CASE BRIEF: Smt. Kaushnuma Begum and Ors v. The New India Assurance Co. Ltd and Ors- Special Leave Petition (civil) 1431 of 2000

Case Brief
Smt. Kaushnuma Begum and Ors v. The New India Assurance Co. Ltd and Ors –Special Leave Petition (civil) 1431 of  2000
Deciding Authority
Supreme Court
Name of the Judges
K.T. Thomas, R.P. Sethi
Date of Judgment
3rd January 2001
Facts of the Case
The question of law involved in this appeal is can a claim be maintained before the Motor Accident Claims Tribunal (Tribunal for short) on the basis of strict liability propounded in Rylands v. Fletcher (1861-1873) All England Reports.
The Tribunal dismissed a claim made before it solely on the ground that there was neither rashness nor negligence in driving the vehicle and hence the driver has no liability, and the corollary of which is that  the owner has no vicarious liability to pay compensation to the dependants of the victim of a motor accident. A Division Bench of the High Court of Allahabad dismissed the appeal filed by the claimants stating that there is no error in the Tribunals order.
The Facts are-
The accident which gave rise to the claim occurred at about 7.00 P.M. on 20.3.1986. The vehicle involved in the accident was a jeep.It capsized while it was in motion. The cause of the capsize was attributed to bursting of the front tyre of the jeep. In the process of capsizing the vehicle hit against one Haji Mohammad Hanif who was walking on the road at that ill fated moment and consequently that pedestrian was crushed and subsequently succumbed to the injuries sustained in that accident.
Appellants are the widow and children of Haji Mohammad Hanif,  the victim of the accident. They filed a claim petition before the Tribunal in 1986 itself claiming a sum of Rs.2,36,000/- as total compensation. They said that deceased Haji  Mohammad Hanif was aged 35 when he died and that he was earning a monthly income of Rs.1500/- during those days by doing some business in manufacturing steel trunks.
The owner of the jeep disclaimed the liability by denying even the fact of the accident in which his jeep was involved. Alternatively, he contended that any liability found against him in respect of the said jeep the same should be realised from the insurance company as the vehicle was covered by valid insurance policy. The Tribunal repelled the above contentions of the jeep owner.
The Tribunal directed the insurance company to pay Rs.50,000/- to the claimants by way of no fault liability envisaged in Section 140 of the Motor Vehicles Act, 1988 (for short the MV Act) (corresponding to Section 92-A of the Motor Vehicles Act, 1939 the old MV Act).
Aggrieved by the said rejection of the claim  the appellants moved the High Court of Allahabad in appeal, as per the provisions of the MV Act. On 28.4.1999, a Division Bench of the High Court dismissed the appeal.
Judgment
The Court observed Section 165(1) of the MV Act confers power on the Sate Government to constitute one or more Motor Accidents Claims Tribunals by notification in the Official Gazette for such area as may be specified in the notification. Such Tribunals are constituted 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. Section 175 of the MV Act contains a prohibition that no civil court shall have jurisdiction to entertain any question relating to any claim for compensation which may be adjudicated upon by the Claims Tribunal.
The Court then went on to observe the applicability of the rule of Strict liability in this matter. It was observed that it depends upon how far the Rule in Rylands v. Fletcher can apply in motor accident cases.
The said Rule is summarised by Blackburn, J, thus: The true rule of law is that the person who, for his own purposes, brings on his land, and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and, if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiffs default, or, perhaps, that the escape was the consequence of vis major, or the act of God; but, as nothing of this  sort exists here, it is unnecessary to inquire what excuse would be sufficient.
The Court observed that in Charan Lal Sahu v. Union of India {1990 (1)SCC 613} another Constitution Bench of this Court while dealing with Bhopal gas leak disaster cases, made a reference to the earlier decisions in M.C. Mehta but did not take the same view. The rule of strict liability was found favour with.Yet another Constitution Bench in Union Carbide Corporation and ors. v. Union of India and  ors.{1991 (4) SCC 584} referred to M.C. Mehta’s decision but did not detract from the Rule in Rylands vs. Fletcher.
In Gujarat State Road Transport Corporation, Ahmedabad v. Ramanbhai Prabhatbhai and Anr. {1987 (3) SCC 234} the question considered was regarding the application of the Rule in cases arising out of motor accidents.It was observed in this case that:
Today, thanks to the modern civilization, thousands of motor vehicles are put on the road and the 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. From the point of view of the pedestrian the roads of           this country have been rendered by the use of the motor vehicles highly dangerous. Hit and run cases where the drivers of 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 not, he or his legal representatives as the case may be should be entitled to recover damages if the principle of social 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 throughout the world to make the liability for damages arising out of motor vehicles accidents as a liability without fault.
Appellants claimed a sum of Rs.2,36,000/-. It is, reasonable to believe that the monthly income of the deceased was Rs.1,500/-. In calculating the amount of compensation in this case we lean the court adopted the structured formula provided in the Second Schedule to the MV Act. Though it was formulated for the purpose of Section 163A of the MV Act, we find it a safer guidance for arriving at the amount of compensation than any other method so far as the present case is concerned. The balance arrived at was Rs.1,80,000/-. This amount was fixed as total compensation payable to the appellants as on the date of their claim.Section 171 of the MV Act empowers the Tribunal to direct that in addition to the amount of compensation simple interest shall also be paid.
It was also directed by the Court that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants. The amount     of Rs.50,000/- paid by the Insurance Company under Section 140 shall be deducted from the principal amount as on the date of its payment, and interest would be recalculated on the balance amount of the principal sum from such date.
Decision
The first respondent (Insurance Company) was directed to pay the above amount to the claimants by depositing it in the Tribunal.
Shubham Shandilya, IVth Year, B.B.A. LL.B., Symbiosis Law School, Pune