Defence Of Negligence Can’t Be Raised In Proceedings U/s 163A Of Motor Vehicles Act, Reiterates SC [Read Judgment]

The Supreme Court has upheld compensation awarded to the parents of deceased driver of the vehicle, reiterating that an insurer cannot be permitted to raise a defence of the negligence of the driver (victim) in proceedings under Section 163A of the Motor Vehicles Act.

A bench comprising Chief Justice of India Dipak Misra, Justice AM Khanwilkar and Justice DY Chandrachud set aside a Karnataka High Court order that refused compensation to the parents of the driver of a vehicle who died in an accident.

Background

The car which Shivaji was driving dashed into a truck which resulted in his death. Two others, who were travelling along with him, also died. His parents made a claim petition before the tribunal which allowed it. On appeal by the insurance company, the Karnataka High Court held that protection is extended only to the injured person or to the legal heirs of the deceased victim, and not to the driver who is responsible for causing the said accident. The high court held that the compensation could not have been awarded since the deceased driver, in this case, was the tortfeasor and responsible for causing the accident.

The single judge had held: “In fact, Section 163(A) is very clear, the claim petition under 163(A) could be for injury suffered or as well as for the death of victim of accident. If the tortfeasor is injured and the entire accident is attributable to his negligence, the question of he being again awarded with the compensation by invoking aforesaid provision, does not stand to reason inasmuch as reading of said Section clearly indicates that it is to protect the innocent victim from suffering and also the legal heirs of innocent victim to withstand the untold misery for the tortious act of the rider of the vehicle, through the accident.”

Defence of Negligence Of Claimant Cannot Be Raised

The bench noticed another three-judge bench judgment in United India Insurance Co. Ltd. v. Sunil Kumar & Anr., and observed: “The issue which arises before us is no longer res integra and is covered by a recent judgment of three judges of this Court in United India Insurance Co. Ltd. v. Sunil Kumar & Anr., wherein it was held that to permit a defence of negligence of the claimant by the insurer and/or to understand Section 163A of the Act as contemplating such a situation, would be inconsistent with the legislative object behind introduction of this provision, which is “final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time”. The Court observed that if an insurer was permitted to raise a defence of negligence under Section 163A of the Act, it would “bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention”. Consequently, it was held that in a proceeding under Section 163A of the Act, the insurer cannot raise any defence of negligence on the part of the victim to counter a claim for compensation.”

Sunil Kumar Case

The judgment in United India Insurance Co. Ltd. v. Sunil Kumar & Anr was delivered by a three-judge bench headed by Justice Ranjan Gogoi, while answering a reference to it by a division bench which disagreed with the dictum in National Insurance Company Limited v. Sinitha and others.

The bench had held: “It is clear that grant of compensation under Section 163-A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by Section 163A(2). Though the aforesaid section of the Act does not specifically exclude a possible defence of the Insurer based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be introduced by the Insurer and/or to understand the provisions of Section 163A of the Act to be contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the Insurer to raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention.”