[Cites 10, Cited by 0]

Madhya Pradesh High Court

Naseem Begum vs Smt. Rakhi Jaiswal on 1 April, 2026

                                                               1


                          IN THE         HIGH COURT OF MADHYA PRADESH
                                              AT JABALPUR
                                                    BEFORE
                                         HON'BLE SHRI JUSTICE VIVEK JAIN
                                           MISC. APPEAL No. 2144 of 2014
                                            NASEEM BEGUM AND OTHERS
                                                       Versus
                                          SMT. RAKHI JAISWAL AND OTHERS


                          Appearance:
                               Shri Kapil Patwardhan - Advocate for the appellants.

                                                           ORDER

(Reserved on :05.02.2026) (Pronounced on : 01.04.2026)

The present appeal has been filed being aggrieved by the award

passed by the Claims Tribunal dated 14.08.2014, whereby the claim

petition of the petitioners has been dismissed on the ground that since the

deceased was himself a driver of the offending vehicle, therefore, for his

own rash and negligent act, he is not entitled to claim any compensation.

2. It was argued that since the claim petition was filed under Section

163-A and not under Section 166, therefore, there would be no question of

any requirement to prove rash and negligent act of a third person and the

present petitioner and the deceased would be a third party for the purpose

of Section 163-A(1) and the owner or the insurer shall be under obligation

to pay compensation on account of death in the accident arising out of the

use of motor vehicle. The Driver in this case was not the Driver of

borrowed vehicle, but was driving a stage carriage bus carrying passengers

on route, and was employee of the owner.

3. Recently, in the case of driver of a borrowed vehicle, a Coordinate

Bench of this Court has considered the position that the driver of a

borrowed vehicle would come under the definition of owner, because he

can be said to have stepped into the issues of the owner and in such

circumstances, he can claim only the amount payable under the personal

accident cover for owner driver as per the terms of the insurance policy.

The aforesaid judgment held in M.A.No.6796/2023 of the Co-ordinate

Bench of this Court in the following terms:-

"12. The Apex Court in the case of Ramkhiladi and another vs. United India Insurance Company and another, 2020(1) T.A.C. 353 (SC) in para 5.4 to 5.6 has held as under :-

"5.4 An identical question came to be considered by this Court in Ningamma [Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710 : (2009) 5 SCC (Civ) 241 : (2010) 1 SCC (Cri) 1213] . In that case, the deceased was driving a motorcycle which was borrowed from its real owner and met with an accident by dashing against a bullock cart i.e. without involving any other vehicle. The claim petition was filed under Section 163-A of the Act by the legal representatives of the deceased against the real owner of the motorcycle which was being driven by the deceased. To that, this Court has observed and held that since the deceased has stepped into the shoes of the owner of the vehicle, Section 163-A of the Act cannot apply wherein the owner of the vehicle himself is involved.

Consequently, it was held that the legal representatives of the deceased could not have claimed the compensation under Section 163-A of the Act. Therefore, as such, in the

present case, the claimants could have even claimed the compensation and/or filed the claim petition under Section 163-A of the Act against the driver, owner and insurance company of the offending vehicle i.e. motorcycle bearing Registration No. RJ 29 2M 9223, being a third party with respect to the offending vehicle. However, no claim under Section 163-A was filed against the driver, owner and/or insurance company of the motorcycle bearing Registration No. RJ 29 2M 9223. It is an admitted position that the claim under Section 163-A of the Act was only against the owner and the insurance company of the motorcycle bearing Registration No. RJ 02 SA 7811 which was borrowed by the deceased from the opponent-owner Bhagwan Sahay. Therefore, applying the law laid down by this Court in Ningamma [Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710 : (2009) 5 SCC (Civ) 241 : (2010) 1 SCC (Cri) 1213] , and as the deceased has stepped into the shoes of the owner of the vehicle bearing Registration No. RJ 02 SA 7811, as rightly held by the High Court, the claim petition under Section 163-A of the Act against the owner and insurance company of the vehicle bearing Registration No. RJ 02 SA 7811 shall not be maintainable.

5.5 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.

5.6 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."

13. Applying the principle laid down in the aforesaid judgment, it is clear that since the claimant had borrowed the offending vehicle and was driving it at the time of the accident, he stepped into the shoes of the owner. Therefore, the claimant is entitled only to the amount payable under the "Personal Accident Cover for Owner-Driver" as per the terms of the insurance policy."

4. The present case is, however, Driver of a Stage Carriage Bus

running on route to carry passengers, and the Driver was an employee of

the Owner, that too, on a Transport Vehicle.

5. Earlier, prior to 2019 amendment, there was some ambiguity

in law, as to whether a Driver who is employee of the owner, would come

under the definition of Third party, or would be an extension of the owner

only, and would be covered under PA cover only.

6. However, after the 2019amendment in the Act of 1988, now it

has been clarified by amending Definition of "third party" as per Section

145 (i), and the amended definition is as under :-

145. In this chapter.-

(i) "third party" includes the Government, the driver and any other co-worker on a transport vehicle.

7. The accident in question beingadmittedly prior to enforcement

of 2019 amendment, now the question will arise, whether the amended

definition shall apply to the case in question.

8. In National Insurance Company Limited Vs. Savidi

Anjaneyulu and Others, 2024 SCC Online AP 4840, the Andhra Pradesh

High Court has held that the amendment amending the definition of third

party does create a new right, but is only clarificatory in nature, as it

removes an ambiguity. The Andhra Pradesh High Court held as under :-

"9. The term third party is defined under Section 145 coming under chapter XI of the Motor Vehicles Act, 1988 (for short 'the Act'). Vide Amending Act No. 32 of 2019, certain amendments were brought to the Act. The amended definition of Section 145 (i) of the Motor Vehicles (Amendment) Act, 2019 which came into effect from 09.08.2019 reads as under:

(i) "third party" includes the Government, the driver and any other co-

worker on a transport vehicle.

10. Pursuant to the amendment, for the purpose of compensation, it is clarified that driver and any other co-worker on a transport vehicle is considered as a third party and are entitled for compensation.

11. Prior to amendment, Section 145(g) of the Act reads as under:

'(g) "third party" includes the Government'.

12. The definition of third party prior to amendment was not elaborate and this led to controversy whether the drivers and others come within the definition of third party for the purpose of claiming compensation under the Act. The amendment to section 145(i) is clarificatory in nature and apparently to redress the controversy, and is therefore applicable for accidents that happened prior to the 2019 amendment also.

13. The Hon'ble Supreme Court in BDA v. Sudhakar Hegde1, while considering a similar clarification to the definition of "Expressways" in Para 7(f) of the Schedule to the 2006 Notification which was issued under Environment (Protection) Act, 1986 read with Environment (Protection) Rules, 1986 held that clarificatory amendments are applicable retrospectively. The Hon'ble Supreme Court relied upon SBI v. V. Ramakrishanan2 and Principles of statutory Interpretation by G.P. Singh in support of its conclusion. The paragraphs 32, 34 and 35 thereof reads as under;

"32. Where an amendment is clarificatory in nature, such amendment is deemed to be retrospective in its application."

"34. The Court in V. Ramakrishnan noted that the Committee clarified that it was never intended that the moratorium under Section 14 applied to personal guarantors of corporate debtors. Accordingly, an amendment was enacted to Section 14. The Court then proceeded to hold, relying on consistent precedent of this Court, that a clarificatory amendment has retrospective application. A similar position is expounded by G.P. Singh in his seminal work Principles of Statutory Interpretation. He states:

"... An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law when the amendment came into force, the amending Act also will be part of the existing law."

35. An amending provision which clarifies the position of law which was considered to be implicit, is construed to have retrospective effect. The position of the retrospective application of clarificatory amendments to notifications is analogous to the position under statutory enactments."

14. Therefore, the contention of the learned counsel for the appellant that drivers cannot seek for compensation cannot be sustained in view of the clarificatory amendment to Section 145 (i) of the Act and is rejected."

9. This Court is in respectful agreement with the aforesaid legal

position as interpreted by the Andhra Pradesh High Court, that the

definition of "Third Party" as amended vide Act of 2019 shall be

retrospective in nature, being clarificatory.

10. However, in the present case, the insurance company has

already been absolved of its liability by a separate order passed in the

connected batch of case. In view of above discussion, if due to violation of

policy conditions, the Insurance Company had not been absolved, it would

have remain liable to indemnify the owner for the risk of Driver also, he

being "Third Party".

11. However, the present appellants are claiming compensation

not only against the insurance company, but also against the owner.

12. This position has been considered recently by the High Court of

Rajasthan in New India Assurance Co. Ltd. v. Gian Singh, 2023 SCC

OnLine Raj 1303, wherein it has been held by the High Court of Rajasthan

that the liability would extend tothe compensation payable under the

Workmen's Compensation Act and in that case, the Rajasthan High Court

even held that the liability of insurance company would extend to the said

quantum of compensation. The High Court of Rajasthan has held as under:-

"6. The counsel for the claimants/respondents is not in a position to controvert this legal aspect of the matter that when the deceased driver himself was driving the insured vehicle then the claim under Section 163A of the Act of 1988 was not maintainable against the Insurance Company. The claimant may get the compensation under the provisions of WC Act of 1923.

7. Heard and considered the submissions made by both sides and perused the record.

8. At the outset, it is noticed that without touching the legal issue raised by the Insurance Company, the Tribunal

has held that the appellant is liable to pay the compensation under the provisions of the Act of 1988. While this fact is clear from the pleadings of the claimants that the deceased driver was driving the insured vehicle at the time of the accident. In this view of the matter, the provisions contained under Proviso to Section 147(1) of the Act, 1988 would come into play.

9. The said provisions of law may be taken note as under:

"147. Requirements of policies and limits of liability-

(i) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-

(a) is issued by a person who is an authorised insurer; and

(b) insures the person or classes of persons specified in the policy to the extent specified in sub- section (2)-

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including 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 a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place;

Provided that a police shall not required

(i) to cover liability in respect of the death, arising out of and in the course of his employment or the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to any such employees

(a) engaged in driving the vehicle, or

(b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or

(c) itit is a goods carriage, being carried in the vehicle, or

(ii) to cover any contractual liability.

Explanation. For the removal of doubts, it is hereby declared that the dearth of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.

10. Perusal of the above provisions clearly indicates that when the driver of the insured vehicle is plying the said vehicle, and if such vehicle meets with an accident, thus, the liability of the Insurance Company would be restricted to payment of compensation under the provisions of WC Act, 1923.

11. Similar question had arisen in case reported as National Insurance Company Ltd. v. PremBai Patel, (2005) 2 ACC 365 (SC) : wherein the Supreme Court upheld similar contention raised by the Insurance Company with following observations in para Nos. 16 and 17 which reads as under:--

"16. The High Court, in the impugned judgment, has held that if the legal representatives of the deceased employee approach the Motor Accident Claims Tribunal for payment of compensation to them by moving a petition under Section 166 of the Act, the liability of the Insurance Company is not limited to the extent provided under the Workmen's Act and on its basis directed the appellant Insurance Company to pay the entire amount of compensation to the claimants. As shown above, the insurance policy taken by the owner contained a clause that it was a policy for 'Act Liability' only. This being the nature of policy the liability of the appellant would be restricted to that arising under the Workmen's Act. The judgment of the High Court, therefore, needs to be modified accordingly.

17. The judgment of the High Court insofar as it relates to quantum of compensation and interest, which is to be paid to the claimants (respondent Nos. 3 to 6 herein) is affirmed. The liability of the appellant Insurance Company to satisfy the award would be restricted to that arising under the Workmen's Act. The respondent Nos. 1 and 2

(owners of the vehicle) would be liable to satisfy the remaining portion of the award."

12. The similar matter again came up for consideration in the case of Oriental Insurance Co.

Ltd. v. MeenaVariyal [(2007) 5 SCC 428] before the Apex Court wherein it was observed:

"13. As we understand Section 147(1) of the Act, an insurance policy thereunder need not cover the liability in respect of death or injury arising out of and in the course of the employment of an employee of the person insured by the policy, unless it be a liability arising under the Workmen's Compensation Act, 1923 in respect of a driver, also the conductor, in the case of a public service vehicle, and the one carried in the vehicle as owner of the goods or his representative, if it is a goods vehicle. It is provided that the policy also shall not be required to cover any contractual liability. Uninfluenced by authorities, we find no difficulty in understanding this provision as one providing that the policy must insure an owner against any liability to a third party caused by or arising out of the use of the vehicle in a public place, and against death or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of vehicle in a public place. The proviso clarifies that the policy shall not be required to cover an employee of the insured in respect of bodily injury or death arising out of and in the course of his employment. Then, an exception is provided to the last foregoing to the effect that the policy must cover a liability arising under the Workmen's Compensation Act, 1923 in respect of the death or bodily injury to an employee who is engaged in driving the vehicle or who serves as a conductor in a public service vehicle or an employee who travels in the vehicle of the employer carrying goods if it is a goods carriage. Section 149(1), which casts an obligation on an insurer to satisfy an award, also speaks only of award in respect of such liability as is required to be covered by a policy under clause (b) of Sub-section (1) of Section 147 (being a liability covered by the terms of the policy). This provision cannot therefore be used to enlarge the liability if it does not exist in terms of Section 147 of the Act.

14. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver, the

conductor and the one carried in a goods vehicle carrying goods. On this plain understanding of Section 147, we find it difficult to hold that the Insurance Company, in the case on hand, was liable to indemnify the owner, the employer Company, the insured, in respect of the death of one of its employees, who according to the claim, was not the driver. Be it noted that the liability is not one arising under the Workmen's Compensation Act, 1923 and it is doubtful, on the case put forward by the claimant, whether the deceased could be understood as a workman coming within the Workmen's Compensation Act, 1923. Therefore, on a plain reading of Section 147 of the Act, it appears to be clear that the Insurance Company is not liable to indemnify the insured in the case on hand."

13. Therefore, in the above terms, the present appeal deserves to be

and is hereby allowed. The claimants are held entitled to claim

compensation to the extent as payable under Workmen's Compensation Act

from the owner.

14. Since the Tribunal has not assessed the quantum of

compensation while rejecting the claim petition, therefore, this Court

deems it appropriate to direct the Tribunal to assess the compensation

instead of undertaking the said exercise for the first time before this Court

at appellate stage.

15. Therefore, the impugned award in Claim Case No. 115/2013 is

set aside and the present matter is remanded back to the Claims Tribunal to

assess the compensation in accordance with the provisions of Workmen's