Date of Judgement:
6th August 2021
Coram:
Justice Uday Umesh Lalit and Justice Ajay Rastogi
Parties:
Appellant: New India Assurance Co. Ltd.
Respondent: Urmila Shukla
Subject
The case deals with the application of Rule 220A of the U. P. Motor Vehicles Rules, 1998 in light of the judgement given in National Insurance Company. Ltd. vs. Pranay Sethi (2017).
Overview
- The case before the Trial Court was an accident case that resulted in the death of one Jairam Shukla.
- While determining the compensation amount, the Trial Court relied on Rule 220A of the U. P. Motor Vehicles Rules, 1998 that mandates 20% additional compensation in case the deceased falls within the age bracket of 50-60. As a result, the total compensation amount was Rs. 24,43,432/- with 7% interest.
- The Appellant approached the Allahabad High Court stating that the Trial Court’s order stands contrary to the Supreme Court’s decision in National Insurance Company v. Pranay Sethi (2017), which serves as a precedent for calculating the compensation in accident cases.
- The High Court, however, upheld the Trial Court’s verdict, and therefore, the present appeal has been preferred before the Supreme Court.
- The Appellants approached the Supreme Court challenging the verdicts of the two courts.
- It was contended that the provisions under Rule 220A of the U. P. Motor Vehicles Rules, 1998 is contradictory to the Supreme Court’s judgement in National Insurance Company vs. Pranay Sethi Case (2017).
- The Respondents argued that the observations in the Pranay Sethi Case would not be applicable in this case because there is already a statutory provision under the U. P. Motor Vehicles Rules to that effect.
- The Supreme Court had appointed Advocate Mr. A. D. N. Rao, as Amicus Curiae, to assist the Court. He submitted that since the statutory provision provides for a more advantageous remedy, the observations in Pranay Sethi Case ought not be considered.
- He further added that in the Pranay Sethi Case, this Court did not give its opinion on the Rules.
Issues Involved
- Whether the application of sub-Rule 3(iii) of Rule 220A of the U. P. Motor Vehicles Rules, 1998 must be restricted or it must be allowed to operate fully?
Important Provisions
- 1) Rule 220A of U. P. Motor Vehicles Rules, 1998: Sub-rule (iii) of Rule 220A of the 1998 Rules state that 20% of the salary of the deceased (between 50-60 years) should be added to the compensation amount as future prospects.
- 2) Supreme Court’s observation in Pranay Sethi Case (2017): One of the questions raised before the Apex Court was whether any additional compensation should be given in case of death of persons who fall between 50-60 years of age. The Court opined that there should be additional compensation for such persons as well. It thus ruled: “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 the case of self-employed or a person on fixed salary, the addition should be 10% 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.” The Court referred to Section 168 of the Motor Vehicles Act, 1988 to come to this conclusion.
- 3) Section 168 of the Motor Vehicles Act, 1988: This Section allows Courts to award additional compensation amounts that it finds to be “just and fair”.
Judgement Analysis
- The Supreme Court dismissed the appeal stating that if a provision in a statutory instrument affords a favourable treatment, the decision in the Pranay Sethi Case cannot limit its operation. It also observed that the appellant did not question the validity of the rules, therefore, the same will be applicable.
- The Bench further opined that only in absence of any such statutory provision, the judgement would serve as a precedent. It was stated that the observations in the Pranay Sethi case were an outcome of the concept of “just compensation” under Section 168 of the Motor Vehicles Act.
- In case if a law provides a more beneficial remedy, the Pranay Sethi Judgement would have no effect unless the concerned law is null and void, the Bench noted. And accordingly, the orders of the Trial Court and Allahabad High Court were upheld.
- The increasing cases of motor vehicle accidents is becoming an issue of concern in our country. There are always some irregularities in determining the quantum of compensation in such cases, despite having the Motor Vehicles Act, 1988. This is mainly because such compensations are decided only after considering the conduct of both the parties.
- The instant case had a different issue. It is based on the concept of “just compensation”, which is awarded by the courts, above the actual compensation. There is no standard provision which made the Supreme Court to make it so in the Pranay Sethi Case. At the same time, the Court did not make any comments on the existing laws in this regard, nor did it state that the judgement overrides the existing laws.
- This should have been the grounds that made both the Trial Court and the High Court to rely on the Rules. Further, as stated by the Supreme Court, when a law gives a more favorable treatment, then it can definitely prevail over other observations.
- Since this amount is given as a small compensation against the life of a person, such beneficial provisions should be considered as the same can help the devastated family until they stabilize themselves. The Supreme Court’s observations, in this issue, comes as a glimmer of hope and upholds the principle of “just and fair compensation”.
Conclusion
Compensating a family who had lost its member is not that easy as no money can actually replace a dear relative. Courts play a crucial role in consoling a shattered family. It is, therefore, the judge’s duty to carefully analyse the issues concerned with the awarding of compensation in such a case, and if otherwise, it would have an unpleasant effect on the victim’s family. In an accident case, in which the deceased had no involvement, the punishment prescribed to an accused is to reform him. But the compensation amount is important for the family to financially heal from the loss. Similarly, such decisions would also have a deterrent effect on accidents, and therefore, the learned judges must do the due diligence in such cases.
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