[S.163A MV Act] Legal Heirs Of Person Driving Borrowed Vehicle Cannot Claim Compensation For Injury Or Death In Accident: Gauhati HC

The Gauhati High Court recently set aside a judgment of Motor Accident Claims Tribunal which awarded a compensation of Rs. 2,54,000/- to the legal heirs of a deceased person who was driving a borrowed motorcycle, on the ground that a borrower of a vehicle if gets injured or dies in an accident while using a vehicle owned by somebody else, his legal heirs cannot claim compensation under Section 163A of Motor Vehicles Act, 1988.

The single judge bench of Justice Parthivjyoti Saikia observed:

“In Ningamma (supra), it has been held that wherever a person, other than a paid driver, uses a vehicle owned by somebody else, steps into the shoes of the real owner. In that case, the user of the borrowed vehicle becomes the first party, not the third party. When a borrower of a vehicle i.e. the first party gets injured or dies in an accident while using a vehicle owned by somebody else, his legal heirs cannot claim compensation under Section 163-A of the Act of 1988.”

On August 12, 2006, the deceased was driving a motorcycle which was owned by one Gautam Roy Choudhury. It met with an accident and the rider (deceased) died. A claim application under Section 163A of the Motor Vehicles Act, 1988 (the Act of 1988) was filed before the Motor Accident Claims Tribunal, Kamrup (Tribunal) seeking compensation on account of the death of the deceased.

The Insurance Company contested the claim petition by stating that the deceased was not a third party as because he had stepped into the shoes of the actual owner of the motorcycle. However, the Tribunal did not accept the plea of the Insurance Company and awarded compensation of Rs. 2,54,000/- along with interest at the rate of 6 percent per annum from the date of filing of the claim petition.

Aggrieved by the impugned order, the appellant Insurance Company filed the present appeal.

The Counsel appearing for the appellant Insurance Company submitted that the deceased was not a third party and he had already stepped into the shows of the real owner. The reliance was placed upon the judgment of the Supreme Court in Ningamma v. United India Insurance Co. Ltd. (2009).

The Court noted that the liability to pay compensation under Section 163A of the Act of 1988, is on the principle of no fault, therefore, the question, who is at fault, is immaterial in an inquiry under Section 163A of the Act of 1988.

“In a case under Section 163-A of the Act of 1988, the owner of the motor vehicle is liable to pay compensation if he causes injury or death of another person. That is why, the owner of the vehicle purchases Insurance Policy. In that case, the owner becomes the first party and the insurer becomes the second party,” the Court said.

It was opined by the Court that the relevant insurance policy is an Act policy and this policy indemnifies the actual owner of the vehicle from paying compensation to a third party and if it was a package policy, then the owner of the vehicle would have been covered by the policy.

Thus, the Court set aside the impugned order passed by the Tribunal.

Citation: 2024 LiveLaw (Gau) 51

Case No.: MACApp./170/2011

Case Title: National Insurance Co. Ltd. v. Joya Das & Ors.

Click Here To Read/Download Order