Section 163-A of the Motor Vehicles Act imposes strict liability for compensation in motor accidents, without the need to prove negligence, and provides a structured formula for determining compensation.

J.B. KOSHY, J.

1. Husband of the first respondent sustained fatal injuries in a motor accident. While the deceased was riding a Scooter owned by the 6th respondent on 11.12.1999, accidentally the Scooter dashed at a stone and he fell down from the vehicle and sustained serious head injuries which resulted in his death. His dependents filed an application for compensation under section 163-A of the Motor Vehicles Act. The Tribunal awarded compensation under section 163-A. The insurance of the vehicle was admitted. There was no pleading in the written statement that rider of the vehicle was not covered under the policy. Since there was valid insurance policy of the Scooter, the appellant insurance company was directed to deposit the amount. Contention of the insurance company is that no other vehicle or person was involved in the accident. Since there is no other person involved in the accident, section 163-A is not applicable. There is no finding or contention that the rider of the Scooter was negligent. Accidentally the motor cycle dashed against a stone and he fell down. Section 163-A is based on strict liability principle. The need for section 163-A was explained by the Hon’ble Supreme Court in Oriental Insurance Co. v. Hansrajbhai (2001) 5 SCC 175). The Supreme Court in the above case held that if the Insurance Company is permitted to prove that insured is not at fault, though his vehicle is involved then the whole purpose of Legislature in introducing section 163-A will be frustrated. It was further held that if the insurance company is permitted to prove the negligence even of the victim or no negligence of the insured, then the purpose for which the Legislature introduced section 163-A would be frustrated. Sections 140 and 163-A are based on strict liability principle formulated in Rylands v. Fletcher (1861-73 All ER (Reprint) 1). A joint reading of sections would show that for death or permanent disablement suffered due to accident arising out of the use of motor vehicles, the claimants need not prove the wrongful act or neglect or default of anyone. So, third party need not be involved in this case. The Apex Court in Kaushnuma Begum and others v. New India Assurance Co. Ltd. AIR 2001 SC 485) awarded compensation where the accident occurred due to the bursting of tyres. A Full Bench of this court has considered the matter in detail in National Insurance Co. Ltd. v. Malathi C.Salian (2003 (3) KLT 460 (FB)). Various decisions of the courts as well as the scope of Section 163-A were mentioned therein and held that merely because the victim was the rider of the vehicle and no other vehicle was involved in the accident, compensation cannot be denied. Section 163-A reads as follows:

“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 or the authorised insurer shall be liable to pay in the case of death or permanent disablement due to accident arising out the use of motor vehicle, compensation, as indicated in the Second Schedule, the legal heirs or the civtim, as the case may be.

Explanation.- For the purposes of this sub-section, “permanent disability” shall have he same meaning and extent as in the Workman’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.