Compensation under Motor Vehicles Act cannot be reduced by applying parameters under Workmen's Compensation Act
Both remedies are different - Insurer cannot rely on Workmen's Compensation Act parameters when claim is pursued under Motor Vehicles Act.
In a significant ruling, the Supreme Court of India has reinstated the compensation awarded by the Motor Accident Claims Tribunal to Mohammed Masood, who sustained severe injuries in a vehicular accident. The Supreme Court, comprising Justices K. Vinod Chandran and N.V. Anjaria, overturned the Karnataka High Court's earlier decision to reduce the compensation amount by applying parameters from the Workmen's Compensation Act, 1923.
The case, Mohammed Masood v. New India Assurance Co. Ltd., revolved around the compensation claim filed under Section 166 of the Motor Vehicles Act, 1988. The Tribunal had initially awarded a compensation of Rs. 19,35,400 to Masood, based on an assessed monthly income of Rs. 9,000. However, the High Court reduced this amount, citing the income parameters of the Workmen's Compensation Act, which caps the monthly income at Rs. 8,000.
The Supreme Court held that the High Court had misdirected itself by applying criteria from the Workmen's Compensation Act to a claim pursued under the Motor Vehicles Act. The judgment emphasized that once a claimant elects to pursue a remedy under the Motor Vehicles Act, the parameters of the Workmen's Compensation Act cannot be invoked.
The apex court's decision reaffirmed the distinct nature of the two legislative frameworks, underscoring that they offer separate remedies and should not be conflated. The insurer, New India Assurance Co. Ltd., had argued for the application of the Workmen's Compensation Act's parameters, but the Supreme Court dismissed this defense, citing precedents such as National Insurance Company Limited v. Mastan and Anr. and National Insurance Company Limited v. Pranay Sethi.
The judgment also addressed the issue of 'future prospects,' which was raised by the appellant. However, the Supreme Court refrained from deliberating on this aspect, as Masood had not filed an appeal against the Tribunal's judgment and the issue was not within the scope of the current appeal.
In conclusion, the Supreme Court set aside the High Court's judgment dated January 23, 2020, and restored the compensation as originally determined by the Tribunal. This ruling serves as a crucial precedent in delineating the boundaries between the Motor Vehicles Act and the Workmen's Compensation Act, reinforcing the autonomy of each legal framework in addressing compensation claims.
Bottom Line:
Compensation under Motor Vehicles Act, 1988 cannot be reduced by applying parameters under Workmen's Compensation Act, 1923. Once the claimant chooses to pursue remedy under Motor Vehicles Act, 1988, the income and compensation must be assessed based on its provisions.
Statutory provision(s): Motor Vehicles Act, 1988 Sections 166 and 167, Workmen's Compensation Act, 1923
Mohammed Masood v. New India Assurance Co. Ltd., (SC) : Law Finder Doc Id # 2784594
