Compensation For "No Fault Liability" U/S 140 MV Act Is Adjustable In Claims Of Compensation For Fault Liability: JKL High Court

The observations came from Justice Rahul Bharti while hearing an appeal in terms of which the insurance company had challenged an interim award passed by the Motor Accident Claims Tribunal to the tune of Rs.50,000, invoking Section 140 of the MV Act (No-Fault liability).

The appellants premised their challenge on the ground that the deceased-Yashpal was a gratuitous passenger in the offending vehicle and therefore the dependents of the deceased were not entitled to any compensation whatsoever from the appellant's end as being the insurer of the offending vehicle.

Deciding the appeal Justice Bharati noted that it is only by factual reference that the deceased was not a roadside walker but in fact, a gratuitous passenger that the appellant is seeking to avoid its liability.

"Whether the nature of this defence can be set up by the appellant to avoid the grant of interim compensation on No Fault liability provision by the Motor Accident Claims Tribunal is a very feeble plea as then in every case whenever and wherever an insurer would take up a different factual position qua the motor vehicle accident, then in that eventuality, the Motor Accident Claims Tribunal will be rendered disabled to award compensation on No Fault liability", the bench explained.

Encouraging such pleas of defence would culminate into rendering the very spirit and policy of section 140 of the Motor Vehicles Act as still provision, without any operationality therein, the court added.

Nonetheless, the bench clarified that any compensation made under the No-Fault liability provision is adjustable in the compensation claimed fault liability under section 166 of the Motor Vehicles Act, 1988 and in case the appellant succeeds in proving its defence with respect to the nature of the accident, the Motor Accident Claims Tribunal, Rajouri will be under a jurisdictional duty to consider as to the application of Pay and Recover Principle against the owner and the driver of the offending vehicle.

Finding the appeal premature and misconceived the bench dismissed the same in light of the observations above.

Case Title: Bajaj Allianz General Insurance Co. Ltd Vs Gulshan Kumar and Ors.

Citation: 2022 LiveLaw (JKL) 253

Coram: Justice Rahul Bharti

Counsel For Petitioner Mr Baldev Singh

Counsel For Respondent : Ms Rozina Afzal.

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