Ramesh Madhav Bapat, J.
1. This is an appeal by the United India Insurance Company Limited. The appellant herein was aggrieved by the award passed in M.V.O.P. No. 97 of 1998 by the Motor Accidents Claims Tribunal-cum-V Additional District Judge, Tirupathi awarding compensation of Rs. 16,51,400/-. The claimants-respondents herein filed a petition under Section 163A of the Motor Vehicles Act claiming compensation of Rs. 22 lakhs on the death of M. Muni Krishna Reddy, husband of first claimant and father of claimants 2 to 5 and son of 6th claimant, who died in the motor accident occurred on 21-1-1998 at about 9-00 p.m., near Rass building at M.R. Palle to AIR By-pass road. On evidence the Tribunal granted compensation of Rs. 16,51,400/-.
2. The main contention raised by the appellant herein that the Tribunal ought to have appreciated that under Section 163A of the Motor Vehicles Act, the maximum earning capacity is to be taken as Rs. 40,000/-for computing compensation and no more amount can be taken by way of earning capacity under Second Schedule. It was further contended by the learned Counsel for the appellant herein that the earning capacity in the present case was held to be Rs. 1,46,400 and the Tribunal applied multiplier from the Second Schedule of the Motor Vehicles Act, which is erroneous.
3. On raising such contention by the learned Counsel for the appellant, the learned Counsel for the claimants-respondents herein filed CMP No. 1251 of 2002 in CMA No. 2981 of 2001 under Order 6, Rule 17 CPC praying to permit the claimants to make an amendment of their claim from 163-A to 166 of the Motor Vehicles Act. While arguing the above CMP., the learned Counsel for the claimants-respondents herein submitted at the Bar that it was the mistake of the Counsel, who represented the claimants in the Tribunal to apply under Section 163A of the Motor Vehicles Act. But the evidence was led as if the petition is filed under Section 166 of the Motor Vehicles Act. We accept the aforesaid proposal of the learned Counsel for the claimants-respondents herein and we allow the claimants-respondents herein to amend the claim from 163-A to 166 of the Motor Vehicles Act.
4. The learned Counsel for the appellant herein submitted at the Bar that there is no much dispute as far as the income of the deceased is concerned, which is computed as Rs. 13,200/- per month and the annual contribution comes to Rs. 1,58,400/-.
5. Now the question arises as to whether the Second Schedule is applicable while applying the multiplier to assess the compensation?
6. The learned Counsel Mr. N. Subba Rao appearing on behalf of the respondents herein relied upon a ruling reported in Oriental Insurance Company Limited v. Hansraj Bhai v. Kondala and Ors., : [2001]2SCR999 .
7. We have gone through the said ruling and we are of the considered view that the Apex Court held that the Second Schedule is not properly drafted and therefore suggestion was made by the Apex Court to the Central Government to take necessary action as early as possible as regards the error in the Second Schedule and the need for amendment in view of the rise in the cost of living. In other words, it means that the Apex Court never said that if the petition is filed under Section 166 of the Motor Vehicles Act, the multiplier in Second Schedule is to be applied.
8. From the same ruling, some of the paragraphs were read out by the learned Counsel for the respondents herein. They are extracted hereunder:
'9. The Law Commission of India in its 119th Report in the Introductory Chapter observed (para 1.6) that previously there was recommendation for inserting provision in the Motor Vehicles Act to extend protection to victims of 'hit-and-run' 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 no-fault liability, the Commission observed as under:
'By 1980, a wind was blowing that compensation to the victims of motor accidents should be by way of social security and the liability to pay the same must be a 'no' fault' liability. The law, as it stands at present, save the provision in Chapter VII-A, inserted by the Motor Vehicles (Amendment) Act, 1982, enables the victim or the dependents of the victims in the event of death to recover compensation on proof of fault of the person liable to pay compensation and which fault caused the harm such as bodily injury or death. In the event of death of a victim of a motor accident and the consequent harm caused to his dependents, the question whether the person responsible for the action causing harm had committed a fault or it was an inevitable accident, is hardly relevant from the point of view of victim or his/her dependents. The expanding notions of social security and social justice envisaged that the liability to pay compensation must be a 'no fault' liability.'10..................................The Court further observed as under: (SCC pp 245-46, para 10):
'This part of the Act is clearly a departure from the usual 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 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 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 part of the Government to remedy the situation created by the modern society which has been responsible for introducing so many fast-moving vehicles on roads.'13. Further, the Statement of Objects and Reasons for amending the Act inter alia mentions that the recommendations of the Review Committee were forwarded to the State Governments for comments and they generally agreed with these recommendations. The draft of the proposals based on the recommendation of the Review Committee and representations from the public were placed before the Transport Development Counsel for seeking their view in the matter. The Transport Development Council made certain suggestions and the relevant suggestion is,--'(b) providing adequate compensation to victims of road accidents without going into long drawn procedure'. The proposed legislation inter alia provides for --
'(h) increase in the amount of compensation to the victims of hit-and-run case;
(k) a new predetermined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational.'
15..........................As per the objects and reasons, it is a new predetermined formula for payment of compensation to road accident 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 predetermined formula for payment of compensation to road accident victims on the basis of age/income, which is more liberal and rational' i.e., Section 163A. It is also apparent that compensation payable under Section 163A 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 the said criteria, the Schedule also provides that amount of compensation shall not be less than Rs. 50,000/-................... The purpose of this section and the 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.
22(6) Award of compensation under Section 163A is on a predetermined formula for payment of compensation to road accident victims and that formula itself is based on criteria similar to determining the compensation under Section 168. The object was to avoid delay in determination of compensation.'
9. We are unable to understand as to how this ruling is applicable to the present set of facts when the Supreme Court held that Second Schedule requires amendment.
10. The learned Counsel Mr. N. Subba Rao appearing for the respondents herein also relied upon a ruling reported in Helen C. Rebello (MRS) and Ors. v. Maharashtra State Road Transport Corporation 7 another, : AIR1998SC3191 . We have gone through the said ruling. We are not inclined to agree with the said ruling that if the petition is filed under Section 166, the Second Schedule of 163-A of the Motor Vehicles Act is to be made use of selecting the multiplier.
11. The learned Counsel Mr. N. Subba Rao further relied upon a ruling reported in Sailada Chinathalli and Ors. v. Oriental Insurance Company Limited, rep. By its Branch Manager, Vizianagaram., : 1994(2)ALT500 (DB). From the aforesaid judgment, the learned Counsel of the respondents herein read out some of the paragraphs of the judgment, which reads as under:
'8. Almost the same question had to be considered by the Supreme Court in the celebrated decision in British India General Insurance Company Limited v. Captain Itbar Singh. The Court held that the insurer had no right, apart from the provisions of Section 96(2) of the Act, to be made a party to the action by the claimant against the insured whose vehicle caused the injury. The Court held that the right created by statute and its content necessarily depend upon the provisions of the statute. The Court held further--
'Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is not specified in it. When the grounds of defence have been specified, they cannot be added to. The only manner of avoiding liability provided for in Sub-section (2) is through the defences therein mentioned. Therefore, when Sub-section (6) talks of avoiding liability in the manner provided in Sub-section (2), it necessarily refers to these defences. It cannot be said that in enacting Sub-section (2) the legislature was contemplating only those defences which were based on the conditions of the policy.'9. It is interesting to note that the above decision arose from the judgment of the High Court of Punjab, holding that insurers impleaded as parties pursuant to Section 96(2) of the Act could defend actions only on the grounds mentioned in the Sub-section and on no others. Unfortunately, however, the clear guidelines provided in ITBAR Singh (supra) were not followed uniformly by all Courts as it ought to have been. A myriad of decisions followed, which took contrary positions, notwithstanding the clear enunciation by the Supreme Court.
10. In National Insurance Company Limited v. Magikhia Das a Full Bench of the Orissa High Court following ITBAR Singh (supra) held that Section 96(2) was clear that an insurer who is made a party in a proceeding for recovery of compensation can resist the claim only on those grounds and no on any other. The Court also held that specific conditions contained in the contract of Insurance enabling the insurer to contest the claim on other grounds may avail the insurer if the insurer had also appeared and contested in cases where the Court or Tribunal had permitted it under Section 110C (2-A) of the Act.
18. We feel constrained, in view of the decision of the Full Bench of this Court reported in Madineni Kondaiah (supra) to hold that the insurer is not entitled to file an appeal challenging the quantum of compensation awarded by the Tribunal when such award is based entirely on defences other than those permitted under Section 96(2) of the Act. We say so, since there has been no pleading that the insurer had reserved its right to contest the liability on all grounds which would have been available to the insurer (sic. insured). Nor has it been made out that the Tribunal, on being satisfied and for reasons recorded in writing, had permitted the insurer to take such defences in view of the provisions contained in Section 110-C (2-A). We are supported in this view in a sufficient measure by the decision of various Courts.'
12. By reading the said ruling, we are also unable to agree with the learned Counsel that Second Schedule has to be applied when the petition is field under Section 166 of the Motor Vehicles Act.
13. The learned Counsel Mr. K.L.N. Rao appearing on behalf of the appellant herein submitted at the Bar that if the petition is filed under Section 166 of the Motor Vehicles Act, then the Schedule given in Bhagwan Das v. Mohd Arifs case reported in 1987 (2) ALT 137 has to be applied. We agree with the proposition made by the learned Counsel for the appellant herein. By reading the entire ruling, it is seen that the Hon'ble Sri Justice M. Jagannadha Rao (as he then was) considered all the aspects in the matter and gave the Schedule in the judgment, which is more on scientific basis. Therefore, we have no hesitation in holding that Bhagwan's case is applicable to the present set of facts. If once this principle is accepted, then the correct multiplier to be applied is six. Thus, in the present case, the dependency can be worked out to Rs. 9,50,400/-as against a sum of Rs. 16,51,400/- awarded. In addition to this amount, the claimants are entitled to Rs. 15,000/- towards loss of consortium and Rs. 15,000/- towards loss of estate. Thus, the claimants-respondents herein are entitled to Rs. 9,50,400 + 30,000/-= Rs. 9,80,400/- plus interest at the rate of 9% p.a., from the date of the petition till realisation of the entire amount. The apportionment and the withdrawal of the amounts have to be worked out as given by the Tribunal.
14. Thus, the appeal filed by the Insurance Company is allowed to the extent indicated above. No costs.