Defence of negligence can’t be raised in proceedings u/s 163A of Motor Vehicles Act.

The Supreme Court has upheld compensation awarded to the parents of deceased driver of the vehicle, reiterating that an insurer cannot be permitted to raise a defence of the negligence of the driver (victim) in proceedings under Section 163A of Motor Vehicles Act 1988.

The said observation was made in Shivaji v. Divisional Manager, United India Insurance Co. Ltd. Civil Appeal No.2816 Of 2018 dated 09.08.2018.

CHALLENGE

The appellants are parents of Shaji Shivaji Dudhade, who was the driver of a car, which met with an accident on 15 June 2010. The accident occurred when the car dashed into a truck, resulting in his death along with two other persons, and leaving two people injured, all of whom were travelling in the car.

The appellants filed a claim petition seeking compensation under Section 163A of the Motor Vehicles Act, 1988. The Tribunal noted that since the claim petition had been filed under Section 163A of the Act, the question of proving that the accident happened due to the rash and negligent act of the driver did not arise. By its award dated 30 July 2011, the Tribunal allowed a claim of Rs 4,60,800/- together with interest at the rate 9% per annum.

The insurer preferred an appeal before the High Court of Karnataka. The appellants also filed an appeal before the High Court seeking enhancement of compensation awarded by the Tribunal. The High Court, by its impugned judgment, allowed the insurer’s appeal and set aside the order of the Tribunal. The High Court opined that the idea behind enacting Section 163A is to ensure that even in the absence of any mistake on the part of the driver of the offending vehicle, the injured person or the legal heirs of the deceased person are compensated by the owner and the insurer. As a result, under this provision, since the victim has been contemplated to be an innocent third party, protection is extended only to the injured person or to the legal heirs of the deceased victim, and not to the driver who is responsible for causing the said accident.

HELD

The Supreme Court based its decision upon the precedent of three judge bench in United India Insurance Co. Ltd. v. Sunil Kumar,  AIR 2017 SC 5710. It was held that to permit a defence of negligence of the claimant by the insurer understand Section 163A of the Act as contemplating in a given situation, would be inconsistent with the legislative object behind introduction of this provision, which is final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time.

Consequently, if an insurer was permitted to raise a defence of negligence under Section 163A of the Act, it would bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self -contradictory but also defeat the very legislative intention.

Therefore, in a proceeding under Section 163A of the Act, the insurer cannot raise any defence of negligence on the part of the victim to counter a claim for compensation.