LILABEN UDESING GOHEL ETC. ETC. versus THE ORIENTAL INSURANCE CO. LTD. AND ORS. ETC. ETC.

Citation: [1996] 3 S.C.R. 450 · Decided: 15-03-1996 · Supreme Court of India · Bench: A.M. AHMADI · Disposal: Case Allowed

Judgment (excerpt)

A 
LILABEN UDESING GOHEL ETC. ETC. 
v. 
THE ORIENTAL INSURANCE CO. LTD. AND ORS. ETC. ETC. 
MARCH 15, 1996 
B 
(A.M. AHMADI, CJ! AND N.P. SINGH, J.] 
Motor Vehicles Act, 1939 : 
Ss. 166, 168---Motor accident claims-Compensation amount-
C Guidelines laid down by Supreme Court for proper utilisation of-Reiterated. 
A Full Bench of the Gujarat High Court in the case of New India 
Assurance Co. Ltd. v. Kamlaben Sultansinh Hakumsinh Jadav & Or.», aris-
ing out of an award of the Motor Accident Claims Tribunal, observed that 
inspite of the guidelines given to the Claims Tribunals to follow while 
D disposing of the claim applications arising under the Motor Vehicles Act, 
1949, a large number of complaints of mis-application of compensation 
money were being filed. The Full Bench while dealing with the proper 
utilisation of the compensation money paid to the claimants observed that 
Insurance Companies were since nationalised, the necessity for awarding 
E lump sum payment to secure the interest of the dependents was no longer 
there; instead regular monthly payments could be made through 
nationalised bank. It inter alia held that the Claims Tribunal should direct 
the Insurance Company to pay the amount of compensation periodically 
by quarterly instalments by calculating interest at the rate of 15% per 
annum on the total amount of compensation determined by it and to pay 
F the principle amount, at the end of 10 to 20 years, having regard to the 
facts of each case; in the case of minor claimants, the Tribunal would order 
that the amount of compensation would be kept with the Insurance Com-
pany till the minor attained the age of 21 years hut in any case not before 
expiry of 10 years from the date of the award; in case the Insurance 
G Company concerned or the General Insurance Corporation of India was 
not ready and willing to pay the amonnt in the manner directed, the 
compensation amount should be deposited with the Life Insurance Cor-
poration of India, which would provide for payment by an appropriate 
annuity to the claimants. 
H 
The claimants in different cases, filed the present appeals challeng-
450 
i 
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I 
LILABEN UDESJNG GOHELv. ORIENTAL INSURANCE CO. LTD. 451 
ing the judgment of the Full Bench of the High Court. A writ petition was A 
r' " 
also filed by way of public interest litigation on behalf of the victims of 
various accidents for quashing the judgment of the Full Bench of the 
Gujarat High Court. 
It was contended for the appellants that the minimum waiting period 
B 
for 10 years as prescribed by the High Court, before the claimant could be 
entitled to receive the compensation money awarded would deprive the 
claimant of his right to compensation. Such a procedure would be ar-
bitrary and unreasonable and as such violative of fundamental rights 
under Article 14 and right to property under Article 300-A of the Constitu-
tion. Likewise entrusting the capital amount to the Insurance Company c 
would also not be in the interest of the claimants. 
Meanwhile, a Division Bench of the Gujarat High Court took note 
of the conflict between the guidelines laid down in Muljibhai's case as 
approved by this Court in Union Carbide case and the judgment of the Full 
Bench of the Gnjarat High Court in New India Assurance Co. Ltd. v. D 
Kamlaben & Ors., and referred the matter to a five Judge Bench. The five 
Judge Bench while deciding the matter in Jayantilal Ambalal Pannar v. 
Gujarat State Road Transp01t Corporation, notice that there was conflict 
between the guidelines in relation to disbursement and investment of the 
amount of compensation as laid down by this Court in the case of Genqal E 
Manager, Kera/a State Road Transport C01poration v. Susamma Tho91'ils & 
Ors., and those laid down by the full bench of the Gujarat High Court in 
New India Assurance Co. Ltd. v. Kamlaben & Ors., and held that the 
guidelines laid down by the Supreme Court had to he followed by all the 
Motor Accident Claims Tribunals. · 
F 
Allo"ing the appeals and disposing of the writ petition, this Court 
HELD : 1. With tile five Judge Bench decision of the Gujarat High 
Court in Jayantilal Ambalal Pannar v. Gujarat State Road Transport Car-
poration, the position in law as it stood before the decision rendered by the G 
three Judge Bench in Kamlaben's case stands restored. 
!"'A 
1. New India Assurance Co. Ltd. v. Kamlaben Sultansinh Hakumsinh 
Jadav & Ors., (1993) 1 Guj. L.R. 779, disapproved. 
2. Muljibhai v. United India

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