Claim U/s 163A MV Act Not Maintainable Against The Owner/Insurer Of The Vehicle Borrowed By Deceased: SC [Read Judgment]

The Supreme Court has observed that a claim under Section 163A of the Motor Vehicles Act is not maintainable against the owner and insurance company of the vehicle which was being driven by the deceased himself.

In this case, the legal heirs of the deceased filed a claim under Section 163A of the Motor Vehicles Act against the owner and insurance company of the vehicle which was being driven by the deceased himself. The Tribunal allowed the claim on the ground that the deceased was in employment of the owner of the vehicle which was driven by him and secondly, in an application under Section 163A of the Act, the negligence is not required to be established and proved and it is enough to establish and prove that the deceased has died in a vehicular accident and while driving a vehicle.

The appeal before the Apex Court was filed against the Rajasthan High Court judgment which held that since claimants have not filed the claim petition against the owner of another vehicle whose driver was in fact negligent, even as per the claimants and the claim petition should have been filed by the claimants against the owner of another vehicle to seek the compensation, the application under Section 163A of the Act against the insurance company of the vehicle driven by the deceased himself is liable to be dismissed.

Agreeing with the High Court's reasoning, the bench of Justice Ashok Bhushan and Justice MR Shah observed that the claimants ought to have joined and/or ought to have made the claim under Section 163A of the Act against the driver, owner and/or the insurance company of the 24 offending vehicle. The bench noted the judgment in Ningamma v. United India Insurance Co. Ltd. (2009) 13 SCC 710 wherein it was held that the owner of the vehicle or his legal representatives or the borrower of the vehicle cannot raise a claim under Section 163A of the Act for an accident in which there was no negligence on the part of the insured vehicle. It said:

It is true that, in a claim under Section 163A of the Act, there is no need for the claimants to plead or establish the negligence and/or that the death in respect of which the claim petition is sought to be established was due to wrongful act, neglect or default of the owner of the vehicle concerned. It is also true that the claim petition under Section 163A of the Act is based on the principle of no fault liability. However, at the same time, the deceased has to be a third party and cannot maintain a claim under Section 163A of the Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner and he cannot maintain a claim under Section 163A of the Act against the owner and insurer of the vehicle bearing registration No. RJ 02 SA 7811. In the present case, the parties are governed by the contract of insurance and under the contract of insurance the liability of the insurance company would be qua third party only. In the present case, as observed hereinabove, the deceased cannot be said to be a third party with respect to the insured vehicle bearing registration No. RJ 02 SA 7811.  

The Court held that as the claim under Section 163A of the Act was made only against the owner and insurance company of the vehicle which was being driven by the deceased himself as borrower of the vehicle from the owner of the vehicle and he would be in the shoes of the owner, the High Court has rightly observed and held that such a claim was not maintainable and the claimants ought to have joined and/or ought to have made the claim under Section 163A of the Act against the driver, owner and/or the insurance company of the offending vehicle.

Case name: Ramkhiladi vs. United India Insurance Company
Case no.:Civil Appeal No. 9393 of 2019 
Coram: Justices Ashok Bhushan and MR Shah

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