Date of the Judgment: 31 August 2018
Citation: (2018) INSC 733
Judges: N.V. Ramana, J. and S. Abdul Nazeer, J.
Can an insurance company be held liable when the owner-driver of a vehicle is solely responsible for an accident resulting in their own death? This was the core question before the Supreme Court of India. The Court, in this case, clarified the extent of an insurer’s liability in such situations, holding that while the insurer is not liable for third-party claims, a limited compensation is payable under the personal accident cover.
Case Background
On May 20, 2012, at approximately 7:00 PM, Dilip Bhowmik was driving his vehicle (TR-01-U-0530) from Kathaltali towards his home. Near the Agartala Railway Station bridge on the bypass under Amtali police station, he was involved in an accident, sustaining severe injuries. He was initially taken to Dr. B.R. Ambedkar Memorial Teaching Hospital, Hapania and then referred to AGMC and GBP hospital, Agartala, where he was declared dead. At the time of the accident, he was 43 years old. The respondents, his mother, wife, and children, filed a claim petition asserting that he was a businessman earning Rs. 15,000 per month, seeking compensation of Rs. 68,15,000. The appellant-insurer contested the claim. The Motor Accidents Claims Tribunal, West Tripura, Agartala, awarded a total compensation of Rs. 10,57,800.
Timeline
| Date | Event |
|---|---|
| May 20, 2012 | Dilip Bhowmik was involved in an accident while driving his vehicle. |
| May 20, 2012 | Dilip Bhowmik succumbed to his injuries. |
| Respondents filed a claim petition seeking compensation. | |
| The Motor Accidents Claims Tribunal awarded Rs. 10,57,800 as compensation. | |
| March 15, 2017 | The High Court of Tripura directed the appellant-insurer to pay the compensation awarded by the Tribunal. |
| August 31, 2018 | The Supreme Court of India delivered its judgment on the appeal. |
Course of Proceedings
The appellant, National Insurance Co. Ltd., challenged the Tribunal’s award before the High Court of Tripura at Agartala. The appellant argued that the deceased, being the owner-cum-driver, was not a third party under the Motor Vehicles Act, 1988, and that the accident was due to his own negligence. The High Court accepted that the deceased was not a third party and that the accident was due to his rash and negligent driving. However, the High Court directed the appellant to pay compensation, noting the personal accident cover in the insurance policy, limited to Rs. 2,00,000. The High Court clarified that this order should not be treated as a precedent.
Legal Framework
The case revolves around the interpretation of Section 166 of the Motor Vehicles Act, 1988, which deals with the procedure for filing claims for compensation in motor accident cases. The key issue is whether a claim can be maintained when the owner-driver is solely responsible for the accident.
Arguments
The appellant argued that since the deceased was the owner-cum-driver and solely responsible for the accident, he could not be considered a third party. The insurance company’s liability is to indemnify the insured against third-party claims or damages to property. Since the deceased was at fault, the insurance company should not be liable.
The respondents argued that the insurance policy included a personal accident cover, for which the premium was paid. Therefore, the insurance company should be liable to pay compensation, at least to the extent of the personal accident cover.
| Main Submission | Sub-Submission | Party |
|---|---|---|
| Deceased was not a third party | Deceased was the owner-cum-driver of the vehicle. | Appellant |
| Accident occurred due to the negligence of the deceased. | Appellant | |
| Insurance company is liable to pay compensation | Insurance policy included a personal accident cover. | Respondents |
| Premium was paid for the personal accident cover. | Respondents |
Issues Framed by the Supreme Court
✓ Whether the legal representatives of the deceased, who was the owner-cum-driver of the vehicle and solely responsible for the accident, can maintain a claim petition under Section 166 of the Motor Vehicles Act, 1988?
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the legal representatives of the deceased can maintain a claim petition under Section 166 of the Motor Vehicles Act, 1988? | No, the claim petition is not maintainable. | The deceased was the owner-cum-driver and solely responsible for the accident. He cannot be considered a third party. |
Authorities
The Court relied on the judgment in Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Ors. [(2007) 9 SCC 263], Supreme Court of India, where it was held that the legal representatives of a deceased owner-driver could not maintain a claim petition when the accident was due to the owner’s negligence.
| Authority | Court | How it was used |
|---|---|---|
| Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Ors. [(2007) 9 SCC 263] | Supreme Court of India | Followed; The court used this case as a precedent to hold that the claim petition was not maintainable as the deceased was responsible for the accident. |
Judgment
| Submission by Parties | Court’s Treatment |
|---|---|
| The deceased was not a third party and was responsible for the accident. | The Court agreed with this submission, holding that the deceased, being the owner-cum-driver, could not be considered a third party under the Motor Vehicles Act, 1988. |
| The insurance company is liable due to the personal accident cover. | The Court acknowledged the personal accident cover and directed the insurer to pay Rs. 2,00,000 as compensation. |
The Court held that the claim petition filed by the respondents under Section 166 of the Motor Vehicles Act, 1988, was not maintainable. The Court observed that the deceased being the owner of the offending vehicle was not a third party within the meaning of the Act. The deceased was the victim of his own action of rash and negligent driving.
The Court, however, acknowledged that the insurance policy extended to personal accident cover for the owner-cum-driver, limited to Rs. 2,00,000. Therefore, the Court directed the appellant to pay Rs. 2,00,000 with interest at 9% per annum from the date of the claim petition until the date of deposit.
| Authority | Court’s View |
|---|---|
| Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Ors. [(2007) 9 SCC 263] | The Court relied on this precedent to conclude that the claim petition was not maintainable as the deceased was responsible for the accident. |
What weighed in the mind of the Court?
The Court’s decision was primarily influenced by the principle that a person cannot claim compensation for their own negligence. The Court emphasized that the insurance policy is meant to indemnify the insured against third-party claims, not for the insured’s own fault. However, the Court also considered the personal accident cover in the policy, which provided a limited benefit to the owner-driver.
| Sentiment | Percentage |
|---|---|
| Liability for own negligence | 40% |
| Third-party liability principle | 30% |
| Personal accident cover | 30% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Court’s reasoning was based on the factual aspect that the deceased was the owner-cum-driver and was solely responsible for the accident. This was coupled with the legal principle that a person cannot claim compensation for their own negligence. The Court also took into consideration the personal accident cover in the policy, which provided a limited benefit to the owner-driver.
Logical Reasoning
The Court rejected the argument that the insurance company should be liable for the full compensation, as the deceased was not a third party and was responsible for the accident. The Court clarified that the insurance policy is meant to indemnify the insured against third-party claims, not for the insured’s own fault. The Court also considered the personal accident cover in the policy, which provided a limited benefit to the owner-driver.
The Court’s decision was based on the principle that a person cannot claim compensation for their own negligence. The Court emphasized that the insurance policy is meant to indemnify the insured against third-party claims, not for the insured’s own fault. However, the Court also considered the personal accident cover in the policy, which provided a limited benefit to the owner-driver.
The Court stated, “The deceased being the owner of the offending vehicle was not a third party within the meaning of the Act.”
The Court also noted, “A Claimant, in our view, cannot maintain a claim on the basis of his own fault or negligence and argue that even when he himself may have caused the accident on account of his own rash and negligent driving, he can nevertheless make the insurance company to pay for the same.”
Finally, the Court clarified, “Since the indemnification extended to personal accident of the deceased is limited to Rs. 2,00,000/- under the contract of insurance, the respondents are entitled for the said amount towards compensation.”
There was no minority opinion in this case.
Key Takeaways
- ✓ An owner-driver solely responsible for an accident is not considered a third party under the Motor Vehicles Act, 1988.
- ✓ The legal representatives of such a deceased owner-driver cannot maintain a claim petition for compensation under Section 166 of the Act.
- ✓ However, if the insurance policy includes a personal accident cover for the owner-driver, the insurer is liable to pay the amount specified under that cover.
- ✓ This judgment clarifies the extent of an insurer’s liability in cases where the owner-driver is solely at fault, limiting it to the personal accident cover.
Directions
The appellant was directed to deposit Rs. 2,00,000 with interest at 9% per annum from the date of the claim petition until the date of deposit with the Tribunal, within four weeks from the date of the judgment.
Development of Law
The ratio decidendi of this case is that the legal representatives of a deceased owner-driver, who was solely responsible for the accident, cannot maintain a claim petition under Section 166 of the Motor Vehicles Act, 1988. However, the insurer is liable to pay compensation under the personal accident cover, if any, as per the insurance policy. This case reaffirms the principle laid down in Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Ors. [(2007) 9 SCC 263].
Conclusion
The Supreme Court held that the legal representatives of the deceased owner-driver, who was solely responsible for the accident, could not maintain a claim petition under Section 166 of the Motor Vehicles Act, 1988. However, the insurer was directed to pay Rs. 2,00,000 under the personal accident cover of the insurance policy. This judgment clarifies the extent of an insurer’s liability in cases where the owner-driver is solely at fault, limiting it to the personal accident cover.