Holding

Compensation under Section 163A of the Motor Vehicles Act, 1988 is an alternative, final remedy and is not to be adjusted against or added to compensation determined on the basis of fault liability under Section 168.

Summary

The Supreme Court considered appeals by Oriental Insurance Co. Ltd. and other insurers against claims filed by Hansrajbhai V. Kodala and others under Section 163A of the Motor Vehicles Act, 1988 for lump‑sum compensation on a structured formula basis. The claimants had also sought interim compensation from the Claims Tribunal, which was allowed, but the High Court held the award under Section 163A to be interim, permitting further claims under Section 168 (fault‑based compensation). The insurers argued that Section 163A was intended to provide a final, alternative remedy to avoid protracted litigation, not an interim award. The Court examined the legislative history, the wording of Sections 140, 141, 163A, 163B and related provisions, and held that compensation under Section 163A is an alternative, not an addition, to fault‑based compensation and cannot be adjusted against it. Consequently, the appeals were allowed, the High Court judgments were set aside, and no costs were awarded. The Court also suggested that the Central Government revise the Second Schedule to reflect current cost of living.

Issues considered

The nature of compensation under Section 163A: whether it is an interim award or a final, alternative remedy to fault‑based compensation under Section 168.
Whether compensation payable under Section 163A is to be adjusted against compensation determined on the basis of fault liability under the Act.
The proper interpretation of the heading, non‑obstante clause and differing language in Sections 140, 141, 163A, 163B, 161, 162 and 167.
The relevance of legislative history, objects and reasons, and committee reports in construing Section 163A.

Legislation cited

Fatal Accidents Act, 1855
General Insurance Business (Nationalisation) Act, 1972
Motor Vehicles Act, 1988s. 140, s. 141, s. 161, s. 162, s. 163A, s. 163B, s. 164, s. 165, s. 166, s. 167, s. 168
Workmen's Compensation Act, 1923

Subjects

Motor Vehicles ActSection 163Astructured formula compensationno‑fault liabilityfault liabilitystatutory interpretationnon‑obstante clauseclaims tribunalinterim compensationalternative remedylegislative intent

Judgment

THE ORIENTAL INSURANCE CO. LTD. ETC. A
~ v.
HANSRAJBHAI V. KODALA AND ORS. ETC. ETC.

APRIL 4, 2001

[M.B. SHAH AND D.P. MOHAPATRA, JJ.] B

Motor Vehicle Act, 1988 :

Sections 140, 161, 163A, 168-Second Schedule-Compensation under
Section 163A on structured formula basis and Compensation under Section 140
on principle of fault liability-Held, compensation under Section 163A is in c
altemativt? and not i"'! addition to the detennination of compensation under
Section 140-Section J63A intmduced to avoid long drawn litigation and delay
in payment o.f compensation-Suggestion to Central Government for revising
the Second Schedule keeping in view the cost of living.
D
Interpretation of Statutes :

Legislative liisto1y-Statement of Objects and Reasons-Aid for con-
st ruction-Held, reason for the Statute is a safest guide for purposes of inter-
pretation.

~ Different phrases in different Sections in an Act-Meaning of-Held, E
different meaning to be assigned unless context othenvise requires.
• Heading of a Section-Aid for construction-Held, language of heading
cannot be used to cont1vl operation aftlze Section-Heading provides meaning
and purpose of the Section, which could be referred to in case of ambiguity.
F
Respondent-claimants filed applications under Section 163A of the
Motor Vehicles Act, 1988 before Claims Tribunals for interim compensa-
tion on structured formula basis from appellant Insurance Companies.
·' The Claims Tribunals allowed the applications and directed the appellants
to pay interim compensation to the respondents. On appeal, High Court G
held that since the award under Section 163A of the Act was an interim
award, the claimants were entitled to proceed further with determination
" .A( of compensation under Section 168 of the Act. Hence this appeal .

The appellant-Insurance companies contended that Section 163A
was inserted to provide quicker relief to the accident victims; that the H
999
1000 SUPREME COURT REPORTS (200 I] 2 S.C.R.
A lump sum compensation payable under the structured formula basis is an
~
alternative and optional to the determination of compensation under Sec-
tion 168 and not meant for interim compensation; and that the applica-
tions made by the respondents before Claims Tribunal were substantial
applications and not interim applications.

B Respondent-claimants contended that compensation payable under
Section 163A of the Act is in addition to the determination of compensa-
tion on the basis of fault liability under Section 140; and that if he gets
higher amount under Section 140, then the amount can be adj1.-ted against
the amount of compensation paid under Section 163A.
c
Allo\\ing the appeals, the Court

HELD : 1.1. The purpose of Section 163A and the Second Schedule
to the Motor Vehicles Act, 1988 is to avoid long drawn litigation and delay
in payment of compensation to the victims or his heirs who are in dire need
D of relief. If such affected claimant opts for accepting the lump-sum com-
pensation based on structured formula, he would get relief at the earliest.
It also gives vital advantage of not pleading or establishing any wrongful
act or neglect or default of the owner of the offending vehicle or vehicles.
However, this benefit can be availed of hy the claimant only by restricting
E his claim on the basis of income at a slab of Rs. 40,000 which is the highest -i
slab in the Second Schedule which indicates that the legislature wanted to
give benefit of no fault liability to a certain limit. This would clearly
indicate that the scheme is in alternative to the determination of compen-
sation on fault basis under the Act. The object underlining the said amend-
ment is to pay compensation without there being any long drawn litigation
F
on an predetermined formula, which is known as structured formula basis
which itself is based on relevant criteria for determining compensation and
the procedure of paying compensation after determining the fault is done
away with. Compensation amount is paid without pleading or proof of '·
fault, on the principle of social justice as a social security measure because
G of even increasing motor vehicle accidents in a fast moving society. For-
ther, the law before insertion of Section 163A was giving limited benefit to
the extent provided under Section 140 for no fault liability and determina-
,.
tion of compensation amount on fault liability was taking long time. That ~

mischief is sought to be remedied hy introducing Section 163A and the
H disease of delay is sought to be cured to a large extent by affording benefit
'
~

ORIENTAL INSURANCE CO. LTD. v. HANSRAJBHAI V. KODALA 1001
to the victims on structured formula basis. Further, if the question of A
determining compensation on fault liability is kept alive, it would result in
'>,-
additional litigation and complications iu case claimants fail to establish
liability of the owner of the defaulting vehicles. [1015-H; 1016-A-F]

1.2. On reading other sections of the Act, it is clear that the right to
claim compensation on the basis of no-fault liability under Section 140 is in B
addition to the right to claim compensation on the principle of fault liabil·
ity or right to get compensation under any other law. Such amount is
required to he reduced from the amount payable under the fault liability
or compensation, which may he received under any other law. If nothing is
payable under the Act, then the claimant is not required to refund the ,c
amount received by him. Section 163A nowhere provides that this
payment of compensation on no-fault liability on the basis of structured
formula is in addition to the liability to pay compensation in accordance
with the right to get compensation on the principle of fault liability and
unless otherwise provided for the same canse, compensation cannot be
paid again. [1017-H; 1018-A-CJ
D

1.3. The Legislature bas spedlically provided scheme of adjustme11t
of compensation under Section 140 read with Section 141 and Section 162
if the claimants get compensation under the Act, while there is no such
provisions under Section 163A. Addition orintroduction of such scheme in E
provisions would he impermissible. Proviso to sub-section (5) of Section
140 would mean that it does not provide for deduction or adjustment of
compensation payable under the Act, i.e., on the principle of fault liability,
• which is to he determined under Section 168. [1019-D; 1020-G]

Gujarat State Road Transpo11 Corporation, Ahmednbad v. Ramanbhai F
Prablzatblzai & Anr., [1987) 3 SCR 404, referred to.

1.4. The heading of Section 163A indicates that the Legislature has
envisaged special provision for paying compensation on structural for·
: mula instead of paying the compensation by long drawn litigation after
establishing fault liability. The non-obstante clause in the Section means
G
that it is not subject to any adjudication of right to claim compensation as
provided under the Act. The owner of the motor vehicle or the authorised
~
insurer would he liable to pay compensation due to accident arising out of
·~ the use of motor vehicle. Section 163B further clarifies that claim petition
can be filed either under Section 140 or under Section 163A hut not under H
~

1002 SUPREME COURT REPORTS (2001] 2 S,C.R
A both sections. Determination of compensation under Section 163A is final
and not as an interim measure. The Legislature has deliberately not pro-
·-I
vided that it is in addition to the compensation payable for adjusting the
compensation payable under Section 163A with the other payment on fault
liability under the Act. (1021-B; G-H]

B 1.5. In case where compensation is paid on no fault liability under
Sections 140 and 161 in case of 'hit and run motor accidents', the Legisla-
lure has provided adjustment or refund of the said compensation in case
where compensation is determined and payable under the award on the
basis of fault liability under section 168 of the Act. There is no such
c procedure for refund or adjustment of compensation paid were the com-
pensation is paid under Section 163A. The words "under any other law''
for for the time being in force would certainly have different meaning from
the words "under this Act" or '~mder any other provision of this Act''. In
view of the non-obstante c,lause 'notwithstanding anything contained in
this Act', the provisions of,Section 163A would exclude determination of
D compensation on the principle of fault liability. The procedure of giving
compensation under Section 163A is inconsistent with the procedure pre-
scribed for awarding compensation on fault liability. Under section 163A
compensation is awarded without proof of any fault, while for getting
compensation on the basis of fault liability claimant is required to prove
E wrongful act, neglect or default of the owner of the vehicle or vehicles
concerned. Award of compensation under section 163A is on predeter-
mined formula for payment of compensation to road accident victims and
that formula itself is based on criteria similar to determining the com pen-
sation under section 168. The object was to avoid delay in determination of
compensation. (1022-C-H]
F
1.6. It would be appropriate if Central Government takes necessary
action for revision and correction of the Second Schedule to the Act,
keeping in view the cost of living. [1024-C)

U.P. Stale Road Transporl Corporation & Ors. v. Trilok Chandra & ~
G Ors., [1996] 4 SCC 362, referred to.

2.1. For the purpose of interpretation, the Statement of Objects and
Reasons and Legislative History for a Statute is a safest guide to cull out ,.
legislative intent. ~

H Utkal Contractors & Joinery P. Ltd. v. Stale of Orissa, [1987] 3 SCC
ORIENTAL INSURANCE CO. LID. v. HANSRAJBHAI V. KODALA [SHAH, I.) 1003
279, referred to. A
..,....
2.2. When the Legislature has taken care of using different phrases
in different sections, normally different meaning is required to be assigned
to the language used by the Legislature unless the context otherwise re-
quires. However, in relation to the same subject matter, if different words
of different import are used in the same statute, there is presumption that B
they are not used in the same sense. [1020-E]

Board of Revenue v. Arthur Paul, AIR (1956) SC 35, relied on.

2.3. For interpretation of the word~ of a Section, the language of the
heading cannot be used to control the operation of the Section, but at the
c
same time being part of the statute, itprimafacie furnishes some clue as to
the meaning and purpose of the Section. In case of ambiguity or doubt,
heading can be referred to as an aid in construing the provisions. [1021-A)

K.P. Varghese v. /. T. 0., [1982] 1 SCR 629, relied on. D
CIVIL APPELLKI'E JURISDICTION : Civil Appeal No. 2568 of 200 I.

From the Judgment and Order dated 4.8.98 of the Gujarat High Court
in F.A. No. 2473 of 1996.

,.... E
WITH

Civil Appeal Nos. 2566/2001, 2570/2001, 2571/2001, 257212001, and
2573/2001.

Altaf Ahmed, Additional Solicitor General, Jitendra Shanna, Mahendra
F
Anand, S.K. Dholakia, Chandra Prakash Pandey, Kashi Nath Pandey, Ms.
Minakshi Vij, P.N. Jha, Pannanand Gaur, R. Rahim, Rajiv Mehta, Divyand
K. Chhaya, Abhijat P. Medh, S. Wasim A. Quadri for Anil Katiyar, B.K.
Satija, Joy Basu, K.N. Rai and Bishwajit Bhattacharya for the appearing
parties.
G
The Judgment of the Court was delivered by

SHAH, J. Leave granted.

The common question involved in these appeals is whether the com-
pensation payable under Section 163A of the Motor Vehicles Act, 1988 H
1004 SUPREME COURT REPORTS ' [2001] 2 S.C.R.
A (hereinafter referred to as "the Act") as per the structured formula basis is
in addition or in the alternative to the determination of the compensation on
the principle of fault liability, after following the procedure prescribed under
the Act?

For convenience we would refer to few facts in Civil Appeal arising
B out of S.L.P. (Civil) No. 8742 of 1999 in which the judgment and order dated
4.8.98 passed by the High Court of Gujarat at Ahmedabad in FA No. 2473
of 1996 is challenged. Petition claiming compensation of Rs. 2,50,000 was
filed before the Claims Tribunal on the ground that one bus bearing regis-
tration No. G.J.3T 9815 met with an accident and Mayur, son of respondent
c Nos. 1 and 2, aged about 6 years died as a result thereof. The claimants also
filed au application under Section l 63A of the Act for interim compensation
on structured formula basis. The Insurance Company- appellant contended
that as the bus was not insured with it, it was not liable to pay compensation.
The Claims Tribunal granted the prayer of the respondents and directed the
appellant to pay Rs. 1,62,000 to the respondents as interim compensation. The
D appellants preferred appeal before the High Court contending inter alia that
in order to provide quicker relief to the accident victims, Section 163A was
inserted and is not meant for interim compensation but is an alternative to
the detennination of compensation under Section 168. It was further con-
tended that the application under Section 163A was a substantial application
E and not an interim application. The High Court by judgment and order dated
..,(
4.8.1998 held that the award under Section 163A was au interim award and
the claimants were entitled to proceed further with determination of compen-
sation under Section 168 of the Act. That 0rder is under challenge.

For determining the question involved, the scheme for payment of
F compensation under the Act can be divided as under:

(i) Section 140 - For no-fault liability in case of death or disable-
ment;

G (ii) Section 161 - In case of hit and run motor accidents, where the
identity of the vehicle carmot be ascertained-compern;~tion
amount is Rs. 25000 in case of death and Rs. 12500 in case of
grievous hurt;

(iii) Section 163A - Special provisions as to payment of compensa-
H tion on structured formula basis without establishing or proving
ORIENTAL INSURANCE CO. LTD. v. HANSRAJBHAI V. KODALA (SHAH, l.J 1005

- any wrongful act or neglect or default of any person;

(iv) Section 168 - Detennination of compensation payable in
pursuance of any right on the principle of fault liability.
A

Chapter XII provides for constitution of Claims Tribunals by the State
Government for the purpose of adjudicating the claims for compensation and B
the procedure thereof. Tue Claims Tribunal is required to detennine the
application for payment of compensation either under section 140 or section
163A on the basis of no-fault liability and also on the basis of right to receive.
the compensation on the principle of fault liability on the basis of Law of
Torts, as modified by the Fatal Accidents Act, 1855 read with Motor Vehicles C
Ac~ 1988.

For appreciating the rival contentions, it would be necessary to refer
to the relevant provisions of the Sections 140 (Chapter X), 161, 162, 163A,
163B (Chapter XI) and 167 (Chapter XII) of the Act which are as uuder:
D
"140. liability to pay tompensatltm in cel1ain cases on the
principle of no fault. -

(I) Whether death or pennanent disablement of any person has
resulted from an accident arising out of the use of a motor vehicle
E
or motor vehicles, the owner of the vehicle shall, or, as the case may
be, the owners of the vehicles shall, jointly and severally, be liable
to pay compensation in respect of such death or disablement in
accordance with the provisions of this section.

(2) Tue amount of compensation which shall be payable under F
sub-section (I) in respect vf the death of any person shall be a fixed
sum of fifty thousand rupees and the amount of compensation payable
under that sub-section in respect of the pennanent disablement of any
person shall be a fixed sum of twenty-five thousand rupees.

(3) In any claim for compensation under sub-section (!),
G
the claimant shall not be required to plead and establish that the
death or pennanent disablement in respect of which the claim has
been made was due to any wrongful act, neglect or default of
the owner or owners of the vehicle or vehicles concerned or of any
other person. H
1006 SUPREME COURT REPORTS (2001] 2 S.C.R.

A (4) A claim for compensation under sub-section (I) shall not be
defeated by reason of any wrongful act, neglect or default of the
person in respect of whose death ot permanent disablement the claim
has been made nor shall the quantum of compensation recoverable in
-
respect of such death or permanent disablement be reduced on the
basis of the share of such person in the responsibility for such death
B
or permanent disablement.

(5) Notwithstanding anything contained in sub-section (2) re-
garding the death or bodily injury to any person, for which the owner
of the vehicle is liable to give compensation forrelief, he is also liable
c to pay compensation under any other law for the time _being in force;

Provided that the amount of such compensation to be given under
any other lmv shall be reduced from the amount of compensation
payable under this section or under section 163A

D 141. (1) Provisions as to other right to claim compensation for
death or petmanent disablement. - (I) The right to claim compen-
sation under section 140 in respect of death or permanent disablement
of any person shall be in addition to any other right, except the right
to claim under the scheme referred to in section 163A (such other
E right hereafter in this section referred to as the right on the principle
of fault) to claim compensation in respect thereof under any other
provision of this Act or of any other law for the time being in force.

(2) A claim for compensation under &ection 140 in respect of
death or permanent disablement of any person shall be disposed of
F as expeditiously as possible and where compensation is claimed in
respect of such death or permanent disablement under section 140 and
also in pursuance of any right on the principle offault, the claim for
compensation under section 140 shall be disposed of as aforesaid in
the first place.
G
(3) Notwithstanding anything contained in sub-section ( 1), where
in respect of the death or permanent disablement of any person, the
person liable to pay compensation under section 140 is also liable to
pay compensation in accordance with the right on the principle of
fault. the person so liable shall pay the first-mentioned compensation
H and-
ORIENTAL INSURANCE CO. LTD. v. HANSRAIBHAI V. KODALA [SHAH. l.t 1007
(a) if the amount of the first-mentioned compensation is less than A
)--
the amount of the second-mentioned compensation, he shall be
liable to pay (in addition) to the first-mentioned compensation)
only so much of the second-mentioned compensation as is equal
to the amount by which it exceeds the first mentioned compen-
sation;
B
(b) if the amount of the first-mentioned compensation is equal to
or more than the amount of the second- mentioned compensa-
tion, he shall not be liable to pay the second-mentioned com-
pensation.

161. Special provisions as to compensation in case of hit and run
c
motor accident.- (1) For the pmposes of this section, section 162 and
section 163-

(a) "grievous hurt" shall have the same meaning as in the Indian
Penal Code, 1860 (45 of 1860); D
(b) "hit and run motor accident" means an accident arising out of
the use of a motor vehicle or motor vehicles the identity whereof
cannot be ascertained in spite of reasonable efforts for the
purpose;
E
(c) "scheme" means the scheme framed under section 163.

(2) Notwithstanding anything contained in the General Insurance
Business (Nationalisation) Act, 1972 (57 of 1972) or any other law
for the time being in force or any instrument having the force of law,
the General Insurance Corporation of India formed under section 9 F
of the said Act and the insurance companies for the time being
carrying on general insurance business in India shall provide for
paying in accordance with the provisions of this Act and the scheme,
compensation in respect of the death of, or grievous hurt to, persons
resulting from hit and run motor accidents. G
(3) Subject to the provisions of this Act and the scheme, there
shall be paid as compensation-

(a) in respect of the death of any person resulting from a hit and
run motor accident, a fixed smn of twenty-five thousand rupees; H
1008. SUPREME COURT REPORTS [2001] 2 S.C.R.

A (b) in respect of grievous hurt to any person resulting from a hit
and run motor accident, a fixed sum of twelve thousand five
hundred rupees.

(4) The provisions of sub-section (1) of section 166 shall apply
for the purpose of making applications for compensation under this
B section as they apply for the purpose of making applications for
compensation referred to in that sub- section.

162. Refund in certain cases of compensation paid un<kr section
161.- (!)The payment of compensation in respect of the death of, or
grievous hurt to, any person m1der section 161 shall be subject to the
c condition that if any compensation (hereafter in this sub-section
referred to as the other compensation) or other amount in lieu of or
by way of satisfaction of a claim for compensation is awarded or paid
in respect of such death or grievous hurt under any other provision
of this Act or 'any other law or otherwise' so much of the other
D compensation or other amount aforesaid as is eqnal to the compen-
sation paid under section 161 _shall be refunded to the insurer.

(2) Before awarding compensation in respect of an accident
involving the death of, or bodily injury to, any person arising out of
the use of a motor vehicle or motor vehicles un<kr any provision of
E thi< Act (other than section 161) or any other law, the Tribunal, Court
or other authority awarding such compensation shall verify a• to
whether in respect of such death or bodily injury compensation has
already been paid under section 161 or an application for payment of
compensation is pending under that section, and such Tribunal, Court
F or other authority shall,-

(a) if compensation has already been paid under section 161, di111ct
tht p•rson liabl• to pay 1/111 comptnsalion awarded by it to
rtfund to tht insurtr, so much thereof as is required to be
refunded in accordance with the provisions of sub- section (1);
G
(b) if an application for payment of compensation is pending under
section 161 fotward the particulars as to the compensation
awarded by it to the insurer.
I

Explanation. - For the putpose of this sub-section, an application
H for compensation under section 161 shall be deemed to be pending-
,
ORIENTAL INSURANCE CO. LID. v. HANSRAJBHA! V. KODALA (SHAH, J.j 1009

•• (i) if such application has been rejected, till the date of the rejection
of the application, and
A

(ii) in any other case, till the date of payment of compensation in
pursuance of the application.

J63A. Special provisions as to payment of compensation on B
structured formula basis. - (1) Notwithstanding anything contained in
this Act or in any other law for the time being in force or instrument
having the force of law, the owner of the motor vehicle of the
authorised insurer shall be liable to pay in tl1e case of death or
perman,ent disablement due to accident arising out of the use of motor
vehicle, compensation, as indicated in the Second Schedule, to tl1e
c
legal heirs or the victim, as the case may be.

Explanalion. - For the purposes of this sub-section, "pe1manent
disability" shall have the same meaning and extent as in the Work-
men's Compensation Act, 1923 (8 of 1923). D

(2) In any claim for compensation under sub-section (!), the
claimant shall not be required to plead or establish that the death or
permanent disablement in respect of which the claim has been made
was due to any wrongful act or neglect or default of the owner of the
vehicle or vehicles concerned or of any other person. E

(3) The Central Government may, keeping in view the cost of
living by notification in the Official Gazette, from time to time amend
the Second Schedule.

1638. Option to flit claim in cmain cases. - Where u person is F
entitled to claim compensation under section 140 and se~tiOll i63A,
he shall lile the claim under tither of the said soctions and not under
both.

167. Option rogarding claimsforcomptnsation in certain cases.-
G
Notwithstanding anything contained in the Workmen'sCompensation
Act, 1923 (8 of 1923) where the death of, 01' bodily injury to,
any person gives rise to a claim for compensation under this Act and
also under the Workmen's CompensatiOll Act, 1923, the person
entitled to compensation may without prejudice to the provisions of
Chapter X claim such compensation under either of those Act• but H
1010 SUPREME COURT REPORTS (2001] 2 S.C.R.
A not nnder both."

Further, Section 164 empowers the Central Government to make rnles
for the purpose of carrying into effect the provisions of Chapter XI which
include making such rules for (a) the forms to be used for the purpose of
the said chapter and (1) the identification by certificates or otherwise of
B persons or vehicles exempted from the provisions of the Chapter. Learned
counsel appearing on behalf of the respondents, however, submitted that uptil
now, the Central Government has not framed any such rules as provided
under Section 164. Thereafter, Chapter XII deals with Claims Tribunals.
Section 165 provides for establishment of Claims Tribunals for the purpose
c of adjudicating upon claims for compensation in respect of accidents involv-
ing a death of, or bodily injury to, persons arising out of or use of motor
vehicles, or damages to any property of a third party so arising, or both, and
Explanation to sub-section (1) provides that "claims for compensation in
respect of accidents involving the death of or bodily injury to persons arising
out of the use of motor vehicle" includes claims for compensation under
D Section 140 and 163A. Hence, the application claiming compensation under
Section 140 or 163A and/or on the right to claim compensation on the
principle of fault liability is required to be filed before the Claims Tribunal.
Section 166 provides who can make application for such compensation and
where it could be filed. Additionally, sub-section (4) of section 166 makes
E provision that the Claims Tribunal shall treat the report of accidents for-
warded to it under sub-section (6) of Section 158 as an application for
compensation under the Act and sub-section (6) of section 158 provides for
submitting the report to the Claims Tribunal by the oliicer in charge of the
police station as soon as any information regarding any accident involving
death or bodily injury to any person is recorded or report under Section 158
F
is completed by a police otlicer. Section 168 requires the Claims Tribunal
to determine the amount of compensation which appears to it to be just
and specify person or persons to whom compensation is to be paid by making
an award. Such award shall also specify the amount which shall be paid
by the insurer or owner or driver of the vehicle involved in the accident
G or by all or any of them, as the case may be. Proviso to sub-section (1)
of Section 168 makes it clear that in an application which is filed
under Section 165, if there is a claim for compensation under Section 140
in respect of death or permanent disablement of any person, the eame is to
be disposed of in fust place in accordance with provisions of Chapter X (i.e.
H Sections 140 to 143).
ORIENTAL INSURANCE CO. LID. v. HANSRAJBHA! V. KODALA [SHAH, J.) !Oll
Legislative History - Statement of Objects and Reasons: A

From the provisions qnoted above, it appears that no specific mention
is made that remedy provided nnder Section 163A is in addition or in the
alternative to the determination of compensation on the basis of fanlt liability.
Section 163A was not there in the original Act of 1988. It was inserted by
Act No. 54 of 1994 w.e.f. 14.11.1994. Hence, for arriving at the proper B
conclnsion, it would be necessary to cull out legislative intent by referring
to the legislative history as well as Objects and Reasons for inserting the said
prov1s1on.

The Law Commission of India in its 119th Report in the Introductory
Chapter observed [para 1.6] that previously there was recommendation for
c
inserting provision in the Motor Vehicles Act to extend protection to victims
of 'hit and rnn' accidents where the person liable to pay such compensation
or his whereabouts cannot be ascertained after reasonable effort by providing
that in such an event, the person entitled to such compensation shall be
entitled to receive it from the State. In para 1.7 for introducing provision for D
no fault liability, the Commission observed as nnder:

"By 1980, a wind was blowing !hat compensation to the victims
of motor accidents should be by way of social security and lhe
liability to pay the same must be 'No-fault' liability. The Jaw, as it
stands at present, save lhe provision in Chapter VIIA, inserted by the E
Motor Vehicles (Amendment) Act, 1982, enables the victim or the
dependants of the victim in the event of death lo recover compensa-
tion on proof of fault of the person liable to pay compensation and
which fanlt caused the harm such as bodily injury or death. In the
event of death of a victim of a motor accident and the consequent F
harm caused to his dependants, the question whether the person
responsible for the action causing hann had committed a fanlt or it
was an inevitable accident, is hardly relevant from the point of view
of victim or his/her dependants. The expanding notions of social
security and social justice envisaged that the liability to pay compen- G
sation must be a 'No-fault' liability."

Before the Motor Vehicles Act 1939 was repealed by the present Act,
the Legislature introduced Chapter VII-A in the Motor Vehicles Act, 1939.
While interpreting the said provisions, this Court in Gujarat State Road
Transp01t Corporation, Ahmednbad v. Ramanbhai Prabhatbhai and Another, H
1012 SUPREME COURT REPORTS [2001] 2 S.C.R.

A [1987] 3 SCR 404, referred to the aforesaid recommendations made by the
Law Commission and observed thus:
-y

"When the Fatal Accidents Act, 1855 was enacted there were no
motor vehicles on the roads in India. Today, thanks to the modem
civilisation, thousands of motor vehicles are put on the road and the
B largest number of injuries and deaths are taking place on the roads
on account of the motor vehicles accidents. In view of the fast and
constantly increasing volume of traffic, the motor vehicles upon the
roads may be regarded to some extent as coming within the principle
of liability defined in Rylands v. Fletcher, [1868] L.R. 3 H.L. 330,
c 340. From the point of view of the pedestrian the roads of this country
have been rendered by the use of the motor vehicles highly danger-
ous. 'Hit and run' cases lvhere the drivers ({f the motor vehicles who
have caused the accidents are not known are increasing in number.
Where a pedestrian without negligence on his part is injured or killed
by a motorist, whether negligently or no~ he or his legal representa-
D tives as the case may be should be entitled to recover damages if
the principle ofsocial justice should have any meaning at all. In order
to meet to some extent the responsibility of the society to the
deaths and injuries caused in road accidents there has been
a continuous agitation through out the world to make the liabil;ty
E for damages arising out of motor vehicles accidents as a liability ·-f.
without fault. In order to meet the above social demand on the
recommendation of the Indian Law CommissiOII Chapter VIIA was
introduced in the Act. Sections 92-A to 92-E of the Act are to be
found in Chapter VI!A."

F The Court further observed as under:

"This part of the Act is cleurly a departure from the usuul
common law principle that a claimant should establish negligence on
the part of the owner or driver of the motor vehicle before claiming
any compensation for the death or permanent disablement caused on
G
account of a motor vehicle accident. To that extent the substantive law
of the country stands modified. The special provisions contained in
section 109-A to section 109-C of the Act providing for a scheme for
granting relief to victims or the legal representatives of victims of 'hit \.
and run' motor vehicle accident cases is another novel effort on the
H part of the Government to remedy the situation created by the modem
ORJENTAL INSURANCE CO. LID. v. HANSRAJBHAI V. KODALA [SHAH, l.] 1013
y society which has been responsible for introducing so many fast A
moving vehicles on roads."

Thereafter a Committee to Review the Provisions of Motor Vehicles
Act, 1988 and Central Motor Vehicle Rules, 1989 (hereinafter referred to as
"the Review Committee") was set up by the Government of India in March
1990. The Review Committee in its report suggested changes in a number B
of provisions in the Act. The Review Committee considered that deterrnina-
¥
tion of the claims cases pending before the Claims Tribunal takes a long time.
To obviate such delay, proposals were made that finalisation of compensation
claims would greatly facilitate to the advantage of claimants, the vehicle
owners as well as the insurance companies, if a system of structured com- c
pensation can te introduced. Under such scheme the affected party can have
the option of their accepting the lump sum compensation as is notified in that
scheme of structured compensation or of pursuing his claim through t11e
normal channels. Thereafter, the Review Committee considered the sugges-
tion of General Insurance Corporation that claimants should first file their
claims with Motor Accident Claims Tribunals and the insurers be allowed six D
months' time to confirm their prima facie liability subject to defences
available under the Act. After such continuation. the claimants should be

... required to exercise their option for conciliation under Structured Compen-
sation Formula within stipulated time .
\'- E
Finally, the Committee also observed:

"Para 4.11.2: .... In case a claimant opts for conciliation, necessary
consent award may be given by MACT and if he does not opt for it,
be may proceed with regular Motor Accidents Claims Tribunal in the
usual course. The Committee also recommended that the decision of F
the insurer to accept liability before t11e expiry of the stipulated period
should be the final one and after it is available it will be open to the
insurer to claim compensation under the structured compensation."

Further, the statement of objects and reasons for amending the Act inttr
alia mentions that the recommendations of the Review Committee were G
forwarded to the State Oovemments for comments and they generally agreed
with these recommendations. The draft of the proposals based on the recom-
~ mendation of the Review Committee and representations from the public were
placed before the Transport Development Council for seeking their views in
the matter. The Transport Development Council made certain suggestions and H
1014 SUPREME COURT REPORTS (2001] 2 S.C.R.
A the relevant suggestion is, - (b) providing adequate compensation to victims
of road accidents without going into long· drawn procedure. The proposed
legislation inter alia provide for-

"(h) increase in the amount of compensation to the victims of hit and
run cases;
B
(k) a new pre-determined formula for payment of compensation to
road accident victims on the basis of age/income, which is more
liberal and rational."

The next question is-whether the recommendations made by the Review
c Committee are reflected in the provisions, which are inserted by the said Act.
It is contended that the relevant provisions nowhere provide that lump sum
compensation payable under the structured formula basis is alternative and
optional to the determination of compensation under Section 168. As stated
above, the Legislature has not specified or clarified that compensation
D payable under Section 163-A is in the alternative or in addition. Therefore,
we are referring to the reasons for inserting Section I 63A in context of other
provisions. For the purpose of interpretation in such cases, this Comt in Utkul

-
Contractors and Joinery P. Ltd. & Ors. v. State of Orissa & Ors., (1987] 3
sec 279, observed that reason for a statute is a safest guide to its interpre-
E talion and held thus (pp. 288-89): -

'' ....... The reason for a statui.e is the safest guide to its interpretation.
The words of a statute take their colour from the reason for it. How do we
discover the reason for a statute? There are external and internal aids. The
external aids are Statement of Objects and Reasons when the Bill is presented
F to Parliament, the reports of committees which preceded the Bill and the
reports of Parliamentary Committees. Occasional excursions into the debates
of Parliament are permitted. Internal aids are the preamble, the scheme and
the provisions of the Act. Having discovered the reason for the statute and
so having set the sail to the wind, the interpreter may proceed ahead. No
G provision in the statute and no word of the statute may be construed in
isolation. Every provision and every word must be looked at generally before
any provision or word is attempted to be construed. The setting and the
pattern are important... Again, while the words of an enactment are important,
the context is no less important."

H In this context if we refer to the Review Committee's Report, the reason
ORIENTAL INSURANCE CO. LTD. v. HANSRAJBHAI V. KODALA [SHAH,!.] 1015
for enacting Section 163A is to give earliest relief to the victims of the motor A
vehicle accidents. The Committee observed that determination of cases takes
long time and, therefore, under a system of structural compensation, the
compensation that is payable for different classes of cases depending upon
the age of the deceased, the monthly income at the time of death, the earning
potential in the case of minor, loss of income on account of loss of limb etc.
B
can be notified and the affected party can then have option of their accepting
lump sum compensation under the scheme of structural compensation or of
pursuing his claim through the normal channels. The Report of the Review
Committee was considered by the State Governments and comments were
notified. Therealier, the Transport Development Council made suggestions for
providing adequate compensation to victims of road accidents without going c
into Jong drawn procedure. As per the objects and reasons, it is a new pre-
determined formula for payment of compensation to road accidents victims
on the basis of age/income which is more liberal and rational. On the basis
of the said recommendation after considering the Report of the Transport
Development Council, the Bill was introduced with "a new pre-determined
D
formula for payment of compensation to road accident victims on the basis
of age/income which is more liberal and notional", i.e., Section !63A. It is
also apparent that compensation payable under Section ! 63A is almost based
on relevant criteria for determining the compensation such as annual income,
age of the victim and multiplier to be applied. In addition to the figure which
is arrived at on the basis of said criteria, schedule also provides that amount E
of compensation shall not be less than Rs. 50,000. It provides for fixed
amount of general damage in case of death such as (!) Rs. 2000 for funeral
expenses (2) Rs. 5000 for loss of consortium if beneficiary is the spouse (3)
Rs. 2400 for loss of estate (4) for medical expenses supported by the bills,
voucher not exceeding Rs. 15000. Similarly, for disability in non-fatal F
accident para 5 of the Schedule provides for dett!rrnination of compensation
on the basis of permanent disability. Para 6 provides for notional income for
those who had no income prior to accident at Rs. 15000 per armum. There
is also provision for reduction of I/3rd amount of compensation on the
assumption that the victim would have incurred the said amount towards
maintaining himself had he been alive. The purpose of this Section and the
G
Second Schedule is to avoid long drawn litigation and delay in payment of
compensation to the victims or his heirs who are in dire need of relief. If such
affected claimant opts for accepting the lump-sum compensation based on
I structured formula, he would get relief at the earliest. It also gives vital
advantage of not pleading or establishing any wrongful act or neglect or H
.... ---
1016 SUPREME COURT REPORTS [2001] 2 S.C.R.
A default of the owner of the offending vehicle or vehicles. This no fault liability
appears to have been introduced on the basis of the suggestion of the Law
Commission to the effect that 'the expanding notions of social security and
social justice envisage that liability to pay compensation must be "no fault
liability" and as observed by this Court in Ramanbhai's case (Snpra), "in
order to meet to some extent the responsibility of the society to the deaths
B
and injuries caused in road accidents." However, this benefit can be availed
of by the claimant only by restricting his claim on the basis of income at a
slab ~f Rs. 40,000 which is the highest slab in the Second Schedule which
indicates that the legislature wanted to give benefit of no fanlt liability to a
certain limit. This would clearly indicate that the scheme is in alternative to
c the detennination of compensation on fault basis under the Act. 111e object
underlining the said amendment is to pay compensation without there being
any long drawn litigation on an predetermined formula, which is known as
structured formula basis which itself is based on relevant criteria for deter-
mining compensation and the procedure of paying compensation after deter-
mining the fault is done away. Compensation amount is paid without pleading
D
or proof of fault, on the principle of social justice as a social security measure
because of ever increasing motor vehicles accidents in a fast tnoving Society.
Further, the law before insertion of Section 163-A was giving limited benefit
to the extent provided under Section 140 for no fault liability and determi-
nation of compensation amount on fault liability was taking long time. That
E mischief is sought to be remedied by introducing Section 163A and the
disease of delay is sought to be cured to a large extent by affording benefit
to the victims on structured formula basis. Further, if the question of
determining compensation on fault liability is kept alive it would result in
additional litigation and complications in case claimants fail to establish
F liability of the owner of the defaulting vehicles.

Use of specific wonis 'also' and 'in addition' in Sections 140 and 141:

The aforesaid conclusion gets support from the language used in
Sections 140, 141, 161 and 163A. Sections 140 to 143 provide for liability
G of the owner of the vehicle in case of death or permanent disablement of any
person resulting from an accident arising out of use of a motor vehicle or
motor vehicles to pay compensation without any pleading or establishing that
death or permanent disablement was due to any wrongful act, neglect or
default of the owner or owners of the vehicle or vehicles. By way of earliest
H relief, victim is entitled to get the amount of compensation of Rs. 50,000 in

I
ORIENTAL INSURANCE CO. LTD. v. HANSRAJBHAI V. KODALA [SHAH, J.] 1017
case of deaJh and Rs. 25,000 in case of pennanent disablement. It is further A
pro' ided that such claim shall not be defeated by reason of any wrongful act,
neglect or default of the person in respect of whose death or pennanent
disablement has occurred. Sub-section (5) of Section 140 upon which much
reliance is placed by learned counsel for the Insurance Companies as well
as the daimants requires consideration and interpretation, which inter alia
B
provides that owner of the vehicle is also liable to pay compensation under
any other law for the time being in force. The word 'also' indicates that the
owner of the vehicle would be additionally liable to pay compensation under
any other law for the time being in force. The proviso to sub-section (5)
further clarifies that the amount of compensation payable under any other law
for the time being in force is to be reduced from the amount of compensation c
pa~able under sub-section (2) or under section 163A. This is further crystal-
ized in Section 141 which provides that right to claim compensation under
Section 140 is in addition to any other right to claim compensation on the
principle of fault liability and specifically excludes the right to claim com-
pensation under the scheme referred to in Section 163A. Section 163B also
D
provides that where a person is entitled to claim compensation under Section
140 and Section 163A, he can file the claim under either of the said sections,
but not under both. Similarly, Section 141(1) also c1ystalises that right to
claim compensation under Section 140 is in addition to the right to claim
compensation in respect thereof under any other provision of the Act or any
• other law for the time being in force. Sub-section (2) further provides that E
if the claimant has filed an application for compensation under Section 140
and also in pursuance of any right on the principle of fault liability, the claim
for compensation under Section 140 is to be disposed of in the first place
and as provided iu sub-section (3) the amount received under sub-section (2)
of Section 140 is to be adjusted while paying the compensation on the F
principle of fault liability. On the basis of fault liability if additional amount
is required to be paid then the claimant is entitled to get the same but there
is no provision for refund of the amount received under Section 140(2), even
if the Claims Tribunal arrives at the conclusion that the claimant was not
entitled to get any compensation on the principle of fault liability. Further,
Section 144 gives overriding effect to the provisions made under Chapter X
G
by providing that the provisions of the chapter shall have effect notwithstand-
ing any thing contained in any provision of the Act or of any other law for
the time being in force. From the aforesaid Sections, one aspect is abundantly
clear that light to claim compensation on the basis of no-fanlt liability under
Section 140 is in addition to the right to claim compensation on the principle H
1018 SUPREME COURT REPORTS [2001] 2 S.C.R.
A of fault liability or right to get compensation under any other law. Such
amount is required to be reduced from the amount payable under the fault
liability or compensation which may be received under any other law. If
nothing is payable under the Act then the claimant is not required to refund
the amount received by him. As against this, there is specific departure in
the scheme envisaged for paying compensation under Section I 63A. Section
B
163A nowhere provides that this payment of compensation on no fault
liability on the basis of stmctured formula is in addition to the liability to
pay compensation in accordance with the right to get compensation on the
principle of fault liability and unless otherwise provided for the same cause,
compensation cannot be paid again.
c
Provisions for refund of compensation if compensation is received under any
other law or under the Act:

Further, as the legislature has not provided for refund or adjustment of
compensation received 'under the Act' and compensation payable under
D
Section 163A, it would mean that Scheme of payment of compensation under
Section 163A is in alternative to detennination of compensation under Section
168. As stated above, sections 140(5) and 141(3) make provisions for
reduction of compensation paid under Section 140. Under proviso to sub-
Section (5) of Section 140, the amount of such compensation which the
E claimant is entitled to receive under any other law is required to be reduced
from the amount of compensation payable under Section 140 or under Section
163A. Under Section 141(3), if a person gets the compensation on principle
of fault liability, then also provision is made for adjustment of compensation
received under section 140. There is no such provision for adjustment of
p compensation received under section i 63A from the compensation receivable
'under the Act' on the principle of fault. Similarly, section 161 provides for
payment of compensation in case of 'hit and mn' motor accidents. Under
Section 161(3), in cases in respect of the death of any person resulting from
a 'hit and run' motor accident, a fixed sum of Rs. 25,000 is to be paid as
compensation and in case of grievous hurt, the amount fixed is Rs.12,500.
G Thereafter, under Section 162, the legislature has provided for refund of
compensation paid under Section 161 on the principle of "hit and run motor
accident" by providing that the payment of compensation under Section 161
shall be subject to the condition that if any compensation is awarded "under
any other provision of this Act" or "any ot11er Jaw" or "otheiwise", so much
H amount as is equal to the compensation paid under Section 161 is required
ORIENTAL INSURANCE CO. LID. v. HANSRAJBHAI V KODALA {SHAH, J.J 1019
to be adjusted or refunded to the insurer. Under section 162(2), duty is cast A
on the Tribunal, Court or other authority awarding such compensation to
verify as to whether in respect of such death or bodily injury, compensation
has already been paid under Section 161 and to make adjustment as required
thereunder. Result is - claimant is not entitled to have additional compensation
but at the same time he can proceed by filing application under Section 165
B
or under the Worlanen Compensation Act (i.e., other law) and if he gets
compensation under either of the said provisions, the amount paid under
Section 161 is to be refunded or adjusted.

The contention of the learned counsel for the claimants that compen-
sation payable under Section l 63A is in addition to the determination of c
compensation on t11e basis of fault liability and thereafter it could be adjusted
on the similar lines provided under Section 140 read with Section 141 or
Section 162 cannot be accepted. The Legislature has specifically provided
scheme of adjustment of compensation under Section 140 read with Section
141 and Section 162 if tl1e claimants get compensation under the Act, while
there is no such provisions nnder Section !63A. Addition or introduction of D
such scheme in provisions would be impermissible.

Use of different lVords such as - '_any otherla1v', 'under this section', 'any
other law for the time being in force', 'provisions of this Act' or 'any other
pmvision of this Act' in different sections:
E
The learned counsel for the claimants submitted that the proviso to sub-
section (5) of Section 140 would mean that even in case where compensation
is determined under the structured basis formula nnder Section l 63A, the
claimant is entitled to claim compensation on the basis of fault liability and
if he gets higher amount on the basis of fault liability then from that amount F
compensation which is paid nnder Section l 63A is to be reduced. At the first
blush the argument of the learned counsel appears to be attractive as the proviso
to sub-section (5) of section 140 is to some extent ambiguous and vague. It
may mean that arnonnt of compensation given under any other law may include
the arnonnt payable on the basis of fault liability, therefore, in view of said
G
proviso compensation amount payable under any other law is to be reduced
from the compensation payable under Section 140 or 163A. For appreciating
this contention and for ascertaining appropriate meaning of the phrase "com-
pensaJion under any other law for the time being in force", the proviso to
sub-section (5) is required to be considered along with other provisions. The
scheme of other provision section 167 indicates tliat the aforesaid phrase is H
1020 SUPREME COURT REPORTS [2001] 2 S.C.R.
A referable to compensation payable under the Workmen's Compensation Act,
1923 or any other law which may be in force but not to the determination
of "compensation nnder the Act", and would not include the compensation
which is determined "nnder the provision of the Act". This section 167 in
terms provides that where death of, or bodily injury to, any person gives rise
to claim compensation under the Act and also nnder Worlanen' s Compensation
B
Act, 1923, such person cannot claim compensation nnder both the Acts. Further,
in Section 140(5), the legislature has used the words "under any other law
for the time being in force" and "under any other law". In Section 141 (I),
the legislature has used the phrase "nnder any other provision of this Act or
of any other law for the time being in force". In sub-section (2), the legislature
c has specifically provided that a claim for compensation under Section 140
shall be disposed of as expeditiously as possible and where compensation is
also claimed in pursuance of any right on principle of fault, the application
under Section 140 is to be disposed of in first place. Whereas, there is no
such reference for payment of compensation under Section 163A. Further, in
Section 161(2), the legislature has used the phrase "any other law for the time
D
being in force" and "provisions of this Act". Similarly, in Section 162, the
legislature has used the words "nnder any other provisions of this Act" or
"any other ,law or otherwise". As against this, in Section 163A, legislature
has used the phrase "notwithstanding anything contained in this Act or in any
other law for tire time being in force". When the Legislature has taken care
E of using different phrases in different sections, normally different meaning is
required to be assigned to the language used by the Legislature unless context
otherwise requires. However, in relation to the same subject matter, if different
words of different import are used in the same statute, there is presumption
that they are not used in the same sense. [Re: Board of Revenue v. Arthur
F Paul, AIR (1956) SC 35 at 38]. In this light, particularly Section 141 which
provides for right to claim compensation 'nnder any other provision of this
Act' or of 'any other Jaw for tire time being in force', proviso to sub-section
(5) of Section 140 would mean that it does not provide for deduction or
adjustment of compensation payable under the Act, that is, on the principle
of fault liability which is to be determined under Section 168.
G
Specific Language of Section J63A including its heading:

Lastly, for interpretation and construction of Section J63A, we would
refer to its heading and language. The heading is "Special provisions as to
H payment of compensation on structured formula basis". At the outset, we
ORIENTAL INSURANCE CO. LTD. v. HANSRAIBHAI V. KODALA !SHAH, J.I 1021
would make it clear that for interpretation of the words of Section the A
"'" language of the heading cannot be used to control the operation of the
Section, but at the same time being part of the statute it prima-facie furnishes
some clue as to the meaning and purpose of Section. [Re: K.P. Vaf6'hese v.
ITO, [1982] I SCR p.629 at 647]. In case of ambiguity or doubt heading can
be referred to as an aid in construing the provision. This heading indicates
B
that the legislature has envisaged special provision for paying compensation
on structural formula basis instead of paying the compensation by long drawn
.i,..-
litigation after establishing fault liability. Section also begins with non-
obstante clause "notwithstanding anything contained in this Act or any law
for the time being in force." This would mean that it is not subject to any
adjudication of right to claim compensation as provided under the Act. The c
owner of the motor vehicle or the authorised insurer would be liable to pay
compensation due to accident arising out of the use of motor vehicle. Section
163-B further clarifies that claim petition can be filed either under Section
140 or under Section 163A but not under both sections.
D
The learned counsel for the claimants however submitted that if we
compare the language used in Sections 163A and 140(1), it would be apparent
that Section 140 contemplates payment of compensation by the owner of the
vehicle. As against this, Section 163A contemplates payment of compensation

., by the owner of the vehicle or authorised insurer. It is submitted that even
if we read tl1e said phrase as "owner of the motor vehicle of authorised
insurer" as "owner of the motor vehicle or authorised insurer" on the
E

assumption that "of' is wrongly used, then also it is their contention that
Section I 63A envisages payment eitl1er by the authorised insurer or by the
owner of the motor vehicle. It has wider implication and, therefore, compen-
sation beyond maximum of Rs. 50000 is provided in Second Schedde and
F
hence the payment nuder Section 163A should not be considered as altema-
tive to payment of compensation under the fault liability. In our view, it is
~
true that Section 140 talks of payment of compensation by the owner of tl1e
vehicle, while Section I 63A after reading 'of as 'or' would mean that owner
of the vehicle or the authorised insurer would be liable to pay compensation
under Section !63A. But that would not make any difference because G
determination of compensation under Section ! 63A is fmal and not as an
interim measure. As stated above, the legislature has deliberately not provided
-.J that it is in addition to the compensation payable on the principle of fault
liability. There is no provision for adjusting the compensation payable under
Section 163A with the other payment on fault.. liability under the Act. H
1022 SUPREME COURT REPORTS [2001] 2 S.C.R.
A In the result, the contention of the claimants that right to get compen-
sation under Section l 63A is additional to claim compensation on no fault ..,,,.
liability is rejected for the following reasons: -

(I) There is no specific provision in th9 Act to the effect that such
compensation is in addition to the compensation payable under
B the Act. Wherever the Legislature wanted to provide additional
compensation, it has done so. [Sections 140 and 141]
4
(2) In case where compensation is paid on no fault liability under
sections 140 and 161 in case of 'hit and run motor accidents',
c the Legislature has provided adjustment or refund of the said
compensation in case where compensation is determined and
payable under the award on the basis of fault Eability under
section 168 of the Act. There is no such procedure for refund
or adjustment of compensation paid where the compensation is
paid under Section 163A.
...
D
(3) The words "under any other law for the time being in force"
would certainly have different meaning from the words "under
this Act" or "under any other provision of this Act"

(4) In view of the non-obstante clause 'notwithstanding anything
E
contained in this Act' the provisions of Section I 63A wonld ~
exclude determination of compensation on the principle of fault
liability.

(5) The procedure of giving compensation under Section 163A is
F inconsistent with the procedure prescribed for awarding com-
pensaiion on fault liability. Under section 163A compensation
is awarded without proof of any fault while for getting compen- .)-.
sation on the basis of fault liability claimant is required to prove
wrongful act, neglect or default of the owner of the vehicle or
vehicles concerned.
G
(6) Award of compensation under section 163A is on predeter-
mined formula for payment of compensation to road accident
victims and that formula itself is based on criteria similar to
determining the compensation nnder section 168. The object
H was to avoid delay in determination of compensation.
ORIENfAL INSURANCE CO. LTD. v. HANSRAJBHAI V. KODALA [SHAH, J.) 1023
In the resul~ the question involved in these matters is answered A
accordingly. The appeals filed by the Insurance Companies are allowed and
the impugned judgments and orders are quashed and set aside. However, there
will be no order as to costs.

Before parting with the judgment, we would like to draw the attention
of the Central Government for revision and appropriate correction of the
B
Second Schedule, which provides for payment of compensation on structured
formula basis, by exercise of its power under Section 163A(3).

The learned counsel for the parties submitted that in U.P. State Road
Transp011 Corporation and others v. Trilok Chandra and Others, (1996] 4 c
SCC 362, Para 18, this Court has pointed out errors in the Second Schedule
thus:

"We must at once point out that the calculation of compensation
and the amount worked out in the Schedule suffers from several
defects. For example, in Item I for a victim aged 15 years, the
D
multiplier is shown to be Rs.3000. The total should be 3000x
15=45,000 but the same is worked out at Rs. 60,000. Similarly, iu 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. E
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 dependant 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
F
in the choice of the nmltiplier. But these mistakes are limited to actual
calculations only and not in respect of other items. What we propose
to emphasize is that the multiplier cannot exceed 18 years' purchase
factor. This is the improvement over the earlier position that ordinar-
ily it should not exceed 16. We thought it necessary to state the correct
legal position as courts and tribunals are using higher multiplier G
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 v.
Powell Duffryn Associated Collieries l.Jd., ((1942) AC 601 : (1942)
1 All ER 657]." H
1024 SUPREME COURT REPORTS [2001] 2 S.C.R.

A In addition, the learned counsel also pointed out that in case of fatal
accident and disability in non-fatal acciden~ it has been provided that notional
income for the claimant who had no income prior to accident shall be
Rs.15000 per annum and still however the Second Schedule provides table
of income ranging from Rs. 3000 to Rs. 40000 and the brake-up also does
not provide any calculation for Rs.15000, as the columns in the Schedule inter
B
alia provide for compensation for a person having income of Rs.12000, and
thereafter straightway at Rs.18000. The learned counsel also submitted that
despite the specific provision in Section 163A(3) that the Central Government
may, keeping in view the cost of living, by notification in Official Gazette
from time to time amend the Schedule, nothing has been done so far. Further,
c by order dated 30.8.2000, this Court again noticed number of anomalies in
the Second Schedule and, therefore, thought it fit to have assistance of either
the Attorney General of India or the Solicitor General of India. When the
matter was called out on 15.12.2000, Mr. Altaf Ahmad, ASG, stated before
the Court that the order passed by this Court on 30.8.2000 has already
D engaged serious attention of the Ministry of Surface Transport Department
and the Government was considering the matter for bringing necessary
correction in the Second Schedule of the Motor Vehicles Act. Thereafter, we
again sought assistance of the Additional Solicitor General on the interpre-
tation of Section 163A and also to verify whether there are corrections in the
Second Schedule. Learned Additional Solicitor General stated that amend-
E ment might take some time. In this view of the matter, we think it would be
appropriate if the. Central Government takes necessary action as early as
possible under Section 163A(3).

Ordered accordingly.

F B.S. Appeals allowed.