Section 163A of Motor Vehicle Act is not Maintainable against Owner/ Insurer if Deceased was in the Shoe of Owner

Kritika Pandey | Maharaja Sayajirao University of Baroda | 11th January 2020

Ramkhiladi & Anr. Vs. The United India Insurance Company & Anr.,
Civil Appeal No. 9393 of 2019

Facts:

In a vehicular accident Chotelal alias Shivram died. The deceased was driving a motorcycle. An accident occurred on account of rash and negligent driving by another motorcycle. The appellants filed a claim petition before the Motor Accident Claims Tribunal, under Section 163A of the Motor Vehicles Act (hereinafter referred to as the Act). Neither the driver nor the owner of the vehicle were joined as opponents in the claim petition. An objection was raised by the respondent, insurer of motorcycles that according to the FIR, the driver of the motorcycle was rash and negligent. And the claimants have not filed the claim petition against the owner of the said vehicle. So, the claim petition is required to be dismissed against the insurance company of the motorcycle.

Tribunal Held:

That the said motorcycle was insured with the respondent insurance company, so the insurance company is liable to pay compensation under Section 163A of the Act.

Appeal before the High Court:

The High Court has allowed the appeal and set aside the Judgment and Award passed by the learned Tribunal. And dismissed the claim petition on the ground that the accident had occurred on account of rash and negligent driving by the driver of a motorcycle. However, the claimants have not filed the claim petition against the owner of the said vehicle and in fact, the claim petition should have been filed by the claimants against the owner of vehicle to seek compensation.

Appeal to Supreme Court:

Feeling aggrieved and dissatisfied with the impugned Judgment and Order passed by the High Court, the original claimants have preferred the appeal.

Appellant Contention:

• The claim petition preferred by the original claimants was under Section 163A of the Act and, therefore,the claimants are only required to prove that the death or permanent disablement is as a result of an accident arising out of the use of motor vehicle. And it includes the driver, passengers and pedestrians.
• The appellants ​original claimants that, as such, the deceased was not the owner of the vehicle. He was an employee of the owner and therefore a third party.
• The claim under Section 163A of the Act on the principle of no ​fault liability against the owner/insurer was perfectly just and maintainable and the learned Tribunal made no error in allowing the same.
• In support of the above, relied upon in the case of Reshma Kumari v. Madan Mohan (2013) 9 SCC 65.
• Section 163A of the Act commences with a “non obstante” clause. Liability to pay the compensation is on “owner of the motor vehicle” or “the authorized insurer”. The word “owner” has been defined under Section 2(30) “a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire purchase agreement or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.”
• In an application under Section 163A of the Act, fault of the owner of the vehicle or of any other person need not be established.

Respondent Contention:

• The High Court has rightly allowed the appeal preferred by the insurer by observing that the claimants ought to have filed the claim petition against the owner of the vehicle.
• Under the Act, only the third party claims are payable, deceased was not a third party given that he had borrowed the vehicle from the owner.
• In the case of Ningamma v. United India Insurance Co. Ltd. (2009) 13 SCC 710 and New India Assurance Co. Ltd. V. Sadanand Mukhi (2009) 2 SCC 417, this Court has held that the owner of the vehicle or his legal representatives or the borrower of the vehicle cannot raise a claim for an accident in which there was no negligence on the part of the insured vehicle. The borrower of the vehicle steps into the shoes of the owner and, therefore, the borrower of the vehicle or his legal representatives are not entitled to compensation from the insurer under the Act.
• In the case of National Insurance Co. Ltd. V. Ashalata Bhowmik (2018) 9 SCC 801, it was held that the parties shall be governed by the terms and conditions of the contract of insurance.

Issue:

• Whether the insurance company of the vehicle driven by the deceased himself would be liable to pay compensation under Section 163A of the Act?
• Whether the deceased not being a third party to the vehicle being in the shoes of the owner can maintain the claim under Section 163A of the Act from the owner of the vehicle?

Held:

The claim petition under Section 163A of the Act against the owner and insurance company of the vehicle shall not be maintainable. The deceased has to be a third party and cannot maintain a claim under Section 163A 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. Appeal is partly allowed.