The Supreme Court set aside a High Court order that had dismissed a motor accident compensation claim on the ground that a deceased person (the vehicle owner) had been wrongly arrayed as a party. The Court restored the compensation awarded by the Motor Accident Claims Tribunal (MACT) for the death of the petitioner’s mother and partially for the father, while also referring a critical legal question on insurance liability under Section 163A of the Motor Vehicles Act to a larger bench.
The case arose from a tragic accident in which four persons, including the minor petitioner’s parents, died when their vehicle lost control due to a tyre burst. The petitioner, then two years old, filed for compensation through her aunt. The MACT awarded ?4.08 lakh and ?4.53 lakh for the deaths of her mother and father, respectively.
However, the High Court held that the claim was not maintainable as the deceased owner (father) was shown as a respondent, which is impermissible. The Supreme Court rejected this reasoning, holding that under Section 155 of the Motor Vehicles Act, a claim survives against the insurer even after the death of the insured. It noted that the insurance policy was valid and the vehicle was driven by a licensed driver.
The key issue concerned whether the daughter, as legal heir of the vehicle owner, could claim compensation under Section 163A, a provision that enables no-fault liability claims without proving negligence. The insurer contended that a person cannot be both liable (as heir to the owner) and a claimant. Although the Court acknowledged this argument, it highlighted the overriding effect of Section 163A, which includes a non-obstante clause that supersedes the Motor Vehicles Act and even the insurance policy terms.
Referring to conflicting precedents by coordinate benches that restricted Section 163A claims to third parties only, the Court expressed disagreement and held that the provision could extend to owner-drivers and their heirs. Recognizing the significant implications, the Court directed that the matter be placed before a larger bench for authoritative determination on the scope of insurer liability under Section 163A when the claimant is the heir of the deceased owner-driver.
