2. The appellant herein-Insurance Company is the
vehicle is the respondent No.1 before the Tribunal.
3. For convenience of reference, the parties herein
are referred to as per their ranking before the Tribunal.
4. The claim petition was filed under section 163-A
accident.
5. The brief facts of the case are as under:
When he reached near Arun Talkies on Congress Road,
Tilakwadi, Belagavi, in front of a sugarcane juice centre, an
unknown vehicle came from behind at high speed and in a
rash and negligent manner and dashed against his
motorcycle, resulting in an accident. Due to the impact, the
deceased fell down, sustained severe head injuries and
injuries to other parts of the body, and he became
unconscious at the spot. He was immediately shifted to
BIMS Hospital, Belagavi, and thereafter, on reference,
shifted to KLE Hospital, Belagavi, where he underwent
treatment and ultimately succumbed to the injuries on
04.08.2014. It was further pleaded that the accident
occurred due to the rash and negligent driving of the
unknown car, and that the deceased was hale and healthy,
earning Rs.40,000/- per annum, and was maintaining the
entire family.
6. After service of notice, respondent No.2, the
Insurance Company filed objections denying all the
allegations and claims made by the claimants and
contended that the accident was not caused due to the
involvement of any vehicle and that the deceased died due
to his own negligence. It was further contended that there
was violation of the policy conditions on the part of
respondent No.1-owner of the vehicle and, therefore,
respondent No.2 was not liable to indemnify the liability of
respondent No.1. Since the death of Sri Prakash Baburao
Chigare was due to self-negligence, the claimants were not
entitled to any compensation.
7. In order to substantiate the case of the
petitioner, the petitioner/claimant No.1 got himself
examined as PW-1 and got marked documents at Exs.P1 to
P35. On the other hand, respondents No.1 to 3 examined
themselves as RW-1 to 3 and got marked Exs.R1 to Ex.R3.
8. On the basis of pleadings, oral and documentary
evidence, the Tribunal framed issue and partly allowed the
claim petition by awarding compensation of Rs.4,24,505/-
with interest at the rate of 9% p.a. from the date of petition
till the date of realization by fastening the liability on the
Insurance Company.
9. The learned counsel for the appellant-Insurance
Company would contend that the Tribunal has failed to
consider the defence raised by the appellant in its proper
perspective in fastening liability on the Insurance Company
to pay compensation of Rs.4,24,505/- with interest at the
rate of 9% per annum.
10. It is further contended that the Tribunal ought
not to have entertained and allowed the claim petition
under Section 163-A of the MV Act, as the same was not
maintainable under the facts and circumstances of the case.
Further, the delay in lodging the police complaint, coupled
with the absence of any medico-legal case registration at
the hospital where the deceased was initially treated, has
not been properly appreciated by the Tribunal.
11. It is also contended that the Tribunal has failed
to consider the violation of policy conditions, inasmuch as
the deceased was not holding a valid and effective driving
licence at the time of accident and had borrowed the
motorcycle, thereby stepping into the shoes of the owner.
Despite applications filed by the appellant and the evidence
of the investigating officer confirming non-production of the
driving licence, the Tribunal wrongly fastened liability on the
insurer, ignoring the statutory defences available under
Section 149(2)(a)(ii) of the MV Act. Additionally, the award
of interest at the rate of 9% per annum is exorbitant.
12. In support of his contention, learned counsel for
the appellant has placed reliance on the judgment of the
Apex Court in the case of Ramkhiladi and another v.
United India Insurance Company and another reported
in (2020) 2 SCC 550. The relevant paras of the said
decisions are as under:-
9. Heard the learned counsel appearing on behalf of
the respective parties at length. We have also perused
and considered the judgment and award passed by the
learned Tribunal as well as the impugned judgment and
order passed by the High Court and the evidence on
record. The short question which is posed for
consideration of this Court is whether, in the facts and
circumstances of the case and in a case where the driver,
owner and the insurance company of another vehicle
involved in an accident and whose driver was negligent
are not joined as parties to the claim petition, meaning
thereby that no claim petition is filed against them and
the claim petition is filed only against the owner and the
insurance company of another vehicle which was driven
by the deceased himself and the deceased being in the
shoes of the owner of the vehicle driven by himself,
whether the insurance company of the vehicle driven by
the deceased himself would be liable to pay the
compensation under Section 163-A of the Act? Whether
the deceased not being a third party to Vehicle No. RJ 02
SA 7811 being in the shoes of the owner can maintain the
claim under Section 163-A of the Act from the owner of
the said vehicle?
9.1. xxx
9.2. xxx
9.3. xxx
9.4. xxx
9.5. It is true that, in a claim under Section 163-A of
the Act, there is no need for the claimants to plead or
establish the negligence and/or that the death in respect
of which the claim petition is sought to be established was
due to wrongful act, neglect or default of the owner of the
vehicle concerned. It is also true that the claim petition
under Section 163-A of the Act is based on the principle
of no-fault liability. However, at the same time, the
deceased has to be a third party and cannot maintain a
claim under Section 163-A of the Act against the
owner/insurer of the vehicle which is borrowed by him as
he will be in the shoes of the owner and he cannot
maintain a claim under Section 163-A of the Act against
the owner and insurer of the vehicle bearing Registration
No. RJ 02 SA 7811. In the present case, the parties are
governed by the contract of insurance and under the
contract of insurance the liability of the insurance
company would be qua third party only. In the present
case, as observed hereinabove, the deceased cannot be
said to be a third party with respect to the insured vehicle
bearing Registration No. RJ 02 SA 7811. There cannot be
any dispute that the liability of the insurance company
would be as per the terms and conditions of the contract
of insurance. As held by this Court
in Dhanraj [Dhanraj v. New India Assurance Co. Ltd.,
(2004) 8 SCC 553 : 2005 SCC (Cri) 363] , an insurance
policy covers the liability incurred by the insured in
respect of death of or bodily injury to any person
(including an owner of the goods or his authorised
representative) carried in the vehicle or damage to any
property of a third party caused by or arising out of the
use of the vehicle. In the said decision, it is further held
by this Court that Section 147 does not require an
insurance company to assume risk for death or bodily
injury to the owner of the vehicle.
9.6. In view of the above and for the reasons stated
above, in the present case, as the claim under Section
163-A of the Act was made only against the owner and
insurance company of the vehicle which was being driven
by the deceased himself as borrower of the vehicle from
the owner of the vehicle and he would be in the shoes of
the owner, the High Court has rightly observed and held
that such a claim was not maintainable and the claimants
ought to have joined and/or ought to have made the
claim under Section 163-A of the Act against the driver,
owner and/or the insurance company of the offending
vehicle i.e. RJ 29 2M 9223 being a third party to the said
vehicle.
9.7. xxx
9.8. xxx
9.9. Now, so far as the submission made on behalf of
the claimants that in a claim under Section 163-A of the
Act mere use of the vehicle is enough and despite the
compensation claimed by the heirs of the owner of the
motorcycle which was involved in the accident resulting in
his death, the claim under Section 163-A of the Act would
- 10 -
be maintainable is concerned, in view of the decision of
this Court in Rajni Devi [Oriental Insurance Co.
Ltd. v. Rajni Devi, (2008) 5 SCC 736 : (2008) 3 SCC (Cri)
67] , the aforesaid cannot be accepted. In Rajni
Devi [Oriental Insurance Co. Ltd. v. Rajni Devi, (2008) 5
SCC 736 : (2008) 3 SCC (Cri) 67] , it has been
specifically observed and held that the provisions of
Section 163-A of the Act cannot be said to have any
application with regard to an accident wherein the owner
of the motor vehicle himself is involved. After considering
the decisions of this Court in Oriental Insurance Co.
Ltd. v. Jhuma Saha [Oriental Insurance Co. Ltd. v. Jhuma
Saha, (2007) 9 SCC 263 : (2007) 3 SCC (Cri) 443]
; Dhanraj [Dhanraj v. New India Assurance Co. Ltd.,
(2004) 8 SCC 553 : 2005 SCC (Cri) 363] ; National
Insurance Co. Ltd. v. Laxmi Narain Dhut [National
Insurance Co. Ltd. v. Laxmi Narain Dhut, (2007) 3 SCC
700 : (2007) 2 SCC (Cri) 142] and Premkumari v. Prahlad
Dev [Premkumari v. Prahlad Dev, (2008) 3 SCC 193 :
(2008) 1 SCC (Civ) 822 : (2008) 1 SCC (Cri) 694] , it is
ultimately concluded by this Court that the liability under
Section 163-A of the Act is on the owner of the vehicle as
a person cannot be both, a claimant as also a recipient
and, therefore, the heirs of the owner could not have
maintained the claim in terms of Section 163-A of the
Act. It is further observed that, for the said purpose, only
the terms of the contract of insurance could be taken
recourse to. In the recent decision of this Court
in Ashalata Bhowmik [National Insurance Co.
Ltd. v. Ashalata Bhowmik, (2018) 9 SCC 801 : (2018) 4
SCC (Civ) 595 : (2019) 1 SCC (Cri) 399] , it is specifically
held by this Court that the parties shall be governed by
the terms and conditions of the contract of insurance.
Therefore, as per the contract of insurance, the insurance
company shall be liable to pay the compensation to a
third party and not to the owner, except to the extent of
Rs 1 lakh as observed hereinabove.
9.8. However, at the same time, even as per the
contract of insurance, in case of personal accident the
owner-driver is entitled to a sum of Rs 1 lakh. Therefore,
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the deceased, as observed hereinabove, who would be in
the shoes of the owner shall be entitled to a sum of Rs 1
lakh, even as per the contract of insurance. However, it is
the case on behalf of the original claimants that there is
an amendment to the 2nd Schedule and a fixed amount
of Rs 5 lakh has been specified in case of death and
therefore the claimants shall be entitled to Rs 5 lakh. The
same cannot be accepted. In the present case, the
accident took place in the year 2006 and even the
judgment and award was passed by the learned Tribunal
in the year 2009, and the impugned judgment and order
has been passed by the High Court in 10-5-2018 [United
India Insurance Co. v. Ramkhiladi, 2018 SCC OnLine Raj
3264] i.e. much prior to the amendment in the 2nd
Schedule. In the facts and circumstance of the present
case, the claimants shall not be entitled to the benefit of
the amendment to the 2nd Schedule. At the same time,
as observed hereinabove, the claimants shall be entitled
to Rs 1 lakh as per the terms of the contract of insurance,
the driver being in the shoes of the owner of the vehicle.
10. In view of the above and for the reasons stated
above, the present appeal is partly allowed to the
aforesaid extent and it is observed and held that the
original claimants shall be entitled to a sum of Rs 1 lakh
only with interest @ 7.5 per cent per annum from the
date of the claim petition till realisation. In the facts and
circumstance of the present case, there shall be no order
as to costs.
13. Learned counsel for the respondents No.1 to 5
herein/claimants would contend that there is no illegality or
infirmity in the judgment and award of the Tribunal and the
Tribunal has rightly allowed the claim petition in part,
fastening liability on the insurer.
- 12 -
14. In support of his contention, learned counsel for
the respondents has placed reliance on the judgment of the
Apex Court in the case of Wakia Afrin (minor) v. M/s
National Insurance Company Limited by order dated
01.08.2025 passed in SLP (civil) Nos. 15447-48/2024.
16. Trite is the principle that the liability with respect
to an accident is on the tortfeasor and in the case of a motor
vehicle accident if the tortfessor is the driver, the owner has
the vicarious liability, which liability is indemnified by the
insurer, when there is a valid policy. The liability is
essentially of the owner but the provision, in addition to the
insured/owner makes liable the authorized insurer too.
Hence, when there is a valid policy issued in the name of the
vehicle involved in the accident, a claim under Section 163A,
as per the words employed in the provision, according to us
covers every claim and is not restricted to a third party
claim; without any requirement of establishing the
negligence, if death or permanent disability is caused by
reason of the motor accident. This would also take in the
liability with respect to the death of an owner or a driver
who stepped into the shoes of the owner, if the claim is
made under Section 163A dehors the statutory liability
under Section 147 or the contractual liability as reduced to
writing in an insurance policy. It would override the
provisions under Sections 147 & 149 along with the other
provisions of the M.V. Act and the law regulating insurance
as also theterms of the policy confining the claim with
respect to an owner-driver to a fixed sum. This according to
us is the intention of incorporating the non-obstante clause
under Section 163A providing for no-fault liability claims, the
compensation for which is restricted to the structured
formula under the IInd Schedule. It is a beneficial piece of
legislation brought in, keeping in mind the enhanced
chances of an accident, resulting from the prevalence of
vehicles in the overcrowded roads of today. It was a social
security scheme, brought about considering the need for a
more comprehensive scheme of 'no-fault' liability for reason
of the ever-increasing instances of motor vehicle accidents
and the difficulty in proving rash and negligent driving.
- 13 -
15. Heard the learned counsel appearing for the
parties and perused entire material on record.
16. On a careful consideration of the pleadings,
evidence on record and the rival submissions, it is not in
dispute that the claim petition was filed under Section
163-A of the MV Act in respect of the death of the
deceased, who was himself riding the motorcycle at the
time of the accident. The Tribunal, while partly allowing the
claim petition, fastened liability on the insurer and awarded
compensation of Rs.4,24,505/- with interest at the rate of
9% per annum. The appellant-Insurance Company has
specifically contended that the deceased was not a third
party, and he had borrowed the motorcycle, thereby he
stepped into the shoes of the owner. Therefore, the claim
petition filed under Section 163-A against the insurer of the
said vehicle was not maintainable.
17. The issue raised in this appeal squarely covered
by the decision rendered by the Apex Court in
- 14 -
Ramkhiladi's case (supra), wherein it has been
categorically held that though Section 163-A is based on the
principle of no-fault liability, the deceased must necessarily
be a third party vis-à-vis the insured vehicle. It has further
held that where the deceased was driving the vehicle as a
borrower, he would be in the shoes of the owner and,
therefore, his legal heirs cannot maintain a claim under
Section 163-A against the owner and insurer of the very
vehicle. It is also clarified that the liability of the insurer in
such cases flows only from the terms of the contract of
insurance and not beyond it, and that Section 147 of the MV
Act does not mandate coverage for death or bodily injury to
the owner of the vehicle.
18. However, the Apex Court further held that even
as per the contractual terms of insurance, the owner/driver
is entitled to personal accident coverage to the extent
stipulated in the policy, which, in the absence of any
enhanced coverage, is Rs.1,00,000/-. Applying the said
binding precedent to the facts of the present case, the claim
- 15 -
under Section 163-A, insofar as it seeks compensation
beyond the contractual personal accident cover, is not
maintainable. Consequently, the award passed by the
Tribunal fastening liability on the insurer cannot be
sustained. The claimants would be entitled only to a sum of
Rs.1,00,000/- as personal accident compensation, with
interest at 7.5% p.a. from the date of petition till
realization, and the impugned judgment and award is liable
to be modified to the said extent.
19. The reliance placed by the claimants on the
decision of the Apex Court in Wakia Afrin's case (supra)
wherein the Apex Court interpreted Section 163-A of the MV
Act in the context of its beneficial and social-security object
and held that the provision could override the limitations
under Sections 147 and 149 and the contractual terms of
the policy; however, the said decision did not consider or
dilute the specific principle laid down in Ramkhiladi's case
(supra).
- 16 -
20. Since the facts of the present case squarely fall
within the ratio laid down in Ramkhiladi's case, the
broader interpretation of Section 163-A as sought to be
applied on the basis of Wakia Afrin is not applicable to the
present case and the liability of the insurer is confined only
to the extent of Rs.1,00,000/- with interest at 7.5% p.a.
from the date of petition till realization.
21. In view of the foregoing discussions, this court
proceeds to pass the following:-
ORDER
(i) The appeal is allowed in part.
(ii) The judgment and award dated 08.06.2017
passed by the VIII Additional District &
Sessions Judge, Belagavi, in MVC
No.1346/2016 is modified.
(iii) The claimants shall be entitled only to a sum of
₹1,00,000/- as personal accident
compensation, with interest at 7.5% p.a. from
the date of petition till realization.
(iv) The Insurance Company is directed to satisfy
the modified award within a period of eight
- 17 -
weeks from the date of receipt of a certified
copy of this order.
(v) Any amount deposited by the Insurance
Company in excess of the modified award shall
be refunded to it, in accordance with law.
(vi) There shall be no order as to costs.
Sd/-
(DR. K.MANMADHA RAO)
JUDGE
MBS
CT:VP
