Damages Involving Motor Vehicles Must Be Adjudicated By Motor Accident Claim Tribunal, Consumer Forums Do Not Have Jurisdiction: NCDRC

Brief Facts:

The Complainants booked 2 tickets for a bus operated by M/s Patel Tours and Travels (“Bus Agency”). During the bus journey from Ahmedabad to Bhuj, the bus caught fire and the passengers were compelled to evacuate it leaving their luggage behind. As a result of the fire, the Complainants' luggage was destroyed. Allegedly, it had valuables worth Rs. 50,000/-. The Complainants sent a legal notice to the Bus Agency seeking compensation for the loss. However, no resolution was provided. The Complainant was suggested to claim the amount from Royal Sundaram Alliance Insurance Co. Ltd. (“Insurance Company”) which had insured the bus trip.

Feeling aggrieved, the Complainants filed a consumer complaint in the District Consumer Disputes Redressal Commission, Kutch-Bhuj, Gujarat (“District Commission”) against the Bus Agency and the Insurance Company. The District Commission allowed the complaint and ordered the Bus Agency to pay Rs. 50,000/- to the Complainant along with Rs. 3,000/- for litigation costs.

Dissatisfied with the order of the District Commission, the Bus Agency filed an appeal to the State Consumer Disputes Redressal Commission, Gujarat (“State Commission”). The State Commission allowed the appeal and modified the order to the extent that the Insurance Company was directed to pay the aforementioned compensation instead of the Bus Agency.

Subsequently, the Insurance Company filed a revision petition in the National Consumer Disputes Redressal Commission (“NCDRC”). It contended that Consumer Fora do not have the jurisdiction to entertain claims by 3rd-parties against insurers for damages involving motor vehicles. Such matters fall within the ambit of the Motor Vehicles Act, as highlighted in Section 165 which excludes the Consumer Fora from adjudicating 3rd-party claims. On the other hand, the Bus Agency contended that the insurance policy itself included a provision regarding 'Damage to 3rd-party Property'. Under this provision, the Insurance Company was obligated to compensate for the damages arising from 3rd-party risks and the loss of the Complainant's luggage would be covered under the same. The Complainants also concurred with these submissions.

Observations of the Commission:

The NCDRC referred to the submissions made by the Insurance Company which argued that consumer forums lack jurisdiction to entertain such matters. It cited the decision of the Supreme Court in The Chairman, Thiruvalluvar Transport Corporation Vs. The Consumer Protection Council [I (1995) CPJ 3SC]. The Supreme Court had ruled that in cases involving fatal accidents, the NCDRC has no jurisdiction to entertain claims for compensation as exclusive jurisdiction is conferred upon the Motor Accident Claim Tribunal (MACT) under the Motor Vehicles Act. The Supreme Court emphasized that the Motor Vehicles Act is a special law concerning claims of compensation arising from motor vehicle accidents and therefore prevails over general consumer protection laws like the Consumer Protection Act, of 1986.

Additionally, the NCDRC referred to its previous decision in National Insurance Company Ltd. Vs. Bolem Rama Devi & Ors. [I (2009) CPJ 273 (NC)], where it had followed the Supreme Court's ruling regarding the jurisdiction of MACT over claims arising from motor vehicle accidents. The NCDRC noted that the complaint in question-related to damage to the complainants' luggage caused by the breakdown of a bus, and such claims could only be adjudicated by the MACT under Section 165 of the Motor Vehicles Act.

Based on these precedents and the specific provisions of the Motor Vehicles Act, the NCDRC held that the State Commission erred in modifying the District Forum's order, which correctly held the Bus Agency liable for compensation without involving the Insurance Company. Therefore, the NCDRC allowed the revision petition, set aside the State Commission's order, and affirmed the District Forum's original order.

Case Title: Royal Sundaram Alliance Insurance Co. Ltd. vs M/s Patel Tours and Travels and Others

Case No.: Revision Petition No. 264 of 2015

Advocate for the Petitioner: Mr S.M. Tripathi

Advocate for the Respondent: None