Supreme Court of India.
Supreme Court Refers Key Motor Accident Compensation Issue to Larger Bench: New Delhi – The Supreme Court has referred a crucial legal question concerning motor accident compensation to a larger bench, a move that could significantly impact how claims are handled for the death of a vehicle owner. The Court is examining whether a deceased vehicle owner’s legal heirs can claim “no-fault” compensation under Section 163A of the Motor Vehicles Act, 1988, even if the accident did not involve a third-party vehicle.
A Division Bench of Justices Sudhanshu Dhulia and K Vinod Chandran expressed strong disagreement with earlier judicial pronouncements that limited such compensation to cases involving third-party risks. The bench’s observation came during the hearing of a petition filed by a minor child seeking compensation for the deaths of her parents in a solo car accident. The parents’ vehicle had collided with a wall after a tire burst.
Under Section 163A, the owner of a motor vehicle or the authorized insurer is liable to pay compensation to the legal heirs of a victim who dies or is permanently disabled in an accident arising from the use of the vehicle.
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The bench stated its view clearly: “A claim under Section 163A…covers every claim and is not restricted to a third party claim; without any requirement of establishing the negligence, if death or permanent disability is caused by reason of the motor accident.”
This interpretation stands in conflict with rulings from other coordinate benches, necessitating a referral to a larger bench for an “authoritative pronouncement.” The Court emphasized that a restrictive interpretation of Section 163A goes against the beneficial nature of the legislation, which was introduced to account for the increased risks of accidents on today’s roads.
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The case, Wakia Afrin (Minor) v. National Insurance Co. Ltd, stems from a 2023 Orissa High Court ruling that set aside a compensation award initially granted by a Motor Accident Claims Tribunal (MACT). The High Court had reasoned that the claim was not maintainable because the vehicle owner (the minor’s father) had also died in the accident, creating a situation where there was no other living person liable for the incident.
The Supreme Court, however, found the High Court’s reasoning untenable. It restored the MACT’s award of ₹4.08 lakh to the minor child for her mother’s death. The Court also observed that the insurance policy’s liability for the death of the father (the vehicle owner) was capped at ₹2 lakh.
The core question that remains is whether the minor child is entitled to additional no-fault compensation for her father’s death under Section 163A, a point that has now been sent to a larger bench for a final determination.
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The insurer, National Insurance Company, represented by Advocate Ambhoj Kumar Sinha, had argued that granting compensation would create an “anomalous situation” where the minor child, as the heir, would be both liable for the accident and the beneficiary of the compensation.
The petitioner, represented by Advocate Satya Kam Sharma, challenged this view.
The final decision of the larger bench is expected to bring much-needed clarity to the interpretation of Section 163A and will have significant implications for families of vehicle owners who die in accidents that do not involve another party.
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