Vehicle's Proximity To Accident, Not Its Motion Is Key In Determining Liability Under Motor Vehicles Act: J&K High Court

A bench of Justice Javed Iqbal Wani has emphasized that a restrictive interpretation of the term "use" would defeat the purpose of the Motor Vehicles Act, 1988, which serves as beneficial legislation aimed at protecting accident victims.

The court made these observations while hearing an appeal arising from a dispute over compensation awarded by the Motor Accident Claims Tribunal, Baramulla, in a case involving the death of one Ghulam Mohammad Lone. Lone had lost his life on September 10, 2004, in an incident involving a bus owned by respondent No. 11 and driven by respondent No. 10 at the time.

The deceased's legal heirs filed a claim petition before the tribunal following which the tribunal awarded Rs. 6,26,000 as compensation with an interest rate of 9% per annum, holding the insurance company liable to indemnify the vehicle owner. Dissatisfied, the insurer challenged the award before the High Court under Section 173 of the Motor Vehicles Act.

Counsel for the insurance company argued that the deceased did not die due to a vehicular accident but rather fell while atop the stationary bus, thereby contesting the liability. It was further contended that awarding 9% interest was excessive. On the other hand, the claimants contended that the accident arose from the vehicle's use, meeting the criteria set forth under the Motor Vehicles Act.

Court's Observations:

After considering the rival contentions the court dismissed the insurer's claim, highlighting that the test for determining the connection between the accident and vehicle use is based on reasonable proximity.

Referring to a Sharlet Augustine v. K.K. Raveendran, AIR 1992 Ker. 346, and Babu v. Remesan, AIR 1996 Ker. 95 of the Kerala Justice Wani noted,

"In order to determine as to whether the vehicular accident has arisen out of the use of the motor vehicle, the test should be whether the accident was reasonably proximate to the use of a motor vehicle, whether or not the motor vehicle was in motion then, holding further that any restrictive interpretation for the word 'use' would be defeating the scheme and object of the Act of 1998 being a beneficiary piece of legislation."

The Court found that the tribunal correctly adjudicated the matter and did not err in saddling the insurer with liability.

Justice Wani observed,

"It cannot by any stretch of imagination be said that the tribunal erred or least grossly erred while adjudicating/inquiring the claim petition and saddling the insurance company with the liability, in that, it had not been in dispute whether the offending vehicle was on the date of occurrence insured with the insurance company appellant herein."

The only relief granted to the insurer was the reduction of the interest rate from 9% to 6% per annum. The Court reasoned that a lower interest rate was warranted, citing the Supreme Court's recent guidance on interest rates in Civil Appeal No. 2611 of 2020,

With these observations, the High Court upheld the tribunal's findings, affirming the insurance company's liability while slashing the interest rate. Justice Wani concluded by directing the Registry to release the deposited compensation to the claimants and return any excess amount to the insurer.

Case Title: United India Insurance Company Vs Taja Begum

Citation: 2024 LiveLaw (JKL) 283

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