Tag Archives: Motor Vehicle

On and from 1st April, 2017 vehicles that are not BS-IV compliant shall not be sold in India

Supreme Court  in the case of M.C. Mehta v. Union of India & Ors. [I.A.
Nos. 487/2017, 491/2017, 494/207, 489/2017, 495/2017 in Writ Petition (Civil)
No.13029 of 1985], issue pertaining to the sale and registration and therefore the
commercial interests of manufacturers and dealers of such vehicles that do not meet
the Bharat Stage-IV (‘BS-IV’) emission standards as on 1st April, 2017 was
examined keeping in mind the potential health hazard of such vehicles being
introduced on the road.

It was observed that “the number of such vehicles may be small compared to
the overall number of vehicles in the country but the health of the people is far, far
more important than the commercial interests of the manufacturers or the loss that
they are likely to suffer in respect of the so-called small number of such vehicles.”

While observing that the manufacturers of such vehicles were fully aware that
eventually from 1st April, 2017 they would be required to manufacture only BS-IV
compliant vehicles but for reasons that are not clear, they chose to sit back and
declined to take sufficient pro-active steps”, it was directed that: “(a) On and from 1st
April, 2017 such vehicles that are not BS-IV compliant shall not be sold in India by
any manufacturer or dealer, that is to say that such vehicles whether two wheeler,
three wheeler, four wheeler or commercial vehicles will not be sold in India by any
manufacturer or dealer on and from 1st April, 2017. (b) All the vehicle registering
authorities under the Motor Vehicles Act, 1988 are prohibited for registering such
vehicles on and from 1st April, 2017 that do not meet BS-IV emission standards,
except on proof that such a vehicle has already been sold on or before 31st March,
2017.”[On 29th March, 2017]

Pappu and Ors. Vs. Vinod Kumar Lamba and ANR [SC 2018 January]

KEYWORDS :- Insurance-Fault Liability-Motor Accident Claim-Authorised person-

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DATE : January 19, 2018

ACTS:- Motor Vehicles Act, 1988-Sections 165 and 168

SUPREME COURT OF INDIA

Pappu and Ors. Vs. Vinod Kumar Lamba and ANR.

[Civil Appeal No. 20962 of 2017 arising out of SLP(C) No.29032 of 2015]

A.M. Khanwilkar, J.

1. This appeal questions the legality and tenability of the judgment of the High Court of Judicature at Allahabad in First Appeal from Order No.1138 of 2000, dated 9th October, 2014, whereby the appeal filed by the appellants was dismissed by the High Court whilst rejecting the only question raised before it regarding absolving the Insurance Company (Respondent No.2) from any liability in respect of truck bearing No.DIL-5955, which was duly insured by respondent No.2 Insurance Company, on the ground that the same was not driven by a person having a valid licence, as found by the Motor Accident Claims Tribunal, District Allahabad in Claim Petition No.215 of 1999.

2. In the claim petition it was asserted that on 12.08.1995 Om Prakash, son of Satku Lal, was driving Truck No.URS-2735 when it was knocked down by a rashly and negligently driven Truck No.DIL-5955 coming from the opposite direction, as a result of which Om Prakash succumbed to fatal injuries.

The claim petition was filed by the widow of deceased Om Prakash. Om Prakash left behind his children Pappu, aged 16 years, Ramu, 12 years, Kumari Geeta, 14 years, Kumari Neetu, 10 years, Kumari Guriya, 8 years and his mother, Smt. Shiv Rani, at the time of the accident. The widow of deceased Om Prakash claimed compensation of Rs.7 lakh under Fault Liability and Rs.25,000/- under No Fault Liability. The mother of Om Prakash claimed compensation of Rs.50,000/- separately. On the date of the accident, Om Prakash was around 35 years of age and was a driver by profession.

3. In the context of the sole contention raised before the High Court and reiterated before this Court, it is not necessary for us to dilate on factual aspects considered by the Tribunal except to state that the Tribunal, on analysis of the evidence on record, held that Om Prakash died because of the accident caused by rash and negligent driving of Truck No.DIL-5955. Although the Tribunal allowed the claim petition in part, it absolved respondent No.2 Insurance Company by dismissing the claim petition against the said respondent.

The Tribunal awarded a sum of Rs.25,000/- to opposite party No.3 Shiv Rani and Rs.1,75,000/- to claimant Nos.1 to 6, with interest at the rate of 12% per annum from the date of petition till the date of payment. In other words, the claim petition was partly allowed against respondent No.1 – the owner of the offending vehicle DIL-5955.

4. In the appeal preferred by the appellants/claimants against the said decision, the only question urged before the High Court was about the correctness of the view taken by the Tribunal in absolving the respondent No.2 Insurance Company even though the offending Truck No.DIL-5955 was duly insured by the said Insurance Company.

The High Court affirmed the view taken by the Tribunal that there was no pleading or any evidence adduced by the owner of the offending Truck to substantiate the fact that the Truck was driven by one Joginder Singh, whose driving licence was produced on record. The High Court also noted that there could be no presumption that Joginder Singh was driving the offending vehicle. The appellants have assailed the aforesaid view taken by the Tribunal and affirmed by the High Court.

5. According to the appellants, the Insurance Company did not produce any evidence before the Tribunal. As a result, it was not open to the respondent No.2 Insurance Company to extricate itself from the liability, having duly insured the offending vehicle DIL-5955, which fact has been substantiated by production of the Insurance Policy.

A defence being available to the Insurance Company, that the offending vehicle was not driven by an authorised person and/or person not having a valid driving licence, it was obligatory on the part of the Insurance Company to substantiate that defence and more so, to rebut the plea taken by the owner of the offending vehicle that the offending vehicle was being driven by an authorised person having a valid driving licence. To buttress this argument, reliance has been placed on the decision of this Court in the case of National Insurance Co. Ltd. Vs. Swarn Singh and Ors.

6. We have heard Mr. Sharve Singh, learned counsel appearing for the appellants and Mr. Rishi Malhotra, learned counsel appearing for the Insurance Company.

7. In the context of the issue that arises for our consideration, we may first advert to the claim petition. In the claim petition, the name of the driver of the offending vehicle DIL-5955 has not been mentioned. The assertion made in the claim petition is that Truck No.URS-2735 driven by Om Prakash was knocked down by the offending Truck No.DIL-5955 coming from the opposite direction by rash and negligent driving.

The reply filed by respondent No.1 – owner of the offending Truck DIL-5955 also does not mention the name of the driver of the offending Truck No.DIL-5955. Indeed, the reply filed by respondent No.1 asserts that the vehicle No.DIL-5955 was comprehensively insured by the respondent No.2 Insurance Company for unlimited liability. The details of the Insurance Certificate have been mentioned in the Written Statement. In paragraph 18 of the Written Statement, however, a vague assertion has been made that on the alleged date of incident, the offending vehicle DIL-5955 6 was plied by an authorised person having a valid driving permit.

8. In the Written Statement filed by the respondent No.2 Insurance Company to oppose the claim petition, it is asserted that the claimants should be put to strict proof about the occurrence of the accident and other related matters. It is then asserted that no insurance is directly issued by the Head Office of respondent No.2. The name of the Branch Office by which the vehicle in question was allegedly insured has not been disclosed and in its absence, it was difficult to trace out the insurance policy.

Further, the original insurance policy will have to be summoned from the Insurer or owner of the vehicle. It is then asserted that neither has the alleged owner of the vehicle (respondent No.1) informed about any claim nor have the claimants made any claim to the Insurance Company. As regards the plea taken by respondent No.1 – owner of the offending vehicle, in paragraph 29 of the Written Statement, it has been asserted by respondent No.2 as follows:

“29. That in petition anywhere or in column 16 of the petition details or driving licence of the alleged driver are not given and in absence of details it is quite impossible for answering opposite party to ascertain the driving licence and its validity on the alleged date of accident, hence the driving licence if any and its validity on the alleged date of accident is denied. The answering opposite party could not be held liable for payment of any award if made, unless it is proved that the vehicle allegedly involved in the alleged accident was driving under valid driving licence by its authorized driver with due permission and under control of its owner and under valid road, permit, fitness, road tax etc. as required under the provisions of M.V. Act and also was driven with full compliance of the terms and conditions of the alleged insurance policy.” It is not necessary to reproduce the other averments in the Written Statement filed by respondent No.2.

9. On the basis of these pleadings, the matter proceeded before the Tribunal. Admittedly, the respondent No.1 – owner of the vehicle did not produce any evidence in support of his plea taken in the Written Statement that the offending vehicle was plied by an authorised person having a valid driving permit. All that respondent No.1 did was to produce a driving licence purportedly of one Joginder Singh. The Tribunal adverted to the said driving licence but found that nowhere the owner of the vehicle has asserted that the Truck No.DIL-5955 was in fact driven by said Joginder Singh at the time of the accident. On the basis of the pleadings, the Tribunal framed issue No.3 and answered the same in favour of the Insurance Company as follows:

“Issue No.3: Whether the Truck No. DIL-5955 was not being driven by a person having valid and effective driving licence? As it has been stated earlier, that the owner of Truck No. DIL-5955 has filed original driving licence of one Joginder Singh but he has not mentioned anywhere that Joginder Singh was driving his truck at the time of accident. The owner has filed photo copy of insurance policy in which at paragraph 5 proviso A, it is written that the insurance company will be liable when driver was holding a valid and effective driving licence. The owner of the vehicle has not proved that his driver was holding a valid and effective driving licence. This issue is decided in the negative.”

10. This view taken by the Tribunal was assailed before the High Court by the claimants. No other contention was raised before the High Court except about the liability of the Insurance Company. The High Court, after analysing the record, negatived the said contention in the following words:

“5. The only question which has been raised before this Court is, whether Insurance Company has rightly been held not liable by holding that Truck No. DIL 5955 was not being driven by a person having valid licence. This Court has to consider, whether findings recorded in respect of issue no.3 is correct or not.

6. Learned counsel for the appellants could not dispute that neither any pleadings nor evidence have been led before Tribunal to suggest or to tell, as a matter of fact, that aforesaid truck was being driven by Sri Joginder Singh. It is not in dispute that owner of aforesaid vehicle produced driving licence which was in the name of Sri Joginder Singh but at no stage it is pleaded or brought on record before Tribunal that Sri Joginder Singh was the person who was driving aforesaid Truck. This fact has been noticed by Tribunal in the impugned order as under. ‘Joginder Singh Ko Prastut Kiya Gaya Hai Parantu Joginder Singh Truck No. 5955 Ka Chalak Tha Yah Kahi Par Bhi Nahi Kaha Gaya Hai.’

7. Learned counsel for the appellants could not dispute this fact. In view of above statement of fact that it was not pleaded or proved before Tribunal, the mere production of driving licence of Sri Joginder Singh, by owner of vehicle, cannot raise a presumption that he was a person who was driving vehicle. The findings recorded by Tribunal, therefore, cannot be faulted in any manner. No other argument has been advanced.”

11. The question is: whether the fact that the offending vehicle bearing No.DIL-5955 was duly insured by respondent No.2 Insurance Company would per se make the Insurance Company liable? This Court in the case of National Insurance Co. Ltd. (supra), has noticed the defences available to the Insurance Company under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988. The Insurance Company is entitled to take a defence that the offending vehicle was driven by an unauthorised person or the person driving the vehicle did not have a valid driving licence. The onus would shift on the Insurance Company only after the owner of the offending vehicle pleads and proves the basic facts within his knowledge that the driver of the offending vehicle was authorised by him to drive the vehicle and was having a valid driving licence at the relevant time.

In the present case, the respondent No.1 owner of the offending vehicle merely raised a vague plea in the Written Statement that the offending vehicle DIL-5955 was being driven by a person having valid driving licence. He did not disclose the name of the driver and his other details. Besides, the respondent No.1 did not enter the witness box or examine any witness in support of this plea. The respondent No.2 Insurance Company in the Written Statement has plainly refuted that plea and also asserted that the offending vehicle was not driven by an authorised person and having valid driving licence. The respondent No.1 owner of the offending vehicle did not produce any evidence except a driving licence of one Joginder Singh, without any specific stand taken in the pleadings or in the evidence that the same Joginder Singh was, in fact, authorised to drive the vehicle in question at the relevant time.

Only then would onus shift, requiring the respondent No.2 Insurance Company to rebut such evidence and to produce other evidence to substantiate its defence. Merely producing a valid insurance certificate in respect of the offending Truck was not enough for the respondent No.1 to make the Insurance Company liable to discharge his liability arising from rash and negligent driving by the driver of his vehicle. The Insurance Company can be fastened with the liability on the basis of a valid insurance policy only after the basic facts are pleaded and established by the owner of the offending vehicle – that the vehicle was not only duly insured but also that it was driven by an authorised person having a valid driving licence.

Without disclosing the name of the driver in the Written Statement or producing any evidence to substantiate the fact that the copy of the driving licence produced in support was of a person who, in fact, was authorised to drive the offending vehicle at the relevant time, the owner of the vehicle cannot be said to have extricated himself from his liability. The Insurance Company would become liable only after such foundational facts are pleaded and proved by the owner of the offending vehicle.

12. In the present case, the Tribunal has accepted the claim of the appellants. It has, however, absolved the respondent No.2 Insurance Company from any liability for just reasons. The High Court has also affirmed that view. It rightly held that there can be no presumption that Joginder Singh was driving the offending vehicle at the relevant time.

13. Be that as it may, no grievance about the quantum of compensation awarded by the Tribunal has been made by the appellants – claimants (either before the High Court or before us in this appeal). Hence, that issue does not warrant any scrutiny. Similarly, the owner of the vehicle (respondent No.1) has not challenged the findings of the Tribunal as affirmed by the High Court in favour of the insurer (respondent No.2), including on the factum that the vehicle was driven by a person who did not have a valid driving licence at the relevant time.

14. The next question is: whether in the fact situation of this case the insurance company can be and ought to be directed to pay the claim amount, with liberty to recover the same from the owner of the vehicle (respondent No.1)?

This issue has been answered in the case of National Insurance Company Ltd. (supra). In that case, it was contended by the insurance company that once the defence taken by the insurer is accepted by the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle. However, this Court held that even if the insurer succeeds in establishing its defence, the Tribunal or the Court can direct the insurance company to pay the award amount to the claimant(s) and, in turn, recover the same from the owner of the vehicle. The three-Judge Bench, after analysing the earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle.

In paragraph 107, the Court then observed thus:

“We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realize the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act.

However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it has not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given an opportunity to defend at all. Such a course of action may also be resorted to when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage.”

Further, in paragraph No.110, the Court observed thus:

110. The summary of our findings to the various issues as raised in these petitions are as follows:

(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

(ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a) (ii) of the said Act.

(iii) The breach of policy condition, e.g. disqualification of driver or invalid driving licence of the driver, as contained in Sub-section (2)(a)(ii) of Section 149, have 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 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 duly licensed driver or one who was not disqualified to drive at the relevant time,

(iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish ‘breach’ on the part of the owner of the vehicle; the burden of proof where for would be on them.

(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case.

(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insured under Section 149(2) of the Act.

(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

(viii) xxx

(ix) xxx

(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with Sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue.

The certificate will be issued for the recovery as arrears of land revenue only if, as required by Sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.

(xi) The provisions contained in Sub-section (4) with proviso thereunder and Sub-section (5) which are 16 intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by, relegating them to the remedy before, regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.”

(emphasis supplied)

15. In the present case, the owner of the vehicle (respondent No.1) had produced the insurance certificate indicating that vehicle No. DIL- 5955 was comprehensively insured by the respondent No.2 (Insurance Company) for unlimited liability. Applying the dictum in the case of National Insurance Company Ltd. (supra), to subserve the ends of justice, the insurer (respondent No.2) shall pay the claim amount awarded by the Tribunal to the appellants in the first instance, with liberty to recover the same from the owner of the vehicle (respondent No.1) in accordance with law.

16. Accordingly, the appeal is allowed to the extent that the compensation amount awarded by the Tribunal and confirmed by the High Court shall be paid and satisfied by the insurer (respondent No.2) in the first instance, with liberty to recover the same from the owner of the vehicle (respondent No.1) in accordance with law.

17. Appeal is disposed of in the aforementioned terms with no order as to costs.

CJI. (Dipak Misra)

J. (A.M. Khanwilkar)

J. (Dr. D.Y. Chandrachud)

New Delhi;

January 19, 2018.

National Insurance Co. Ltd. Vs Swaran Singh and others [SC 2004 January]

KEYWORDS:- MOTOR VEHICLE CLAIM-

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DATE:-05-01-2004-

  • If a vehicle at the time of accident was driven by a person having a learner’s licence, the insurance companies would be liable to satisfy the decree.

AIR 2004 SC 1531 : (2004) 1 SCR 180 : (2004) 3 SCC 297 : JT 2004 (1) SC 109 : (2004) 1 SCALE 180

(SUPREME COURT OF INDIA)

National Insurance Co. Ltd. Appellant
Versus
Swaran Singh and others Respondent

(Before : V. N. Khare, C.J.I., D. M. Dharmadhikari And S. B. Sinha, JJ.)

Spl. Leave Petn. (C) No. 9027 of 2003 with SLP (C) Nos. 10017, 10042, 10055, 10510, 10787, 10829-10831, 11129 of 2003, 153 of 2004, 4917 of 2003, 154, 156, 155, 157, 159, 356 of 2004, 9335, 9356, 9554, 9560, 9811, 9812, 9815, 9867, 9900, 9947 of 2003, 321, 160, 357 of 2004, 15528 and 15772 of 2002,

Decided on : 05-01-2004.

Motor Vehicles Act, 1988—Sections 7(2), 4(3) and 10—Accident caused by person having learner’s licence—Liability of insurer—Insurance company liable.

The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

Motor Vehicles Act, 1988 provides for grant of learner’s licence. (See Section 4(3), Section 7(2), Section 10 and Section 14). A learner’s licence is, thus, also a licence within the meaning of the provisions of the said Act. It cannot, therefore, be said that a vehicle when being driven by a learner subject to the conditions mentioned in the licence, he would not be a person who is not duly licensed resulting in conferring a right on the insurer to avoid the claim of the third party. It cannot be said that a person holding a learner’s licence is not entitled to drive the vehicle. Even if there exists a condition in the contract of insurance that the vehicle cannot be driven by a person holding a learner’s licence, the same would run counter to the provisions of Section 149(2) of the said Act.

The provisions contained in the said Act provide also for grant of driving licence which is otherwise a learner’s licence. Sections 3(2) and 6 of the Act provides for the restriction in the matter of grant of driving licence. Section 7 deals with such restrictions on granting of learner’s licence. Section 8 and 9 provide for the manner and conditions for grant of driving licence. Section 15 provides for renewal of driving licence. Learner’s licences are granted under the rules framed by the Central Government or the State Governments in exercise of their rule-making power. Conditions are attached to the learner’s licences granted in terms of the statute. A person holding learner’s licence would, thus, also come within the purview of “duly licensed” as such a licence is also granted in terms of the provisions of the Act and the rules framed thereunder.

Motor Vehicles Act, 1988—Section 149—Liability of insurer—Available defences—Burden of proof—No criteria laid down how the burden to be discharged.

The Court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.

Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insured under Section 149(2) of the Act.

Motor Vehicles Act, 1988—Section 149(2)—Accident caused by person having learner’s licence—Liability of insurer—Insurance company liable.

The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

If a vehicle at the time of accident was driven by a person having a learner’s licence, the insurance companies would be liable to satisfy the decree.

Motor Vehicles Act, 1988 provides for grant of learner’s licence. (See Section 4(3), Section 7(2), Section 10(3) and Section 14). A learner’s licence is, thus, also a licence within the meaning of the provisions of the said Act. It cannot, therefore, be said that a vehicle when being driven by a learner subject to the conditions mentioned in the licence, he would not be a person who is not duly licensed resulting in conferring a right on the insurer to avoid the claim of the third party. It cannot be said that a person holding a learner’s licence is not entitled to drive the vehicle. Even if there exists a condition in the contract of insurance that the vehicle cannot be driven by a person holding a learner’s licence, the same would run counter to the provisions of Section 149(2) of the said Act.

The provisions contained in the said Act provide also for grant of driving licence which is otherwise a learner’s licence. Sections 3(2) and 6 of the Act provides for the restriction in the matter of grant of driving licence. Section 7 deals with such restrictions on granting of learner’s licence. Section 8 and 9 provide for the manner and conditions for grant of driving licence. Section 15 provides for renewal of driving licence. Learner’s licences are granted under the rules framed by the Central Government or the State Governments in exercise of their rule-making power. Conditions are attached to the learner’s licences granted in terms of the statute. A person holding learner’s licence would, thus, also come within the purview of “duly licensed” as such a licence is also granted in terms of the provisions of the Act and the rules framed thereunder.

Motor Vehicles Act, 1988—Section 149(2)—Insurance policy conditions—Construing of—In interpreting policy conditions, tribunal to apply ‘rule of main purpose’ and ‘concept of fundamental breach’ to allow defences available under Section 149(2).

Motor Vehicles Act, 1988—Section 149(2)—Liability of insurer—Insurance company to satisfy the decree first and recover the awarded amount later—No deviation from the said principle.

Liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time.

Apart from the reasons stated hereinbefore the doctrine of stare decisis persuades us not to deviate from the said principle.

It is well-settled rule of law and should not ordinarily be deviated from.

Motor Vehicles Act, 1988—Section 149(2)(a)(ii)—Third party risks—Defences available to insurer—Mere absence, fake/invalid driving licence or disqualification of driver for driving at relevant time, not by themselves defences for insurer.

The breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, have 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 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 duly licensed driver or one who was not disqualified to drive at the relevant time.

The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish ‘breach’ on the part of the owner of the vehicle; the burden of proof wherefore would be on them.

Motor Vehicles Act, 1988—Section 165—Accident claim—Adjudication by tribunal—Powers of—Tribunal has power and jurisdiction to decide disputes inter se between insurer and insured.

The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.

Where an adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Sections 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears as land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.

The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.

Counsel for the Parties:

Harish N. Salve, M. L. Verma, P. P. Malhotra, Sr. Advocates, Pramod Dayal, Piysh Sharma, Vishnu Mehra, B. K. Satija, Joy Basu, Atul Nanda, Ms. Veena Nanda, P. N. Puri, Shailendra Sharma, Ms. Binu Tamta, Ms. Pankaj Bala Verma, Ms. Kirti Renu Mishra, S. L. Gupta, S. P. Jain, K. P. Singh, S. M. Suri, Ms. Meenu Pandey, Pramod Dayal, Sudhir Kumar Gupta, P. K. Seth, Anurag Pandey, Ms. Kiran Suri, Kishore Rawat, M. K. Dua, Manish Goswami, Rameshwar Prasad Goyal, B. S. Chahar, Ms. Jyoti Chahar, Vinay Garg, Parveen K. Vohra, Dinesh Verma, Ms. Suresh Kumari and A. P. Mohanty, Advocates with them, for Appearing Parties.

Judgment

V. N. Khare, C.J.I. And D. M. Dharmadhikari, S. B. Sinha, Jj—Interpretation of S. 149(2)(a)(ii) vis-a-vis the proviso appended to sub-sections (4) and (5) of the Motor Vehicles Act, 1988 is involved in this batch of special leave petitions filed by the National Insurance Company Limited (hereinafter referred to as Insurer) assailing various awards of the Motor Vehicles Claims Tribunal and judgments of the High Courts.

2. In view of the fact that these petitions involve pure questions of law, it is not necessary to advert to the individual fact pertaining to each matter.

Suffice, however, is to point out that the vehicles insured with the petitioners, were involved in accidents resulting in filing of claim applications by the respective legal representatives of the deceased(s) or the injured person(s) as the case may be.

3. Defences raised by the petitioner-company in the claim petitions purported to be in terms of S. 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the Act’) were (a) driving licence produced by the driver or owner of the vehicle was a fake one; (b) driver did not have any licence whatsoever, (c) licence, although was granted to the concerned driver but on expiry thereof, the same had not been renewed; (d) licence granted to the drivers being for one class or description of vehicle but the vehicle involved in the accident was of different class or description; and (e) the vehicle in question was driven by a person having a learner’s licence.

4. Before we proceed further in the matter it is relevant to notice certain relevant statutory provisions which are :

“2(10) “driving licence” means the licence issued by a competent authority under Chapter II authorising the person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle of any specified class or description;

3. Necessity for driving licence.- (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle other than (a motor cab or motor cycle hired for his own use or rented under any scheme made under sub-section (2) of S. 75 unless his driving licence specifically entitles him so to do.

(2) The conditions subject to which sub-section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be prescribed by the Central Government.

4. Age limit in connection with driving of motor vehicles.- (1) No person under the age of eighteen years shall drive a motor vehicle in any public place :

Provided that a motor cycle with engine capacity not exceeding 50cc may be driven in a public place by a person after attaining the age of sixteen years.

(2) Subject to the provisions of S. 18, no person under the age of twenty years shall drive a transport vehicle in any public place.

(3) No learner’s licence or driving licence shall be issued to any person to drive a vehicle of the class to which he has made an application unless he is eligible to drive that class of vehicle under this section.

5. Responsibility of owners of motor vehicles for contravention of Ss. 3 and 4.- No owner or person in-charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of S. 3 or S. 4 to drive the vehicle.

6. Restrictions on the holding of driving licences.- (1) No person shall, while he holds any driving licence for the time being in force, hold any other driving licence except a learner’s licence or a driving licence issued in accordance with the provisions of S. 18 or a document authorising, in accordance with the rules made under S. 139, the person specified therein to drive a motor vehicle.

(2) No holder of a driving licence or a learner’s licence shall permit it to be used by any other person.

(3) Nothing in this section shall prevent a licensing authority having the jurisdiction referred to in sub-section (1) of S. 9 from adding to the classes of vehicles which the driving licence authorises the holder to drive.

7. Restrictions on the granting of learner’s licences for certain vehicles. (1) No person shall be granted a learner’s licence to drive a transport vehicle unless he has held a driving licence to drive a light motor vehicle for at least one year.

(2) No person under the age of eighteen years shall be granted a learner’s licence to drive a motor cycle without gear except with the consent in writing of the person having the care of the person desiring the learner’s licence.”

Section 9 provides for grant of driving licence.

“9. Grant of driving licence.- (1) Any person who is not for the time being disqualified for holding or obtaining a driving licence may apply to the licensing authority having jurisdiction in the area-

(i) in which he ordinarily resides or carries on business, or

(ii) in which the school or establishment referred to in S. 12 from where he is receiving or has received instruction in driving a motor vehicle is situated.

for the issue to him of a driving licence.

**********

(7) When any application has been duly made to the appropriate licensing authority and the applicant has satisfied such authority of his competence to drive, the licensing authority shall issue the applicant a driving licence unless the applicant is for the time being disqualified for holding or obtaining a driving licence :

Provided that a licensing authority may issue a driving licence to drive a motor cycle or a light motor vehicle notwithstanding that it is not the appropriate licensing authority, if the licensing authority is satisfied that there is good and sufficient reason for the applicant’s inability to apply to the appropriate licensing authority :

Provided further that the licensing authority shall not issue a new driving licence to the applicant, if he had previously held a driving licence, unless it is satisfied that there is good and sufficient reason for his inability to obtain a duplicate copy of his former licence.

(8) If the licensing authority is satisfied, after giving the applicant an opportunity of being heard, that he-

(a) is a habitual criminal or a habitual drunkard; or

(b) is a habitual addict to any narcotic drug or psychotropic substance within the meaning of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

(c) is a person whose licence to drive any motor vehicle has, at any time earlier, been revoked,

it may, for reasons to be recorded in writing, make an order refusing to issue a driving licence to such person and any person aggrieved by an order made by a licensing authority under this sub-section may, within thirty days of the receipt of the order, appeal to the prescribed authority.

(9) Any driving licence for driving a motor cycle in force immediately before the commencement of this Act shall, after such commencement, be deemed to be effective for driving a motor cycle with or without gear.

10. Form and contents of licences to drive.- (1) Every learner’s licence and driving licence, except a driving licence issued under S. 18, shall be in such form and shall contain such information as may be prescribed by the Central Government.

(2) A learner’s licence or, as the case may be, driving licence shall also be expressed as entitling the holder to drive a motor vehicle of one or more of the following classes, namely :-

(a) motor cycle without gear;

(b) motor cycle with gear;

(c) invalid carriage;

(d) light motor vehicle;

(e) transport vehicle;

(i) road-roller;

(j) motor vehicle of a specified description.

14. Currency of licences to drive motor vehicles.- (1) A learner’s licence issued under this Act shall, subject to the other provisions of this Act, be effective for a period of six months from the date of issue of the licence.

(2) A driving licence issued or renewed under this Act shall.-

(a) in the case of a licence to drive a transport vehicle, be effective for a period of three years :

Provided that in the case of licence to drive a transport vehicle carrying goods of dangerous or hazardous nature be effective for a period of one year and renewal thereof shall be subject to the condition that the driver undergoes one day refresher course of the prescribed syllabus; and

(b) in the case of any other licence,-

(i) if the person obtaining the licence, either originally or on renewal thereof, has not attained the age of fifty years on the date of issue or, as the case may be, renewal thereof,-

(A) be effective for a period of twenty years from the date of such issue or renewal; or

(B) until the date on which such person attains the age of fifty years, whichever is earlier;

(ii) if the person referred to in sub-clause (i), has attained the age of fifty years on the date of issue or as the case may be, renewal, thereof, be effective, on payment of such fee as may be prescribed, for a period of five years from the date of such issue or renewal:

Provided that every driving licence shall, notwithstanding its expiry under this sub-section continue to be effective for a period of thirty days from such expiry;

15. Renewal of driving licences.- (1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of its expiry :

Provided that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal :

Provided further that where the application is for the renewal of a licence to drive a transport vehicle or where in any other case the applicant has attained the age of forty years, the same shall be accompanied by a medical certificate in the same form and in the same manner as is referred to in sub-section (3) of S. 8, and the provisions of sub-section (4) of S. 8 shall, so far as may be, apply in relation to every such case as they apply in relation to a learner’s licence.

(2) An application for the renewal of a driving licence shall be made in such form and accompanied by such documents as may be prescribed by the Central Government.

(3) Where an application for the renewal of a driving licence is made previous to, or not more than thirty days after the date of its expiry, the fee payable for such renewal shall be such as may be prescribed by the Central Government in this behalf;

(4) Where an application for the renewal of a driving licence is made more than thirty days after the date of its expiry the fee payable for such renewal shall be such amount as may be prescribed by the Central Government :

Provided that the fee referred to in sub-section (3) may be accepted by the licensing authority in respect of an application for the renewal of a driving licence made under this sub-section if it is satisfied that the applicant was prevented by good and sufficient cause from applying within the time specified in sub-section (3) :

Provided further that if the application is made more than five years after the driving licence has ceased to be effective the licensing authority may refuse to renew the driving licence unless the applicant, undergoes and passes to its satisfaction the test of competence to drive referred to in sub-section (3) of S. 9.

(5) Where the application for renewal has been rejected, the fee paid shall be refunded to such extent and in such manner as may be prescribed by the Central Government.

(6) Where the authority renewing the driving licence is not the authority which issued the driving licence it shall intimate the fact of renewal to the authority which issued the driving licence.

16. Revocation of driving licence on grounds of disease or disability.- Notwithstanding anything contained in the foregoing sections, any licensing authority may at any time revoke a driving licence or may require, as a condition of continuing to hold such driving licence, the holder thereof to produce a medical certificate in the same form and in the same manner as is referred to in sub-section (3) of S. 8 if the licensing authority has reasonable grounds to believe that the holder of the driving licence is, by virtue of any disease or disability, unfit to drive a motor vehicle and where the authority revoking a driving licence is not the authority which issued the same, it shall intimate the fact of revocation to the authority which issued that licence.”

5. Section 19 provides for power of the licensing authority to disqualify from holding a driving licence or revoke such licence.

6. Section 20 empowers the Court to disqualify a person in the event a person is convicted of an offence under the Motor Vehicles Act or of an offence in the commission of which a motor vehicle was used.

7. Section 21 provides for suspension of driving licence in certain cases. Section 23 provides for effect of disqualification order. Section 27 provides for the power of the Central Government to make rules.

8. Chapter II of the Act deals with the provisions of licensing of drivers of motor vehicles.

9. Section 147 of the Act provides for requirements of policies and limits of liability. Section 149 provides for the duty of insurers to satisfy judgments and award against persons insured in respect of third party risks. Sub-section (1) of S. 149 postulates that in the event of a certificate of insurance has been issued in terms of sub-section (3) of S. 147 a judgment or award in respect of any such liability is obtained by the insured, the insurer notwithstanding its entitlement to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. Sub-section (2) of S. 149 of the Act, however, seeks to make an exception thereto. Sub-sections (4), (5) and (7) of S. 149 read thus :

“(4) Where a certificate of insurance has been issued under sub-section (3) of S. 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in Cl. (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under Cl. (b) of sub-section (1) of S. 147, be of no effect :

Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be.”

Section 165 of the Act provides as under:

“165. Claims Tribunals.- (1) A State Government may, by Notification in the Official Gazette, constitute one or more Motor Accidents Claims Tribunals (hereafter in this chapter referred to as Claims Tribunal) for such area as may be specified in the Notification for the purpose of adjudicating upon claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles, or damages to any property of a third party so arising, or both.

Explanation.- For the removal of doubts, it is hereby declared that the expression “claims for compensation in respect of accidents involving the death of or bodily injury to persons arising out of the use of motor vehicles” includes claims for compensation under S. 140 (and S. 163-A).

(2) A Claims Tribunal shall consist of such number of members as the State Government may think fit to appoint and where it consists of two or more members, one of them shall be appointed as the Chairman thereof.

(3) A person shall not be qualified for appointment as a member of a Claims Tribunal unless he-

(a) is, or has been, a Judge of a High Court, or (b) is, or has been a District Judge, or

(c) is qualified for appointment as a High Court Judge

(or as a District Judge).

(4) Where two or more Claims Tribunals are constituted for any area, the State Government, may by general or special order, regulate the distribution of business among them.”

Section 168 of the Act provides as follows:

“168. Award of the Claims Tribunal.- On receipt of an application for compensation made under Section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of S. 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be :

Provided that where such application makes a claim for compensation under S. 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X.

(2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.

(3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct.”

10. r. Harish Salve and Mr. M. L. Verma, learned senior counsel appearing on behalf of the insurer made the following submissions in support of these petitions.

(1) The insurer in terms of sub-section (2) of S. 149 of the Act has an absolute right to raise a defence specified, inter alia, in sub-clause (ii) of Cl. (a) thereof;

(2) Such a right being clear and unequivocal having regard to the judgment of this Court in National Insurance Company Ltd., Chandigarh vs. Nicolletta Rohtagi and others (2002) 7 SCC 456) must be allowed to be invoked by the insurer to its full effect. In the proceedings before the Tribunal, the insurers, thus, were entitled to show that the vehicle involved in the accident at the material point of time was driven by a person who was not ‘duly licensed’ or was ‘disqualified to hold a licence.’

(3) A person cannot be said to be ‘duly licensed’ unless he has been granted a permanent licence for driving a particular vehicle in terms of the provisions of Chapter II of the Motor Vehicles Act and, thus, a vehicle cannot be held to be driven by a person duly licensed therefor if : (a) he does not hold a licence; (b) he holds a fake licence; (c) he holds a licence but the validity thereof has expired; or (d) he does not hold a licence for the type of vehicle which he was driving in terms of Chapter II of the Motor Vehicles Act, 1988, or (e) he holds merely a learner’s licence. Reliance in this behalf has been placed on New India Assurance Co. Ltd. vs. Mandar Madhav Tambe and others (1996) 2 SCC 328) and United India Insurance Co. Ltd. vs. Gian Chand and others (1997) 7 SCC 558).

(4) Once the defence by the insurer is established in the proceedings before the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle.

(5) Once it is held that the insurer has been able to establish its defence, the Tribunal or the Court cannot direct the insurance companies to pay the awarded amount to the claimant and in turn recover the same from the owner and the driver of the vehicle.

11.The decisions of this Court in New India Assurance Co., Shimla vs. Kamla and others etc. (2001) 4 SCC 342) and United India Insurance Company Ltd. vs. Lehru and others (2003) 3 SCC 338) wherein it has been held that the Court is entitled to issue a direction upon the insurer to satisfy the award and thereafter recover the same from the owner of the vehicle do not lay down the correct law and should be overruled.

12. The learned counsel appearing on behalf of the respondents, who are third party claimants on the other hand, submitted :

(i) that the Parliament deliberately used two different expressions ‘effective licence’ in S. 3 and ‘duly licensed’ in sub-section (2) of S. 149 of the Act which are suggestive of the fact that a driver once licensed, unless he is disqualified, would continue to be a duly licensed person for the purpose of Chapter XI of the Act.

(ii) Thus, once a person has been duly licensed but has not renewed his licence, the same would not come within the purview of S. 149 and thus would not constitute a statutory defence available to the insurer in terms thereof. Only in the event of lapse of five years from the date of expiry of the licence, such statutory defence may be raised.

(iii) Once a certificate of insurance is issued in terms of the provisions of the Act, the insurer has a liability to satisfy an award. It has been pointed that a major departure has been made in the 1988 Act insofar as in terms of S. 96(2)(b) of the 1939 Act all the statutory defences were available in terms of sub-section (3) thereof provided that the policy conditions other than those prescribed therein had no effect, whereas in the new Act, Section 149(2)(a) prescribes that the policy is void if it is obtained by non-disclosure of material fact. Section 149(4) confines to only Cl. (b) and states that the conditions of policy except as mentioned in Cl. (b) of sub-section (2) are of no effect and, thus, after the amendment, except in cases which are covered under Cl. (b) of S. 149, the insurance companies are liable to pay to the third parties. In other words, the right of insurer to avoid the claim of the third party would arise only when the policy is obtained by misrepresentation of material fact and fraud and in no other case.

(iv) Sub-section (1) of S. 149 makes it clear that the insurer should pay first to the third parties and recover the same if they are absolved on any of the grounds specified in sub-section (2) thereof. Reliance, in this connection, has been placed on BIG Insurance Co. Ltd. vs. Captain Itbar Singh and others (AIR 1959 SC 1331) and New India Assurance Company vs. Kamla and others (2001) 4 SCC 342).

(v) The burden to prove the defence raised by the insurers as regard the question as to whether there has been any breach of violation of policy conditions of the insurance policy has been issued or not, would be upon the insurer.

(vi) The breach on the part of the insured must be a wilful one being of fundamental condition by the insured himself and the burden of proof, therefore, would be on the insurer.

(vii) With a view to avoid its liabilities it is not sufficient for the insurer to show that the person driving at the time of accident was not duly licensed but it must further be established that there was a breach on the part of the insured. Reliance, in this connection, has been placed on Narcinva V. Kamath and another vs. Alfredo Antonio Doe Martins and others (1985) 2 SCC 574), Skandia Insurance Company Ltd. vs. Kokilaben Chandevadan and others (1987) 2 SCC 654); Sohan Lal Passi vs. P. Sesh Reddy and others (1996) 5 SCC 21) and United India Insurance Company Ltd. vs. Lehru and others (2003) 3 SCC 338) .

13. Before we deal with various contentions raised by the parties it is desirable to look into the legislative history of the provisions for its interpretation. The relevant provisions of the Act indisputably are beneficent to the claimant. They are in the nature of a Social Welfare Legislation.

14. Chapter XI of the Motor Vehicles Act, 1988, inter alia, provides for compulsory insurance of vehicles in relation to the matters specified therefor. The provision for compulsory insurance indisputably has been made inter alia with a view to protect the right of a third party.

This Court in Sohan Lal Passi (supra) noted :

“10. The road accidents in India have touched a new height. In majority of cases because of the rash and negligent driving, innocent persons become victims of such accidents because of which their dependents in many cases are virtually on the streets. In this background, the question of payment of compensation in respect of motor accidents has assumed great importance for public as well as for Courts. Traditionally, before the Court directed payment of tort compensation, it had to be established by the claimants that the accident was due to the fault of the person causing injury or damage. Now from different judicial pronouncements, it shall appear that even in western countries fault is being read and assumed as someone’s negligence or carelessness. The Indian Parliament, being conscious of the magnitude of the plight of the victims of the accidents, have introduced several beneficial provisions to protect the interest of the claimants and to enable them to claim compensation from the owner or the insurance company in connection with the accident.”

15. The intention of the Parliament became further evident when in the Motor Vehicles Act, 1939, a new chapter being Chapter VIIA dealing with insurance of motor vehicles against third party risks was introduced and the beneficent provisions contained in the Motor Vehicles Act, 1939 were further made liberal by reason of the Motor Vehicles Act, 1988 and the amendments carried out therein from time to time in aid of the third party claims by way of grant of additional or new rights conferred on the road accident victims.

16. Under the common law a person injured by reason of another person’s wrongdoing had no right of action against insurers who undertook to indemnify the wrongdoer. The first invasion of this principle took place by reason Third Parties (Rights Against Insurers) Act, 1930. The British Parliament in the light of the aforementioned Act enacted the Road Traffic Act, 1930 which has since been replaced by Road Traffic Act, 1988.

17. The Third Parties (Rights Against Insurers) Act, 1930 was enacted with a view to correct injustice effecting a statutory assignment of the rights of the assured to the injured person as prior thereto the right of a person to be indemnified under a contract of insurance against claims made against him by persons whom he might have injured was one personal to himself, and there was no privity of any sort between the injured person and the insurers. The injured person had no interest either at law or in equity in the insurance money, either before or after it was paid by the insurers to the assured. In a case where the assured became bankrupt and if the injured person had not already obtained judgment and levied execution of his claim for damages his only rights was to move in the bankruptcy or the winding up of proceedings. The beneficial provisions of the aforementioned English statutes were incorporated by the Parliament of India while enacting the Motor Vehicles Act, 1939 which has also since been repealed and replaced by the Motor Vehicles Act, 1988.

18. Concededly different types of insurance covers are issued containing different nature of contract of insurance. We are, however, in this batch of cases mainly concerned with third party right under the policy. Any condition in the insurance policy, whereby the right of the third party is taken away, would be void.

19. Indisputably such a benefit to a third party was provided under the Statute keeping in view the fact that the conditions in the assured’s policy may not be of no or little effect in relation to a claim by a person to whom an assured was under a compulsorily insurable liability.

20. In this context, it is necessary to consider as to what is a third party right. A third party claim arises when a victim of an accident suffers a bodily injury or death as a result thereof or his property is damaged. An accident is not susceptible to a very precise definition.

21. The popular and ordinary sense of the word was “an unlooked for mishap or an untoward event which is not expected or designed.”

22. In R. V. Morris (1972) 1 WLR 228), the Court of appeal defined the word as an “unintended occurrence which has an adverse physical result.” The Supreme Court of Canada in Pickford and Black Ltd. vs. Canadian General Insurance Co. (1976) 2 Lloyd’s Rep 108), stated the law thus :-

“The meaning to be attached to the word “accident” as employed in the body of an insurance policy was thoroughly explored by Mr. Justice Pigeon in the reasons for judgment which he delivered on behalf of the majority of this Court in the Canadian Indemnity Co. vs. Walkem Machinery and Equipment Ltd. (1975) DLR (3d) 1. In the course of these reasons at p. 5 he adopted the views expressed by Mr. Justice Freedman, in a dissenting opinion in the Court of Appeal of Manitoba in Marshall Wells of Canada Ltd. vs. Winnipeg Supply and Fuel; R. Litz and Sons Co. vs. Canadian General Insurance Co. (1964) 49 WWR 644 at p. 665 where that learned Judge said :

With respect, I am of the view that what occurred here was an accident. One must avoid the danger of construing that term as if it were equivalent to “inevitable accident.” That a mishap might have been avoided by the exercise of greater care and diligence does not automatically take it out of the range of accident. Expressed another way, “negligence” and “accident” as here used are not mutually exclusive terms. They may co-exist.

After expressing the view that even an occurrence which is the result of a calculated risk or of a dangerous operation may come within the meaning of the word “accident,” Mr. Justice Pigeon went on to say at p. 6 :

While it is true that the word “accident” is sometimes used to describe unanticipated or unavoidable occurrences, no dictionary need be cited to show that in every day use, the word is applied as Halsbury says… to any unlooked for mishap or occurrence… this is the proper test…”

23. In Halsbury’s Laws of England, Fourth Edition Reissue, it is stated :

“An injury caused by the wilful or even criminal act of a third person, provided the assured is not a party or privy to it, is to be regarded as accidental for the purposes of the policy, since from the assured’s point of view it is not expected or designed.”

24. In Colinvau’s Law of Insurance (6th Edition) page 304, the following illustration is given :

“If a man walks and stumbles, thus spraining his ankle, the injury is accidental for while he intends to walk he does not intend to stumble. In Hamlyn vs. Crown Accidental Insurance the assured’s injury was due to stopping forward to pick up a marble dropped by a child as it rolled from him. He stood with his legs together, separated his knees, leaned forward and made a grab at the marble, and in doing so wrenched his knee. The injury was held by the Court of Appeal to be accidental, on the ground that the assured did not intend to get into such a position that he might wrench his knee.”

25. At para 17-13 of the said treatise it is stated :

“Accident includes negligence

It makes no difference that the accident was caused by the negligence of the assured (as opposed to his intentional act). Thus there is an accident where the assured crosses a railway line without exercising due care and is knocked down by an approaching train. In fact, one of the commonest causes of accidents is negligence, and an accident policy applies, excepted perils apart, whether the injury is caused by the negligent act of the assured himself or of a third party.”

26. A right of the victim of a road accident to claim compensation is a statutory one. He is a victim of an unforeseen situation. He would not ordinarily have a hand in it. The negligence on the part of the victim may, however, be contributory. He has suffered owing to wrongdoing of others. An accident may ruin an entire family. It may take away the only earning member. An accident may result in the loss of her only son to a mother. An accident may take place for variety of reasons. The driver of a vehicle may not have a hand in it. He may not be found to be negligent in a given case. Other factors such as unforeseen situation, negligence of the victim, bad road or the action or inaction of any other person may lead to an accident.

27. A person suffering grievous bodily injury may require money for his survival/medical treatment. Statutory compensation paid to the next of kin of the victim of an accident may, thus, bring to a large number of families the only ray of light at the end of the tunnel.

28. In other words, what would also be covered by the contract of insurance vis-a-vis the beneficent statutory provisions like sub-section (2) of Section 149 of the said Act would be when a death or bodily injury has been caused as a result of assured’s own voluntary act. Even an unforeseeable result of assured’s deliberate act may come within the purview of the accident. Even if an accident has occurred due to negligent driving of the assured person, it may not prevent recovery under the policy and certainly thereby a third party would not be non-suited.

29.However, we may notice that in C.M. Jaya’s case (supra), a Constitution Bench of this Court held that the liability of the insurer will have to be determined having regard to the question as to whether any extra premium is paid or not. It was observed:

“. . . The said decision cannot be read as laying down that even though the liability of the Insurance Company is limited to the statutory requirement, an unlimited or higher liability can be imposed on it. The liability could be statutory or contractual. A statutory liability cannot be more than what is required under the statute itself. However, there is nothing in Section 95 of the Act prohibiting the parties from contracting to create unlimited or higher liability to cover wider risk. In such an event, the insurer is bound by the terms of the contract as specified in the policy in regard to unlimited or higher liability as the case may be. In the absence of such a term or clause in the policy, pursuant to the contract of insurance, a limited statutory liability cannot be expanded to make it unlimited or higher. If it is so done, it amounts to rewriting the statute or the contract of insurance which is not permissible.”

30. For the aforementioned reasons, the provisions contained in Chapter XI of the Motor Vehicles Act, 1988 must be construed in that light.

31. Sub-section (1) of Section 149, casts a liability upon the insurer to pay to the person entitled to the benefit of the decree as if he were the judgment debtor. Although the said liability is subject to the provisions of this section, it prefaces with a non-obstante clause that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy. Furthermore, the statute raises a legal fiction to the effect that for the said purpose the insurer would be deemed to be judgment debtor in respect of the liability of the insurer.

32. In Halsbury’s Laws of England, Fourth Edition Reissue, Volume 25, it is stated :

“743. Benefits conferred on third parties by the Road Traffic Act, 1930. It was against the background of the Third Parties (Rights against Insurers) Act 1930 that the Road Traffic Act 1930 (now replaced by the Road Traffic Act 1988), was passed. It was realised that, unless some alterations were made in the rights to which the third party was by the first-named Act subrogated, those rights would frequently be of little, if any, value. Accordingly, it was provided that certain conditions in the assured’s policy were to be of no effect in relation to a claim by a person to whom an assured was under a compulsorily insurable liability. The conditions to that extent avoided are any conditions providing (1) that no liability is to arise, or (2) that any liability which has arisen is to cease, in the event of some specified thing being done, or omitted to be done, after the occurrence of the event giving rise to the claim. If, therefore, any admission of liability is made after an accident contrary to a condition in the policy, or if, contrary to a condition in the policy, proper notice of the accident is not given to the insurers, the injured third party is not affected so far as his claim is concerned.”

33. This Court in Nicolletta Rohtagi (supra) which has since been followed in Sadhana Lodh vs. National Insurance Company Ltd. and another reported in (2003) 1 SCR 567 in no uncertain terms held that the defence available to an insurance company would be a limited one.

34. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in sub-section (2) of Section 149 of the Act corresponding to sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject-matter of decisions in the large number of cases.

35. It is beyond any doubt or dispute that under Section 149(2) of the Act an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action on any of the grounds mentioned therein.

36. However, Clause (a) opens with the words “that there has been a breach of a specified condition of the policy”, implying that the insurer’s defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence.

37. We may also take note of the fact that whereas in Section 3 the words used are ‘effective licence’, it has been differently worded in Section 149(2) i.e. ‘duly licensed’. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 141 of the Act but Section 149 pertains to insurance as regard third party risks.

38. A provision of a statute which is penal in nature vis-a-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently.

39. The words ‘effective licence’ used in Section 3, therefore, in our opinion cannot be imported for sub-section (2) of Section 149 of the Motor Vehicles Act. We must also notice that the words ‘duly licensed’ used in sub-section (2) of Section 149 are used in past tense.

40. Thus, a person whose licence is ordinarily renewed in terms of the Motor Vehicles Act and the rules framed thereunder despite the fact that during the interregnum period, namely, when the accident took place and the date of expiry of the licence, he did not have a valid licence, he could during the prescribed period apply for renewal thereof and could obtain the same automatically without undergoing any further test or without having been declared unqualified therefor. Proviso appended to Section 14 in unequivocal term states that the licence remains valid for a period of thirty days from the day of its expiry.

41. Section 15 of the Act does not empower the authorities to reject an application for renewal only on the ground that there is a break in validity or tenure of the driving licence has lapsed as in the meantime the provisions for disqualification of the driver contained in Sections 19, 20, 21, 22, 23 and 24 will not be attracted, would indisputably confer a right upon the person to get his driving licence renewed. In that view of the matter he cannot be said to be delicensed and the same shall remain valid for a period of thirty days after its expiry.

42. If a person has been given a licence for a particular type of vehicle as specified therein, he cannot be said to have no licence for driving another type of vehicle which is of the same category but of different type. As for example when a person is granted a licence for driving a light motor vehicle he can drive either a car or a jeep and it is not necessary that he must have driving licence both for car and jeep separately.

43. Furthermore, the insurance company with a view to avoid its liabilities is not only required to show that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured. By reason of the provisions contained in the 1988 Act, a more extensive remedy has been conferred upon those who have obtained judgment against the user of a vehicle and after a certificate of insurance is delivered in terms of Section 147(3) a third party has obtained a judgment against any person insured by the policy in respect of a liability required to be covered by Section 145, the same must be satisfied by the insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy or may in fact have done so. The same obligation applies in respect of a judgment against a person not insured by the policy in respect of such a liability, but who would have been covered if the policy had covered the liability of all persons, except that in respect of liability for death or bodily injury.

44. Such a breach on the part of the insurer must be established by the insurer to show that not only the insured used or caused or permitted to be used the vehicle in breach of the Act but also that the damage he suffered flowed from the breach.

45. Under the Motor Vehicles Act, holding of a valid driving licence is one of the conditions of contract of insurance. Driving of a vehicle without a valid licence is an offence. However, the question herein is whether a third party involved in an accident is entitled to the amount of compensation granted by the Motor Accidents Claims Tribunal although the driver of the vehicle at the relevant time might not have a valid driving licence but would be entitled to recover the same from the owner or driver thereof.

46. It is trite that where the insurers relying upon the provisions of violation of law by the assured takes an exception to pay the assured or a third party, they must prove a wilful violation of the law by the assured. In some cases violation of criminal law, particularly, violation of the provisions of the Motor Vehicles Act may result in absolving the insurers but, the same may not necessarily hold good in the case of third party. In any event, the exception applies only to acts done intentionally or “so recklessly as to denote that the assured did not care what the consequences of his act might be”.

47. In Narvinva’s case (supra), a Division Bench of this Court observed :

“. . . The insurance company complains of breach of a term of contract which would permit it to disown its liability under the contract of insurance. If a breach of term of contract permits a party to the contract to not to perform the contract, the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract. The test in such a situation would be who would fail if no evidence is led. . .”

48. In Skandia’s case (supra), this Court held :

“Section 96(2)(b)(ii) extends immunity to the insurance company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified from holding or obtaining driving licence during the period of disqualification. The expression “breach”, is of great significance. The dictionary meaning of “breach” is “infringement or violation of a promise or obligation” (See Collins English Dictionary). It is, therefore, abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of the promise that a person who is duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression “breach” carries within itself induces an inference that the violation or infringement on the part of the promisor must be wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect, how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who dies not hold a driving licence, that it can be said that he is “guilty” of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach, the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive it himself, it cannot be said that the insured is guilty of any breach.”

49. In B. V. Nagaraju vs. M/s. Oriental Insurance Co. Ltd. (AIR 1996 SC 2054), Punchhi, J. speaking for the Division Bench followed Skandia (supra) and read down the exclusionary term of the insurance policy to save the main purpose thereof, holding :

“The National Commission went for the strict construction of the exclusion clause. The reasoning that the extra passengers being carried in the goods vehicle could not have contributed, in any manner, to the occurring of the accident, was barely noticed and rejected sans any plausible account; even when the claim confining the damage to the vehicle only was limited in nature. We, thus, are of the view in accord with the Skandia’s case (AIR 1987 SC 1184), the aforesaid exclusion term of the insurance policy must be read down so as to serve the main purpose of the policy that is indemnify the damage caused to the vehicle, which we hereby do.”

50. A contract of insurance also falls within the realm of contract. Thus, like any other contract, the intention of the parties must be gathered from the expressions used therein.

51. Ivamy in his treatise ‘Fire and Motor Insurance’ (2nd Edition) at page 272-273 narrated an interesting case concerning Employment of “under age” driver in Sweeney vs. Kennedy (1948) 82 LIL Rep 294 at 297) as under :

“In Sweeney vs. Kennedy the proposer in answer to a question stating “Are any of your drivers under twenty-one years of age or with less than twelve months’ experience” replied “No”. One of the lorries covered by the policy was involved in an accident whilst it was being unloaded, and a third party was fatally injured. At the time of the accident it was being driven by the insured’s son, who had twelve months’ driving experience but was under twenty-one. When a claim for an indemnity was made against the insurance company, payment was refused on the ground that the employment of a driver under twenty-one years of age amounted to such an alteration in the character of the risk as would avoid the policy.

Kingsmil Moore, J., giving judgment in the Eire Divisional Court, rejected this argument and held that the company was liable. He said that whether a change of risk was so great as to avoid an insurance must always be a question of degree and a question of the opinion of the Court on the circumstances of the case. He could see a vast difference between the risks involved in insuring a merchantman and a privateer; a smaller but still very substantial difference between the risk involved in insuring an explosive and non-explosive demolition; and a very exiguous difference between the risks of insuring when a driver was under or over-twenty-one.

He then observed :

“The law provides that licences to drive motor vehicles may be given to persons of specified ages, the ages varying with the class of the vehicle; and when a person is driving a vehicle of the category which by his age he is entitled to drive, there is, I think, some presumption that, as far as age reflects on competency, he is competent to drive it. Certainly this would be an honest and reasonable view for an insured person to take in a case where he had not been expressly limited by the terms of the policy to the employment of drivers over 21. Certain categories of vehicles may not, by law, be driven by persons under 21, and as the framework of the proposal form was apt to cover an application for insurance of such vehicle, he might reasonably consider that Q. 9 was designed to all attention to this fact. If insurers take a different view as to the proposer age of drivers from the view of the law, it is open to them – indeed, I would say incumbent upon them – to make this clear by the insertion of specific provisions in the policy and not attempt to secure their ends by a side wind. I hold that there was no such alteration in the subject-matter of the insurance as would or could avoid the policy.”

52. In the event the terms and conditions of policy are obscure it is permissible for the purpose of construction of the deed to look to the surrounding circumstances as also the conduct of the parties.

53.In Oriental Insurance Co. Ltd. vs. Sony Cheriyan (1999) 6 SCC 451), it has been held:

“The insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy. That being so, the insured has also to act strictly in accordance with the statutory limitations or terms of the policy expressly set out therein.”

54.Yet in Oriental Insurance Co. Ltd. vs. Samayanallur Primary Agricultural Co-op. Bank (AIR 2000 SC 10), this Court laid down the law in the following terms :

“The State Commission appreciated the real controversy between the parties and decided the dispute on interpretation of the insurance policies and the proposal produced before the District Forum. There was no necessity of referring to the dictionaries for understanding the meaning of the word ‘safe’ which the parties in the instant case are proved to have understood while submitting the proposal and accepting the insurance policy. The cashier’s box could not be equated with the safe within the meaning of the insurance policy. The alleged burglary and the removal of the cash box containing the jewellery and cash was not covered by the insurance policy between the parties. The insurance policy has to be construed having reference only to the stipulations contained in it and no artificial far-fetched meaning could be given to the words appearing in it.”

55. The Courts also readily apply the doctrine of waiver in favour of the insured and against the insurer.

56. The insurer’s liability arises both from contract as well as statute. It will, therefore, may not be proper to apply the rules for interpretation of a contract for interpreting a statute.

57.The correctness of the decision rendered in Skandia’s case (supra) was questioned and the matter was referred to a three-Judge Bench to which we shall advert to a little later.

58.Gian Chand’s case (supra) relied on behalf of the petitioner is of not much assistance. Therein this Court was dealing with peculiar fact-situation obtaining therein. In that case the insured admittedly did not have any driving licence and in that situation, the insurance company was held to be not liable. The Bench noticed the purported conflict between the two sets of decisions but did not refer the matter to a larger Bench. It merely distinguished the cases on their own facts stating :

“Under the circumstances, when the insured had handed over the vehicle for being driven by an unlicensed driver, the Insurance Company would get exonerated from its liability to meet the claims of the third party who might have suffered on account of vehicular accident caused by such unlicensed driver. In view of the aforesaid two sets of decisions of this Court, which deal with different fact-situation, it cannot be said that the decisions rendered by this Court in Skandia Insurance Co. Ltd. vs. Kokilaben Chandravadan and the decision of the Bench of three learned Judges in Sohan Lal in any way conflict with the decisions rendered by this Court in the cases of New India Assurance Co. Ltd. vs. Mandar Madhav Tambe and Kashiram Yadav vs. Oriental Fire and General Insurance Co.”

59. There may be a case where an accident takes place without there being fault on the part of the driver. In such an event, the question as to whether a driver was holding a valid licence or not would become redundant. (See Jitendra Kumar vs. Oriental Insurance Co. Ltd. and another, JT 2003 (5) SC 538.

60. Skandia (supra), on the other hand, has been approved by a three-Judge Bench, when the correctness thereof was referred to a larger Bench in Sohan Lal Passi’s case (supra) wherein a three-Judge Bench of this Court noticed the ratio propounded in Skandia’s case (supra) and observed :

“. . . In other words, once there has been a contravention of the condition prescribed in sub-section (2)(b)(ii) of Section 96, the person insured shall not be entitled to the benefit of sub-section (1) of Section 96. According to us, Section 96(2)(b)(ii) should not be interpreted in a technical manner. Sub-section (2) of Section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in sub-section (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression ‘breach’ occurring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the Court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of Section 96. . .”

61. A bare perusal of the provisions of Section 149 of the Act leads to only one conclusion that usual rule is that once the assured proved that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within an exception.

62. In MacGillivray on Insurance Law it is stated :

“25-82. Burden of Proof : Difficulties may arise in connection with the burden of proving that the facts of any particular case fall within this exception. The usual rule is that once the assured has proved that the case comes within the general risk, it is for the insurers to prove that it comes within an exception. It has therefore been suggested in some American decisions that, where the insurers prove only that the assured exposed himself to danger and there is no evidence to show why he did so, they cannot succeed, because they have not proved that his behaviour was voluntary or that the danger was unnecessary. Since an extremely heavy burden is imposed on the insurers if they have to prove the state of mind of the assured, it has been suggested in Canadian decisions that the Court should presume that the assured acted voluntarily and that, where he does an apparently dangerous and foolish act, such danger was unnecessary, until the contrary is shown. In practical terms, therefore, the onus does in fact lie on the claimant to explain the conduct of the assured where there is no apparent reason for exposing himself to an obvious danger.”

63. In Rukmani and others vs. New India Assurance Co. Ltd. and others (1999 ACJ 171), this Court while upholding the defences available to the insurer to the effect that vehicle in question was not being driven by a person holding a licence, held that the burden of the insurer would not be discharged when the evidence which was brought on record was that the Inspector of Police in his examination-in-chief merely stated. “My enquiry revealed that the respondent No. 1 did not produce the licence to drive the abovesaid scooter. The respondent No. 1 even after my demand did not submit the licence since he was not having it.”

64. The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event, the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. [See Sohan Lal Passi (supra)].

65. Apart from the above, we do not intend to lay down anything further i.e. degree of proof which would satisfy the aforementioned requirement inasmuch as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance. Each case may pose different problem which must be resolved having to a large number of factors governing the case including conduct of parties as regard duty to inform, correct disclosure, suppression, fraud on the insurer etc. It will also depend upon the fact as to who is the owner of the vehicle and the circumstances in which the vehicle was being driven by a person having no valid and effective licence. No hard and fast rule can therefor be laid down. If in a given case there exists sufficient material to draw an adverse inference against either the insurer or the insured, the Tribunal may do so. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of contract of insurance on the part of the insurer by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records.

66. In the aforementioned backdrop, the provisions of sub-sections (4) and (5) of Section 149 of the Motor Vehicles Act, 1988 may be considered as the liability of the Insurer to satisfy the decree at the first instance.

67.A beneficent statute, as is well known, must receive a liberal interpretation (See Bangalore Water Supply and Sewerage Board etc. vs. A. Rajappa and others etc. (1978) 2 SCC 213), Steel Authority of India Ltd. and others vs. National Union Waterfront Workers and others (2001) 7 SCC 1), ITI Ltd. vs. Siemens Public Communications Network Ltd. (2002) 5 SCC 510), Amrit Bhikaji Kale and others vs. Kashinath Janardhan Trade and another (1983) 3 SCC 437) and Kunal Singh vs. Union of India and another (2003) 4 SCC 524).

68. The liability of the insurer is a statutory one. The liability of the insurer to satisfy the decree passed in favour of a third party is also statutory.

69. In Halsbury’s Laws of England, Fourth Edition Reissue, Volume 25, it is stated :

“749. Judgments required to be satisfied. The first condition of the obligation of the insurers to pay on a judgment is that there is a judgment.

The Second condition is that the judgment must be in respect of a liability which is required to be covered by compulsory insurance. In other words, the only person who can maintain a right of action direct against the insurers is a person falling within the class of third parties whose bodily injury or death or damage to whose property is required to be covered by a motor policy.

The third condition is that the liability is, in fact, covered by the terms of the policy, or would be covered but for the fact that the insurer is entitled to avoid or cancel, or has avoided or cancelled, the policy. For this purpose conditions declared to be invalid as against a third party are ignored, but if, even after ignoring all such conditions, the relevant use of the vehicle puts it outside the scope of the policy, the insurers are left immune. The most important clause in this connection is the ‘description of use’ clause. The assured is criminally liable if he uses his car for purposes outside the scope of his insurance and, in addition to his criminal liability, he has to bear unaided the cost of compensating third parties injured by his use if he is negligent. Subject to the statutory provision rendering certain conditions invalid against third parties, the insurers are not obliged to carry a wider scope of liability that they have agreed by their policy to carry.

The fourth condition is that the judgment must be against a person insured by the policy. This language covers a permitted driver as well as the person by whom the policy has been effected.”

70. As has been held in Sohan Lal Passi (supra), the insurance company cannot shake off its liability to pay the compensation only by saying that at the relevant point of time the vehicle was driven by a person having no licence.

71. Thus, where a liability has been established by a judgment, it is not permissible to look beyond the determination in order to establish the basis of the liability.

72.In United Insurance Co. Ltd. vs. Jaimy and others (1998 ACJ 1318), it is stated :

“Section 149(2) relates to the liability of the insurer and speaks of a situation in regard to which no sum shall be payable by an insurer to whom notice of bringing of any such proceeding is given, could defend the action stated in the said statutory provision. The contention in the context would be found in Section 149(2)(a) in the event of a breach of a specified condition of the policy enabling the insurer to avoid liability in regard thereto. In the process in regard to the right of the insurer to recover the amount from the insured, it would have to be seen by referring to Section 149(4) successfully recovered from the insured.

Section 149(4) says that where a certificate of insurance is issued, so much of the said policy as purports to restrict the insurance of the persons insured thereby by referring to any of the conditions mentioned and it is precisely enacted in regard thereto and that the liability covered by Section 2(b) as are required to be covered by the policy would not be available. The position is made further clear by the provisions enacting that any sum paid by the insurer in or towards the discharge of any liability of any person who is covered by the policy by virtue of this sub-section shall be recoverable by the insurer from that person.

In other words, Section 149(4) considers the right of the insurance company in regard to re-imbursement of the amount paid by them only in the context of a situation other than the one contemplated under Section 149(2)(b). It would mean that except under the situation provided by Section 149(2)(b), the insurer would not be in a position to avoid the liability because he has got rights against the owner under the above provision.

The learned counsel strenuously submitted that this would not be the correct understanding and interpretation of the statutory provisions of Section 149 of the 1988 Act. The learned counsel submitted that to read the statutory provision to understand that the insurance company could only claim from the owner in situations governed by Section 149(2)(b) and to have no right under the said provision with regard to other situations under Section 149(2)(a) would not be the proper reading of the statutory provision. The learned counsel submitted that in fact the provision would have to be meaningfully understood. It is not possible to consider the submission of the learned counsel in the light of the plain language of the statutory provision. It is necessary to emphasise that under the new Act the burden of the insurance company has been made heavier in the context of controlling the need of taking up contentions to legally avoid the liabilities of the insurance company.”

73. The social need of the victim being compensated as enacted by the Parliament was the subject-matter of consideration before a three-Judge Bench of this Court as early as in 1959 in British India General Insurance Co. Ltd. vs. Captain Itbar Singh and others (1960) 1 SCR 168, wherein Sarkar, J. speaking for the Bench observed:

“Again, we find the contention wholly unacceptable. The Statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds, and therefore, to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to sub-section (3) and under sub-section (4) recover it from the assured. It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer’s bad luck. In such circumstances the injured person also would not have been able to recover the damages suffered by him from the assured, the person causing the injuries…….”

74. Similar view has been taken in Skandia’s case (supra), Sohan Lal Passi’s case (supra) Kashiram Yadav and another vs. Oriental Fire and General Insurance Co. Ltd. and others (1989) 4 SCC 128 and several others.

75. In Kamla’s case (supra) a Division Bench of this Court summed up the legal position :

“The position can be summed up thus :

The insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence. Learned counsel for the insured contended that it is enough if he establishes that he made all due enquiries and believed bona fide that the driver employed by him had a valid driving licence, in which case there was no breach of the policy condition. As we have not decided on that contention it is open to the insured to raise it before the Claims Tribunal. In the present case, if the Insurance Company succeeds in establishing that there was breach of the policy condition, the Claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer shall be allowed to recover that amount (which the insurer is directed to pay to the claimant-third parties) from the insured person.”

76.The submissions made on behalf of the petitioner may now be noticed. According to the learned counsel, sub-section (4) of Section 149 deals with the situation where the insurer in the policy purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in Clause (b) of sub-section (2) of Section 149 and in that view of the matter no liability is covered for driving of a vehicle without licence or fake licence. The submission ignores the plain and unequivocal expression used in sub-section (2) of Section 149 as well as the proviso appended thereto. With a view to construe a statute the scheme of the Act has to be taken into consideration. For the said purpose the entire Act has to be read as a whole and then chapter by chapter, section by section and word by word. (See Reserve Bank of India etc. vs. Peerless General Finance and Investment Co. Ltd. and others (1987) 1 SCC 424 Para 33).

77.Proviso appended to sub-section (4) of Section 149 is referable only to sub-section (2) of Section 149 of the Act. It is an independent provision and must be read in the context of Section 96(4) of the Motor Vehicles Act, 1939. Furthermore, it is one thing to say that the insurer will be entitled to avoid its liability owing to breach of terms of a contract of insurance but it is another thing to say that the vehicle is not insured at all. If the submission of the learned counsel for the petitioner is accepted, the same would render the proviso to sub-section (4) as well as sub-section (5) of Section 149 of the Act otiose, nor any effective meaning can be attributed to the liability clause of the insurance company contained in sub-section (1). The decision in Kamla’s case (supra) has to be read in the aforementioned context.

78. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading.

WHEN ADMITTEDLY NO LICENCE WAS OBTAINED BY A DRIVER :

79.We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle admittedly did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand at all, e.g. a case where an accident takes place owing to a mechanical fault or vis major. [See Jitendra Kumar (supra)]

80. In V. Mepherson vs. Shiv Charan Singh (1998 ACJ 601 (Delhi) the owner of the vehicle was held not to be guilty of violating the condition of policy by wilfully permitting his son to drive the car who had no driving licence at the time of accident. In that case, it was held that the owner and insurer both were jointly and severally liable.

81. In New India Assurance Co. Ltd. vs. Jagtar Singh and others (1988 ACJ 1074), Hon’ble M. Srinivasan, C.J. as His Lordship then was, dealing with the case where a duly licensed driver was driving a vehicle but there was a dispute as to who was driving the vehicle. In that case the Court referred to the judgment in Kashiram Yadav vs. Oriental Fire and General Insurance Co. Ltd. (1989 ACJ 1078 (SC) and expressed its agreement with the views taken therein.

82. In National Insurance Co. Ltd. vs. Ishroo Devi and others (1999 ACJ 615) where there was no evidence that the society which employed the driver was having knowledge that the driver was not holding a valid licence, it was held the insurance company is liable. The Court relied upon the decisions of this Court in Kashiram Yadav’s case (supra), Skandia’s case (supra) and Sohan Lal Passi’s case (supra). WHEN THE PERSON HAS BEEN GRANTED LICENCE FOR ONE TYPE OF VEHICLE BUT AT THE RELEVANT TIME HE WAS DRIVING ANOTHER TYPE OF VEHICLE :

83. Section 10 of the Act provides for forms and contents of licences to drive. The licence has to be granted in the prescribed form. Thus, a licence to drive a light motor vehicle would entitle the holder there to drive the vehicle falling within that class or description.

84. Section 3 of the Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle which he intends to drive. Section 10 of the Act enables Central Government to prescribe forms of driving licences for various categories of vehicles mentioned in sub-section (2) of said section. The various types of vehicles described for which a driver may obtain a licence for one or more of them are: (a) Motorcycle without gear, (b) motorcycle with gear, (c) invalid carriage, (d) light motor vehicle, (e) transport vehicle, (f) road roller, and (g) motor vehicle of other specified description. The definition clause in Section 2 of the Act defines various categories of vehicles which are covered in broad types mentioned in sub-section (2) of Section 10. They are ‘goods carriage’, ‘heavy-goods vehicle’, ‘heavy passenger motor-vehicle’, ‘invalid carriage’, ‘light motor-vehicle’, ‘maxi-cab’, ‘medium goods vehicle’, ‘medium passenger motor-vehicle’, ‘motor-cab’, ‘motorcycle’, ‘omnibus’, ‘private service vehicle’, ‘semi-trailer’, ‘tourist vehicle’, ‘tractor’, ‘trailer’, and ‘transport vehicle’. In claims for compensation for accidents, various kinds of breaches with regard to the conditions of driving licences arise for consideration before the Tribunal. A person possessing a driving licence for ‘motorcycle without gear’, for which he has no licence. Cases may also arise where a holder of driving licence for ‘light motor vehicle’ is found to be driving a ‘maxi-cab’, ‘motor-cab’ or ‘omnibus’ for which he has no licence. In each case on evidence led before the Tribunal, a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or contributory cause of accident. If on facts, it is found that accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence.

85. We have construed and determined the scope of sub-clause (ii) of sub-section (2) of Section 149 of the Act. Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation in the matter of use of vehicles. Such minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to the third parties.

86. On all pleas of breach of licensing conditions taken by the insurer, it would be open to the Tribunal to adjudicate the claim and decide inter se liability of insurer and insured; although where such adjudication is likely to entail undue delay in decision of the claim of the victim, the Tribunal in its discretion may relegate the insurer to seek its remedy of reimbursement from the insured in the Civil Court.

WHERE THE DRIVER’S LICENCE IS FOUND TO BE FAKE :

87. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru’s case (supra) the matter has been considered at some details. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or the owners be absolved from any liability whatsoever. We would be dealing in some details with this aspect of the matter a little later.

LEARNER’S LICENCE :

88. Motor Vehicles Act, 1988 provides for grant of learner’s licence. (See Section 4(3), Section 7(2), Section 10(3) and Section 14). A learner’s licence is, thus, also a licence within the meaning of the provisions of the said Act. It cannot, therefore, be said that a vehicle when being driven by a learner subject to the conditions mentioned in the licence, he would not be a person who is not duly licensed resulting in conferring a right on the insurer to avoid the claim of the third party. It cannot be said that a person holding a learner’s licence is not entitled to drive the vehicle. Even if there exists a condition in the contract of insurance that the vehicle cannot be driven by a person holding a learner’s licence, the same would run counter to the provisions of Section 149(2) of the said Act.

89. The provisions contained in the said Act provide also for grant of driving licence which is otherwise a learner’s licence. Sections 3(2) and 6 of the Act provides for the restriction in the matter of grant of driving licence, Section 7 deals with such restrictions on granting of learner’s licence. Section 8 and 9 provide for the manner and conditions for grant of driving licence. Section 15 provides for renewal of driving licence. Learner’s licences are granted under the rules framed by the Central Government or the State Governments in exercise of their rule-making power. Conditions are attached to the learner’s licences granted in terms of the statute. A person holding learner’s licence would, thus, also come within the purview of “duly licensed” as such a licence is also granted in terms of the provisions of the Act and the rules framed thereunder. It is now a well-settled principle of law that rules validly framed become part of the statute. Such rules are, therefore, required to be read as a part of main enactment. It is also well-settled principle of law that for the interpretation of statute an attempt must be made to give effect to all provisions under the rule. No provision should be considered as surplusage.

90. Mandar Madhav Tambe’s case (supra), whereupon the learned counsel placed reliance, has no application to the fact of the matter. There existed an exclusion clause in the insurance policy wherein it was made clear that the Insurance Company, in the event of an accident, would be liable only if the vehicle was being driven by a person holding a valid driving licence or a permanent driving licence “other than a learner’s licence”. The question as to whether such a clause would be valid or not did not arise for consideration before the Bench in the said case. The said decision was rendered in the peculiar fact-situation obtaining therein. Therein it was stated that “a driving licence” as defined in the Act is different from a learner’s licence issued under Rule 16 of the Motor Vehicles Rules, 1939 having regard to the factual matrix involved therein.

91. The question which arises for consideration in these petitions did not arise there. Neither the same were argued at the Bar nor the binding precedents were considered. Mandar Madhav Tambe’s case (supra), therefore, has no application to the facts of these cases nor create any binding precedent. The view we have taken is in tune with the judgments rendered by different High Courts consistently. (See for example New India Assurance Co. Ltd. vs. Latha Jayaraj and others (1991 ACJ 298).

CONFLICT OF DECISIONS :

92.Contention of Mr. Salve that there exists a conflict in the decisions of this Court in Nicolletta Rohtagi (supra) on the one hand and Kamla (supra) and Lehru (supra) on the other cannot be accepted. We do not find in the said decisions any such conflict.

93. Nicolletta Rohtagi (supra) was a case where a question arose as to whether an appeal by the insurer on the ground dehors those contained in Section 149(2) would be maintainable. It was held not to be. There cannot be any doubt or dispute that defences enumerated in Section 149(2) would be available to the insurance companies, but that does not and cannot mean that despite such defences having not been established, they would not be liable to fulfil their statutory obligation under sub-section (1) of Section 149 of the Act.

94.So far as the purported conflict in the judgments of Kamla (supra) and Lehru (surpa) is concerned, we may wish to point out that the defence to the effect that the licence held by the person driving the vehicle was a fake one, would be available to the insurance companies, but whether despite the same, the plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case.

95. The Court, however, in Lehru (supra) must not read that an owner of a vehicle can under no circumstances has any duty to make any enquiry in this respect. The same, however, would again be a question which would arise for consideration in each individual case.

96. The submission of Mr. Salve that in Lehru’s case (supra), this Court has, for all intent and purport, taken away the right of insurer to raise a defence that the licence is fake does not appear to be correct. Such defence can certainly be raised but it will be for the insurer to prove that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the driver.

97. Our attention has also been drawn on an unreported order of this Court in Malla Prakasarao vs. Malla Janaki and others. (Civil Appeal No. 163 of 1996 disposed of on 6th August, 2002) which reads as under :

“It is not disputed that the driving licence of the driver of the vehicle had expired on 20th November, 1982 and the driver did not apply for renewal within 30 days of the expiry of the said licence, as required under Section 11 of the Motor Vehicles Act, 1939. It is also not disputed that the driver of the vehicle did not have driving licence when the accident took place. According to the terms of contract, the Insurance Company has no liability to pay any compensation where an accident takes places by a vehicle driven by a driver without driving licence. In that view of the matter, we do not find any merit in the appeal.

The appeal fails and is, accordingly dismissed. There shall be no order as to costs.”

98. In that case, the Court presumably as in the case of Mandar Madhav Tambe’s case (supra) was concerned with the terms and conditions of the contract of insurance. Before the Court, no occasion arose to consider the general terms and conditions of the contract of insurance vis-a-vis liability of insurance under the Motor Vehicles Act.

CONCLUSION :

99. It is, therefore, evident from the discussions made hereinbefore that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time.

100. Apart from the reasons stated hereinbefore the doctrine of stare decisis persuades us not to deviate from the said principle.

101. It is well-settled rule of law and should not ordinarily be deviated from. (See The Bengal Immunity Company Limited vs. The State of Bihar and others, (1955) 2 SCR 603 at 630-632; Keshav Mills Co. Ltd. vs. Commissioner of Income-tax, Bombay North, (1965) 2 SCR 908 at 921-922; Union of India and another vs. Reghubir Singh (Dead) by L.Rs. etc., (1989) 3 SCR 316 at 323, 327, 334; M/s. Gannon Dunkerle and Co. and others vs. State of Rajasthan and others, (1993) 1 SCC 364; Belgaum Gardeners Co-operative Production Supply and Sale Society Ltd. vs. State of Karnataka, (1993) 1 Suppl. SCC 96 ; Hanumantappa Krishnappa Mantur and others vs. State of Karnataka (1992) 2 Suppl. SCC 213).

102. We may, however, hasten to add that the Tribunal and the Court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver and the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it had not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given opportunity to defend at all. Such a course of action may also be resorted when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage.

103. Although, as noticed hereinbefore, there are certain special leave petitions wherein the persons having the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicles in the manner laid down therein. But this order may not be considered as a precedent.

104. Although in most of the cases, we have not issued notices in view of the fact that the question of law has to be determined; we have heard counsel for the parties at length at this stage.

SUMMARY OF FINDINGS :

105. The summary of our findings to the various issues as raised in these petitions are as follows :

(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

(ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.

(iii) The breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, have 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 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 duly licensed driver or one who was not disqualified to drive at the relevant time (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish ‘breach’ on the part of the owner of the vehicle; the burden of proof wherefore would be on them.

(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.

(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insured under Section 149(2) of the Act.

(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

(viii) If a vehicle at the time of accident was driven by a person having a learner’s licence, the insurance companies would be liable to satisfy the decree.

(ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.

(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Sections 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears as land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.

(xi)The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.

106. For the reasons aforementioned, these petitions are dismissed but without any order as to costs.

Motor Vehicle Laws in India

Government of india
India having 48.65 lakh km of road network is the second largest in the World.
At present, National Highway network of about 92,851 km comprises only 1.9% of the total length of roads, but carries over 40% of the total traffic across the length and breadth of the country.
The Central Government, which is responsible for development and maintenance of NHs, implements the work on agency basis. The State Governments (State PWDs), Border Roads Organisation (BRO) and National Highways Authority of India (NHAI) are the implementing agencies for the development and maintenance works on NH. As on 30th April, 2014, 32,037 km length of NHs were entrusted to NHAI, 44,591 km to State PWDs, 4,830 km to BRO and 11,393 km is yet to be entrusted.

CENTRAL MOTOR VEHICLES RULES, 1989

Government of india

The Central Motor Vehicles Rules, 1989

Published vide Notification G.S.R. 590 (E), dated 2.6.1989, published in the Gazette of  India, Extraordinary, Part, 2, Section 3, dated 2.6.1989

 

CHAPTER-I
PRELIMINARY

1. Short title and commencement

2. Definitions

CHAPTER II
LICENSING OF DRIVERS OF MOTOR VEHICLES
GENERAL

3. General.

4. Evidence is to the correctness of address and age.

5. Medical certificate

6. Exemption from production of medical certificate

7. Affixing of photograph to medical certificate.

8. [Omitted]

9. Educational qualifications for drivers of goods carriages carrying dangerous or hazardous goods

LEARNER’S LICENCE

10. Application for learner’s licence

11. Preliminary test

12. Consent of parent or guardian in the case of application by minor

13. Form of learner’s licence

DRIVING LICENCE

14. Application for a driving licence

15. Driving test

16. Form of driving licence.

17. Addition to driving licence

18. Renewal of driving licence

19. Refund of fee

20. Driving licence to drive motor vehicle belonging to the Defence Department

DISQUALIFICATION

21. Powers of licensing authority to disqualify

ENDORSEMENT IN DRIVING LICENCE

22. Endorsement by courts

STATE REGISTER

23. State Register of driving licences

DRIVING SCHOOL AND ESTABLISHMENTS

24. Driving schools and establishments

25. Duration of a licence renewal thereof.

26. Issue of duplicate licence

27. General conditions to be observed by the holder of licence

28. Power of the licensing authority to suspend or revoke licence.

29. Appeal.

30. Procedure for appeal.

31. Syllabus for importing instruction in driving of motor vehicles.

31A. Temporary licence.

32. Fees

CHAPTER III
REGISTRATION OF MOTOR VEHICLES
TRADE CERTIFICATE

33. Condition for exemption from registration

34. Trade certificate.

35. Grant or renewal of trade certificate.

36. Refund.

37. Period of validity

38. Issue of duplicate certificate

39. Use of trade registration mark and number.

40. Restrictions on use of trade certificate or trade registration mark and number.

41. Purposes for which motor vehicle with trade certificate may be used.

42. Delivery of vehicle subject to registration.

43. Register of trade certificate.

44. Suspension or cancellation of trade certificate.

45. Appeal.

46. Procedure for appeal

REGISTRATION

47. Application for registration of motor vehicles.

48. Issue of certificate of registration.

49. Registration records to be kept by the registering authority.

50. Form and manner of display of registration marks on the motor vehicles.

51. Size of letters and numerals of the registration mark.

52. Renewal of certificate of registration

53. Issue of duplicate certificate of registration

54. Assignment of new registration mark.

55. Transfer of ownership.

56. Transfer of ownership on death of owner of the vehicle.

57. Transfer of ownership of vehicle purchased in public auction.

58. No-objection certificate.

59. Change in residence.

60. Endorsement of hire-purchase agreements, etc.

61. Termination of Hire-purchase agreements, etc.

CERTIFICATE OF FITNESS

62. Validity of certificate of fitness

63. Regulation and control of authorised testing station.

64. Duration of letter of authority.

65. General conditions to be observed by the holder of letter of authority.

66. Issue of duplicate letter of authority.

67. Supervision of authorised testing stations.

68. Power of registering authority or Regional Transport Authority to call for information.

69. Power of registering authority to suspend or cancel the letter of authority or forfeit security deposit

70. Appeal.

71. Procedure for appeal.

72. Voluntary surrender of letter of authority

73. Tax clearance certificate to be submitted to the testing station

REGISTRATION OF VEHICLES BELONGING TO THE CENTRAL GOVERNMENT
USED FOR DEFENCE PURPOSE

74. Assignment of registration marks to the vehicles belonging to the Central Government used for defence purposes

STATE REGISTER OF MOTOR VEHICLES

75. State Register of Motor Vehicles.

SPECIAL PROVISIONFOR REGISTRATION OF MOTOR VEHICLES
OF DIPLOMATIC OFFICERS, ETC.

76. Registration of vehicles of diplomatic and consular officers

76A. Application of rules 76 to 80 to organisations notified under the United Nations (Privileges and Immunities) Act, 1947

77. Exhibition of registration mark.

78. Assignment of new registration mark on removal of vehicle to another State.

79. Suspension and cancellation of registration of vehicle registered under rule 76.

80. Transfer or disposal of motor vehicle registered under rule 76.

FEES

81. Fees.

CHAPTER IV
CONTROL OF TRANSPORT VEHICLES
TOURIST PERMITS

82. Tourist permits.

83. Authorisation fee.

84. Right of operation.

85. Additional conditions of tourist permit.

85B. Additional conditions of every tourist permit in respect of motor cabs.

NATIONAL PERMITS

86. Application for national permit.

87. Form, contents and duration of authorisation.

88. Age of motor vehicle for the purpose of national permit.

89. Quarterly return to be filed by a national permit holder.

90. Additional conditions for national permit.

CHAPTER V
CONSTRUCTION, EQUIPMENT AND MAINTENANCE
OF MOTOR VEHICLES
PRELIMINARY

91. Definitions.

92. General.

OVERALL DIMENSION

93. Overall dimension of motor vehicles.

SIZE, NATURE AND CONDITION OF TYRES

94. Condition of tyres.

95. Size and ply rating of tyres.

BRAKES, STEERING GEARS, SAFETY GLASS AND WINDSCREEN WIPERS

96. Brakes.

97. Brakes for trailers.

98. Steering gears.

99. Forward and backward motion.

100. Safety glass.

101. Windscreen wiper.

102. Signalling devices, direction indicators and stoplights.

103. Position of the indicator.

104. Fitment of reflectors.

105. Lamps.

106. Deflection of lights.

107. Top lights.

108. Use of red or white light.

109. Parking light.

110. Lamp on auto-rickshaws and three-wheelers with engine capacity not exceeding 500 cc.

111. Prohibition of spotlights, etc.

SMOKE, VAPOUR, SPARK, ASHES, GRIT AND OIL

112. Exhaust gases.

113. Location of exhausts pipes.

114. Exhaust pipes of public service vehicles.

115. Emission of smoke, vapour, etc. from motor vehicles.

116. Test for smoke emission level and carbon monoxide level for vehicles.

SPEED GOVERNORS

117. Speedometer.

118. Speed governor.

REDUCTION OF NOISE

119. Horns.

120. Silencers.

121. Painting of motor vehicles.

CHASSIS NUMBER AND ENGINE NUMBER

122. Embossment of the chassis number and engine number and date of manufacture.

SAFETY DEVICES
SAFETY DEVICES FOR DRIVERS, PASSENGERS AND ROAD USERS

123. Safety devices in motor cycle.

124. Safety, standards of components.

125. Commencement

126. Prototype of every motor vehicle to be subject to test.

126A. Testing agencies.

127. Quality certificate by manufacturer.

SPECIAL PROVISIONS

128. Tourist vehicles other than motor cabs, etc.

129. Transportation of goods of dangerous or hazardous nature to human life.

129A. Spark arrester.

130. Manner of display of class labels.

131. Responsibility of the consignor for safe transport of dangerous or hazardous goods.

132. Responsibility of the transporter or owner of goods carriage.

133. Responsibility of the driver.

134. Emergency information panel.

135. Driver to be instructed.

136. Driver to report to the police station about accident.

137. Class labels.

CHAPTER VI
CONTROL OF TRAFFIC

138. Signals and additional safety measures for motor cycle.

139. Production of licence and certificate of registration.

CHAPTER VII
INSURANCE OF MOTOR VEHICLES AGAINST THIRD PARTY RISKS

140. Definitions.

INLAND INSURANCE

141. Certificate of insurance.

142. Cover notes.

143. Issue of certificate and cover notes.

144. Transfer of certificate of insurance.

145. Exclusion of advertising matter.

146. Certificates or cover notes lost, destroyed, torn, soiled, defaced or mutilated.

147. Records to be maintained by authorised insurers.

148. Record of exempted vehicles.

149. Supply of information.

150. Furnishing of copies of reports to Claims Tribunal.

151. Establishment of fund.

152. Amount of the fund.

153. Investment of the fund.

154. Securities held as a deposit in the fund.

155. Deposit procedure.

156. Interest on deposit.

157. Withdrawal.

158. Settlement of claims.

FOREIGN INSURANCE

159. List of foreign insurers.

160. Guarantor of foreign insurer.

161. Endorsement of certificate of foreign insurance.

162. Validity of certificate of foreign insurance.

163. Maintenance of records by the guarantor.

CHAPTER VIII
OFFENCES, PENALTIES AND PROCEDURE

164. Offences for the purpose of section 208.

FORMS
ANNEXURES
APPENDIX
SCHEDULE

 



OTHER LAWS

  1. Motor Vehicles Act, 1988
  2. Central Motor Vehicles (Accreditation of Bus Body Builders) Order, 2007
  3. Central Motor Vehicles (Regulation of Bus Service Between Agartala And Dhaka) Rules, 2002
  4. Central Motor Vehicles (Regulation of Bus Service Between Calcutta and Dhaka) Rules, 2000
  5. Central Motor Vehicles (Regulation of Bus Service Between New Delhi and Lahore) Rules, 2000
  6. Central Motor Vehicles (Regulation of Bus Service between Amritsar and Lahore) Rules, 2006
  7. Central Motor Vehicles (Regulation of Bus Service between Amritsar and Nankana Sahib) Rules, 2006
  8. Central Motor Vehicles Rules,1989
  9. Driving Licence(Conditions For Exemption) Rules, 1992
  10. Maximum Speed Limit

Manjeet Singh Vs. National Insurance Company Ltd. & ANR. [SC 2017 DECEMBER

KEYWORDS:- Insurance- Fault-Nullity of Policy-

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  • The appellant who is the owner, was not at fault. His driver gave a lift to some passengers. Carrying such passengers may be a breach of the policy, but it cannot be said to be such a fundamental breach as to bring the insurance policy to an end and to terminate the insurance policy. The driver, on a cold wintery night, gave lift to some persons standing on the road. It was a humanitarian gesture.  It cannot be said to be such a breach that it nullifies the policy. No doubt, these passengers turned against the driver and stole the truck, but this, the driver could not have foreseen. In the cases cited above, such claims where there is breach of policy, have been treated to be non-standard claims and have been directed to be settled at 75%.

December 08, 2017

SUPREME COURT OF INDIA

[Civil Appeal No(S). 21552 of 2017 @Special Leave Petition (C) No. 34605 of 2015]

Deepak Gupta, J.

1. Leave granted.

2. None has put in appearance on behalf of the respondent no. 2 despite service. Hence, the matter has been heard in the absence of the learned counsel for the respondent no. 2.

3. Briefly stated the facts of the case are that the appellant Manjeet Singh purchased a second-hand Tata open truck under a Hire Purchase agreement dated 13.10.2003 for a sum of Rs. 8,57,000/- from Respondent No.2. The vehicle was hypothecated in favour of Respondent No.2. It was insured for a value of Rs.7,28,000/- and the insurance policy was valid from 25.09.2004 to 24.09.2005. On 12.12.2004, the vehicle was being driven by Sanjay Kumar on the National Highway near Karnal.

Some persons gave a signal to the driver to stop the vehicle. After he stopped, they requested the driver to give them lift up to Yamuna Nagar since no other mode of transport was available. Since it was a cold wintery night, the driver gave a lift to these persons. After a little while, one of the passengers requested the driver to stop the truck on the pretext that he had to answer the call of nature. When the truck driver stopped the truck, the three passengers assaulted the driver, tied his hands and legs with a rope and threw him in a nearby field and fled away with the vehicle.

4. An FIR was lodged at Police Station, Ladwa on 13.12.2004 and the respondent no. 2, finance company was intimated about the theft. The complainant had also given a letter of authority to the finance company to negotiate and settle the claim with the insurance company. However, no settlement was arrived at and the claim was not settled and repudiated vide letter dated 11.11.2005 on the ground of breach of terms of the policy. The owner-complainant filed a claim petition before the District Consumer Disputes Redressal Forum (for short ‘the District Forum’) alleging that the insurance company was liable to compensate him for the loss caused to him by the theft of the truck.

The main defence taken by the respondent no. 2, insurance company was that the driver of the vehicle, by giving a lift to the passengers, had violated the terms of the policy and, as such, there was breach of policy and the insurance company was not liable. This ground found favour with the District Forum. The appeal filed by the claimant before the State Consumer Disputes Redressal Commission (for short ‘the State Commission’) was rejected and so was the revision filed before the National Consumer Disputes Redressal Commission (for short ‘the National Commission’). The District Forum also rejected the claim on the ground that the arbitration proceedings had been initiated by the Respondent No. 2, finance company against the complainant and they were at the final stage.

5. As far as the first ground is concerned, we are of the considered opinion, that the District Forum had not properly appreciated the scope and ambit of the policy. The violation of the condition should be such a fundamental breach so that the claimant cannot claim any amount whatsoever. As far as the violation in carrying passengers is concerned, this has consistently been held not to be a fundamental breach and, in this behalf, we may make reference to the judgments of this Court in the case of National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, National Insurance Co. Ltd. v. Nitin Khandelwal, (2008) 11 SCC 259, Lakhmi Chand v. Reliance General Insurance, (2016) 3 SCC 100 and B.V. Nagaraju v. Oriental Insurance Co. Ltd., (1996) 4 SCC 647.

6. In Lakhmi Chand case (supra), this Court held that to avoid its liability, the insurance company must not only establish the defence that the policy has been breached, but must also show that the breach of the policy is so fundamental in nature that it brings the contract to an end.

7. In the present case, the appellant who is the owner, was not at fault. His driver gave a lift to some passengers. Carrying such passengers may be a breach of the policy, but it cannot be said to be such a fundamental breach as to bring the insurance policy to an end and to terminate the insurance policy. The driver, on a cold wintery night, gave lift to some persons standing on the road. It was a humanitarian gesture.  It cannot be said to be such a breach that it nullifies the policy. No doubt, these passengers turned against the driver and stole the truck, but this, the driver could not have foreseen. In the cases cited above, such claims where there is breach of policy, have been treated to be non-standard claims and have been directed to be settled at 75%.

8. As far as the second ground is concerned, we fail to understand how the arbitration proceedings between the financer and the insurer, relating to recovery of the loan amount, can in any way, negate the rights of the insured against the insurance company.

9. In view of the above discussion, we allow the appeal, set aside the orders of the courts below and direct the respondent no.1-insurance company to pay 75% of the insured amount of Rs.7,28,000/- along with interest at the rate of 9% per annum from the date of filing the claim petition till the deposit of the amount. In addition, the insurance company shall also pay another sum of Rs.1,00,000/- as compensation. Since the financer is also a party to the petition, the amount shall be deposited before the District Forum, and in case the claim of the financer has not been settled in terms of the arbitration award, then the deposited amount shall first be used to pay the awarded amount and the balance, if any, shall be paid to the appellant. The appeal is disposed of in the aforesaid terms. Pending application(s), if any, also stand(s) disposed of.

 (MADAN B. LOKUR)

 (DEEPAK GUPTA)

Dr. S. Rajaseekaran (II) Vs. Union of India & Ors.[SC 2017 NOVEMBER]

KEYWORDS:-PIL-ROAD ACCIDENT-

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November 30, 2017

Motor Vehicles Act, 1988

SUPREME COURT OF INDIA

Dr. S. Rajaseekaran (II) Vs. Union of India & Ors.

[Writ Petition (Civil) No. 295 of 2012]

Madan B. Lokur, J.

1. In this petition under Article 32 of the Constitution Dr. S. Rajaseekaran, an orthopaedic surgeon, a public spirited citizen and President of the Indian Orthopaedic Association has, inter alia, prayed for enforcement of road safety norms and appropriate treatment of accident victims.

2. The petitioner states that in his capacity as Chairman and Head of Department of Orthopaedic Surgery, Ganga Hospital, Coimbatore, he witnesses daily, the acute loss of life and limbs caused by road accidents. He suggests that practical measures need to be taken in a time-bound and expeditious manner to give effect to legislations, reports and recommendations for ensuring that the loss of lives due to road accidents is minimized.

The petitioner estimates that 90% of the problem of deaths due to road accidents is the result of a lack of strict enforcement of safety rules on roads and strict punishment for those who do not obey rules. The petitioner has relied upon data published in December 2011 by the Ministry of Road Transport and Highways in its publication captioned “Road Accidents in India 2010 to indicate that the number of road accidents is increasing every year and that unfortunately more than half the victims are in the economically active age group of 25-65 years.

3. Since the petitioner has no personal interest in the matter, the writ petition filed by him was taken up as a public interest litigation.

4. Initially, the Ministry of Road Transport and Highways opposed the writ petition but as the litigation progressed, the matter was looked at in a non-adversarial manner and considered as one in public interest.

5. In view of the non-adversarial stance of the Government of India, this Court passed an order on 22nd April, 2014 constituting a Committee on Road Safety under the Chairmanship of Justice K. S. Radhakrishnan, a former judge of this Court. The Committee was notified by the Ministry of Road Transport and Highways (MoRTH) of the Government of India on 30th May, 2014 and orders finalizing the terms and conditions of appointment of the Chairperson and Members of the Committee were issued on 8th August, 2014.

6. In compliance with the orders of this Court and notwithstanding bureaucratic delays and without having been provided adequate infrastructure and staff, the Committee commenced its work in earnest from 15th/16th May, 2014. The Committee has since submitted 12 reports to this Court but it is not necessary at present to deal with all these reports.

7. On 10th April, 2015 we recognized the exemplary work being done by the Committee and expressed the view that its recommendations need to be seriously discussed and debated. This was in the context of the fact that the number of deaths due to road accidents in the country was said to be over 100,000 in a year, which translates to about one death every three minutes and that the compensation awarded for deaths and other motor accident claims runs into hundreds of crores of rupees.

8. However, it appeared to us that various State Governments were not responding positively to the recommendations made by the Committee and accordingly the Secretary of the MoRTH was directed to call a meeting of his counterparts from all the States and Union Territories on or before 31st May, 2015 to deliberate on the reports prepared by the Committee as well as its recommendations, their implementation and further measures that could be taken.

9. We also noted that despite the lapse of a considerable period of time, the Government of India was unable to provide adequate facilities to the Committee even though a letter was sent by the learned Attorney General for India on 19th December, 2014 to the Revenue Secretary and the Urban Development Secretary of the Government of India. We are mentioning this fact only to highlight the casualness with which the Government of India was taking the directions of this Court, in spite of the importance of the work being carried out by the Committee and its non-adverserial stance. We may mention here that as of now, we have been informed that the Committee has been provided with all necessary facilities and support by the Government of India.

10. In the hearing on 26th August, 2016 we noted that in 2014 the number of persons who had died in road accidents was 139,671 and that this figure had jumped up in 2015 to 146,133.

11. Since we were informed by Mr. Gaurav Agrawal, Advocate who was requested to assist us as Amicus Curiae that the State Governments were still not cooperating with the Committee, we had no option but to again direct the Transport Secretaries of all States to attend a meeting to be convened by the Secretary of the MoRTH on 7th September, 2016. We had to, perforce, set the agenda for the meeting, that is, implementation of the recommendations of the Committee, keeping in mind the very large number of deaths taking place.

12. On 19th September, 2016 we noted that in the meeting chaired by the Secretary of the MoRTH convened on 2nd September, 2016 (instead of 7th September, 2016) only two or three Secretaries of the concerned Transport Ministries of the State Governments had participated and the rest of the State Governments were represented by junior officials and in some cases even the designation of these junior officials was not mentioned.

13. During this hearing, we sought to impress upon all concerned that road safety issues should be taken seriously both by the Central Government as well as by the State Governments. We also noted that huge amounts running into hundreds of crores of rupees had been earmarked for road safety and it was also highlighted that a very large number of deaths had been taking place due to road accidents. We noted that the insurance companies had spent an amount of Rs. 11,480 crores by way of compensation for deaths, injuries, third party property damage and other damage due to road accidents during the financial year 2015-16.

14. On 7th November, 2016 we again noted that there was one death almost every three minutes as a result of road accidents. Unfortunately, the legal heirs of half the victims were not compensated (perhaps being unaware of their entitlement). We expressed our distress at this unfortunate situation and had to remind all concerned that we were not dealing with an adversarial issue but a public interest litigation for the benefit of the common man particularly for the victims of road accidents and their legal heirs.

15. On 11th April, 2017 we were informed by the learned Amicus that the Government of India had woken up to the problems faced due to road accidents and had prepared a Bill for the amendment of the Motor Vehicles Act, 1988.

16. Thereafter, the learned Amicus prepared a chart in three columns: First, relating to the issues that this Court had been dealing with in this public interest litigation; second the views expressed by the MoRTH on these issues, and third, the orders prayed for by the learned Amicus Curiae. A perusal of the chart indicates that fortunately, the Government of India has now begun considering the issues raised in the right spirit and in a non-adversarial manner and has accepted almost all the suggestions.

Those that form a part of the Bill seeking to amend the Motor Vehicles Act, 1988 will be considered by Parliament. The tabular statement is given below:

S. No.

Issue contained in note of Amicus Curiae

Views by Ministry of Road Transport & Highways

Orders prayed by the AC

i.

Road Safety Policy:
Every State Government shall implement State Road Safety Policy formulated as a result of the intervention of the Committee on Road Safety. The said Policy may be notified in the gazette and brought into existence w.e.f. 1st September, 2017, if not already done so.

Ministry of Road Transport & Highways is in agreement with the suggestion.

All the States/UTs except Assam, Delhi, Nagaland, Tripura, Lakshadweep, Dadra Nagar Haveli and Andaman & Nicobar have already formulated their Road Safety Policy.

The States / UTs which have not formulated the Road Safety Policy, have been requested to formulate the policy on priority basis.

Order Proposed: 
The States / UTs which have not formulated the Road Safety Policy may be directed to formulate the policy on priority basis, latest by 31st December 2017. The statement made by the Government of India may kindly be taken on record and ordered.

ii.

State Road Safety Council:
All State Government (except Nagaland) have constituted State Road Safety Council as required under Section 215 of the Motor Vehicles Act, 1988 and directed by the Committee. The said Council must undertake periodic meetings to review the actions and implementation of road safety laws and submit suitable reports to the competent legislature and the Committee on Road Safety.

Ministry of Road Transport & Highways is in agreement with the suggestion. All States / UTs except Daman & Diu, Dadra Nagar Haveli and Andaman & Nicobar have already constituted State Road Safety Councils.

Order proposed: 
All States / UTs except Daman & Diu, Dadra Nagar Haveli and Andaman & Nicobar have already constituted State Road Safety Councils. The others may be directed to constitute the same as per the recommendations of the Committee on Road Safety. The Statement made by the Government of India may kindly be taken on record and ordered.

iii.

Lead Agency: 
Each State Government may be directed to establish a Lead Agency as required by the Committee on Road Safety headed by a senior officer and with adequate staff to be solely dedicated to matters relating to licensing, issuing of driving licences, and registration of vehicles, road safety, and features of vehicles, pollution and other allied matters.

Ministry of Road Transport & Highways is in agreement with the suggestion.

Ministry held review meeting with the States to review the implementation of the directions of the Committee on Road Safety from 27th to 30thJune, 2017. The States / UTs were requested to establish Lead Agency and depute adequate, dedicated and professional / technical staff.

Few States viz. Chhattisgarh, Daman & Diu, Haryana, Jharkhand, Jammu & Kashmir, Nagaland, Rajasthan, Tamil Nadu have already established the Lead Agency.

Order proposed: 
The States / UTs that have not established Lead Agency, as defined and required by the Committee on Road Safety and depute adequate, dedicated and professional / technical staff may be directed to do so by 31st December 2017 as per the standards set by the Committee on Road Safety. The statement made by the Government of India may kindly be taken on record and ordered.

iv

Road Safety Fund: 
Pursuant to recommendations of the Committee on Road Safety all the States have commenced or completed action to set up a Road Safety Fund with assured flow of money as desired by the Committee. However, in such States where it has not come into place it must come into effect w.e.f. 1st September 2017.

Ministry of Road Transport & Highways is in agreement with the suggestion.

Some of the States viz. Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Kerala, Madhya Pradesh, Puducherry, Rajasthan, Uttar Pradesh have established dedicated fund as per directions of Committee on Road Safety.

During the review meeting held by the Ministry, the remaining States / UTs have been requested to create the Road Safety Fund as per the directions of the Committee on Road Safety.

Order Proposed: 
The States /UTs that have not constituted the Road Safety Fund may be directed to establish the same as soon as possible and not later than March, 2018 and report to the Committee on Road Safety. The statement made by the Government of India may kindly be taken on record and ordered.

v

Road Safety Action Plan: 
State Governments may be directed to formulate and notify “Road Safety Action Plan” with an annual target for reducing road accident with effect from a date not later than 1st September 2017.

Ministry of Road Transport & Highways is in agreement with the suggestion.

During the review meetings held by the Ministry, the States / UTs have been requested to prepare the annual target based Action Plan to reduce accident & fatality rate in pursuance of directions of Committee on Road Safety.

Order Proposed: 
The States / UTs may be directed to prepare the annual target based Action Plan to reduce accident & fatality rate in pursuance of directions of Committee on Road Safety and the report to the Committee

vi

District Road Safety Committee: 
All State Governments may be directed to constitute District Road Safety Committee headed by the Collector of the District which will fix targets for reduction in accidents and fatality dependent upon peculiar facts of the District. As suggested in the written Note, District Road Safety Committee could include Superintendent of Police, Health Officers, PWD Engineers, representatives of NHAI and RTO of the District.

Ministry of Road Transport & Highways is in agreement with the suggestion.

Order proposed: 
State Governments may be directed to constitute District Road Safety Committee headed by the Collector of the District as soon as possible lay down responsibilities of said committees, including regular and periodic meeting and report to the Committee on Road Safety. The statement made by the Government of India may kindly be taken on record and ordered.

vii

Engineering Improvement: 
The Amicus Curiae submits that one of the main reasons for accidents is poor quality of roads, improper design, inadequate curve, inadequate depth and inadequate angle which need to be maintained at crucial junctions. At the instance of the Committee on Road Safety, the MoRTH has set up protocol for identification and rectification of black spots. The said protocol for rectifying black spots for better road safety is annexed herewith as Annexure “B pages (28 to 29). This Hon’ble Court may be pleased to direct that the same be enforced into immediate effect by the NHAI, the Ministry of Road Transport & Highways of Government of India as well as the PWD Departments of all State Governments as well their contractors. It is important that the same is also enforced in all expressways being constructed on PPP mode.

The Ministry is in agreement with the suggestion. However, the protocol has to be reviewed and updated from time to time based on the experience gained.

Order proposed: 
Protocol for Identification and Rectification of Black Spots prepared by MoRTH at the instance of Committee on Road Safety may be directed to be implemented by all concerned including NHAI and State Governments in consultation with the Committee on Road Safety.

It may be clarified that the said protocol would be reviewed and updated by MoRTH annually based on the experience gained.

The statement made by the Government of India may kindly be taken on record and ordered.

viii

Traffic Calming Measures: 
This Hon’ble Court may further direct the State Governments to adopt Traffic Calming Measures at accident prone areas, junctions of lower hierarchy roads and other vulnerable spots like schools, hospitals, etc.

Ministry of Road Transport & Highways is in agreement with the suggestion.

Order proposed: 
This Hon’ble Court may direct that the State Governments should adopt Traffic Calming Measures at accident prone areas, junctions of lower hierarchy roads with higher hierarchy roads and other vulnerable spots like schools, hospitals etc., and submit district wise compliance reports to the Committee on Road Safety, as per the directions of the Committee on periodic basis. The statement made by the Government of India may kindly be taken on record and ordered.

ix

Roads Safety Audits: 
This Hon’ble Court may direct State Governments to carry out road safety audits during design, construction and operation of roads and also in respect of existing roads within a specified time frame. This audit must be carried out by auditors accredited by National Road Safety Audit Board. This National Road Safety Audit Board must consist of Senior Officers of the NHAI, MoRTH, of respective State Governments as well as Road Safety Experts who are trained Road Safety Auditors. It is respectfully submitted that if roads were properly constructed and maintained in this country, as is done in many overseas countries, road accidents would be much less.

In-principle, the Ministry is in agreement with the suggestion. However, there is a deficiency of qualified auditors in road safety engineering in the country. Efforts are being made by the Government to build capacity, by way of organizing workshops on road safety engineering, road safety audit certification courses etc. It would take some time to build up capacity in the field of road safety audit. Therefore, States may be permitted to set their own targets for completing the road safety audits, as per the guidelines issued by the Ministry from time to time.

With regard to the recommendation of accreditation by National Road Safety Audit Board, it is stated that a proposal to create a National Road Safety Board has been incorporated in the Motor Vehicle (Amendment) Bill, 2017. The bill has been passed by Lok Sabha. The proposed Board will deal with all aspects of the road safety.

Order proposed: 
This Hon’ble Court may be pleased to direct the Central Government to:

(i) Conduct audit of 2 most accident prone stretches of highways/ expressways in each State as a pilot programme, and present strategies for reducing the accidents;

(ii) build capacity and train at least 150 more auditors within the period of next one year;

The State Governments/UTs may be directed to train at least 25 such auditors within the period of next one year, and thereafter conduct audits.

The statement made by the Government of India may kindly be taken on record and ordered.

x

Engineering Design of New Roads: 
It may be directed by this Hon’ble Court that no new road/project costing more than Rs. 10 Crores should be undertaken unless the design is audited and the audit recommendation are implemented to the satisfaction of the aforementioned National Road Safety Audit Board.

The road projects costing Rs. 10.00 crore or more may be of different types like re-surfacing of the road, reconstruction of bridges / culverts, construction of retaining walls for protection of roads etc. Such projects do not require the road safety audit. Therefore, specifying only cost criteria for carrying out road safety audits is not appropriate.

It is proposed that the road safety audit including the design stage audit should be carried out for all road capacity augmentation projects of 5 km or more.

Order proposed: 
It is prayed that this Hon’ble Court may be pleased to direct the road safety audit including the design stage audit should be carried out for all road capacity augmentation projects of 5 km or more.

xi

Working Group on Engineering: 
it is prayed that this Hon’ble Court may pass an order directing that recommendations of the Working Group on Engineering as directed by this Hon’ble Court (marked as Annexure “C” pages (30 to 38)) be implemented forthwith as directed by the Hon’ble Court.

The report of the Working Group on Engineering (Roads) contains a detailed background discussion. The recommendations and suggested policies are contained in Para 4 of the Working Group Report. Many of these recommendations are in the nature of general comments.

In view of the above, appropriate recommendations based on Working Group Report which can be passed by Hon’ble Supreme Court as directions are brought out as below:

  • Highways and urban road design standards and guidelines will be made consistent with the safety requirements and in tune with the international best practices on a continuous basis at regular intervals.
  • Road safety audits at different stages should be carried out depending on the size / type of the project for all the road development projects.
  • All road improvement projects including resurfacing works should have provision of signs & markings as per the requirements.
  • Adequate traffic calming measures should be taken, wherever necessary, to enhance safety of vulnerable road users.
  • Existing stretches of National Highways & State Highways not covered in development projects on modes like BOT/EPC should be subjected to Road Safety Audits in phased manner through a time bound programme.
  • Recommendations of Road Safety Audits should be implemented, preferably within 2 years of submission of audit reports.
  • Standard Road accident recording & reporting formats should be evolved considering all aspects of feasibility and manpower resources and be published as standard documents for adoption by all authorities at Central and State levels.
  • Specialized accident investigation centres shall be established to study a few selected accidents using accident reconstruction techniques etc., and the details to be preserved in a data base.
  • Institutionalized system of database storage and management should be developed for road accident data. A suitable web based electronic road accident data collection/ compilation system shall be developed for countrywide implementation.
  • Centre of excellence for road safety Research & Accident analyses should be developed in academic institutions across the country.
  • Establishing synergy between various stake holders (road authorities, academia, enforcement authorities, health authorities etc) in road safety at central/ state levels is being strived through National Road Safety Council and State Road Safety Councils. These should be strengthened and made robust to deliver the intended results.
  • Centre is extending support to Road Safety Engineering improvements on state roads through specific schemes to act as benchmarks and models for further efforts by states. 10% of Central Road Fund (CRF) allocations have been earmarked for Road Safety Engineering works on state roads through Central Road Fund (State Roads) Amendment Rules, 2016. Detailed guidelines have also been issued in this regard.

Order proposed: 
This Hon’ble Court may issue the following directions as set out as below:

1. Highways and urban road design standards and guidelines will be made consistent with the safety requirements and in tune with the international best practices on a continuous basis at regular intervals.

2. Conduct Road safety audits at different stages of construction and operation.

3. All road improvement projects including resurfacing works should have provision of signs & markings as per the requirements.

4. Adequate traffic calming measures should be taken, wherever necessary, to enhance safety of vulnerable road users.

5. Recommendations of Road Safety Audits should be implemented, before further work is undertaken on the road concerned.

6. Standard Road accident recording & reporting formats should be evolved considering all aspects of feasibility and manpower resources and be published as standard documents for adoption by all authorities at Central and State levels.

7. Specialized accident investigation centres shall be established to study a few selected accidents using accident reconstruction techniques etc., and the details to be preserved in a data base.

8. Institutionalized system of database storage and management should be developed for road accident data. A suitable web based electronic road accident data collection/ compilation system shall be developed for countrywide implementation.

9. Centre of excellence for road safety Research & Accident analyses should be developed in Academic institutions across the country.

Till such time as the NRSB becomes operational, the above steps may be taken by the Government in consultation with the Committee on Road Safety.

xii

Drivers’ Training
: This Hon’ble Court may be pleased to issue a direction that licenses of all drivers would be renewed after every five years and would be subject to their qualifying the stringent criteria including technical efficiency, quality of driving, control over a vehicle and other relevant factors. It is necessary that any person who drives the vehicle must be in complete control of the vehicle to be able to minimize the risk of an accident.

It is submitted that only accredited driving schools should be authorized to impart training to the learners and recommend the grant of permanent licenses. Such institutions must have driving teachers (a) with not less than 10 years’ experience; (b) who have experience in driving all kinds of vehicles; (c) who have the the requisite learning vehicle; (d) who have adequate facilities and take suitable number of tests before the final license by a public authority should only be upon recommendation of such an accredited licensing institution. Computerized driving tests should be resorted for checking driving skills.

In the Motor Vehicle (Amendment) Bill, 2017, it is proposed that the transport driving license is to be renewed at an interval of five years.

It has been proposed in the Motor Vehicle (Amendment) Bill, 2017 that the Central Government may make rules for such schools or establishments. The efforts shall be made to improve the quality of driving training by prescribing detailed curriculum as well as the infrastructure and trainer requirements by the Driving Training Schools.

Order proposed:
The Government of India and the State Governments may be directed to take such steps as recommended by the Committee on Road Safety in a time bound manner to ensure improvement in the quality of driver training and licensing (including emphasis on lane driving) as well as in the infrastructure and the trainer requirements.

xiii

Lane Driving: 
This Court may issue a direction that all the State Government would issue a mandatory circular that lane driving will be strictly insisted upon in all parts of this country. Further, overtaking shall be only according to the protocols which are devised for the said purpose and contravention may even result in forfeiture of his or her license.

Ministry of Road Transport & Highways has already notified Motor Vehicles (Driving) Regulations 2017 vide G.S.R. 634 (E) dated 23rd June 2017 which mandates the lane driving and also provides for the protocol for overtaking.

Order proposed:
The State Governments/ UTs may be directed to strictly implement Motor Vehicles (Driving) Regulations 2017 notified vide G.S.R. 634 (E) dated 23rd June 2017 which mandates the lane driving and also provides for the protocol for overtaking.

xiv

Road Safety Equipment: 
All the State Governments will take steps to acquire and use cameras and other surveillance equipment according to the norms suggested by the Ministry of Home Affairs to check and detect traffic violators. Further, this Hon’ble Court may direct that special patrol forces along the National Highways, Expressways and the State Highways be established. The States may also be directed to take the following actions to the satisfaction of the Committee on Road Safety:

(A) Formulate and enforce a policy for the removal of all hoardings and objects which obstruct driving or distract drivers.

(B) Formulate and enforce a policy for detection and removal of encroachment on all pedestrian path which will cause any hindrance to pedestrians and vehicles.

(C) Issue a direction that all driving licenses will be suspended for a period of at least one year under Section 19 of the Motor Vehicles Act and Rule 21 of the CMV for over speeding, red-light jumping, use of cellular phone while driving, over loading, and using goods carriage for ferrying passengers.

Bureau of Police Research & Development (BPR & D) had prepared a report in consultation with States/UTs on the norms for the number of Traffic Police and also for the Equipment for identifying violations of traffic laws with reference to vehicle population of that City/State and submitted the same to the Committee on Road Safety in the month of September, 2015. Further, Committee on Road Safety has forwarded the report to all States/UTs on 30th November, 2015 (copy attached in Annexure-II)

Order Proposed: 
All the State Governments/UTs may be directed to take steps to acquire and use cameras and other surveillance equipment according to the norms suggested by the Ministry of Home Affairs in a phased manner to check and detect traffic violators; and may further be directed to set up special patrol forces along the National Highways, Expressways and the State Highways. This may be done in consultation with and to the satisfaction of the Committee on Road Safety.

xv

Alcohol and Road Safety: 
As per the order dated 15th December 2016, by a judicial order passed in (State of Tamil Nadu v. K. Balu, (2017) 2 SCC 281) this Hon’ble court prohibited the grant of licences for the sale of liquor along national and state highways and over a distance of 500 metres from the outer edge of the highway throughout the territory of India. This Hon’ble Court may further direct the State Governments to ensure that the said prohibition imposed by this Hon’ble Court be effectively implemented. Further, those found driving under the influence of alcohol should be prosecuted under the Motor Vehicles Act, 1988 as well as under the Indian Penal Code, 1860 within a time period fixed by this Hon’ble Court.

Ministry has written to the States vide letter dated 6th April, 2017, for compliance of the orders of the Hon’ble Supreme Court. Ministry of Home Affairs had issued an advisory on road safety and accidents to all the States/UTs on 17th December, 2015, advising for strict enforcement of provisions of IPC and MV Act to prosecute and punish persons causing injury or death in offences related to road safety (detail attached in Annexure-III).

Order proposed: 
No further orders are required at this stage. The statement made by the Government of India may kindly be taken on record and ordered.

xvi

Road Safety Education: 
Pursuant to recommendations of the Committee on Road Safety, Road Safety Education has already been included by CBSE in school curriculums. This Hon’ble Court may further direct the State Governments to ensure that Road Safety Education and Counselling is also incorporated into the curriculum of the State Boards.

The Ministry of Road Transport & Highways is in agreement with the suggestion.

Order proposed:
This Hon’ble Court may further direct the State Governments/UTs to ensure that Road Safety Education and Counselling is also incorporated into the curriculum laid down by the State Boards by 1st April, 2018.The statement made by the Government of India may kindly be taken on record and ordered.

xvii

Speed Governors: 
It is prayed that State Governments be directed to take steps to ensure that approved speed Governors are fitted in the existing transport vehicles and given Unique Identification Number. These numbers should be uploaded in the VAHAN Database along with the details of the vehicle. The instructions issued by Committee on Road Safety in this regard may kindly be directed to be strictly followed.

Ministry of Road Transport & Highways has already issued guidelines for fitment of approved Speed Limited Device (speed governors) on transport vehicles. The suggestion to upload the Unique Identification Number of the Speed Governor in the VAHAN database is acceptable.

Order proposed: 
State Governments be directed to take steps to ensure that approved speed Governors are fitted in the existing transport vehicles and given Unique Identification Number. These numbers should be uploaded in the VAHAN Database along with the details of the vehicle. The instructions issued by Committee on Road Safety in this regard may kindly be directed to be strictly followed.

xviii

Emergency Medical Care: 
As far as emergency care is concerned, this Hon’ble Court may direct that the State Government shall establish for every District at least one Trauma Care Centre with all modern medical facilities, and ambulances equipped with first-aid facility manned by trained para-medical staff should also be made available.

In respect of the Trauma Care Programme being implemented by Ministry of Health & Family Welfare, a total number of 116 Trauma Care Facilities (TCFs) were identified and approved during the 11th Five Year Plan (FYP) and 81 TCFs were identified during the 12th FYP. It may further be mentioned that with regard to trained para-medical staff for ambulances, the Programme Division, the Director General of Health Services has developed the Pre-hospital Trauma Technician Course curriculum, and the training is being undertaken in the three Central Government Hospitals of Delhi, namely Safdarjung Hospital, LHMC and Dr. RML Hospital since 2007.

Order proposed: 
This Hon’ble Court may direct that the State Government shall establish for every District at least one Trauma Care Centre with all modern medical facilities, and ambulances equipped with first-aid facility manned by trained para-medical staff should also be made available. Further, District Magistrates of every district may be directed to ensure that sufficient publicity is given in respect of existing facilities.

xix

Universal Accident Helpline Number: 
This Hon’ble Court may be pleased to order that there shall be one Universal Accident Helpline Number which should be established by the Department of Tele
-communication throughout the country. Further, a universal code for ambulances should be notified by the MoRTH.

The National Health Mission already provides for a call centre number (108), which is being extensively used in the States for medical emergencies including accidents. The ambulance services are also operational in most of the states through this call centre number (108).

Order Proposed: 
The State overnments/UTs may be directed to strengthen the accident helpline number by providing adequate facilities. The State Governments that have not made ambulance services operational may be directed to do so by 31st March 2018, and to further develop a code/method to utilize services of all ambulances in the area.

xx

Permanent Road Safety Cell: 
This Hon’ble Court may direct that National Highways Authority of India must have a permanent Road Safety Cell consisting of suitable engineers and qualified personnel and which shall be established on or before 30th September, 2017.

The Ministry of Road Transport & Highways is in agreement with the suggestion.

Ministry of Road Transport & Highways as well National Highways Authority of India have established road safety engineering cells. All the States/UTs have also been requested to establish Road Safety Engineering Cell in their National Highways Directorates by Ministry of Road Transport & Highways.

Order Proposed: 
The cells have been set up and no further orders are required at present. The statement made by the Government of India may kindly be taken on record and ordered.

xxi

Data Collection: 
This Hon’ble Court may direct that a computerized format be prepared by the MoRTH for collecting road accident data throughout the country and data so collected should be made public so that even members of the public could pursue remedial actions or research.

Ministry of Road Transport & Highways has already evolved a new format for recording accident data & report. The format is enabled for computerized data entry. State Government / UTs have been asked to take further action to collect and report the data in new format. The Ministry has been making the data public for information of all the stakeholders.

Order proposed: 
No further orders are required at this stage. However, it may be directed that the said format evolved by the Ministry be strictly followed.

The statement made by the Government of India may kindly be taken on record and ordered

xxii

GPS: 
It is submitted that it has been found that use of GPS and GIS mapping encourages safety both for drivers and passengers. Therefore, it is prayed that a direction be issued to all car manufactures that with effect from 1st January 2018 they would ensure that all vehicles are installed with GPS and GIS.

Ministry of Road Transport & Highways has already notified vide G.S.R. No. 1095 (E) dated 28th November 2016 mandating the fitment of vehicle location tracking device and emergency button in all public service vehicles except two wheelers, e-rickshaw, three wheelers and any transport vehicles for which no permit is required under the Motor Vehicles Act, 1988. Fitment of GPS devices on other vehicles would be considered in due course since this would put additional cost burden on the vehicle owners in terms of cost of the GPS equipment.

Order proposed: 
This Hon’ble Court may direct that all public service vehicles shall be fitted with location tracking device as mentioned by GoI and the said notification be strictly implemented. The statement made by the Government of India may kindly be taken on record and ordered.

xxiii

Bus/Truck-Body Building Code: 
This Hon’ble Court may direct that MoRTH may take suitable steps to notify Bus/Truck-Body Building Code so that henceforth buses and trucks built on different chassis are not found wanting in security and safety features.

Bus Body Code: Ministry of Road Transport & Highways has already notified the bus body code vide G.S.R. No. 287 (E) dated 22nd April 2014.

Truck Body Code: 
Ministry of Road Transport & Highways has already notified the truck body code vide G.S.R. No. 1034 (E) dated 2nd November 2016 for vehicles registered on or after 1st October 2018.

Order proposed: 
No further orders are required at this stage.

The statement made by the Government of India may kindly be taken on record and ordered.

xxiv

ABS, Air Bags and Headlights: 
It is prayed that a direction be issued that in every model of car sold in India there shall be Anti-Lock Braking System and air bags. Further a direction be issued that all two-wheeler manufacturer will take recourse to “Automatic Headlights On” systems. It is prayed that a direction be issued that the State Government must not allow vehicles with impermissible headlights to ply.

ABS: Ministry of Road Transport & Highways has notified for the fitment of ABS in motor cycles vide G.S.R. No. 310 (E) dated 16th March 2016 and for four wheelers vide G.S.R. No. 120 (E) dated 10th February 2017 for new models on or after 1st April 2018 and for existing models on or after 1st April 2019.

Air Bags: Ministry of Road Transport & Highways finalized a standard AIS-145, which is being notified. This standard would mandate fitment of Air Bags on all the LMV passenger vehicles.

Automated Headlights On: 
Ministry of Road Transport & Highways has notified vide G.S.R. No. 188 (E) dated 22.02.2016 for fitment of “Automated Headlights On’ (AHO) in two wheelers manufactured on or after 1st April 2017.

Orders proposed: 
No further orders are required.

xxv

Crash Test: 
It is respectfully submitted that in view of the doubtful crash test of all the LMVs, crash test in proper conditions must be undertaken in respect of LMVs by laboratories that are accredited. It is submitted that this Hon’ble Court may further direct that all vehicle testing agencies in India should be internationally accredited / recognized to ensure that crash tests are genuinely and sincerely undertaken having utmost regard to the value of human life. This may be done by 1st April 2018.

The crash tests for all the Light Motor Vehicles (LMVs) have been notified by the Ministry for implementation. The tests are to be conducted only by the testing agencies notified under Rule 126 of the Central Motor Vehicle Rules, 1989. The agencies are required to have their testing facilities accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL). The Ministry has issued S.O. 1139 (E) dated 28.04.2015 and S.O. 2412 (E) dated 03.09.2015 amending the Central Motor Vehicles Rules, 1989 (CMVRs) notifying the following crash standards: –

Standards

Date of commen -cement/ validity

Requi
-rement for behaviour of steering mechanism of a vehicle in a Head-on Collision as per AIS 096/2008

New Models- 1.10.2017

All Models- 01.10.2019

Protection of occupants in the event of an offset Frontal Collision as per AIS 098/2008

New Models- 1.10.2017

All Models- 01.10.2019

Approval of vehicles with regard to the Protection of Occupants in the event of a Lateral Collision as per AIS 099/2008

New Models- 1.10.2018 All Models- 01.10.2019

Approval of Vehicles with regard to the Protection of Pedestrian and other Vulnerable Road Users in the event of a Collision with a Motor Vehicle as per AIS 100/2010

New Models- 1.10.2018

All Models- 01.10.2020

Order proposed: 
No further orders are necessary at this stage.

The statement made by the Government of India may kindly be taken on record and ordered.

17. We have heard learned Amicus Curiae as well as learned Additional Solicitor General. They have taken us through all the suggestions made and the response of the MoRTH to these suggestions. In view of the submissions, and keeping in mind issues of road safety and the interest of those who may be unfortunate victims of road accidents, we issue the following directions:

1. Road Safety Policy: Most of the State Governments and Union Territories have already framed a Road Safety Policy. Those that have not framed such a policy namely Assam, Nagaland, Tripura, Delhi, Lakshadweep, Dadra and Nagar Haveli and Andaman and Nicobar Islands, must now formulate the Road Safety Policy by 31st January, 2018. All States and Union Territories are expected to implement the Road Safety Policy with all due earnestness and seriousness.

2. State Road Safety Council: All States have already constituted a Road Safety Council in terms of Section 215 of the Motor Vehicles Act, 1988. The Union Territories of Daman and Diu, Dadra and Nagar Haveli and Andaman and Nicobar Islands have not constituted the Road Safety Council as yet. We direct these Union Territories to constitute the State Road Safety Council on or before 31st January, 2018. The responsibility and functions of the Council will be as recommended by the Committee on Road Safety. The State Road Safety Councils should periodically review the laws and take appropriate remedial steps wherever necessary.

3. Lead Agency: Only a few States have established the Lead Agency as recommended by the Committee on Road Safety in its communication of 23rd December, 2014. The States and Union Territories that have not done so should establish the Lead Agency on or before 31st January, 2018 in terms of the recommendations made by the Committee on Road Safety. It may be mentioned that the Lead Agency will act as the Secretariat of the State Road Safety Council and coordinate all activities such as licensing issues including issues of driving licences, registration of vehicles, road safety and features of vehicles, along with other allied matters including emission norms and other activities as mentioned in the communication dated 23rd December, 2014.

4. Road Safety Fund: Some of the States have already established a Road Safety Fund. Those States and Union Territories that have not yet established the Road Safety Fund should do so not later than 31st March, 2018 and report back to the Committee on Road Safety. The corpus of the Road Safety Fund will be from the fines collected for traffic violations and the Fund will be utilized for meeting expenses relating to road safety.

5. Road Safety Action Plan: The purpose of a Road Safety Action Plan is to reduce the number of road accidents, as well as the fatality rate. The MoRTH has already requested all the States and Union Territories to prepare a Road Safety Action Plan but it appears that the response to this has been somewhat lukewarm. The State Governments and Union Territories are therefore directed to urgently prepare a Road Safety Action Plan by 31st March, 2018 and put it into action after giving it due publicity.

6. District Road Safety Committee: A District Road Safety Committee is required to be set up by the State Government for every district in terms of Section 215(3) of the Motor Vehicles Act, 1988. As suggested by the learned Amicus and agreed to by the MoRTH, the District Road Safety Committee should be put in place by 31st January, 2018 and should be headed by the Collector of the District and should include amongst others the Superintendent of Police, Health Officers, Engineers of the Public Works Department, representatives of the National Highways Authority of India, the Road Transport Officer of the District and members of civil society from the District. The District Road Safety Committee must hold regular and periodic meetings to review road safety issues and take corrective measures.

7. Engineering Improvement: It appears that one of the main reasons for road accidents is the poor quality of roads, improper design, etc. The MoRTH is of the opinion that the protocol for road design and identification of black spots needs to be reviewed and enforced. Accordingly, it is directed that the MoRTH should publish a protocol for identification and rectification of black spots and take necessary steps for improving the design of roads to make them safe.

8. Traffic Calming Measures: It is suggested by the learned Amicus that traffic calming measures must be adopted at accident prone areas. This is agreed to by the MoRTH. However, such measures will need to be studied and then put in place. This is an on-going exercise which must be carried out by the Road Safety Committee with the assistance of the MoRTH and other stakeholders.

9. Road Safety Audits: There is agreement, in principle, between the learned Amicus and the MoRTH to carry out Road Safety Audits. However, there appears to be a dearth of qualified auditors in Road Safety Engineering. The MoRTH supports the idea of capacity building. It is, therefore, directed that necessary steps be taken by the Committee on Road Safety as well as by the MoRTH to work in this direction since there can be little doubt that an audit of road safety is essential to reduce the possibility of road accidents through corrective measures.

10. Engineering Design of New Roads: The MoRTH is of the view, and the learned Amicus is also in agreement, that the Road Safety Audit as mentioned above should include the design stage audit of new road projects of 5 kms or more, rather than being based on the cost of the project. It is ordered accordingly.

11. Working Group on Engineering: The Working Group on Engineering (Roads) has already submitted a Report which is available with the Road Safety Committee as well as the MoRTH. This Working Group was constituted pursuant to the decision taken in the meeting of the 12th National Road Safety Council held on 25th March, 2011. The recommendations of the Working Group should be implemented in the terms prayed for by the learned Amicus as well as those accepted by the MoRTH. These will, of course, be in the nature of interim directions since the National Road Safety Board is likely to be created as proposed in the Motor Vehicles (Amendment) Bill, 2017.

12. Drivers’ Training: This is the subject matter of the Motor Vehicles (Amendment) Bill, 2017 and no orders are required to be passed in this regard.

13. Lane Driving: The MoRTH has already issued Motor Vehicles (Driving) Regulations, 2017 vide G.S.R. 634 (E) dated 23rd June, 2017.

The Notification should be implemented by the State Governments and Union Territories strictly.

14. Road Safety Equipment: The Bureau of Police Research and Training has already prepared a Report on the subject and has submitted it to the Road Safety Committee in September, 2015. The recommendations in the Report should be implemented including acquisition of cameras and surveillance equipments in detecting traffic and identifying violators. It is also necessary to set up special patrol forces along the National Highways and State Highways for which necessary steps must be taken by the State Governments and Union Territories.

15. Alcohol and Road Safety: The MoRTH has already written to the States to comply with orders of this Court in this regard. The MoRTH may issue further advisories in this regard on a quarterly basis during the calendar year 2018 so as to serve as a reminder to the State Governments and Union Territories to implement the directions of this Court.

16. Road Safety Education: The learned Amicus as well as MoRTH are in agreement that road safety education and counselling should be incorporated in the curriculum by the State Boards by 1st April, 2018. It is directed that the State Governments may seriously consider this recommendation and include Road Safety Education and Counseling as a part of the school curriculum at the earliest.

17. Speed Governors: Guidelines in this regard have already been issued by the MoRTH. The MoRTH has agreed to upload the Unique Identification Number of the speed governors in the VAHAN database. This should be followed up by the MoRTH with expedition.

18. Emergency Medical Care: There is agreement that at least one Trauma Care Centre should be set up in every district with necessary facilities and an ambulance. The State Governments and Union Territories should take up this recommendation at the earliest since it is on record that treatment soon after a road accident is crucial for saving the life of the victim. In this context, it may also be mentioned that this Court has issued certain directions in Pt. Parmanand Katara v. Union of India1 which should be followed.

19. Universal Accident Helpline Number: The MoRTH has stated that there is already a call centre number, that is, 108 provided by the National Health Mission. Due publicity must be given to this so that an ambulance can be activated at the earliest whenever necessary.

20. Permanent Road Safety Cell: All State Governments and Union Territories have already been requested by the MoRTH to set up Road Safety Cells. The State Governments and Union Territories should establish Permanent Road Safety Cells by 31st January, 2018.

21. Data Collection: The MoRTH has already taken steps for recording accident data and reports through computerised data entry. The State and Union Territories have been asked to take further action in this regard and make the data public for the information of all stakeholders. This needs to be followed up and no further orders are necessary in this regard.

22. GPS : The MoRTH has already notified vide G.S.R. No. 1095 (E) dated 28th November, 2016 mandating the fitment of vehicle location tracking devices in all public service vehicles subject to some exceptions. Since this has cost implications, the MoRTH may assist the State Governments and Union Territories to ensure that to the maximum extent possible and within the shortest time frame, location tracking devices must be fitted in all public service vehicles as notified.

23. Bus/Truck-Body Building Code: This has already been notified by the MoRTH with regard to buses vide G.S.R. No. 287 (E) dated 27th April, 2014 and with regard to trucks vide G.S.R. No. 1034(E) dated 2nd November, 2016. No further orders are necessary in this regard.

24. ABS, Air Bags and Headlights: The MoRTH has already notified for fitment of ABS in motor cycles vide G.S.R. No. 310(E) dated 16th March, 2016 and for four wheelers vide G.S.R. No. 120(E) dated 10th February, 2017. As far as air bags are concerned a standard AIS-145 has already been notified. As regards automated headlights, the MoRTH has notified vide G.S.R. No. 188(E) dated 22nd February, 2016 for fitment of “Automated Headlights On” in two wheelers manufactured on or after 1st April, 2017. No further orders are required in this regard except the faithful implementation of the various notifications issued by the MoRTH.

25. Crash Test: This too has been notified by the MoRTH and the test for all light motor vehicles is required to be conducted by the testing agency notified under Rule 126 of the Central Motor Vehicles Rules, 1989. No further orders are required in this regard except the faithful implementation of the notifications and crash standards issued by the MoRTH.

18. We make it clear that the directions given above are those that have been agreed upon by the parties before us and are in addition to and supplement the directions already given in S.Rajaseekaran v. Union of India. We commend the efforts put in by the learned Amicus Curiae and the Justice K.S. Radhakrishnan Committee on Road Safety. We are confident that the directions given above, at their instance and with the support, cooperation and assistance of the MoRTH, will save thousands of lives in road accidents and crores of rupees in compensation payable by the insurance companies – provided the directions are faithfully and sincerely complied with.

19. We also make it clear that if there is any doubt or clarity required in implementing the directions given, the concerned State Government or Union Territory is at liberty to move the Committee on Road Safety.

20. We may note that none of the directions given by us or the directions given earlier by this Court are difficult to comply with. In this connection, we may draw attention to the excellent document prepared by the Committee on Road Safety and the MoRTH titled “Consulting Services to Audit the Implementation by the States of the Directions Issued by the Committee on Road Safety – Group 4- Final Report” concerning Haryana prepared in September 2017. The Report has received considerable support from the Delhi Integrated Multi-Model Transit System Limited (DIMTS), Transportation Research and Injury Prevention Programme (TRIPP), IIT-Delhi and The Energy and Resource Institute (TERI). It would be worthwhile if similar reports are prepared and published so that roads all over the country are rendered far safer than what they are today.

21. List for further proceedings on 7th February, 2018.

 (Madan B. Lokur)

(Deepak Gupta)

Ankur Kapoor Vs. Oriental Insurance Company Ltd.[SC 2017]

Date: November 06, 2017
• Keywords:-Motor Accident claim-The Motor Accident Claims Tribunal-composite negligence -liability to pay .

Supreme Court-min

The appellant sustained a grievous injury to his right arm which resulted in permanent disability to the extent of 50% to his right arm. The Tribunal as well as the High Court have not quantified the compensation under separate heads, which in our considered opinion has resulted in grant of lesser compensation.

Bench:  [S.A. BOBDE] [MOHAN M. SHANTANAGOUDAR]

Acts:

History:- The Motor Accident Claims Tribunal, Karnal awarded compensation of Rs.6,60,000/- (Rupees Six Lacs Sixty Thousand only) along with 9% interest per annum from the date of filing the claim petition to the appellant.  Dissatisfied with the quantum of compensation, the appellant approached the High Court of Punjab and Haryana at Chandigarh seeking enhancement of compensation. The High Court has enhanced the compensation by Rs.2,20,000/- (Rupees Two Lacs Twenty Thousand only) along with interest @ 6% per annum, which means the appellant has been awarded a total compensation of Rs.8,80,000/- along with interest. As mentioned supra, this appeal is filed praying for further enhancement of compensation


SUPREME COURT OF INDIA

Ankur Kapoor Vs. Oriental Insurance Company Ltd.

[Civil Appeal No. 17998 of 2017 arising from SLP (C) No.4841/2016]

MOHAN M. SHANTANAGOUDAR, J.

1. Leave granted.

2. The appellant has sought enhancement of compensation by filing this appeal, questioning the judgment dated 31.10.2015 passed by the High Court of Punjab and Haryana at Chandigarh in FAO No. 3218 of 2003 (O & M).

3. Facts leading to this appeal are as under: In the accident that occurred at about 10.30 p.m. on 21.3.2000 at Jamnagar, the appellant sustained grievous injury to his right arm which resulted in permanent disability to the extent of 50% to his right arm. Since the appellant was immediately admitted to the hospital at Jamnagar his life was saved; the appellant remained as in-patient in the hospital from 21.03.2000 to 31.05.2000 and had undergone several surgeries. It is the case of the appellant that even after discharge from the hospital at Jamnagar, he was taking treatment at Karnal as out-patient.

At the time of accident, the appellant was “Dec Cadet trainee” of Merchant Navy in the Binnyship Management Company Ltd. and as a trainee, he was getting fifty US dollars per month as salary, apart from free boarding and lodging. It was the claim of the appellant that he would have become “third Officer” after 18 months and the said post was attached with the salary of 1500 US dollars per month. According to the appellant, he would have then become “Chief Officer” within three years and then “Captain” of the ship after about eight years of the service, but as a result of accident and as a result of permanent disability to the right arm of the appellant, he has not only lost his job in Binnyship Management Company Ltd. but he has become unfit for the Merchant Navy. He alleges that his future career is ruined, apart from sustaining heavy financial loss.

4. The Motor Accident Claims Tribunal, Karnal awarded compensation of Rs.6,60,000/- (Rupees Six Lacs Sixty Thousand only) along with 9% interest per annum from the date of filing the claim petition to the appellant.

5. Dissatisfied with the quantum of compensation, the appellant approached the High Court of Punjab and Haryana at Chandigarh seeking enhancement of compensation. The High Court has enhanced the compensation by Rs.2,20,000/- (Rupees Two Lacs Twenty Thousand only) along with interest @ 6% per annum, which means the appellant has been awarded a total compensation of Rs.8,80,000/- along with interest. As mentioned supra, this appeal is filed praying for further enhancement of compensation.


6. The Tribunal as well as the High Court have not quantified the compensation under separate heads, which in our considered opinion has resulted in grant of lesser compensation.

7. It is by now well settled by this Court in a catena of decisions including the case of Raj Kumar vs. Ajay Kumar reported in (2011) 1 SCC 343, in the case of permanent disability, the compensation is usually awarded under the following heads:

A. Pecuniary damages (Special Damages):

(i) Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure;

(ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising:

(a) Loss of earning during the period of treatment;

(b) Loss of future earnings on account of permanent disability.

(iii) Future medical expenses.

B. Non-pecuniary damages (General Damages)

(iv) Damages for pain, suffering and trauma as a consequence of the injuries;

(v) Loss of amenities (and/or loss of prospects of marriage);

(vi) Loss of expectation of life (shortening of normal longevity)


8. The record reveals that the Tribunal has made a note while recording the deposition of the claimant about the seriousness of the injuries sustained by the claimant. The observation of the Tribunal reads thus:

“At this stage I have seen the right arm i.e. right upper limb which is almost completely in a damaged condition and skin is not visible properly from elbow onward till shoulder and there seems to be some muscle loss.” The record also reveals that the claimant was unconscious for a couple of days in the hospital and he was operated by the doctor at Jamnagar hospital. According to the appellant, he has spent an amount of Rs.3,00,000/- (Rupees Three Lacs only) at Jamnagar hospital. Thereafter, he has taken the assistance of Dr. O.P.Miglani at Karnal for getting the dressing done every day.

The disability certificate is Ex. P1 and the treatment certificate issued by the hospital is Ex. P9. Due to the injuries sustained, the appellant has lost strength and flexibility in his right arm and he cannot lift the weight. The appellant cannot raise the arm beyond the level of 90 degree and he cannot drive the vehicle as his arm is not as strong as it was before the accident. The appellant had completed six and half months training prior to the incident. When the ship had halted at Jamnagar for ten days, he took casual leave for seven days to go to Karnal for applying fresh passport, during which time the accident occurred.

After completion of his 10+2, the appellant had passed Diploma in Applied Research International, New Delhi which is a condition precedent for joining Merchant Navy. The appellant had also passed Diploma in Personal Safety and Social Responsibilities, Oil Tanker Familiarization, Elementary First Aid, Personal Survival Techniques, Fire Prevention and Fire Fighting(all are related to sea courses) for Dec Cadet and thereafter he joined Binniship Management Company as Dec Cadet. The record further reveals that the appellant has to undergo one more surgery i.e. plastic surgery at Mumbai inasmuch as such facility is not available in his native place at Karnal. According to the appellant, the said surgery may cost him rupees three to four lacs.

9. Having regard to the afore-mentioned material on record and keeping in mind that the future of the appellant has become bleak, so also his marriage prospects are reduced to greater extent, in our considered opinion, the compensation awarded to the appellant needs to be enhanced to certain extent. The appellant, as mentioned supra, has spent about rupees three lacs for treatment, hospitalization, medicines, transportation, nourishing food and miscellaneous expenditure during the course of treatment. He lost his earnings during the course of treatment, i.e., at least for a period of four months.

He has also lost his future earnings since he may not be able to do the job as before and he cannot join Merchant Navy. Even, it would be very difficult for him to get an alternate job easily, particularly in view of 50% permanent disability to his right arm. Thus, the appellant is awarded Rs.10,00,000/- (Rupees Ten Lacs only) on account of the expenses relating to treatment, hospitalization, medicines etc, loss of earnings during the course of treatment and loss of future earnings on account of permanent disability. The appellant is awarded Rs.3,00,000/- (Rupees Three Lacs only) for future medical expenses. The appellant must have suffered pain, agony and trauma as a consequence of injuries. The Court can take judicial notice of the fact that he may not have bright future as before.

He was just 22 years of age at the time of accident and was unmarried. It is unfortunate that he had to suffer at this young age when he was thinking of his bright future life. Having regard to the material on record, we award Rs.3,00,000/-(Rupees Three Lacs only) towards pain, agony and trauma as a consequence of injuries, and Rs.3,00,000/-(Rupees Three Lacs only) towards loss of amenities(including loss of prospects of marriage) and Rs.3,00,000/-(Rupees Three Lacs only) towards loss of expectation of life.

10. Thus, on all counts, the appellant is awarded, in total, a compensation of Rs.22,00,000/-(Rupees Twenty Two Lacs only), instead of Rs.8,80,000/-(Rupees Eight Lacs Eighty Thousand only) awarded by the High Court, along with uniform rate of interest @ 8% per annum from the date of filing of the claim petition before the Motor Accident Claims Tribunal till its realization. It is also directed that the payment of compensation with interest shall be made to the appellant within three months from today. Needless to mention that any amount, if already paid, shall be adjusted. The findings of the Motor Accident Claims Tribunal and the High Court regarding composite negligence and liability to pay will remain undisturbed.

11. The instant appeal is accordingly allowed to the aforesaid extent. There shall be no order as to costs.


The Central Motor Vehicles (Accreditation of Bus Body Builders) Order, 2007

The Motor Vehicles Act 1988

The Central Motor Vehicles (Accreditation of Bus Body Builders) Order, 2007

The Central Motor Vehicles (Accreditation of Bus Body Builders) Order, 2007d expedient in the public interest to notify certain norms and process in respect of the accreditation of bus body builders, it therefore, in exercise of the powers conferred by the sub-section (3) of section 109 of the Motor Vehicles Act, 1988 (59 of 1988) makes the following order to specify such norms and process, namely :-

1. (1) This Order may be called as the Central Motor Vehicles (Accreditation of Bus Body Builders) Order, 2007 (hereinafter referred to as the said order).(2) It shall come into force after one year from the date of publication of this Order in the Official Gazette.

2. Definitions. –

(a) “Accreditation” means the process of evaluating, assessing and approving the capabilities and capacities of a Bus Body Builder to consistently produce specified quality of bus bodies by the competent authority;

(b) “Act” means the Motor Vehicles Act, 1988 (59 of 1988);

(c) “Assessor” means a technical expert appointed by the Zonal Accreditation Board to carry out the inspection of Bus Body Builders and bus bodies, as per the prescribed norms, standards and procedure;

(d) “Bus Body Builder (BBB)” means a firm engaged in the fabrication of bus bodies and having the following minimum facilities, namely :-

(i) infrastructure facilities, namely the land, building and utilities;

(ii) plant and equipment to undertake corrosion preventive treatment; painting, structural fabrication, paneling, finishing and equipping with necessary ingredients;

(iii) inspection, quality assurance and testing of fully built buses with all its ingredients either made in-house or bought out; and

(iv) having upto date knowledge of the Central Motor Vehicles Rules, 1989.

(e) “Form” means a Form appended to this order;

(f) “National Accreditation Board (NAB)” means the body constituted by the Government of India to serve as the agency to implement the said rules and monitor the functions of Zonal Accreditation Boards;

(g) “Secretariat” means the National Accreditation Board Secretariat and the Zonal Accreditation Board Secretariat established under paragraph 9 and paragraph 12, respectively;

(h) “Zonal Accreditation Board (ZAB)” means a body constituted for any one of the four zones namely, North Zone, South Zone, East Zone and West Zone to function under overall guidance of National Accreditation Board. It shall be responsible for implementation of the process of Accreditation in the respective zone;

3. Bus Body Builders. – Bus Body Builders shall be categorized on the basis of the activities undertaken by them as indicated in the Table given below :-

Table

Category

Activities undertaken

D Structural assembly, corrosion prevention treatment, painting, finishing and equipping, inspection and testing of bus bodies. They shall invariably have a quality assurance system and facilities for all bought out items, as they shall be outsourcing a large number of items and components. Land, building and other facilities shall be available.
C In addition to the activities being performed by Category-D, this category of Bus Body Builder shall also have facilities for fabrication of the structural and other components, whereas other sub assemblies or aggregates (like seats, windows, and the like) shall be outsourced by them, besides the standard items like fasteners, brackets, glasses, rubber items as in category-D.
C1 In addition to the activities being performed by category-C, this category of Bus Body Builder shall also undertake design and development of bus bodies.
B In addition to the activities being performed by category-C, this category of Bus Body Builders shall also undertake fabrication activities of other sub systems and aggregates like seats, windows and the like. In other words, this category of Bus Body Builders shall have all facilities for bus body building except the capability of designing and developing a bus body.
A This category of Bus Body Builders shall not only have in-house facility for building a complete bus and its sub-assemblies or aggregates, but shall also have capability to design and develop bus bodies.

4. Accreditation of Bus Body Builders. – All the Bus Body Builders shall be accredited by National Accreditation Board and Zonal Accreditation Boards as notified under the said order. The accredited Bus Body builders shall meet the type approval requirements specified in the relevant provisions of the Bus Body Code for the relevant type of vehicle in accordance with AIS:052:2001 as amended from time to time till the corresponding Bureau of Indian Standards specifications are notified under the Bureau of Indian Standard Act, 1986(63 of 1986).

5. Activities involved in the Accreditation System. – (1) The process of accreditation shall be carried out in the following stages, namely:-

(i) Constitution and notification of Zonal and National Accreditation Boards by Central Government including establishment of permanent Secretariat at Zonal and National Accreditation Boards,

(ii) Selection and preparation of panel of assessors at Zonal Accreditation Boards.

(iii) Notice for commencement of accreditation of Bus Body Builders and the formalities involved therein at Zonal Accreditation Board.

(iv) Receipt and scrutiny of application at Zonal Accreditation Board.

(v) Nomination of assessors and planning of assessment at Zonal Accreditation Boards.

(vi) Assessment at Zonal Accreditation Boards.

(vii) Scrutiny of assessment report at Zonal Accreditation Board Secretariat for its completeness and putting up to Zonal Accreditation Board for consideration.

(viii) Grant of provisional accreditation by Zonal Accreditation Board.

(ix) Approval or ratification of provisional accreditation by National Accreditation Board.

(x) Issue of accreditation certificate by the Zonal Accreditation Board Secretariat.

(xi) Conduct of surveillance or re-accreditation assessment at Zonal Accreditation Board.

(xii) Dealing with the complaints or representations and appeals and other relevant issues at National Accreditation Board, and

(xiii) Renewal of accreditation at Zonal Accreditation Board.

(2) The flow chart for Accreditation Activities are given in Annexure BBB-I.

6. Organization Structure for Accreditation System. – There shall be four Zonal Accreditation Boards, namely – North Zone Accreditation Board, South Zone Accreditation Board, East Zone Accreditation Board and West Zone Accreditation Board. These zonal bodies shall be responsible for undertaking the accreditation process in their respective zones. The activities of all these Zonal Accreditation Boards shall be coordinated by the National Accreditation Board. The organization structure for Bus Body Builder Accreditation System is given in Annexure BBB-2 and Annexure BBB-2A.

7. Composition of National Accreditation Board. – The composition of the National Accreditation Board shall be as indicated in the Table given below, namely :-

Table

Serial number

Organization

Number of representatives

Status

1 Department of Road Transport and Highways Two Chairman and one member
2 Department of Heavy Industry One Member
3 Chairman of the Zonal Accreditation Boards Four, one each from the Zonal Accreditation Boards Members
4 Society of India Automobile Manufacture One Member
5 Automotive Component Manufacture Association One Member
6 Central Institute of Road Transport. One Member
7 Association of State Road Transport Undertaking (ASRTU) including two to be nominated from State Transport Undertakings by Association of State Road Transport Undertakings. One Member
8 Automotive Research Association of India One Member
9 Vehicles Research and Development Establishment One Member
10 Bus Body Builders and their Associations (one representative to be co-opted by the Board and another to be nominated by Department of Road Transport and Highways) Two Members
11 Chairman, Central Motor Vehicles Rules-Technical Standing Committee One Member
12 Secretary (to be nominated by Department of Road Transport and Highways) One Member Secretary
Total 19 Members including Chairman

8. Functions of National Accreditation Board. – The functions of the National Accreditation Board shall be as follows, namely :-

(a) to lay down rules of transaction of business for Zonal Accreditation Boards and the National Accreditation Board;

(b) to sanction the manning levels and the number of the Secretariat staff at the National Accreditation Board and Zonal Accreditation Boards;

(c) to lay down service conditions for the Secretariat Staff and their pay scales and other terms of appointment;

(d) to lay down the qualification and the like for appointment of Secretariat staff;

(e) to act as appellate authority;

(f) to lay down the qualification, terms and conditions and names of the assessors;

(g) to lay down required qualification and other conditions of service for the Secretary;

(h) to define powers and authority of the permanent Secretary as to ensure smooth functioning of the Secretariat of Zonal Accreditation Board;

(i) to ensure the implementation of the policies and legislation of the Government of India concerning bus body building;

(j) co-ordination among the different Zonal Accreditation Boards;

(k) to ensure uniformity in the accreditation process being followed by different Zonal Accreditation Boards;

(l) interaction with the Government of India;

(m) to approve the provisional accreditation recommended by Zonal Accreditation Boards;

(n) to handle grievances or complaints and appeals;

(o) to undertake random test checks to ensure the compliance with accreditation standards;

(p) to decide and review the accreditation fee structure from time to time;

(q) to design the appropriate National Accreditation Board logo and to ensure its proper usage; and

(r) any other function required for the purpose as may be decided by Zonal Accreditation Board or National Accreditation Board;

9. National Accreditation Board Secretariat. – (1) A Secretariat shall be established in Association of State Road Transport Undertakings, New Delhi. A permanent Secretary from the Secretariat shall be nominated by Department of Road Transport and Highways. National Accreditation Board shall either appoint the requisite complement of staff or authorize Association of State Road Transport Undertakings to do so.(2) The National Accreditation Board Secretariat shall assist the National Accreditation Board in discharging its functions as enumerated in paragraph 8 above.

10. Composition of Zonal Accreditation Board. – The composition of each Zonal Accreditation Board shall be indicated in the Table given below :

Serial No.

Representatives

Number of representatives

Status

1 Transport Secretary of Transport Commissioner of one of the State Governments in the zone on rotational basis One Chairman
2 Vehicle manufactures (Representatives to be nominated by Society of Indian Automobile Manufacture) Two Member
3 Technical head of the State Transport Undertaking of each State in the zone (representatives to be nominated by Association of State Road Transport Undertakings) One from each State in the Zone Member
4 Central Institute of Road Transport One Member
5 Automotive Research Association of India One Member
6 Bus Body Builders and their Association (to representatives to be co-opted by the Zonal Accreditation Board and one representative to be nominated by Department of Road Transport and Highways) Three Member
7 Accessories or component manufacture (representative to be nominated by Association of Components Manufactures of Automoblies) One Member
8 Zonal Secretary One Member Secretary
Total 11 Members including Chairman

11. Functions of Zonal Accreditation Board. – The following shall be the functions of the Zonal Accreditation Board.

(a) to appoint permanent Secretary to the Board;

(b) to consider and approve or disapprove the assessment submitted by the Secretariat after due evaluation;

(c) to grant provisional accreditation to the Bus Body Builder;

(d) to authorize Secretary to issue provisional accreditation certificate within a given time span;

(e) to approve the panel of assessors in the zone;

(f) to ensure the training of assessors in the assessment techniques; and

(g) to define powers and authority of the Secretary to plan the assessment in consultation with the team of assessors and Bus Body Builders.

12. Zonal Accreditation Board Secretariat. – (1) A Secretariat shall be established for each Zonal Accreditation Boards. This shall be headed by a permanent Secretary who shall be appointed by Zonal Accreditation Board. Zonal Accreditation Board shall also appoint other staff required for the Board.(2) Secretariat for West Zonal Accreditation Board and South Zonal Accreditation Board shall be established in Central Institute of Road Transport, Pune. Secretariat for North Zonal Accreditation Board and East Zonal Accreditation Board shall be established in the Automotive Research Association of India, Pune.

13. Functions of Zonal Accreditation Board Secretariat. – The following shall be the functions of Zonal Accreditation Board Secretariat.

(a) to invite and accept applications (Form No. BBB-1) for accreditation from perspective Bus Body Builders;

(b) to scrutinize applications and obtain additional information, if required;

(c) to finalise tentative category of the Bus Body Builder and inform Bus Body Builder regarding accreditation fee for that particular category;

(d) to appoint a team of assessors;

(e) to arrange assessment for accreditation as per Form No. BBB-5 to Form No. BBB-10 according to the category of the Bus Body Builder, within one month of the receipt of registration fee and the assessment charges;

(f) to put up assessed cases after due examination to the Zonal Accreditation Board for their consideration;

(g) to issue a provisional accreditation certificate as per recommendation by Zonal Accreditation Board;

(h) to coordinate all the activities related to the assessment including appointment of assessors and planning the assessment;

(i) to prepare draft agenda of cases to be put up to National Accreditation Board;

(j) to prepare and issue the final Accreditation Certificate on approval of the provisional accreditation by National Accreditation Board;

(k) to inter alia, maintain and update the following, namely:-

(a) panel of assessors;

(b) all documents; and

(c) liaison with National Accreditation Board/Zonal Accreditation Board and their members.

(l) any other function related to the activity

14. Accreditation Procedure. – (1) Application for Accreditation:

(i) The Bus Body Builder intending to get the accreditation shall apply to Zonal Accreditation Board in the prescribed application form (Form No. BBB-1) in duplicate;

(ii) The application shall be accompanied with the prescribed application fee as decided from time to time by the National Accreditation Board.

(iii) While applying for accreditation, the Bus Body Builder shall ensure availability of the following, namely:-

(a) adequate machines or infrastructural facilities for the purpose;

(b) competent manpower;

(c) the compliance mechanism of the regulatory or legal and safety requirements;

(d) compliance mechanism with the environmental requirements so as not to cause hazard to the neighborhood and surroundings;

(e) adequacy of material management system;

(f) adequate equipments and know how for item or materials, receipt stage quality assurance, the in-process inspection and final testing of the bus body, wherever applicable; and

(g) copies of reference documents.

(2) Acknowledgement, scrutiny and processing of Application:

(i) Zonal Accreditation Board Secretariat, on receipt of the application along with its enclosures and the requisite fees, etc. shall issue an acknowledgement along with receipt to Bus Body Builder within ten working days, allotting unique Customer Registration Number (CRN) to Bus Body Builder, to be used in future for reference and correspondence;

(ii) The preliminary scrutiny of the application shall be done by Zonal Accreditation Board Secretariat. The said Secretariat may ask for additional information or clarification, if necessary. If there are gross shortcomings, the Bus Body Builder shall be asked by the said Secretariat to comply with the requirements and shall re submit the application with Compliance Report; and

(iii) If the application is found to be generally in order, the same is considered for categorization. The Bus Body Builder shall be asked to remit the assessment fee accordingly thereafter.

(3) Assessment:

(i) On receipt of assessment fee, the Zonal Secretary shall coordinate with the assessor and the Bus Body Builder for planning the schedule of assessment;

(ii) Two assessors, a Technical Assessor and a Lead Technical Assessor shall be deputed for assessment;

(iii) The Technical Assessor shall be responsible for assessment of the technical competency of the Bus Body Builder In terms of machines, manufacturing techniques, method deployed and maintenance and calibration of machines or equipments;

(iv) The Lead Technical Assessor shall be responsible for the evaluation of Application form, verification of the contents of the application form, verification of the claims made by the Bus Body Builder, maintenance of quality system and overall assessment of the Bus Body Builder;

(v) The Bus Body Builder shall be informed about the final schedule of assessment and the information about Assessment Team;

(vi) The Assessment Team shall review the capability of the Bus “Body Builder using Form No. BBB-5 to Form No. BBB-10 for the following areas, and against the claim made by Bus Body Builder. Form No. BBB-2 shall be used for noting the observations made by assessors :

(a) availability of manufacturing facility including machineries, jigs and fixtures;

(b) availability of competent manpower. For this purpose the Assessment Team shall verify the records and interview the personnel, where necessary;

(c) compliance with the relevant legal requirements and environmental conditions including fire hazards;

(d) provision of safety appliances and measures;

(e) availability of tools or equipments for inspection, measurement, etc.;

(f) records of in-process and final inspection of bus bodies;

(g) if design is included in the scope, verification for the competent manpower and facilities shall be made;

(h) availability of adequate land, space and infrastructure facilities;

(i) calibration records for the measuring equipments and inspection/testing facilities; and

(j) any other requirement decided or specified by the Zonal Accreditation Board or National Accreditation Board from time to time.

(vii) Once the Assessment is completed, the Assessment Team shall submit the Assessment Report to the Zonal Accreditation Board Secretariat within ten working days. The Assessment Report shall be jointly prepared and signed by the Technical Assessor and the Lead Technical Assessor in Form No. BBB-4 and shall be countersigned by the representative of Bus Body Builder. The assessment report shall give clear recommendation for grant of accreditation or otherwise with due justification and without any ambiguity;

(viii) Non-conformance found during assessment shall be recorded in Form No. BBB-3 by Technical Assessor and Lead Technical Assessor and shall be informed to Bus Body Builder. The Bus Body Builder shall decide about the proposed corrective action within the definite time schedule but within a maximum period of three months. The Zonal Accreditation Board Secretariat shall monitor the progress of compliance with areas of non-conformity;

(ix) Depending on the nature of non-conformity, these shall be closed by the Lead Technical assessor on the submission of documentary evidence of corrective action with or without verification visits at the Bus Body Builder’s cost;

(x) Based on the information gathered during the processing of the application, the assessment report, additional information gathered during the assessment and the consequent verifications, if any, the Zonal Secretary shall prepare a brief summary. An agenda item including the summary recommendations, etc. or otherwise with due justification for accreditation shall be placed before the Zonal Accreditation Board for their consideration for grant of provisional accreditation or otherwise;

(xi) The Zonal Accreditation Board’s observation on the Assessment Report and its recommendations shall be the deciding factors for grant of Provisional Accreditation or otherwise. All decisions taken by the Zonal Accreditation Board shall be recorded in the form of minutes. These minutes shall also be sent to National Accreditation Board for information;

(xii) In case the Zonal Accreditation Board finds deficiencies in the assessment report to arrive at the decision, the Zonal Secretariat shall obtain clarification from the assessor or Bus Body Builder and place before Zonal Accreditation Board for its decision;

(xiii) The final recommendation of Zonal Accreditation Board shall be placed before the National Accreditation Board, who shall meet at least once in six months depending on the number of applications and reports;

(xiv) On grant of Accreditation, Zonal Accreditation Board Secretariat shall prepare an Accreditation Certificate mentioning therein the category, date of issue and date of validity of Certificate;

(xv) Each Certificate shall be signed by the Zonal Secretary mentioning therein the approval by Zonal Accreditation Board and National Accreditation Board;

(xvi) All the applicant Bus Body Builders shall make all the payments due to Zonal Accreditation Board before the Certificate is issued to Bus Body Builder; and

(xvii) All the decisions taken by the Zonal Accreditation Board regarding grant or refusal of accreditation, are subject to appeal to the National Accreditation Board whose decision shall be final and binding.

(4) Accreditation:

(i) Validity: The Bus Body Builder Accreditation Certificate shall be valid for a period of four years;

(ii) Use of National Accreditation Board Logo: On grant of Accreditation, the Bus Body Builder shall use National Accreditation Board Logo on Its business promotion literature, namely letter heads, visiting cards, brochures, etc, and

(iii) Surveillance: Zonal Accreditation Board shall conduct surveillance assessment once in two years and a re-assessment of the Bus Body Builder before the expiry of the Accreditation Certificate. The Surveillance or Re-assessment, shall be similar to the first assessment. During the validity of Accreditation, the Bus Body Builder shall continuously comply with the requirements of the said order.

(5) Extension or Reduction of Scope of Accreditation:

(i) The Bus Body Builder, if so desires, may request in writing to Zonal Accreditation Board for the change in the category of Accreditation. For this purpose, Zonal Accreditation Board shall assess the Bus Body Builder during surveillance/re-assessment visit or may organize a supplementary or a special visit; and

(ii) In case of the Bus Body Builder is accredited for one zone, and if scope is required to be extended to other zones, the same can be done without any assessment but on the payment of additional fee as decided by National Accreditation Board.

(6) Supplementary or Special Visit: The National Accreditation Board/Zonal Accreditation Board may also arrange for supplementary or special visit at any time during the validity of accreditation in the following circumstances:

(a) change in category;

(b) misuse of Accreditation or Certificate or Logo;

(c) on receipt of a complaint, for the verification of facts; and

(d) any other circumstances decided by the Zonal Accreditation Board or National Accreditation Board.

(7) Voluntary Withdrawal: The Bus Body Builder at any time during the validity of accreditation may discontinue their accreditation voluntarily by making a written request to Zonal Accreditation Board. If the Bus Body Builder decides to regain the accreditation status, after it has sought voluntary withdrawal, it shall be treated as a fresh accreditation, and it shall have to pay all the fees for application and accreditation and assessment expenses, as applicable at that time.(8) Surveillance:

(i) Zonal Accreditation Board shall conduct surveillance once in two years for all accredited Bus Body Builders;

(ii) Surveillance is aimed at examining whether the accredited Bus Body Builder is maintaining all the requirements claimed or declared in the Application;

(iii) Zonal Accreditation Board shall inform the accredited Bus Body Builder about the surveillance assessment and the surveillance fee to be paid in advance, at least three months before the due date for surveillance visit. The Bus Body Builder shall confirm its readiness within thirty days; and

(iv) The Bus Body Builder may request for change in scope or category while confirming their readiness.

(9) Renewal of Accreditation and Re-Assessment:

(i) The Bus Body Builder may apply for renewal of accreditation by submitting an application in Form No. BBB-1 in two copies;

(ii) The application shall be accompanied with the prescribed renewal fee as required. The Bus Body Builder may request for change in scope of accreditation or category, which shall explicitly be mentioned in the application form;

(iii) The request for renewal shall be submitted at least six months before the expiry of the validity of accreditation. Accreditation status of the Bus Body Builder shall expire on the validity date mentioned in the certificate, in case there is no application in time. The Bus Body Builder shall have to apply afresh and the continuity of the Certificate would stand cancelled;

(iv) The procedure for processing of renewal application is similar to that of fresh application;

(v) If the results of reassessment visit are positive and all non-conformities are closed before the expiry of the certificate then the validity of the certificate shall be extended by another four years without any discontinuity; and

(vi) A new certificate of accreditation shall be issued on renewal, however, the Certificate number remains same.

(10) Appeal: All decisions taken by National Accreditation Board or Zonal Accreditation Board regarding grant or continuation or renewal of accreditation shall be open to appeal by the Bus Body Builder, to the Chairman, National Accreditation Board.(11) Audit: The Central Government may carry out Audit of the scheme from time to time to ensure the effective operation of the scheme many of the respective zones. The audit team shall have the power to disqualify any Bus Body Builder or assessor as the case may be in case he is found guilty or violating any of the provisions that is applicable to him.(12) Type Approval (TA) and Conformity of Production (CoP) of Bus Bodies: The Central Government will separately notify a suitable procedure for the Type Approval and Conformity of Production of the bus bodies built by the accredited Bus Body Builder.(13) Panel of Assessors:

(i) A panel of assessors shall be prepared by each Zonal Accreditation Board wherein the persons preferably from the same zonal jurisdiction shall be employed;

(ii) The minimum qualification for Technical Assessor shall be a Bachelor’s Degree In Engineering or Technology in relevant field with five years experience in the engineering field. Diploma holders in relevant branch and with the similar background but with a minimum experience of ten years shall also be eligible. The Technical Assessor shall also be required to keep abreast of the Type Approval(TA) and the Conformity of Production(CoP) procedures prescribed under the Central Motor Vehicles Rules, 1989 as amended from time to time;

(iii) The Lead Assessor shall have the same qualifications as given at clause (b) above and in addition, shall have a background in quality management systems as per ISO 9001:2000/ISO:14001: 1996/ISO/IEC 17025:1999 (NABL) or any other National or International Certification or Accreditation System;

(iv) The list of empanelled assessors prepared or approved by Zonal Accreditation Board shall be sent to National Accreditation Board for their information and record; and

(v) If at any time any of the Assessors is found to be transgressing the policy and procedures of Zonal Accreditation Board and National Accreditation Board, their name shall be struck off from the panel by Zonal Accreditation Board under intimation to the National Accreditation Board.

(14) Confidentiality: The members of the Zonal Accreditation Board, assessors and National Accreditation Board officials shall be required to maintain strict confidentiality of the information gathered regarding the Bus Body Builders during the process of evaluation for grant of accreditation. National Accreditation Board shall impose the same obligation of maintaining secrecy on those to whom they entrust the tasks of a confidential nature, as described above.(15) Liability: National Accreditation Board shall not be responsible for any damages, which the Bus Body Builder may suffer as a result of any action or negligence by those who are carrying out the tasks on behalf of National Accreditation Board and any failure to the grant of accreditation or abeyance or suspension or forced withdrawal of the accreditation.(16) Amendments to the Policies and Procedures: National Accreditation Board may at any time amend the policies and procedures related to grant of accreditation, maintaining accreditation, surveillance, renewal of accreditation and the adverse decisions taken thereon. National Accreditation Board shall inform the Bus Body Builder regarding such amendments indicating the transition period which shall be at least six months.15. Fees for Assessment of Bus Body Builders. – The following fees as may be amended by Central Government shall be charged:

Fees to be charged

Category of Bus Body Builders

Fee for Assessment (in Rupees)

Initial Accreditation

Surveillance

A 50000 25000
B 30000 15000
C1 20000 10000
C 20000 10000
D 20000 10000

Annexure BBB-1

(See sub-para (2) of para 5)

Flow Chart For Accreditation Activities

Application for Accreditation by Bus Body Builder

Interaction between

Acknowledgement and Scrutiny of Application (by Zonal Accreditation Board)
Nomination of assessors and Planning of Assessment (by Zonal Accreditation Board)
Assessment of Bus Body Builders by Assessment Team

Zonal Accreditation Board and Bus Body Builder

Submission of Assessment Report (By Assessment tea)
Scrutiny of Assessment Report (by Zonal Accreditation Board)
Provisional Accreditation (by Zonal Accreditation Board)
Approval for Accreditation (by National Accreditation Board)
Final issue of Accreditation Certificate (by Zonal Accreditation Board/Secretary)

Annexure BBB-2

(See para 6)

Organisation Structure For Bus Body Builder Accreditation System

Government of India Department of Road Transport and Highways

National Accreditation Board

Representative (s) of:
– Department of Road Transport and Highways (one Chairman and one member)
– Department of Heavy Industry (one member)
– Chairmen of the Zonal Accreditation Boards – 4
– Society of Indian Automobile Manufacturers, Automotive Components Manufacturers Association-1 each
– Association of State Road Transport Undertakings – 2 Including one member from State Transport Undertakings
– Central Institute of Road Transport, Automotive Research Association of India, Vehicles Research and Development Establishment-1 each
– Bus Body Builder Association-2
– Member – Secretary – to be nominated by Department of Road Transport and Highways

Zonal Accreditation Boards (4)

Representative (s) of:
– Head of Transport Departments of one of the State Governments (Chairman by rotation)
– Vehicle manufacturers (Society of Indian Automobile Manufacturers) – 2
– The State Transport Undertakings in each state in the Zone -1 each
– Central Institute of Road Transport, Automotive Research Association of India-1 each
– Bus Body Builder Association – 3
– Component manufacturer (Automotive Components Manufacturers Association) -1

Annexure BBB-2A

(See para 6)

Zonal Accreditation Board and Assessors

(See sub-para (2) of para 5)

APPLICATION FOR ACCREDITATION OF BUS BODY BUILDERS

(For the use of Bus Body Builders)

(To be accompanied with the Registration Fee of Rs. 1000/- only [non-refundable] by a D.D. drawn in favour of Zonal Accreditation Board)

Section – I

Part-1

1. Full Name and Address of the Bus Body Builder:Telephone :Fax :Email Address :2. Factory Address :Telephone :Fax :Email Address :3. Contact Person name/s :Contact Phone Numbers (O) (R)4. Whether Public Sector/Private Sector or Joint Sector Undertaking In case of Partnership firms enclose a copy of Partnership deed :5. Whether Proprietorship/Partnership/Private Limited/Public Limited Company :6. Whether Large Scale/Medium Scale/Small Scale :7. Factory Registration Certificate :

(i) Number :

(ii) Date :

(iii) Issuing Authority :

Note: Please attach photocopy :Date of commissioning of the Factory :8. Sales Tax Registration number :9. Registered/installed capacity of :

(i) Bus bodies per annum :

(a) ordinary; :

(b) semi-deluxe; :

(c) deluxe; and :

(d) super deluxe. :

(ii) Truck bodies per annum :

(iii) Others per annum (Please specify) :

10. Registered for construction of :

(i) All Aluminium bus body bodies :

(ii) Steel Structure plus aluminium bodies :

(iii) Composite bodies :

(iv) Stainless steel bodies :

11. Details of the Act and Rules applicable : Ownership/Rented/Leased

Part-2

12. Land and buildings available :

(a) Built up (Covered) (Square meters) :

(b) Uncovered area (Square meters) :

(c) Total land area (Square meters) :

(Attach a copy of relevant document)13. Details of manpower (in numbers) :

a) Managerial :

b) Supervisory and others :

c) Production related workmen on : regular basis

d) Production related workmen on contractual basis :

Details should be furnished in the following format

Serial number

Name

Designation

Educational and Technical Qualifications

Relevant Training

Experience related to present work

14. Production activities undertaken. Please tick (..) wherever applicableDesign and development of bus bodiesFabrication of structures/components/panellingManufacturing/fabrication of subassemblies likeSeat assemblies Windows Doors Luggage carriersCorrosion prevention unitAssembling and equipping – PaintingInspection, quality assurance and testing facilities forIn process Finished items Bought out items*Details of production machines or equipments

Serial Number

Machine/Equipment

Specification/

Capacity

Make and Model

Quantity

(Nos.)

Year of Purchase

Details in Inspection/Test Equipment/Instruments

Serial Number

Instrument/Equipment

Specification/

Capacity

Make and Model

Year of Purchase

Year of Purchase

Date of last calibration

Callibration frequency

17. Details of Inspection of in-coming/bought out Items

Serial Number

Item/Description

Inspection/Details

Equipment Used

18. Method of disposal of scrap (in brief):19. Availability of safety devices including fire safety (in brief):

Part-3

20. Number of bus bodies built in last five years

Serial Number

Year

Type of bus bodies

Number of bus bodies built during the year

AL

SA

SS

C

A1:All Aluminium, SS:Steel Structure, SA:Steel and Aluminium, C: Composite21. Are you an approved body builder by Defence/Directorate General of Supplies and Disposals/State Transports/Original Equipment Manufacturers ?If so please give details below:

Approved bus body builder for State Road Transport Undertakings

Name of State Transport Undertaking/Original Equipment Manufacturers

Type of bus(es)

No. of the bus bodies built during last year

Remarks

City

Inter-city

Deluxe

Others

AL

SA

SS

Comosite

Directorate General of Supplies and Disposals
Defence
Original Equipment Manufacturer

Attach copies of Certificate/Relevant documents)

Part-4

22. Give financial details for immediate past 3 years (in Rs. Lakhs)

Latest financial year

Immediate Past year

Previous year

a Total Fixed Assets
b Total Current Assets
c Total Secured Loan
d Total Unsecured Loan
e Total Inventory carried
f Total raw materials consumed

(Attach copies of balance sheets and profit and loss statements)23. Income tax clearance certificate and details for last 3 years

(i)

(ii)

(iii)

Note: Please attach photocopy24. Sales tax clearance certificate and details for last 3 years

(i)

(ii)

(iii)

Note : Please attach photocopy25. Are you certified under

ISO 9001 :

QS 9000 :

Any other scheme :

(Attach copy of certificate) :

Declaration

Certified that the information furnished above is true to the best of our knowledge and belief.• We are familiar with the terms and conditions of maintaining accreditation and will abide by them.• We agree to comply with accreditation procedures, pay all costs for assessment, verification visit (if any), surveillance and reassessment irrespective of the result.• We agree to co-operate with the assessment team appointed by ZAC for examination of all relevant documents by them and their visits to those parts of the factory that are covered under the scope of accreditation.Authorised Signatory (on behalf of the company)Name :Designation :Date :Note: (1) Annexure – A, B, C and D along with the details shall be attached separately.(2) Whenever required separate sheet shall be used.

Enclosures – Check list

Application for Accreditation of Bus Body Builder

1. Draft for Rs. 1000/-towards registration KFee draft no._______________________ Date ______________ :Bank _________________________________________________ :Payable at ____________________________________________ :2. Factory Registration Certificate (Serial number 7) :3. Copy of evidence for premises (Serial number 13) :4. Annexure – A (Serial number 14) details of manpower :5. Annexure – B (Serial number 16-A) details of production machine :6. Annexure – C (Serial number 16-B) Details of Inspection/Test Equipments :7. Annexure – D (Serial number 17) Details of Inspection of incoming items :8. Copy of certificate for approval by Defence/DGS&D/STU/OEMs (Serial number 21) :9. Copies of Balance sheet and Profit and Loss Statement (Serial number 22) :10. Copies of Income Tax Clearance (Serial number 23) :11. Copies of Sales Tax Clearance (Serial number 24) :12. Copy of Certificate for ISO 9001/QS 9000/etc. (Serial number 25) :13. Any other document :Details

Relevant Serial Number

Section – II: Scrutiny Of Application

(For use of Zonal Accreditation Board)

Date of Receipt of application :

Details of Registration fee received :

Date of Acknowledgement/Receipt :

Verification for Completeness of ApplicationRegistration No.

Secretary

Date:

Section – III: Decision Of Zonal Accreditation Board

(For use of Zonal Accreditation Board)

Date of Meeting :

Approved/Not approved for Assessment :

If approved, category :Assessment fee to be charged :Assessors Appointed

Lead Technical Assessor _________

Technical Assessor _____________

Secretary

Date:

Form No. BBB-2

(See para 6)

Assessor’s Observations

Bus Body Builder
Date Department Activity assessed
Auditee Education Years of Experience
Serial Number

Observation

Remarks

Signature and Name of Assessor

Form No. BBB-3

(See para 14)

Assessor’s Summary On Non-Conformance

(Please use separate sheet for raising each Non-Conformance)

Bus Body Builder

Date Department Activity Assessed
NC number Reference to Observation number in Format number 2

Non-Conformation (NC) Raised :

Signature and Name of Bus Body BuilderRepresentative

Signature and Name of Assessor

CORRECTIVE ACTION PROPOSED/TAKEN BY THE BUS BODY BUILDER :

Signature of Bus Body Builder

ASSESOR’S COMMENTS ON CORRECTIVE ACTION PROPOSED/TAKEN BY THE BUS BODY BUILDER:

Signature of Assessor

REMARKS BY LEAD TECHNICAL ASSESSOR, IF ANY :

Signature of Lead Technical Assessor and Date</p>

Form No. BBB-4

(See para 14)

SUMMARY OF THE ASSESSMENT

Category Date(s) of visit
Type of visit : Accreditation/Surveillance/2nd Surveillance/Re-assessment Non-conformances recorded earlies visit have/have not been discharged
Date of earlier :

ASSESSMENT SUMMARY

Non-conformation raised during the visit,

Non-conformation(s) remaining to be discharged*

RECOMMENDATIONS OF ASSESSMENT TEAM :

Date by which remaining Non-conformance(s) are to be discharged by the Bus Body Builder

Signature of Technical Assessors with Date

Signature of Lead Technical Assessor and Date

Acknowledgement by authorized signatory of the Body builder and Date

Form No. BBB-5

(See para 14)

Check List

A-Category Bus Body Builder (Chassis built Buses)

Name of Bus Body Builder ………………………..

Address …………………………………….

Date of Assessment

Assessors (1)………………………….. (2)………………………….

Capacity per annum :

Upto 240

Upto 340

Upto 480

More than 481

Zone………………………..

Type of Bus Body :

Aluminium

Steel structure

Composite(wood) bus bodies

Others specify: ……..

Serial No.

Description

Minimum specification

Minimum quantity required for production of buses/annum

Actual quantity available

Specification details of existing facility

Comments about quality and suitability of available facilities

Upto 240

Upto 360

Upto 480

More than 481

A Facilities
A1 Design software Modelling software eg. Auto CAD 1 1 1 1
A2 Computers P III, 32 MB Graphic card, 128 MB Ram, 10 GB Hard Disk, CD ROM, Floppy Drive 1 1 1 1
A.3 Development of prints Printer 1 1 1 1
A.4 Drafting equipments (if Software not available) Drawing board, Draftor, Set of Triesquare 1 1 1 1
Design and development manpower
A.5 Design engineers M. Tech.M.E./B.Tech/B.E. In Design/Structures Mech/ Automobile Engg. 1 1 1 1
A6. Diploma holders Mechanical/Electrical 1 1 1 1
A7 Draftsman 1 1 1 1
A8 Others (specify)

Capacity to be calculated for ordinary Bus unit using the following relationship

Form No. BBB-6

(See para 14)

Check List

A. Category Bus Body Builder (Chassis built Buses)

Name of Bus Body Builder ………………………..

Address …………………………………….

Date of Assessment

Assessors (1)………………………….. (2)………………………….

Capacity per annum :

Upto 240

Upto 340

Upto 480

More than 481

Zone………………………..

Type of Bus Body :

Aluminium Steel structure

Composite(wood) bus bodies

Others specify: ……..

Serial No.

Description

Minimum specification

Minimum quantity required for production of buses/annum

Actual quantity available

Specification details of existing facility

Comments about quality and suitability of available facilities

Upto 240

Upto 360

Upto 480

More than 481

B Seat fabrication and assembly
B1 Total covered area for seat Manufacturing (sq.m) 130 130 130 130
B2 Tube/Pipe cutting machine Bandsaw (Horizontal) 125 kgs.0.5 HP (approx) or backsaw or hacksaw or Power press of 40 tonne 1 1 2 2
B.3 Tube bending fixtures Die for bending 1 1 1 1
B.4 Drafting equipments (if Software not available) 01/04/12 1 1 1 2
B.5 Drilling Machine (bench/pillar) Horizontal saw or circular S 1 1 1 2
B6. Sheering Machine Manual 8* 1 1 1 2
B7 Sewing machine Heavy duty Industrial 1 1 2 3
B8 Welding Transformer 300 Amps 1 1 2 3
B9 Portable Ginder 6 well, 0.25 HP 1 1 2 2
B10 Total covered area for Window manufacture (sq.m) 70 150 200 300
B.11 Metal cutting machine Bandsaw : 16* throat, saw width 20 mm or Abrasive cutting machine 1 1 1 2
B.12 Drilling Machine Bench/pillar type 1/2 1 1 1 2
B.13 Grinder Portable single wheel 3”wheel dia 1 1 2 2
B.14 Bending Jig Fixture 1 1 1 1

Capacity to be calculated for ordinary Bus unit using the following relationship.One Intercity bus = 1.2 ordinary bus, One Deluxe Bus= 1.4 ordinary bus. One Super deluxe bus = 1.5 ordinary bus.

Form No. BBB-7

(See Para 14)

CHECK LIST

C-Category Bus Body Builder (Chassis built Buses)

Name of Bus Body Builder ………………………..

Address …………………………………….

Date of Assessment

Assessors (1)………………………….. (2)………………………….

Capacity per annum :

Upto 240

Upto 340

Upto 480

More than 481

Zone………………………..

Type of Bus Body :

Aluminium Steel structure

Composite(wood) bus bodies

Others specify: ……..

Serial No.

Description

Minimum specification

Minimum quantity required for production of buses/annum

Actual quantity available

Specification details of existing facility

Comments about quality and suitability of available facilities

Upto 240

Upto 360

Upto 480

More than 481

C Plant and Equipments
C.1 Sheering Machine Cutting ara 1.2 m length * 3.25 mm thick 1 1
C.2 Power Press [**] 50 tonne (Mechanical/Hydraulic/Manual) 1
C.3 Power Press.[*] 40 tonne (Mechanical/Hydraulic/Manual) 1 1 1 1
C.4 Dies Depending on sections used in bus bodies 1 1 1 1

Capacity to be calculated for ordinary Bus unit using the following relationshipOne Intercity bus= 1.2 ordinary bus, One Deluxe Bus= 1.4 ordinary bus, One Super deluxe bus = 1.5 ordinary bus

Form No. BBB-8

(See para 14)

CHECK LIST

C1-Category Bus Body Builder (Chassis built Buses)

Name of Bus Body Builder ………………………..

Address …………………………………….

Date of Assessment

Assessors (1)………………………….. (2)………………………….

Capacity per annum :

Upto 240

Upto 340

Upto 480

More than 481

Zone………………………..

Type of Bus Body :

Aluminium Steel structure

Composite(wood) bus bodies

Others spceify: ……..

Serial No.

Description

Minimum specification

Minimum quantity required for production of buses/annum

Actual quantity available

Specification details of existing facility

Comments about quality and suitability of available facilities

Upto 240

Upto 360

Upto 480

More than 481

C.11 Sheering Machine Cutting ara 1.2 m length * 3.25 mm thick 1 1
C.12 Power Press [**] 50 tonne (Mechanical/Hydraulic/Manual) 1
C.13 Power Press.[*] 40 tonne (Mechnical/Hydraulic/Manual) 1 1 1 1
C.14 Dies Depending on sections used in bus bodies 1 1 1 1

Form No. BBB-9

(See para-14)

CHECK LIST

D-Category Bus Body Builder (Chassis built Buses)

Name of Bus Body Builder ………………………..

Address …………………………………….

Date of Assessment

Assessors (1)………………………….. (2)………………………….

Capacity per annum :

Upto 240

Upto 340

Upto 480

More than 481

Zone………………………..

Type of Bus Body :

Aluminium

Steel structure

Composite(wood) bus bodies

Others spceify: ……..

Serial No.

Description

Minimum specification

Minimum quantity required for production of buses/annum

Actual quantity available

Specification details of existing facility

Comments about quality and suitability of available facilities

D Inspection facilities
1.1 Vemier calpers To measure 0 to 150 m.m, least count 0.01 mm 1 1 1 1
1.2 Micrometres To measure 0 to 150 m.m, least count 0.01 mm 1 1 1 1
1.3 Thread pitch micrometres To measure 0 to 25 mm 1 1 1 1
1.4 Hardness testing machine HRC/Brinnell/Vickers 1 1 1 1
1.5 Hardness testing machine for rubber materials Shore ‘A’ 1 1 1
1.6 Multi meter 0.30V 1 1 1 1
1.7 Measuring tape (i) 0.3m

(ii) 0.100m

2 2 4 4
1.8 Paint thickness checking facility |(after painting bus body) Thickness gauge 0.401 1 1 1

Capacity to be calculated for ordinary Bus unit using the following relationshipOne Intercity bus= 1.2 ordinary bus, One Deluxe Bus= 1.4 ordinary bus, One Super deluxe bus = 1.5 ordinary bus

Sl. No.

Description

Plant and Equipments

Minimum specifications

Minimum quantity required for production of buses/annum

Actual quantity available

Specification /details

Comments about quantity suitability

upto 24

upto 3

upto 4

more than 481

2 Tool room
2.1 Grinders (Pillar Bench type) Wheel capacity (m.m) 56 dia * 20 width

1

1

1

1

2.2 Drilening machine (Bench Pillar type) 6 m.m

1

1

2

2

3 Press shop
3.1 Press Break 50 tonne (Mechanical/Hyraulic Manual)

1

1

3.2 Power Press 20 tonne (Mechnical/Hyraulic Manual)

1

3.3 Shearing machine Cutting area: 3 m length * 3.15 mm thick

1

1

1

1

4 Fabrication shop
4.1 Power saw(s) Horizontal, band width 20mm, 1HP

1

1

1

2

4.2 Circular saw Wheel size: 200 mm

1

1

4.3 Band saw with thing table 16* throat, band width 20 mm

1

1

4.4 Oxyacetylene gas welding with cutting equipments 1 set of 2 cylinders

2

2

2

2

4.5 MIG working machines 200amps

1

2

4

4

Optional
4.6 TIG welding machine 100amps

1

1

4.7 Arc welding equipments (transformer/rectifier) 300 to 400 Amps

1

1

4.8 Bending machine for roof tick bending Die for bending

1

1

1

1

4.9 Bending machine for pillar bending Die for bending

1

1

1

1

4.1 Portable grinding machine 10 mm dia

1

1

2

2

4.2 Sheet folding equipments Die for the press/Folding/Hand press

1

1

1

1

4.3 Bluffing machine 8* Buffer, 1/8 HP
5 Fixtures for all models
5.1 Side structure Left and right hand side One adjustable picture or Fixed one for all models

1

1

1

1

5.2 Roof One adjustable fixture or Fixed one for all models

1

1

1

1

5.3 Front One adjustable fixture or Fixed one for all models

1

1

1

1

5.4 Rear One adjustable future or Fixed one for all models

1

1

1

1

5.5 Doors One adjustable fixture or Fixed one for all models

1

1

1

1

6 Corrosion prevention system
6.1 Pretreatment shop Hot phospating/Cold phospating/Galvanising

1

1

1

1

Not applicable for complete aluminium bus bodies
6.2

6.3

No of tanks for phosphorating system

Size of the tank (uniform size for all tanks)

7 or 9

1

2

3

4

5

6

7

6.4 Mechanism heating
6.2 Specay guns
6.3 Mechanism of Temperature control
7 Panelling and Equipping facilities
7.1 Solid netting guns/tool Drive size : mm (Pnenmatic/mechanical)

2

2

5

10

For aluminium bodies only
7.2 Pep riveting guns Pnenmatic Manual

2

2

5

10

For aluminium bodies only
7.3 Hand drilling machines For all types of bus bodies
7.4 Size 1 6 mm

2

3

4

5

7.5 Size 2 12 mm

2

3

4

5

7.6 Size 3 10 mm

2

3

4

5

7.7 Panelling sheet stretching equipments Manual Hydraulic For G.I. sheet panelling
8 Painting system
8.1 Spray painting system

1

1

1

1

08/02/01 Capacity in litres 1 litres
08/02/02 Capacity system Pneumatic/Electric/Electrostatic
8.3 Containers According to necessity
8.4 Sealer system Manual mechanical
8.5 Painting cycle time required per vehicle (Hrs)
8.6 Drying system Open dying Oven type
8.7 Oven drying
8.7.1 Heating arrangement and temp required
8.7.2 Temperature control mechanism
8.7.3 Environment control system in booth
8.7.4 Job feeding mechanism
9 Shower system for roof leak testing
9.2 Motor pump for water supply (HP/delivery) 5 HP mono set

1

1

1

1

9.3 Spacing between nozzles Depending on window size
9.4 Shower system length One bus length with
9.5 Pipe Size 1- .125*
9.6 Platform Hard
10 Managerial and supervisory
10.1 Management qualified Degree/Diploma 10 years experience

2

3

4

5

10.2 Workmen(production related)

Increment of 50 persons for every 120 additional buses

10.3 Skilled ITI trained or minimum 10 yrs.
Trade experience
10.4 Semi-skilled 10th std. or minimum 5yrs
10.5 Unskilled
10.6 Inspection staff for :
10.6.1 Receipt state

1

1

1

2

10.6.2 In-process stage, final inspection and testing stages

1

1

1

2

11 Total land area (excluding seat and window manufacturing) in Meters

1000

2000

3000

4000

11.1 Parking of chassis (uncovered area)

200

300

500

600

11.2 Stores

240

240

400

500

11.3 Offices

100

150

200

250

11.4 Wash rooms for employees

30

30

40

40

11.5 Canteen

2 sqm per person 2 sqm per person

11.6 Roof leak test

100

100

100

100

11.7 Structures assembly and Fittings

450

750

100

1500

11.8 Pretreatment shop

50

50

50

50

11.9 Paint

60

120

200

300

11.1 Press/Machine shop

140

140

300

400

Form No. BBB-10

(See para 14)

CHECK LIST

CD-Category Bus Body Builder (Monocoque Buses)

Name of Bus Body Builder : Date of Assessment Asseccors (1)…………………………..(2)…………………………..
Address :
Capacity per annum upto 240 upto 340 upto 480 Mote than 481 Zone …………………….
Type of Bus Body Aluminium Steel structure Composite (wood) Bus Bodies Other specify……………..
Sr. No. Description Minimum specification Minimum quantity required for production of buses/annum upto 24 Actual quantity available upto 360 Specification/details of existing facility upto 480 Cements about quantity and suitability of available facilities
1 Abrasive cutting machine 350mm 1 1
2 Portable drilling machine 10 15 15 e
3 Spot welding 450 Amps 1 1 1
4 Drilling Machine (Bench) 28 mm 1 1 2
5 Press 40 tonne 1 1 2
6 Panelling sheet stretching equipment Manual/Hyraulic 1 1 1 For G.I. Sheet panelling
7 Fixtures for all models
7.1 Side structure Left and right hand side One adjustable fixture or Fixed one for all models 1 1 1
7.2 Rood One adjustable fixture or Fixed one for all models 1 1 1
7.3 Front One adjustable fixture or Fixed one for all models 1 1 1
7.4 ……………….. 1 1 1 1
7.5 Doors One adjustable fixture or Fixed one for all models 1 1 1
8 MIG welding machines 200 amps 2 2 4
9 TIG welding machine 200 amps 1 Only for Aluminium bodies
10 Are welding equipment(s) (Transformed/rectifier) 300 to 400 Amps 1 1 1
11 Others (specify)

Maximum Speed Limit UNDER MOTOR VEHICLES ACT

The Motor Vehicles Act 1988

Maximum Speed Limit

Published Notification No. Vide S.O. 425(E), dated 9.6.1989.

17/763

In exercise of the powers conferred by sub-section (1) of section 112 of the Motor Vehicles Act, 1988 (59 of 1988), the Central Government hereby fixes the speed specified in column (2) of the Table below as the maximum speed in respect of the class of motor vehicles specified in the corresponding entry in column (2) thereof.

TABLE
Class of vehicles
Maximum speed per hour in kilometers
(1)
If all the wheels of the vehicle are fitted with pneumatic tyres and the vehicle is not drawing a trailer:
(a)   if the vehicle is a light motor vehicle, other than transport No limit vehicle;
No limit
(b)   if the vehicle is a light motor vehicle and a transport vehicle;
65
(c)   if the vehicle is a motor cycle;
50
(d)   if the vehicle is a medium or heavy passenger motor vehicle
65
(e)   if the vehicle is a medium or heavy goods vehicle.
65
(2)
If the vehicle is an articulated vehicle, all the wheels of which are fitted with pneumatic tyres, which is a heavy goods vehicle or heavy passenger motor vehicle.
50
(3)
If the vehicle is drawing not more than one trailer, or in the case of artillery equipment, not more than two trailers and all the wheels of that vehicle and the trailer are fitted with pneumatic tyres:
(a)   if the vehicle is a light motor vehicle and the traiier being two-wheeled has a gross vehicle weight not exceeding 800 kilograms:
60
(b)   if the vehicle is a light motor vehicle and the trailer has more than two wheels or a gross vehicle weight exceeding 800 kilograms;
50
(c)   if the vehicle is a medium goods vehicle or medium passenger motor vehicle;
50
(d)   if the vehicle is a heavy goods vehicle or heavy passenger motor vehicle;
40
(e)   if the vehicle is a heavy goods vehicle or heavy passenger motor vehicle used by the fire brigade.
50
(4)
Any other case not covered by entry (1), (2) or (3)
30

2. This notification shall come into force on the first day of July, 1989.

National Insurance Company Ltd. Vs. Pranay Sethi and Ors[SC 2017]Constitutional Bench

Keywords-Motor Vehicle claim

SC INDEx

[Special Leave Petition (Civil) No. 25590 of 2014] 

Bench:- CJI. (Dipak Misra)  (A.K. Sikri) (A.M. Khanwilkar)  (Dr. D.Y. Chandrachud) (Ashok Bhushan)

Act :Act 54 of 1994 for introducing Section 163-A. Sections 163-A and 166 of the Motor Vehicles Act, 1988

Dipak Misra, CJI.

Perceiving cleavage of opinion between Reshma Kumari and others v. Madan Mohan and another and Rajesh and others v. Rajbir Singh and others, both three-Judge Bench decisions, a two-Judge Bench of this Court in National Insurance Company Limited v. Pushpa and others thought it appropriate to refer the matter to a larger Bench for an authoritative pronouncement, and that is how the matters have been placed before us.

2. In the course of deliberation we will be required to travel backwards covering a span of two decades and three years and may be slightly more and thereafter focus on the axis of the controversy, that is, the decision in Sarla Verma and others v. Delhi Transport Corporation and another4 wherein the two- Judge Bench made a sanguine endeavour to simplify the determination of claims by specifying certain parameters.

3. Before we penetrate into the past, it is necessary to note what has been stated in Reshma Kumari (supra) and Rajesh’s case. In Reshma Kumari the three-Judge Bench was answering the reference made in Reshma Kumari and others v. Madan Mohan and another. The reference judgment noted divergence of opinion with regard to the computation under Sections 163-A and 166 of the Motor Vehicles Act, 1988 (for brevity, “the Act”) and the methodology for computation of future prospects. Dealing with determination of future prospects, the Court referred to the decisions in Sarla Dixit v. Balwant Yadav Abati Bezbaruah v. Dy. Director General, Geological Survey of India7 and the principle stated by Lord Diplock in Mallett v. McMonagle and further referring to the statement of law in Wells v. Wells9 observed:-

“46. In the Indian context several other factors should be taken into consideration including education of the dependants and the nature of job. In the wake of changed societal conditions and global scenario, future prospects may have to be taken into consideration not only having regard to the status of the employee, his educational qualification; his past performance but also other relevant factors, namely, the higher salaries and perks which are being offered by the private companies these days. In fact while determining the multiplicand this Court in Oriental Insurance Co. Ltd. v. Jashuben 10 held that even dearness allowance and perks with regard thereto from which the family would have derived monthly benefit, must be taken into consideration.

47. One of the incidental issues which has also to be taken into consideration is inflation. Is the practice of taking inflation into consideration wholly incorrect? Unfortunately, unlike other developed countries in India there has been no scientific study. It is expected that with the rising inflation the rate of interest would go up. In India it does not happen. It, therefore, may be a relevant factor which may be taken into consideration for determining the actual ground reality. No hard-and-fast rule, however, can be laid down therefor.

48. A large number of English decisions have been placed before us by Mr Nanda to contend that inflation may not be taken into consideration at all. While the reasonings adopted by the English courts and its decisions may not be of much dispute, we cannot blindly follow the same ignoring ground realities.

49. We have noticed the precedents operating in the field as also the rival contentions raised before us by the learned counsel for the parties with a view to show that law is required to be laid down in clearer terms.”

4. In the said case, the Court considered the common questions that arose for consideration. They are:-

“(1) Whether the multiplier specified in the Second Schedule appended to the Act should be scrupulously applied in all the cases?

(2) Whether for determination of the multiplicand, the Act provides for any criterion, particularly as regards determination of future prospects?”

5. Analyzing further the rationale in determining the laws under Sections 163-A and 166, the Court had stated thus:-

“58. We are not unmindful of the Statement of Objects and Reasons to Act 54 of 1994 for introducing Section 163-A so as to provide for a new predetermined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational. That may be so, but it defies logic as to why in a similar situation, the injured claimant or his heirs/legal representatives, in the case of death, on proof of negligence on the part of the driver of a motor vehicle would get a lesser amount than the one specified in the Second Schedule. The courts, in our opinion, should also bear that factor in mind.”

6. Noticing the divergence of opinion and absence of any clarification from Parliament despite the recommendations by this Court, it was thought appropriate that the controversy should be decided by the larger Bench and accordingly it directed to place the matter before Hon’ble the Chief Justice of India for appropriate orders for constituting a larger Bench.

7. The three-Judge Bench answering the reference referred to the Scheme under Sections 163-A and 166 of the Act and took note of the view expressed by this Court in U.P. State Road Transport Corporation and others v. Trilok Chandra and others11, wherein the Court had stated:-

“17. The situation has now undergone a change with the enactment of the Motor Vehicles Act, 1988, as amended by Amendment Act 54 of 1994. The most important change introduced by the amendment insofar as it relates to determination of compensation is the insertion of Sections 163-A and 163-B in Chapter XI entitled ‘Insurance of motor vehicles against third-party risks’.

Section 163-A begins with a non obstante clause and provides for payment of compensation, as indicated in the Second Schedule, to the legal representatives of the deceased or injured, as the case may be. Now if we turn to the Second Schedule, we find a Table fixing the mode of calculation of compensation for thirdparty accident injury claims arising out of fatal accidents. The first column gives the age group of the victims of accident, the second column indicates the multiplier and the subsequent horizontal figures indicate the quantum of compensation in thousand payable to the heirs of the deceased victim. According to this Table the multiplier varies from 5 to 18 depending on the age group to which the victim belonged. Thus, under this Schedule the maximum multiplier can be up to 18 and not 16 as was held in Susamma Thomas case.

18. We must at once point out that the calculation of compensation and the amount worked out in the Schedule suffer from several defects. For example, in Item 1 for a victim aged 15 years, the multiplier is shown to be 15 years and the multiplicand is shown to be Rs 3000. The total should be 3000 × 15 = 45,000 but the same is worked out at Rs 60,000. Similarly, in the second item the multiplier is 16 and the annual income is Rs 9000; the total should have been Rs 1,44,000 but is shown to be Rs 1,71,000. To put it briefly, the Table abounds in such mistakes. Neither the tribunals nor the courts can go by the ready reckoner.

It can only be used as a guide. Besides, the selection of multiplier cannot in all cases be solely dependent on the age of the deceased. For example, if the deceased, a bachelor, dies at the age of 45 and his dependants are his parents, age of the parents would also be relevant in the choice of the multiplier. But these mistakes are limited to actual calculations only and not in respect of other items. What we propose to emphasise is that the multiplier cannot exceed 18 years’ purchase factor. This is the improvement over the earlier position that ordinarily it should not exceed 16.

We thought it necessary to state the correct legal position as courts and tribunals are using higher multiplier as in the present case where the Tribunal used the multiplier of 24 which the High Court raised to 34, thereby showing lack of awareness of the background of the multiplier system in Davies case.” [Underlining is ours]

8. The Court also referred to Supe Dei v. National Insurance Company Limited13 wherein it has been opined that the position is well settled that the Second Schedule under Section 163-A to the Act which gives the amount of compensation to be determined for the purpose of claim under the section can be taken as a guideline while determining the compensation under Section 166 of the Act.

9. After so observing, the Court also noted the authorities in United India Insurance Co. Ltd v. Patricia Jean Mahajan14, Deepal Girishbhai Soni v. United India Insurance Co. Ltd.15, and Jashuben (supra). It is perceivable from the pronouncement by the three-Judge Bench that it has referred to Sarla Verma and observed that the said decision reiterated what had been stated in earlier decisions that the principles relating to determination of liability and quantum of compensation were different for claims made under Section 163-A and claims made under Section 166. It was further observed that Section 163-A and the Second Schedule in terms did not apply to determination of compensation in applications under Section 166.

In Sarla Verma (supra), as has been noticed further in Reshma Kumari (supra), the Court found discrepancies/errors in the multiplier scale given in the Second Schedule Table and also observed that application of Table may result in incongruities. 10. The three-Judge Bench further apprised itself that in Sarla Verma (supra) the Court had undertaken the exercise of comparing the multiplier indicated in Susamma Thomas (supra), Trilok Chandra (supra), and New India Assurance Co. Ltd v. Charlie and another16 for claims under Section 166 of the Act with the multiplier mentioned in the Second Schedule for claims under Section 163-A and compared the formula and held that the multiplier shall be used in a given case in the following manner:-

“42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the Table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years); reduced by one unit for every five years, that is, M-17 for 26 to 30 years, M- 16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”

11. After elaborately analyzing what has been stated in Sarla Verma (supra), the three-Judge Bench referred to the language employed in Section 168 of the Act which uses the expression “just”. Elucidating the said term, the Court held that it conveys that the amount so determined is fair, reasonable and equitable by accepted legal standard and not on forensic lottery.

The Court observed “just compensation” does not mean “perfect” or “absolute compensation” and the concept of just compensation principle requires examination of the particular situation obtaining uniquely in an individual case. In that context, it referred to Taff Vale Railway Co. v. Jenkins17 and held:-

“36. In Sarla Verma, this Court has endeavoured to simplify the otherwise complex exercise of assessment of loss of dependency and determination of compensation in a claim made under Section 166. It has been rightly stated in Sarla Verma that the claimants in case of death claim for the purposes of compensation must establish

(a) age of the deceased;

(b) income of the deceased; and

(c) the number of dependants. To arrive at the loss of dependency, the Tribunal must consider

(i) additions/deductions to be made for arriving at the income;

(ii) the deductions to be made towards the personal living expenses of the deceased; and

(iii) the multiplier to be applied with reference to the age of the deceased. We do not think it is necessary for us to revisit the law on the point as we are in full agreement with the view in Sarla Verma.”

[Emphasis is added]

12. And further:- “It is high time that we move to a standard method of selection of multiplier, income for future prospects and deduction for personal and living expenses. The courts in some of the overseas jurisdictions have made this advance. It is for these reasons, we think we must approve the Table in Sarla Verma for the selection of multiplier in claim applications made under Section 166 in the cases of death. We do accordingly. If for the selection of multiplier, Column (4) of the Table in Sarla Verma is followed, there is no likelihood of the claimants who have chosen to apply under Section 166 being awarded lesser amount on proof of negligence on the part of the driver of the motor vehicle than those who prefer to apply under Section 163-A.

As regards the cases where the age of the victim happens to be up to 15 years, we are of the considered opinion that in such cases irrespective of Section 163-A or Section 166 under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) of the Table in Sarla Verma should be followed. This is to ensure that the claimants in such cases are not awarded lesser amount when the application is made under Section 166 of the 1988 Act. In all other cases of death where the application has been made under Section 166, the multiplier as indicated in Column (4) of the Table in Sarla Verma should be followed.” This is how the first question the Court had posed stood answered.

13. With regard to the addition of income for future prospects, this Court in Reshma Kumari (supra) adverted to Para 24 of the Sarla Verma’s case and held:-

“39. The standardisation of addition to income for future prospects shall help in achieving certainty in arriving at appropriate compensation. We approve the method that an addition of 50% of actual salary be made to the actual salary income of the deceased towards future prospects where the deceased had a permanent job and was below 40 years and the addition should be only 30% if the age of the deceased was 40 to 50 years and no addition should be made where the age of the deceased is more than 50 years.

Where the annual income is in the taxable range, the actual salary shall mean actual salary less tax. In the cases where the deceased was selfemployed or was on a fixed salary without provision for annual increments, the actual income at the time of death without any addition to income for future prospects will be appropriate. A departure from the above principle can only be justified in extraordinary circumstances and very exceptional cases.” The aforesaid analysis vividly exposits that standardization of addition to income for future prospects is helpful in achieving certainty in arriving at appropriate compensation. Thus, the larger Bench has concurred with the view expressed by Sarla Verma (supra) as per the determination of future income.

14. It is interesting to note here that while the reference was pending, the judgment in Santosh Devi v. National Insurance Company Limited and others18 was delivered by a two-Judge Bench which commented on the principle stated in Sarla Verma.

It said:-

“14. We find it extremely difficult to fathom any rationale for the observation made in para 24 of the judgment in Sarla Verma case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc. the courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances.

In our view, it will be naïve to say that the wages or total emoluments/income of a person who is selfemployed or who is employed on a fixed salary without provision for annual increment, etc. would remain the same throughout his life.

15. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put in extra efforts to generate additional income necessary for sustaining their families.

16. The salaries of those employed under the Central and State Governments and their agencies/instrumentalities have been revised from time to time to provide a cushion against the rising prices and provisions have been made for providing security to the families of the deceased employees. The salaries of those employed in private sectors have also increased manifold. Till about two decades ago, nobody could have imagined that salary of Class IV employee of the Government would be in five figures and total emoluments of those in higher echelons of service will cross the figure of rupees one lakh.

17. Although the wages/income of those employed in unorganised sectors has not registered a corresponding increase and has not kept pace with the increase in the salaries of the government employees and those employed in private sectors, but it cannot be denied that there has been incremental enhancement in the income of those who are self-employed and even those engaged on daily basis, monthly basis or even seasonal basis.

We can take judicial notice of the fact that with a view to meet the challenges posed by high cost of living, the persons falling in the latter category periodically increase the cost of their labour. In this context, it may be useful to give an example of a tailor who earns his livelihood by stitching clothes. If the cost of living increases and the prices of essentials go up, it is but natural for him to increase the cost of his labour. So will be the cases of ordinary skilled and unskilled labour like barber, blacksmith, cobbler, mason, etc.

18. Therefore, we do not think that while making the observations in the last three lines of para 24 of Sarla Verma judgment, the Court had intended to lay down an absolute rule that there will be no addition in the income of a person who is selfemployed or who is paid fixed wages. Rather, it would be reasonable to say that a person who is self-employed or is engaged on fixed wages will also get 30% increase in his total income over a period of time and if he/she becomes victim of an accident then the same formula deserves to be applied for calculating the amount of compensation.”

15. The aforesaid analysis in Santosh Devi (supra) may prima facie show that the two-Judge Bench has distinguished the observation made in Sarla Verma’s case but on a studied scrutiny, it becomes clear that it has really expressed a different view than what has been laid down in Sarla Verma (supra). If we permit ourselves to say so, the different view has been expressed in a distinctive tone, for the two-Judge Bench had stated that it was extremely difficult to fathom any rationale for the observations made in para 24 of the judgment in Sarla Verma’s case in respect of self-employed or a person on fixed salary without provision for annual increment, etc.

This is a clear disagreement with the earlier view, and we have no hesitation in saying that it is absolutely impermissible keeping in view the concept of binding precedents. 16. Presently, we may refer to certain decisions which deal with the concept of binding precedent.

17. In State of Bihar v. Kalika Kuer alias Kalika Singh and others19, it has been held:- “10. … an earlier decision may seem to be incorrect to a Bench of a coordinate jurisdiction considering the question later, on the ground that a possible aspect of the matter was not considered or not raised before the court or more aspects should have been gone into by the court deciding the matter earlier but it would not be a reason to say that the 19 (2003) 5 SCC 448 16 decision was rendered per incuriam and liable to be ignored. The earlier judgment may seem to be not correct yet it will have the binding effect on the later Bench of coordinate jurisdiction. …”

The Court has further ruled:-

“10. … Easy course of saying that earlier decision was rendered per incuriam is not permissible and the matter will have to be resolved only in two ways – either to follow the earlier decision or refer the matter to a larger Bench to examine the issue, in case it is felt that earlier decision is not correct on merits.”

18. In G.L. Batra v. State of Haryana and others20, the Court has accepted the said principle on the basis of judgments of this Court rendered in Union of India v. Godfrey Philips India Ltd. , Sundarjas Kanyalal Bhatija v. Collector, Thane, Maharashtra22 and Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel 23 .

It may be noted here that the Constitution Bench in Madras Bar Association v. Union of India and another has clearly stated that the prior Constitution Bench judgment in Union of India v. Madras Bar Association25 is a binding precedent. Be it clarified, the issues that were put to rest in the earlier Constitution Bench judgment were treated as precedents by latter Constitution Bench.

19. In this regard, we may refer to a passage from Jaisri Sahu v. Rajdewan Dubey26:-

“11. Law will be bereft of all its utility if it should be thrown into a state of uncertainty by reason of conflicting decisions, and it is therefore desirable that in case of difference of opinion, the question should be authoritatively settled. It sometimes happens that an earlier decision given by a Bench is not brought to the notice of a Bench hearing the same question, and a contrary decision is given without reference to the earlier decision. The question has also been discussed as to the correct procedure to be followed when two such conflicting decisions are placed before a later Bench.

The practice in the Patna High Court appears to be that in those cases, the earlier decision is followed and not the later. In England the practice is, as noticed in the judgment in Seshamma v. Venkata Narasimharao that the decision of a court of appeal is considered as a general rule to be binding on it. There are exceptions to it, and one of them is thus stated in Halsbury’s Laws of England, 3rd Edn., Vol. 22, para 1687, pp. 799-800: “The court is not bound to follow a decision of its own if given per incuriam. A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a Court of a co-ordinate jurisdiction which covered the case before it, or when it has acted in ignorance of a decision of the House of Lords. In the former case it must decide which decision to follow, and in the latter it is bound by the decision of the House of Lords.”

In Virayya v. Venkata Subbayya it has been held by the Andhra High Court that under the circumstances aforesaid the Bench is free to adopt that view which is in accordance with justice and legal principles after taking into consideration the views expressed in the two conflicting Benches, vide also the decision of the Nagpur High Court in Bilimoria v. Central Bank of India. The better course would be for the Bench hearing the case to refer the matter to a Full Bench in view of the conflicting authorities without taking upon itself to decide whether it should follow the one Bench decision or the other. We have no doubt that when such situations arise, the Bench hearing cases would refer the matter for the decision of a Full Court.”

20. Though the aforesaid was articulated in the context of the High Court, yet this Court has been following the same as is revealed from the aforestated pronouncements including that of the Constitution Bench and, therefore, we entirely agree with the said view because it is the precise warrant of respecting a precedent which is the fundamental norm of judicial discipline.

21. In the context, we may fruitfully note what has been stated in Pradip Chandra Parija and others v. Pramod Chandra Patnaik and others27. In the said case, the Constitution Bench was dealing with a situation where the two-Judge Bench disagreeing with the three-Judge Bench decision directed the matter to be placed before a larger Bench of five Judges of this Court. In that scenario, the Constitution Bench stated:-

“6. … In our view, judicial discipline and propriety demands that a Bench of two learned Judges should follow a decision of a Bench of three learned Judges. But if a Bench of two learned Judges concludes that an earlier judgment of three learned Judges is so very incorrect that in no circumstances can it be followed, the proper course for it to adopt is to refer the matter before it to a Bench of three learned Judges setting out, as has been done here, the reasons why it could not agree with the earlier judgment. …”

22. In Chandra Prakash and others v. State of U.P. and another28, another Constitution Bench dealing with the concept of precedents stated thus:-

“22. … The doctrine of binding precedent is of utmost importance in the administration of our judicial system. It promotes certainty and consistency in judicial decisions. Judicial consistency promotes confidence in the system, therefore, there is this need for consistency in the enunciation of legal principles in the decisions of this Court.

It is in the above context, this Court in the case of Raghubir Singh29 held that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or smaller number of Judges. …”

23. Be it noted, Chandra Prakash concurred with the view expressed in Raghubir Singh and Pradip Chandra Parija. In Sandhya Educational Society and another v. Union of India and others , it has been observed that judicial decorum and discipline is paramount and, therefore, a coordinate Bench has to respect the judgments and orders passed by another coordinate Bench. In Rattiram and others v. State of Madhya Pradesh31, the Court dwelt upon the issue what would be the consequent effect of the latter decision which had been rendered without noticing the earlier decisions.

The Court noted the observations in Raghubir Singh (supra) and reproduced a passage from Indian Oil Corporation Ltd. v. Municipal Corporation32 which is to the following effect:- “8. … The Division Bench of the High Court in Municipal Corpn., Indore v. Ratnaprabha Dhanda was clearly in error in taking the view that the decision of this Court in Ratnaprabha was not binding on it. In doing so, the Division Bench of the High Court did something which even a later coequal Bench of this Court did not and could not do. …”

25. It also stated what has been expressed in Raghubir Singh (supra) by R.S. Pathak, C.J. It is as follows:-

“28. We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, 30 (2014) it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court. …”

26. In Rajesh (supra) the three-Judge Bench had delivered the judgment on 12.04.2013. The purpose of stating the date is that it has been delivered after the pronouncement made in Reshma Kumari’s case. On a perusal of the decision in Rajesh (supra), we find that an attempt has been made to explain what the two- Judge Bench had stated in Santosh Devi (supra). The relevant passages read as follows:-

“8. Since, the Court in Santosh Devi case actually intended to follow the principle in the case of salaried persons as laid down in Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase in the case of those groups is not 30% always; it will also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future prospects.

Needless to say that the actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years.

9. In Sarla Verma case, it has been stated that in the case of those above 50 years, there shall be no addition. Having regard to the fact that in the case of those self-employed or on fixed wages, where there is normally no age of superannuation, we are of the view that it will only be just and equitable to provide an addition of 15% in the case where the victim is between the age group of 50 to 60 years so 22 as to make the compensation just, equitable, fair and reasonable. There shall normally be no addition thereafter.”

27. At this juncture, it is necessitous to advert to another three- Judge Bench decision in Munna Lal Jain and another v. Vipin Kumar Sharma and others . In the said case, the three-Judge Bench commenting on the judgments stated thus:- “2. In the absence of any statutory and a straitjacket formula, there are bound to be grey areas despite several attempts made by this Court to lay down the guidelines. Compensation would basically depend on the evidence available in a case and the formulas shown by the courts are only guidelines for the computation of the compensation. That precisely is the reason the courts lodge a caveat stating “ordinarily”, “normally”, “exceptional circumstances”, etc., while suggesting the formula.”

28. After so stating, the Court followed the principle stated in Rajesh. We think it appropriate to reproduce what has been stated by the three-Judge Bench:- “10. As far as future prospects are concerned, in Rajesh v. Rajbir Singh, a three-Judge Bench of this Court held that in case of self-employed persons also, if the deceased victim is below 40 years, there must be addition of 50% to the actual income of the deceased while computing future prospects.”

29. We are compelled to state here that in Munna Lal Jain (supra), the three-Judge Bench should have been guided by the 33 (2015) 6 SCC 347 23 principle stated in Reshma Kumari which has concurred with the view expressed in Sarla Devi or in case of disagreement, it should have been well advised to refer the case to a larger Bench. We say so, as we have already expressed the opinion that the dicta laid down in Reshma Kumari being earlier in point of time would be a binding precedent and not the decision in Rajesh.

30. In this context, we may also refer to Sundeep Kumar Bafna v. State of Maharashtra and another34 which correctly lays down the principle that discipline demanded by a precedent or the disqualification or diminution of a decision on the application of the per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and comity of courts would become a costly casualty. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the court.

A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a coequal or larger Bench. There can be no scintilla of doubt that an earlier decision of co-equal Bench binds the Bench of same strength. Though the judgment in Rajesh’s case was delivered on a later date, it had not apprised itself of the law stated in Reshma Kumari (supra) but had been guided by Santosh Devi (supra). We have no hesitation that it is not a binding precedent on the co-equal Bench.

31. At this stage, a detailed analysis of Sarla Verma (supra) is necessary. In the said case, the Court recapitulated the relevant principles relating to assessment of compensation in case of death and also took note of the fact that there had been considerable variation and inconsistency in the decision for Courts and Tribunals on account of adopting the method stated in Nance v. British Columbia Electric Railway Co. Ltd. and the method in Davies v. Powell Duffryn Associated Collieries Ltd.

36. It also analysed the difference between the considerations of the two different methods by this Court in Susamma Thomas (supra) wherein preference was given to Davies method to the Nance method. Various paragraphs from Susamma Thomas (supra) and Trilok Chandra (supra) have been reproduced and thereafter it has been observed that lack of uniformity and consistency in awarding the compensation has been a matter of grave concern. It has stated that when different tribunals calculate compensation differently on the same facts, the claimant, the litigant and the common man are bound to be confused, perplexed and bewildered. It adverted to the observations made in Trilok Chandra (supra) which are to the following effect:-

“15. We thought it necessary to reiterate the method of working out ‘just’ compensation because, of late, we have noticed from the awards made by tribunals and courts that the principle on which the multiplier method was developed has been lost sight of and once again a hybrid method based on the subjectivity of the Tribunal/court has surfaced, introducing uncertainty and lack of reasonable uniformity in the matter of determination of compensation. It must be realised that the Tribunal/court has to determine a fair amount of compensation awardable to the victim of an accident which must be proportionate to the injury caused. …”

32. While adverting to the addition of income for future prospects, it stated thus:- “24. In Susamma Thomas this Court increased the income by nearly 100%, in Sarla Dixit the income was increased only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of the imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years. (Where the annual income is in the taxable range, the words “actual salary” should be read as “actual salary less tax”). The addition should be 26 only 30% if the age of the deceased was 40 to 50 years.

There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances.”

33. Though we have devoted some space in analyzing the precedential value of the judgments, that is not the thrust of the controversy. We are required to keenly dwell upon the heart of the issue that emerges for consideration. The seminal controversy before us relates to the issue where the deceased was self-employed or was a person on fixed salary without provision for annual increment, etc., what should be the addition as regards the future prospects. In Sarla Verma, the Court has made it as a rule that 50% of actual salary could be added if the deceased had a permanent job and if the age of the deceased is between 40 – 50 years and no addition to be made if the deceased was more than 50 years.

It is further ruled that where deceased was self-employed or had a fixed salary (without provision for annual increment, etc.) the Courts will usually take only the actual income at the time of death and the departure is permissible only in rare and exceptional cases involving special circumstances.

34. First, we shall deal with the reasoning of straitjacket demarcation between the permanent employed persons within the taxable range and the other category where deceased was self-employed or employed on fixed salary sans annual increments, etc.

35. The submission, as has been advanced on behalf of the insurers, is that the distinction between the stable jobs at one end of the spectrum and self-employed at the other end of the spectrum with the benefit of future prospects being extended to the legal representatives of the deceased having a permanent job is not difficult to visualize, for a comparison between the two categories is a necessary ground reality. It is contended that guaranteed/definite income every month has to be treated with a different parameter than the person who is self-employed inasmuch as the income does not remain constant and is likely to oscillate from time to time.

Emphasis has been laid on the date of expected superannuation and certainty in permanent job in contradistinction to the uncertainty on the part of a selfemployed person. Additionally, it is contended that the permanent jobs are generally stable and for an assessment the entity or the establishment where the deceased worked is identifiable since they do not suffer from the inconsistencies and vagaries of self-employed persons. It is canvassed that it may not be possible to introduce an element of standardization as submitted by the claimants because there are many a category in which a person can be self-employed and it is extremely difficult to assimilate entire range of self-employed categories or professionals in one compartment.

It is also asserted that in certain professions addition of future prospects to the income as a part of multiplicand would be totally an unacceptable concept. Examples are cited in respect of categories of professionals who are surgeons, sports persons, masons and carpenters, etc. It is also highlighted that the range of self-employed persons can include unskilled labourer to a skilled person and hence, they cannot be put in a holistic whole. That apart, it is propounded that experience of certain professionals brings in disparity in income and, therefore, the view expressed in Sarla Verma (supra) that has been concurred with Reshma Kumari (supra) should not be disturbed.

36. Quite apart from the above, it is contended that the principle of standardization that has been evolved in Sarla Verma (supra) has been criticized on the ground that it grants compensation without any nexus to the actual loss. It is also urged that even if it is conceded that the said view is correct, extension of the said principle to some of the self-employed persons will be absolutely unjustified and untenable. Learned counsel for the insurers further contended that the view expressed in Rajesh (supra) being not a precedent has to be overruled and the methodology stood in Sarla Verma (supra) should be accepted.

37. On behalf of the claimants, emphasis is laid on the concept of “just compensation” and what should be included within the ambit of “just compensation”. Learned counsel have emphasized on Davies method and urged that the grant of pecuniary advantage is bound to be included in the future pecuniary benefit.

It has also been put forth that in right to receive just compensation under the statute, when the method of standardization has been conceived and applied, there cannot be any discrimination between the person salaried or self-employed. It is highlighted that if evidence is not required to be adduced in 30 one category of cases, there is no necessity to compel the other category to adduce evidence to establish the foundation for addition of future prospects.

38. Stress is laid on reasonable expectation of pecuniary benefits relying on the decisions in Tafe Vale Railway Co. (supra) and the judgment of Singapore High Court in Nirumalan V Kanapathi Pillay v. Teo Eng Chuan. Lastly, it is urged that the standardization formula for awarding future income should be applied to self-employed persons and that would be a justifiable measure for computation of loss of dependency.

39. Before we proceed to analyse the principle for addition of future prospects, we think it seemly to clear the maze which is vividly reflectible from Sarla Verma, Reshma Kumari, Rajesh and Munna Lal Jain. Three aspects need to be clarified. The first one pertains to deduction towards personal and living expenses. In paragraphs 30, 31 and 32, Sarla Verma lays down:-

“30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra4, the general practice is to apply standardised deductions. Having considered several subsequent decisions of this 37 (2003) 3 SLR (R) 601 31 Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.

31. Where the deceased was a bachelor and the claimants are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be considered as dependants, because they will either be independent and earning, or married, or be dependent on the father.

32. Thus even if the deceased is survived by parents and siblings, only the mother would be considered to be a dependant, and 50% would be treated as the personal and living expenses of the bachelor and 50% as the contribution to the family. However, where the family of the bachelor is large and dependent on the income of the deceased, as in a case where he has a widowed mother and large number of younger nonearning sisters or brothers, his personal and living expenses may be restricted to one-third and contribution to the family will be taken as two-third.”

40. In Reshma Kumari, the three-Judge Bench agreed with the multiplier determined in Sarla Verma and eventually held that the advantage of the Table prepared in Sarla Verma is that uniformity and consistency in selection of multiplier can be achieved.

It has observed:-

“35. … The assessment of extent of dependency depends on examination of the unique situation of the individual case. Valuing the dependency or the multiplicand is to some extent an arithmetical exercise. The multiplicand is normally based on the net annual value of the dependency on the date of the deceased’s death. Once the net annual loss (multiplicand) is assessed, taking into account the age of the deceased, such amount is to be multiplied by a “multiplier” to arrive at the loss of dependency.”

41. In Reshma Kumari, the three-Judge Bench, reproduced paragraphs 30, 31 and 32 of Sarla Verma and approved the same by stating thus:-

“41. The above does provide guidance for the appropriate deduction for personal and living expenses. One must bear in mind that the proportion of a man’s net earnings that he saves or spends exclusively for the maintenance of others does not form part of his living expenses but what he spends exclusively on himself does. The percentage of deduction on account of personal and living expenses may vary with reference to the number of dependent members in the family and the personal living expenses of the deceased need not exactly correspond to the number of dependants.

42. In our view, the standards fixed by this Court in Sarla Verma on the aspect of deduction for personal living expenses in paras 30, 31 and 32 must ordinarily be followed unless a case for departure in the circumstances noted in the preceding paragraph is made out.”

42. The conclusions that have been summed up in Reshma Kumari are as follows:-

“43.1. In the applications for compensation made under Section 166 of the 1988 Act in death cases where the age of the deceased is 15 years and above, the Claims Tribunals shall select the multiplier as indicated in Column (4) of the Table prepared in Sarla Verma read with para 42 of that judgment.

43.2. In cases where the age of the deceased is up to 15 years, irrespective of Section 166 or Section 163-A under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) of the Table in Sarla Verma should be followed.

43.3. As a result of the above, while considering the claim applications made under Section 166 in death cases where the age of the deceased is above 15 years, there is no necessity for the Claims Tribunals to seek guidance or for placing reliance on the Second Schedule in the 1988 Act.

43.4. The Claims Tribunals shall follow the steps and guidelines stated in para 19 of Sarla Verma for determination of compensation in cases of death. 43.5. While making addition to income for future prospects, the Tribunals shall follow para 24 of the judgment in Sarla Verma. 43.6. Insofar as deduction for personal and living expenses is concerned, it is directed that the Tribunals shall ordinarily follow the standards prescribed in paras 30, 31 and 32 of the judgment in Sarla Verma 34 subject to the observations made by us in para 41 above.”

43. On a perusal of the analysis made in Sarla Verma which has been reconsidered in Reshma Kumari, we think it appropriate to state that as far as the guidance provided for appropriate deduction for personal and living expenses is concerned, the tribunals and courts should be guided by conclusion 43.6 of Reshma Kumari. We concur with the same as we have no hesitation in approving the method provided therein.

44. As far as the multiplier is concerned, the claims tribunal and the Courts shall be guided by Step 2 that finds place in paragraph 19 of Sarla Verma read with paragraph 42 of the said judgment. For the sake of completeness, paragraph 42 is extracted below :-

“42. We therefore hold that the multiplier to be used should be as mentioned in Column (4) of the table above (prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to 30 years, M- 16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”

45. In Reshma Kumari, the aforesaid has been approved by stating, thus:- “It is high time that we move to a standard method of selection of multiplier, income for future prospects and deduction for personal and living expenses. The courts in some of the overseas jurisdictions have made this advance. It is for these reasons, we think we must approve the Table in Sarla Verma for the selection of multiplier in claim applications made under Section 166 in the cases of death.

We do accordingly. If for the selection of multiplier, Column (4) of the Table in Sarla Verma is followed, there is no likelihood of the claimants who have chosen to apply under Section 166 being awarded lesser amount on proof of negligence on the part of the driver of the motor vehicle than those who prefer to apply under Section 163-A. As regards the cases where the age of the victim happens to be up to 15 years, we are of the considered opinion that in such cases irrespective of Section 163-A or Section 166 under which the claim for compensation has been made, multiplier of 15 and the assessment as indicated in the Second Schedule subject to correction as pointed out in Column (6) of the Table in Sarla Verma should be followed.

This is to ensure that the claimants in such cases are not awarded lesser amount when the application is made under Section 166 of the 1988 Act. In all other cases of death where the application has been made under Section 166, the multiplier as indicated in Column (4) of the Table in Sarla Verma should be followed.”

46. At this stage, we must immediately say that insofar as the aforesaid multiplicand/multiplier is concerned, it has to be accepted on the basis of income established by the legal representatives of the deceased. Future prospects are to be 36 added to the sum on the percentage basis and “income” means actual income less than the tax paid. The multiplier has already been fixed in Sarla Verma which has been approved in Reshma Kumari with which we concur.

47. In our considered opinion, if the same is followed, it shall subserve the cause of justice and the unnecessary contest before the tribunals and the courts would be avoided. 48. Another aspect which has created confusion pertains to grant of loss of estate, loss of consortium and funeral expenses. In Santosh Devi (supra), the two-Judge Bench followed the traditional method and granted Rs. 5,000/- for transportation of the body, Rs. 10,000/- as funeral expenses and Rs. 10,000/- as regards the loss of consortium. In Sarla Verma, the Court granted Rs. 5,000/- under the head of loss of estate, Rs. 5,000/- towards funeral expenses and Rs. 10,000/- towards loss of Consortium.

In Rajesh, the Court granted Rs. 1,00,000/- towards loss of consortium and Rs. 25,000/- towards funeral expenses. It also granted Rs. 1,00,000/- towards loss of care and guidance for minor children. The Court enhanced the same on the principle that a formula framed to achieve uniformity and consistency on a socio-economic issue has to be contrasted from a legal principle 37 and ought to be periodically revisited as has been held in Santosh Devi (supra). On the principle of revisit, it fixed different amount on conventional heads. What weighed with the Court is factum of inflation and the price index. It has also been moved by the concept of loss of consortium. We are inclined to think so, for what it states in that regard.

We quote:-

“17. … In legal parlance, “consortium” is the right of the spouse to the company, care, help, comfort, guidance, society, solace, affection and sexual relations with his or her mate. That non-pecuniary head of damages has not been properly understood by our courts. The loss of companionship, love, care and protection, etc., the spouse is entitled to get, has to be compensated appropriately. The concept of nonpecuniary damage for loss of consortium is one of the major heads of award of compensation in other parts of the world more particularly in the United States of America, Australia, etc. English courts have also recognised the right of a spouse to get compensation even during the period of temporary disablement.

By loss of consortium, the courts have made an attempt to compensate the loss of spouse’s affection, comfort, solace, companionship, society, assistance, protection, care and sexual relations during the future years. Unlike the compensation awarded in other countries and other jurisdictions, since the legal heirs are otherwise adequately compensated for the pecuniary loss, it would not be proper to award a major amount under this head. Hence, we are of the view that it would only be just and reasonable that the courts award at least rupees one lakh for loss of consortium.”

49. Be it noted, Munna Lal Jain (supra) did not deal with the same as the notice was confined to the issue of application of correct multiplier and deduction of the amount. 50. This aspect needs to be clarified and appositely stated. The conventional sum has been provided in the Second Schedule of the Act. The said Schedule has been found to be defective as stated by the Court in Trilok Chandra (supra). Recently in Puttamma and others v. K.L. Narayana Reddy and another38 it has been reiterated by stating:- “… we hold that the Second Schedule as was enacted in 1994 has now become redundant, irrational and unworkable due to changed scenario including the present cost of living and current rate of inflation and increased life expectancy.”

51. As far as multiplier or multiplicand is concerned, the same has been put to rest by the judgments of this Court. Para 3 of the Second Schedule also provides for General Damages in case of death. It is as follows:- “3. General Damages (in case of death): The following General Damages shall be payable in addition to compensation outlined above:-

(i) Funeral expenses – Rs. 2,000/-

(ii) Loss of Consortium, if beneficiary is the spouse – Rs. 5,000/-

(iii) Loss of Estate – Rs. 2,500/-

(iv) Medical Expenses – actual expenses incurred before death supported by bills/vouchers but not exceeding – Rs. 15,000/-“

52. On a perusal of various decisions of this Court, it is manifest that the Second Schedule has not been followed starting from the decision in Trilok Chandra (supra) and there has been no amendment to the same. The conventional damage amount needs to be appositely determined. As we notice, in different cases different amounts have been granted. A sum of Rs. 1,00,000/- was granted towards consortium in Rajesh. The justification for grant of consortium, as we find from Rajesh, is founded on the observation as we have reproduced hereinbefore.

53. On the aforesaid basis, the Court has revisited the practice of awarding compensation under conventional heads. 54. As far as the conventional heads are concerned, we find it difficult to agree with the view expressed in Rajesh. It has granted Rs. 25,000/- towards funeral expenses, Rs. 1,00,000/- loss of consortium and Rs. 1,00,000/- towards loss of care and guidance for minor children. The head relating to loss of care and minor children does not exist. Though Rajesh refers to Santosh Devi, it does not seem to follow the same.

The conventional and 40 traditional heads, needless to say, cannot be determined on percentage basis because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified. Any quantification must have a reasonable foundation. There can be no dispute over the fact that price index, fall in bank interest, escalation of rates in many a field have to be noticed. The court cannot remain oblivious to the same. There has been a thumb rule in this aspect. Otherwise, there will be extreme difficulty in determination of the same and unless the thumb rule is applied, there will be immense variation lacking any kind of consistency as a consequence of which, the orders passed by the tribunals and courts are likely to be unguided.

Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The principle of revisiting the said heads is an acceptable principle. But the revisit should not be fact-centric or quantum-centric. We think that it would be condign that the amount that we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% in a span of three years. We are disposed to hold so because that will bring in consistency in respect of those heads.

55. Presently, we come to the issue of addition of future prospects to determine the multiplicand. 56. In Santosh Devi the Court has not accepted as a principle that a self-employed person remains on a fixed salary throughout his life. It has taken note of the rise in the cost of living which affects everyone without making any distinction between the rich and the poor. Emphasis has been laid on the extra efforts made by this category of persons to generate additional income. That apart, judicial notice has been taken of the fact that the salaries of those who are employed in private sectors also with the passage of time increase manifold. In Rajesh’s case, the Court had added 15% in the case where the victim is between the age group of 15 to 60 years so as to make the compensation just, equitable, fair and reasonable. This addition has been made in respect of self-employed or engaged on fixed wages.

57. Section 168 of the Act deals with the concept of “just compensation” and the same has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard because such determination can never be in arithmetical exactitude. It can never be perfect. The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis of materials brought on record in an individual case. The conception of “just compensation” has to be viewed through the prism of fairness, reasonableness and nonviolation of the principle of equitability. In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance.

Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, “just compensation”. The determination has to be on the foundation of evidence brought on record as regards the age and income of the deceased and thereafter the apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla Verma (supra) and it has been approved in Reshma Kumari (supra). The age and income, as stated earlier, have to be established by adducing evidence. The tribunal and the Courts have to bear in mind that the basic principle lies in pragmatic computation which is in proximity to reality.

It is a well accepted norm that money cannot substitute a life lost but an effort has to be made for grant of just compensation having uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the Courts is difficult and hence, an endeavour has been made by this Court for standardization which in its ambit includes addition of future prospects on the proven income at present. As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency. We approve the principle of “standardization” so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age.

58. The seminal issue is the fixation of future prospects in cases of deceased who is self-employed or on a fixed salary. Sarla Verma (supra) has carved out an exception permitting the claimants to bring materials on record to get the benefit of addition of future prospects. It has not, per se, allowed any future prospects in respect of the said category.

59. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty.

But to state that the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious. It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to enhance one’s income for sustenance.

The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time.

Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing income unlike in the case of a person having a permanent job, yet the said perception does not really deserve acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the marrows of ground reality.

And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt concept of 46 percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and where the deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.

60. The controversy does not end here. The question still remains whether there should be no addition where the age of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to one reason or the other.

To lay down as a thumb rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no addition thereafter. Similarly, in case of selfemployed or person on fixed salary, the addition should be 10% 47 between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by the tribunals and the courts.


61. In view of the aforesaid analysis, we proceed to record our conclusions:-

(i) The two-Judge Bench in Santosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view than what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a contrary view than what has been held by another coordinate Bench.

(ii) As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a binding precedent.

(iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was 48 between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.

(iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.

(v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30 to 32 of Sarla Verma which we have reproduced hereinbefore.

(vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment.

(vii) The age of the deceased should be the basis for applying the multiplier.

(viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.

62. The reference is answered accordingly. Matters be placed before the appropriate Bench.

New Delhi;

October 31, 2017


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