[Motor Vehicles Act] Legal Heirs Of Borrower Of Vehicle Cannot Claim Compensation Under Section 163A: Gauhati High Court

Update: 2024-08-07 14:00 GMT

The Gauhati High Court set aside a decision by the Motor Accident Claims Tribunal, which had awarded Rs. 2,54,000 in compensation to the legal heirs of a deceased individual who was driving a borrowed motorcycle.

In this case, the deceased had been operating a motorcycle owned by some other person when he was involved in a fatal accident. The deceased's legal heirs filed a compensation claim under Section 163A of the Motor Vehicles Act before the Tribunal. This section provides for compensation on a no-fault basis, meaning the question of who was at fault in the accident is not considered.

A bench of Justice Parthivjyoti Saikia held, “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.”

Advocate R. Goswami appeared for the appellant and Advocate D. Mondal appeared for the Respondent.

The Insurance Company contested the claim, arguing that the deceased, being a borrower of the motorcycle, was not a "third party" under the Act.

The Court reasoned that under Section 163A, the compensation obligation falls on the vehicle owner, who typically purchases an insurance policy to cover such liabilities. The insurance policy in question was an Act policy, meant to cover liabilities arising from third-party injuries or deaths, not for claims made by those stepping into the shoes of the owner. The Court added, “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 held that the Tribunal’s award of compensation to the legal heirs was incorrect based on the legal interpretation of third-party status and the insurance policy's coverage.

Consequently, the High Court set aside the Tribunal's order, denying the compensation claim made under Section 163A.

Cause Title: National Insurance Co. Ltd. v. Joya Das & Ors., [GAHC010108002011]

Appearance:

Appellant: Advocates D K Das, R Goswami, A Alam

Respondents: Advocates D Mondal, P Sarma

Click here to read/download Judgment



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