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Sunday, April 7, 2013

Apex Court on dual benefit ~ can one claim under MACT after receiving payment in WC ?

Apex Court on dual benefit ~ can one claim under MACT after receiving payment in WC ?
Everywhere you go ~ the  roads are overcrowded, bustling with traffic all the time.   Decades ago, there existed specified path for pedestrians to walk, then there were cycle path – all have vanished as automobiles jostle their way.  Road accidents do occur frequently. There is a legislation aimed at regulating the usage of automobiles in public place known as ‘Motor Vehicles Act 1988’ which is  an improvised version of the earlier 1939 act.   
Sec 147 spells out the requirements of Policies and limits of liability.  It states that in order to comply with the requirements of this Chapter, Policy of Insurance must be issued by an authorized Insurer and insure the person or classes of persons specified against liabilities in respect of death of or bodily injury to person or damage to property of a third party caused by or arising out of the use of vehicle in a public place.  It also requires to cover liability arising under WC Act 1923 in respect of employee engaged in driving the vehicle etc.,  

Sec 165 of MC Act is about constitution of Claims Tribunals known as Motor Accidents Claims Tribunals [MACT] 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.

Sec 167 speaks of the option regarding claim for compensation – which states that in respect of an accident giving rise to a claim for compensation under MC Act as also WC Act 1923, the  person  entitled  to compensation may  without prejudice  to the  provisions of  Chapter  X claim such compensation under either of those Acts but not under both. [Sections  partially reproduced and hence could give a different meaning too ~ which is not intended]. Generally, in all MACT petitions, the defendants would seek an affidavit that no other claim is filed by the claimant or any other legal heir before any other MACT/WC Court for the same cause of action. 

One of the cases frequently referred is the decision of the Hon’ble Karnataka High Court on 4th Mar 1992  in the case of Oriental Insurance Co. Ltd. vs Veronica Obrin (Smt.) And Ors. It was an appeal made by the Insurer against the WC Commissioner made under WC Act to pay the dependents of deceased Machale Obrin, a driver of a motor vehicle.  The dependents of the deceased had opted to claim under WC and such  opting, it was claimed that,  disentitled them  to make a claim for compensation in the forum provided for under the MV Act.  Relief in MACt could be got  not only against the employer or his insurer, but also against the tort-feasor, whereas in WC the claim is against the employer.   However, filing of a claim by the owner of the motor vehicle or his insurer who has to bear the liability for compensation, does not prevent either of them from proceeding against the owner or Insurer of driver of the other motor vehicle responsible for the accident, before the Claims Tribunal under the MV Act for obtaining reimbursement of the liability suffered by any of them.

Now in a recent Judgment, the Supreme Court has provided a varied and clearer interpretation of this.  The reference is to Civil Appeal No. 937 of 2013 – where Oriental Insurance was the Appellant and Dyamavva & Ors were the respondents. 

The facts of the case was :   Yalgurdappa  B.  Goudar  was  employed  as  a  Pump  Operator  of the Mormugao Port Trust.  While discharging his duties in his aforesaid capacity he was hit and fatally injured by a tipper when he was on pillion of a motor cycle. The  tipper was insured with the Oriental Insurance Company.  The dependants of the deceased  filed a claim petition under Section 166 of the Motor Vehicles  Act seeking compensation. 

The Port Trust intimated the death to the WC Commissioner Goa and deposited an amount of Rs.3,26,140/- with the  Workmen’s  Compensation  Commissioner,  as compensation payable to  the  dependants  of  the  deceased.  The widow of the the  deceased  Yalgurdappa  B.  Goudar,  appeared   before   the   Workmen’s
Compensation  Commissioner  and  her   statement   was   recorded   by   the Commissioner.  In her statement she acknowledged the demise of  her  husband in a motor accident, while working in the employment of the Port  Trust. Since the claim raised by Dyamavva  Yalgurdappa,  widow  of  Yalgurdappa  B. Goudar was not contested  by  the  employer,  the  amount  of  Rs.3,26,140/- deposited by the Port Trust with the  Workmen’s  Compensation  Commissioner, was ordered to be mainly released to  the  Dyamavva  Yalgurdappa,  widow  of Yalgurdappa  B.  Goudar,  and  partly  to  the  daughter  of  the   deceased Yalgurdappa B. Goudar. 

Besides the compensation determined under the  Workmen’s  Compensation Act, 1923, the claim raised by Dyamavva Yalgurdappa  under  Section  166  of the Motor Vehicles Act, 1988  was  independently  determined  by  the  Motor Accident Claims Tribunal, Bagalkot.  Vide  an  award  dated  15.7.2008,  the said Motor Accident Claims Tribunal awarded the  claimants  compensation  of Rs.11,44,440/-.  Out of  the  aforesaid  compensation,  the  Motor  Accident Tribunal ordered a deduction of Rs.3,26,140/-, (i.e., the amount  which  had been disbursed to the claimants by the Workmen’s Compensation  Commissioner) The order of MACT Bagalkot was challenged by the Insurer before the High Court of Karnataka  Circuit  Bench  at Dharwad.  The High Court affirmed the award and hence Oriental preferred appeal before the Supreme Court of India. 

Their challenge was based on Sec 167 of MC Act    that claim for compensation can be under either of  the Acts but not under both. They contended that since the WC had already awarded compensation and received by the dependents, they were precluded from raising a claim before the MACT.  They relied on a earlier decision in National Insurance Company Ltd.  V.  Mastan  &  Anr.,  (2006)  2  SCC  641.  

In order to succeed before this Court, it was necessary for the appellant to establish, that the respondents-claimants had  exercised  their option to seek compensation under WC Act and therefore, were precluded from seeking  compensation  yet  again  under  the MC Act.  For, it is only  when  such  an option has been exercised, that the provisions of Section 167 of  the  Motor Vehicles  Act,  1988,  would  disentitle  the   claimant(s)   from   seeking compensation under the Motor Vehicles Act, 1988.

In this case, the Court having  perused the provisions  of WC Act determined that the  Port  Trust  had  initiated  proceedings  for paying compensation to the dependants of the deceased “suo motu” under Section 8 of the Workmen’s  Compensation  Act,  1923 and had  deposited a sum  of  Rs.3,26,140/-; the dependent was called by WC Commissioner and hence the issue was  whether  the  acceptance  of  the compensation would amount to the claimants having exercised  their option, to seek compensation under the  Workmen’s  Compensation  Act,  1923.

The Apex Court affired the determination rendered by the  MACT,  Bagalkot, and the Karnataka High Court in awarding compensation quantified at Rs.11,44,440/-  to the claimant.  The Motor Accidents Claims Tribunal, Bagalkot, as  also,  the High Court, ordered a deduction therefrom of a sum  of  Rs.3,26,140/-  (paid to the claimants under the  Workmen’s  Compensation  Act,  1923).  The  said deduction gives full effect to Section 167 of the Motor Vehicles Act,  1988, inasmuch as, it awards compensation to the respondents-claimants  under  the enactment based on the option first exercised, and also  ensures  that,  the respondents-claimants  are  not  allowed  dual   benefit   under   the   two enactments.

For these reasons, the Apex Court dismissed the appeal of the Insurer and affirmed the judgment rendered by the High Court.  As the idiom goes, there is no royal road to learning and there is learning in every experience

With regards – S. Sampathkumar.
31st Mar 2013.


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