Insurer not entitled to raise defence of negligence by victim in a proceeding under Section 163A of Motor Vehicles Act: SC

Supreme Court: Dr D.Y. Chandrachud, J. delivered the judgment for CJ Deepak Misra and A.M. Khanwilkar, J. and himself whereby an appeal filed by parents of the deceased driver against the judgment of Karnataka High Court was allowed.

The appellants were parents of deceased driver who died in a road accident. Earlier, appellants had filed a claim petition seeking compensation under Section 163A of the Motor Vehicles Act, 1988. The Motor Accidents Claim Tribunal (Belgaum), by its award, allowed a claim Rs 4,60,800. The respondent-insurer preferred an appeal, against the award of the Tribunal, before the High Court. The High Court, vide judgment impugned herein, held that the deceased driver was himself a tortfeasor and responsible for causing the accident, allowed the insurer’s appeal and set aside the order of the Tribunal. Aggrieved thus, the appellants filed the present appeal.

The Supreme Court, at the outset, observed that the matter that arose for consideration was no longer res integra and was covered by the Supreme Court decision in United India Insurance Company Ltd. v. Sunil Kumar, 2017 SCC OnLine SC 1443, wherein it was held that to permit the insurer’s defence of negligence on part of the victim, and/or to understand that Section 163A allows such a defence, would be inconsistent with the legislative object behind introduction of the provision. Further, the object of the provision is to provide a final compensation within a limited time frame on the basis of structured formula, to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. Basing its judgment on the decision referred, the present Bench held that in a proceeding under Section 163A of MV Act, the insurer cannot raise any defence of negligence on the part of the victim to counter a claim of compensation. Accordingly, the appeal was allowed, the judgment impugned was set aside, and order of the Tribunal was restored. [Shivaji v. United India Insurance Co., 2018 SCC OnLine SC 877, dated 09-08-2018]

One comment

  • The very edifice of the MV Act 1988 is that the driver has to be negligent for the owner or Insurance Company to be liable to Third Parties. This is also the rule in almost all countries which have a full fledged Road Accident Compensation law. Moreover, the driver who is the tortfeasor cannot be the beneficiary which has been held by the Apex Court in many a case. The National Insurance vs. Sinitha case decided on 23.11.2011 by Hon’ble Supreme Court was a reasoned judgement which was not perhaps looked into well by the Bench in United India vs. Sunil Kumar (2017). Sec 147 excludes employees (driver is one of them) from the definition of Third Parties but be covered under EC Act 1923. Had the Bench looked into nuance of Sec 163 A in the light of Sinitha case and the Advocate pointed out why the person committing the tort cannot be a beneficiary, it would certainly have decided differently.

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