VERY IMPORTANT POINT
Rule of strict liability propounded in Rylands v. Fletcher can be followed in respect of motor accident claim before Motor Accident Claims Tribunal at least until any other new principle which excels the former can be evolved, or until legislation provides differently.

Headnote:(i) Motor Vehicles Act, 1988-Section 168 r/w Section 140-Claim for compensation-Application of rule of strict liability propounded in Rylands v. Fletcher-Can be followed at least until any other new principle which excels rule in Rylands v. Fletcher or until legislation provides differently-No fault liability envisaged under Section 140 is distinguishable from rule of strict liability.
       The jurisdiction of the Tribunal is not restricted to decide claims arising out of negligence in the use of motor vehicles. Negligence is only one of the species of the causes of action for making a claim for compensation in respect of accidents arising out of the use of motor vehicles. There are other premises for such cause of action. Even if there is no negligence on the part of the driver or owner of the motor vehicle, but accident happens while the vehicle was in use, should not the owner be made liable for damages to the person who suffered on account of such accident? Like any other common law principle, which is acceptable to our jurisprudence, the Rule in Rylands v. Fletcher can be followed at least until any other new principle which excels the former can be evolved, or until legislation provides differently. Hence, we are disposed to adopt the Rule in claims for compensation made in respect of motor accidents. (Paras 11, 12 and 19)
       "No Fault Liability" envisaged in Section 140 of the M.V. Act is distinguishable from the rule of strict liability. In the former the compensation amount is fixed and is payable even if any one of the exceptions to the Rule can be applied. It is a statutory liability created without which the claimant should not get any amount under that count. Compensation on account of accident arising from the use of motor vehicles can be claimed under the common law even without the aid of a statute. The provisions of the MV Act permits that compensation paid under no fault liability can be deducted from the final amount awarded by the Tribunal. Therefore, these two are resting on two different premises. We are, therefore, of the opinion that even apart from Section 140 of the MV Act, a victim in an accident which occurred while using a motor vehicle, is entitled to get compensation from a Tribunal unless any one of the exceptions would apply. (Para 20)
       (ii) Motor Vehicles Act, 1988-Section 140-No fault liability-Is distinguishable from rule of strict liability propounded in Rylands v. Fletcher-Claim under both resting on two different premises-Rule of strict liability applicable to motor accident compensation claim. (Para 20)
       (iii) Motor Vehicles Act, 1988-Section 163A-Compensation-Quantification of-Structured formula-Application of-Victim (deceased) 35 years at the time of accident-Earning per month Rs. 1500-Amount works out at Rs. 2,70,000-Rs. 1,80,000 awarded deducting 1/3 from figure indicated in structured formula. (Paras 21 to 23)
       (iv) Motor Vehicles Act, 1988-Section 171-Interest on compensation awarded-Nationalised banks granting 9% interest on fixed deposits for one year-It is reasonable to grant interest at the rate of 9% per annum from date of claim made by claimant. (Para 24)

Judgement Key Points

Based on the provided legal document, here are the key points:

The Supreme Court of India held that the rule of strict liability propounded in Rylands v. Fletcher can be followed in respect of motor accident claims before the Motor Accident Claims Tribunal, at least until a new superior principle is evolved or legislation provides otherwise (!) (!) (!) .
The jurisdiction of the Tribunal is not restricted to deciding claims arising out of negligence; negligence is only one of the species of causes of action for compensation claims regarding accidents involving motor vehicles (!) .
Even if there is no negligence on the part of the driver or owner, the owner should be made liable for damages if an accident occurs while the vehicle is in use, unless one of the exceptions to the Rylands v. Fletcher rule applies (!) (!) .
The "No Fault Liability" envisaged under Section 140 of the Motor Vehicles Act is distinguishable from the rule of strict liability; the former is a statutory liability with a fixed amount, while the latter is a common law principle resting on different premises (!) .
Regarding the quantum of compensation, the Court adopted the structured formula from the Second Schedule to the Motor Vehicles Act, calculating the amount based on the deceased's age (35 years) and monthly income (Rs. 1,500), resulting in a total compensation of Rs. 1,80,000 after deducting one-third (!) (!) .
The Court directed that interest on the compensation should be paid at the rate of 9% per annum from the date of the claim, reflecting the interest rates granted by nationalised banks on fixed deposits (!) .
The compensation awarded under Section 140 (No Fault Liability) by the insurance company is deductible from the final amount awarded by the Tribunal (!) (!) .

JUDGMENT

Thomas, J.-Leave granted.

2. Can a claim be maintained before the Motor Accident Claims Tribunal ( Tribunal for short ) on the basis of strict liability propounded in Rylands v. Fletcher1. The Tribunal dismissed a claim made before it solely on the ground that there was neither rashness nor negligence in driving the vehicle and hence the driver has no liability, and the corollary of which is that the owner has no vicarious liability to pay compensation to the dependants of the victim of a motor accident. A Division Bench of the High Court of Allahabad dismissed the appeal filed by the claimants by a cryptic order stating that there is no error in the Tribunal s order. Hence this appeal by special leave.

3. The accident which gave rise to the claim occurred at about 7.00 P.M. on 20.3.1986. The vehicle involved in the accident was a jeep. It capsized while it was in motion. The cause of the capsized was attributed to bursting of the front tyre of the jeep. In the process of capsizing the vehicle hit against one Haji Mohammad Hanif who was walking on the road at that ill-fated moment and consequently that pedestrian was crushed and subsequently succumbed to the injuries sustained in that accident.

4. Appellants are the widow and children of Haji Mohammad Hanif, the victim of the accident. They filed a claim petition before the Tribunal in 1986 itself claiming a sum of Rs. 2,36,000/- as total compensation. They said that deceased Haji Mohammad Hanif was aged 35 when he died and that he was earning a monthly income of Rs.1500/- during those days by doing some business in manufacturing steel trunks.

5. The owner of the jeep disclaimed the liability by denying even the fact of the accident in which his jeep was involved. Alternatively, he contended that any liability found against him in respect of the said jeep the same should be realised from the insurance company as the vehicle was covered by valid insurance policy. The Tribunal repelled the above contentions of the jeep owner. However, the Tribunal found as follows :

"It appears that the front wheel of the jeep suddenly got burst resulting in the disbalance and occurrence of this accident as it is mentioned in Ex-2 the report of the Police Station. Whatever is the circumstance, the rash and negligence of the alleged jeep is not established."

6. Consequently, the Tribunal dismissed the claim for compensation. However, the Tribunal directed the insurance company to pay Rs. 50,000/- to the claimants by way of no fault liability envisaged in Section 140 of the Motor Vehicles Act, 1988 (for short the MV Act ) (corresponding to Section 92-A of the Motor Vehicles Act, 1939 - the old MV Act).

7. Aggrieved by the said rejection of the claim the appellants moved the High Court of Allahabad in appeal, as per the provisions of the MV Act on 28.4.1999, a Division Bench of the High Court dismissed the appeal for which a very short order has been passed. It reads thus:

"Heard learned counsel for the appellant. Finding has been recorded that the tempo overturned and there were no negligence or rashness of the driver. Hence Rs.50,000/- has been awarded as compensation which is the minimum amount. There is no error in the order. Dismissed."

8. We have to proceed on two premises based on the finding of the Tribunal. The first is that there was no negligence or rashness on the part of the driver of the jeep. Second is that the deceased was knocked down by the jeep when its front tyre burst and consequently the vehicle became disbalanced and turned turtle. Should there necessarily be negligence of the person who drove the vehicle if a claim for compensation (due to the accident involving that vehicle) is to be sustained?

9. For considering the above question we may refer to the relevant provisions of the MV Act. Chapter XII of the MV Act subsumed the provisions relating to "Claims Tribunal". Whatever could be considered and determined by the civil courts in suits claiming compensation in respect

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2001 Supreme(SC) 5

VERY IMPORTANT POINTRule of strict liability propounded in Rylands v. Fletcher can be followed in respect of motor accident claim before Motor Accident Claims Tribunal at least until any other new principle which excels the former can be evolved, or until legislation provides differently.

Cases Referred (5)

VERY IMPORTANT POINT
Rule of strict liability propounded in Rylands v. Fletcher can be followed in respect of motor accident claim before Motor Accident Claims Tribunal at least until any other new principle which excels the former can be evolved, or until legislation provides differently.