Motor Accident Compensation | Supreme Court To Reconsider Judgment Barring Claim Under S.163A MV Act After Dismissal S.166 Claim

For context, Section 166 permits the claimant to seek compensation based on proving fault or negligence of the driver of the offending vehicle. However, Section 163A allows for no-fault liability, meaning the claimant is not required to prove any wrongful act, neglect, or default by the vehicle owner or driver.

The Bench of Justices Sudhanshu Dhulia and K. Vinod Chandran reasoned that Section 163A is a beneficial legislation and thus it is difficult to accept the decision in the Deepal Girishbhai Soni case. In view of this, the Court ordered:

“The position, all the same, is that we are presently bound to follow the three­ Judge Bench decision in Deepal Girishbhai Soni (supra). However, considering our difficulty, which we have expressed hereinabove, with all respect but purely in the interests of justice, we are of the opinion that this matter requires re­consideration by another three ­judge Bench and therefore, we refer the matter to Hon'ble The Chief Justice of India for constituting a three­Judge Bench for re­consideration of the issue.”

To give a brief factual background, in the present case, one Chacko George was travelling with his wife. The car was driven by a driver, and present in the vehicle were two minor children. The car met with an accident. The father (Chacko George), one of the minor children and the driver were killed. The mother, her surviving child and her in­-laws thereafter filed claim petitions before the Tribunal. Pertinently, the claim was made under Section 166.

However, the petition was dismissed by the Tribunal, observing that the accident occurred due to the negligent driving of the driver. When challenged, the High Court upheld the rejection. Imperatively, at this stage, a plea was made by the claimants for instead treating their claim under Section 163A. However, the High Court, adhering to the decision in Deepal Girishbhai Soni, declined the same. Against this background, the matter came up before the Apex Court.

At the outset, the Court, after perusing the aforementioned precedent, discussed the insertion of Section 163A under the Act.

“In fact, the said decision in paragraph 39 finds introduction of Section 163A of the Act to be a social security scheme, brought about on the recommendations of a Review Committee, appointed on various representations received from different stake holders. The need for a more comprehensive scheme of 'no­fault liability' was felt, for reason of the ever­ increasing instances of motor vehicle accidents and the difficulties in proving rash and negligent driving as a cause, leading to the accident.,” the Court said.

The Court observed that though this provision has been repealed, as a similar provision has been inserted, it is still relevant because it was applicable when the accident occurred.

The Court highlighted how Section 163A is a beneficial piece of legislation. Thus, in cases, including the present one where half of the family died, the Court found it difficult to accept the position of law laid down in Deepal Girishbhai Soni.

“Indeed, the finding that if the accident occurred due to the fault of one's own driver, but even in such a case, the claimants would be prohibited from moving an application under Section 163A of the Act; if they had unsuccessfully moved an application under Section 166 of the Act, is a difficult proposition in law to be accepted; especially given the beneficial nature of the provision which is also one incorporated, notwithstanding the other provisions of the Act or any other law in force.,”

The Court observed that in cases where no claim is made under Section 166, the Tribunal should give an opportunity to the claimants to convert their claim under Section 163A, even if not sought voluntarily by them. Further, it also opined that in the present case, where both the vehicle's owner and insurer were made a party, a 'no­fault liability' could be imposed on the insurer of the other vehicle as a third-party claim.

In view of these facts and circumstances, the Court passed the above order.

Case name: VALSAMMA CHACKO & ANR v. M.A. TITTO & ORS., SPECIAL LEAVE PETITION (C) NO. 27621 OF 2019

Citation : 2025 LiveLaw (SC) 271

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