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2025 Supreme(Sikk) 34

THE HIGH COURT OF SIKKIM : GANGTOK
Meenakshi Madan Rai, J.
The Branch Manager, The New India Assurance Co. Ltd. – Appellant
Versus
Minor Keonsel Namgyal Bhutia and Another- Respondents
MAC App. No. 21 of 2024
Decided On : 24-04-2025

Advocates Appeared
For the Appellant :Mr. Dipayan Roy, Advocate
For the Respondent:Mr. K. B. Chettri, Advocate, Mr. Rachhita Rai, Advocate

Statutory limits on compensation for grievous hurt in motor vehicle accidents cannot be bypassed by a tribunal under the guise of the law being benevolent. Tribunals are bound by specific legislative ceilings and cannot enhance awards beyond these prescribed limits.

Headnote:(A) Motor Vehicles Act, 1988 - Section 164 - Determination of compensation for grievous hurt - Statutory cap of two and a half lakh rupees - Benevolent nature of legislation does not authorize Tribunals to grant compensation exceeding statutory prescriptions. (Paras 6, 7)

(B) Appellate jurisdiction - Setting aside awards - Tribunal misdirecting itself by ignoring statutory limits - Duty of appellate court to ensure compliance with legislative mandates on quantum of damages. (Paras 8, 9)

Facts of the case:
A minor claimant sustained a fracture following a road traffic accident. The Tribunal awarded compensation of five lakh rupees. The insurer challenged this award, contending that the statute limits compensation for grievous hurt to two and a half lakh rupees. The claimant conceded that the amount exceeded the legislative cap.

Findings of Court:
The statute provides specific fixed sums for death and grievous hurt. While the legislation is intended to be benevolent, this does not grant the Tribunal power to act beyond the unambiguous parameters set by the legislature. Granting higher amounts based on the benevolence of the Act reflects a failure to apply the law as written.

Issues: Whether a Tribunal is empowered to award compensation for grievous hurt in excess of the amount explicitly prescribed by the governing statute by invoking the principle of benevolent legislation.

Ratio Decidendi: Legislation regarding compensation for motor accidents is binding, and statutory limits on the quantum of compensation for specified harms are mandatory. Tribunals are strictly limited by the ceilings prescribed and cannot enhance awards based on judicial discretion or broad equitable interpretations.

Result: Appeal allowed; the award set aside and reduced to the statutory ceiling of two and a half lakh rupees with specified interest.

Table of Content
1. parties frame appeal regarding statutory compensation limits under section 164 of the motor vehicles act. (Para 1 , 2 , 3)
2. factual context of accident and the lower tribunal's reliance on benevolent legislative interpretation. (Para 4 , 5)
3. judicial discretion cannot exceed statutory compensation limits prescribed by section 164 of the mv act. (Para 6 , 7)
4. corrective order issued to rectify compensation to match section 164 statutory limits. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14)

JUDGMENT :

Meenakshi Madan Rai, J.

1. The Appellant assails the Judgment and Award, both dated 26-06-2024, of the Learned Motor Accidents Claims Tribunal, Gangtok, Sikkim (hereinafter, the “MACT”), in MACT Case No.25 of 2023 (Minor Keonsel Namgyal Bhutia vs. Shri Ranjeet Subba and Another), whereby the Appellant was directed to pay Rs. 5,00,000/- (Rupees five lakhs) only, with interest @ 10% per annum, in a Claim Petition filed by the Claimant, under Section 164 of the Motor Vehicles Act, 1988 (hereinafter, the “MV Act”), on grounds of “injury” sustained by the minor victim.

(i) Learned Counsel for the Appellant submits that the Learned MACT erred in granting compensation of Rs. 5,00,000/- (Rupees five lakhs) only, under Section 164(1) of the MV Act instead of Rs. 2,50,000/- (Rupees two lakhs and fifty thousand) only, as envisaged by the provision, since the victim of the accident only suffered a fracture in his left leg and it was not a case of fatality. The impugned Judgment may be rectified, requiring the Appellant to compensate the Claimant for a sum of Rs. 2,50,000/- (Rupees two lakhs and fifty thousand) only, as legally provided.

2. Learned Counsel for the Claimant/Respondent No.1 fairly concedes that the Claim Petition was filed under Section 164 of the MV Act and the compensation sought was Rs. 4,87,377/- (Rupees four lakhs, eighty seven thousand, three hundred and seventy seven) only, however in view of the statutory provision, the Claimant/Respondent No.1 ought to have been compensated with Rs. 2,50,000/- (Rupees two lakhs and fifty thousand) only, by the Learned MACT.

3. Learned Counsel for the Respondent No.2 had no specific submissions to advance.

4. Heard Learned Counsel for the parties. The facts briefly narrated are that on 08-01-2023, at around 09.00 a.m., the minor Keonsel Namgyal Bhutia, aged about seven years, (represented by his father before the Learned MACT,) was standing alongside the road with several other devotees, waiting for a religious guru. The driver of the offending vehicle (Hyundai i-10) drove the vehicle into the waiting crowd, rashly and negligently as a result of which the minor suffered a fracture in his left leg. Admittedly, the parents of the Claimant incurred a sum of Rs. 57,377.29/- (Rupees fifty seven thousand, three hundred, seventy seven and twenty nine paisa) only, in his medical treatment, hence the Claim Petition.

5. The Learned MACT in the impugned Judgment has observed inter alia as follows;

19. It is relevant to note that after the Motor Vehicles (Amendment) Act, 2019 came into force, the old Chapter XI has been replaced with a new one. The provision of Section 164 (sic., Section 163A) has now been replaced with Section 164, which provides at sub-section (1) that 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 authorized insurer shall be liable to pay in the case of death or grievous hurt due to any accident arising out of the use of motor vehicle, a compensation, of a sum of five lakh rupees in case of death or of two and a half lakh rupees in case of grievous hurt to the legal heirs or the victim, as the case may be.

20. Though the claim is of Rs. 4,87,377 the petitioner/claimant is entitled to compensation of Rs. five lakhs in view of Section Rs. 164(1) of the Act of 1988. Being a benevolent legislation, I have preferred to invoke the provision which is more favo

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