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Shivaji and Anr. v. Divisional Manager, United India Insurance Co. Ltd. and Ors.

Civil Appeal · 2018 INSC 682Decided 9 Aug 2018
Civil Appeal No. 2816 of 2018
Chief Justice Dipak Misra · Justice A.M. Khanwilkar · Dr. Justice D.Y. Chandrachud

Background

The appellants were the parents of a driver who died in a 2010 road accident along with two other people, when the car he was driving collided with a truck. They claimed compensation as legal heirs under Section 163A of the Motor Vehicles Act, a "no-fault" provision that does not require proving the accident was due to anyone's negligence. The Motor Accident Claims Tribunal awarded them compensation, but the Karnataka High Court set that award aside, reasoning that Section 163A is meant to protect "innocent" victims and should not benefit the family of the driver who caused the accident.

Decision Breakdown

The Supreme Court held the issue was already settled by its earlier three-judge ruling in United India Insurance Co. Ltd. v. Sunil Kumar, which found that an insurer cannot raise a defence of the victim's own negligence in a Section 163A claim, because doing so would defeat the scheme's purpose of providing quick, formula-based compensation without needing to establish fault. Applying that precedent, the Court held the High Court was wrong to deny compensation to the deceased driver's parents on the basis that he had caused the accident. The appeal was allowed, the High Court's judgment was set aside, and the Tribunal's original compensation award was restored.

Lesson Learnt

Under the Motor Vehicles Act's no-fault compensation scheme (Section 163A), an insurer cannot escape paying compensation by arguing that the victim (or deceased) was themselves negligent: compensation is payable on a fixed formula regardless of fault.

Official source (sci.gov.in)View Judgment (PDF)

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