award is passed under Section 163-A of the Act and more so, there was neither any plea of contributory negligence by the appellant-Insurance Company nor the deceased contributed to the cause of the accident, as such, the said findings are erroneous and accordingly set aside.

23. Now coming to the next challenge on the quantum, the Tribunal assessed the income of the deceased of Rs.7,331/- per month (Rs.87,972/- per annum), instead of following the maximum notional income prescribed in Schedule-II of Rs.40,000/- per annum, since the claim is under Section 163- Aof the Act. Admittedly, no evidence is placed in respect of the earnings of the deceased though stated to be drawing Rs.25,000/- per month. In view of the same, the notional income u/s.163A of the Act is to be adopted and monthly wages @ Rs.7,331/- cannot be applied. Thus, this Court deems it appropriate to consider the annual earnings of the deceased @ Rs.40,000/- on the basis of a structured formula in Schedule II of the Act.

24. As regards future prospects, it is settled position of law that the law laid down by the Hon’ble Supreme Court in National Insurance Company Ltd., v. Pranay Sethi and Others ((2017) 16 SCC 680), is not applicable in the claim petitions filed under 163-A of the Act, and as regards the multiplier, as the deceased was aged about 37 years, the appropriate multiplier is ‘16’.

25. Similarly, the Tribunal ought to have deducted 1/3rd instead of 1/4th towards personal expenditure in view of the claim arising out of Section 163-A of the Act. Thus, after deducting 1/3rd towards personal expenses of the deceased, the actual annual loss of contribution to his family works out to Rs.26,667/- (Rs.40,000 - Rs.13,333). Thus, total loss earnings of the deceased works out to Rs.4,26,672/-(Rs.26,667/- X ‘16’ multiplier).

26. As regards non-pecuniary damages under Section 163-A, it is settled position of law that the law laid down by the Hon’ble Supreme Court in National Insurance Company Ltd., v. Pranay Sethi and Others ((2017) 16 SCC 680) and the subsequent judgment granting parental and lineal consortium, is not applicable in the claim petitions filed under 163-A of the Act, as such the amount of Rs.2,15,000/- granted by the Tribunal towards consortium and funeral expenses is not proper. Hence, the said finding is set aside.

27. Thus, in terms of Schedule II of the Act, towards funeral expenses, loss of consortium(spouse) and loss of estate, the claimants are entitled to Rs.2,000/-, Rs.5,000/- and Rs.2,500/- respectively, in all amounting to Rs.9,500/-. Further, as per Schedule II of the Act, the claimants are entitled to the actual medical expenditure incurred during the course of treatment for the injuries sustained by the deceased, due to which he succumbed. As per Ex.A6, medical bills claimants incurred medical expenses of Rs.3,636/- (Rs.3,635.82 ps rounded to Rs.3,636/-), they are entitled to the said amount of Rs.3,636/-.

28. Thus, as per the computation made in consonance with the structured formula approach under Section 163-A of the Act, the claimants are entitled to a sum of Rs.4,39,808/- (Rs.4,26,672/- + Rs.9,500/- + Rs.3,636/-).

29. As regards the rate of interest awarded by the Tribunal @ 7.5% per annum on the compensation awarded from the date of petition till the date of realization, the same is found to be just and reasonable in the light of the judgment of the Hon’ble Supreme Court in Pranay Sethi’s case (supra) and does not warrant any interference.

30. In view of the above findings, the MACMA is partly allowed modifying the Award of the Tribunal by reducing the compensation to Rs.4,39,808/- along with interest @ 7.5% per annum, from the date of petition to the date of realization. The appellant-Insurance Company shall deposit the total amount within a period of eight weeks from the date of receipt of a copy of this order. No order as to costs.

As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed.