Holding

The Supreme Court held that the claimants were not entitled to compensation under Section 163‑A because the deceased, though authorized to drive, stepped into the shoes of the owner and cannot be both claimant and owner, and remanded the case to the High Court to decide factual issues under Section 166 and determine any quantum of compensation.

Summary

The widowed wife and minor son of Ramappa, who had borrowed a motorbike and died in a solo accident, claimed compensation under Section 163-A of the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal awarded compensation, which the insurer appealed, arguing that Section 163-A applies only to third‑party claims and that the deceased’s income exceeded the Rs 40,000 ceiling. The High Court set aside the award, holding Section 163‑A was inapplicable and ordering restitution. The Supreme Court held that the claimants could not invoke Section 163‑A because the deceased, though authorized to drive, stepped into the shoes of the owner and cannot be both claimant and owner; however, the Court remanded the matter to the High Court to determine factual issues under Section 166, including negligence, applicability of the insurance policy, and the quantum of "just compensation". The appeals were disposed of and the case sent back for fresh fact‑finding.

Issues considered

Whether legal representatives of a person who was driving a borrowed motor vehicle and met with a solo accident are entitled to compensation under Section 163-A of the Motor Vehicles Act, 1988.
Whether Section 163-A applies when the deceased is not the owner of the vehicle but was authorized to drive it.
Whether the claimants can invoke Section 166 of the Act for "just compensation" in the present facts.
Whether the insurer is bound to indemnify the legal heirs under the terms of the insurance policy.
Whether the claimants qualify as a "third party" within the meaning of the Act.
Whether the deceased’s alleged negligence and the income ceiling affect liability.

Legislation cited

Motor Vehicles Act, 1988s. 147, s. 163-A, s. 166

Subjects

Motor Vehicles ActSection 163-ASection 166CompensationInsurance liabilityLegal heirsMotor accidentThird partyJust compensationBorrowed vehicle

Judgment

[2009] 8 S.C.R. 683
...,.
NINGAMMA & ANR. A
v.
UNITED INDIA INSURANCE CO. LTD.
(Civil Appeal No. 3538 of 2009)
MAY 13, 2009
8
[S.B. SINHA AND DR. MUKUNDAKAM SHARMA, JJ.]
,-)

Motor Vehicles Act, 1988:

Sections 147, 163A, 166 - Compensation - Whether the c
legal representatives of a person who was driving a borrowed
Motor Vehicle and met with an accident without involving any
other vehicle would be entitled to compensation - Held: A
party should not be deprived from getting just compensation
" in case the claimant is able to make out a case under any
provision of law - Whether or not the claimants would be
D
governed by the terms and conditions of insurance policy,
whether s.147 would be applicable and whether or not there
was rash and negligent driving on the part of the deceased
are matters of fact required to be answered at/east by the High
E
Court - All the said issues being purely questions of fact,
matter remanded to the High Court - Question of
_,, compensation having regard to earning capacity to be
-i decided by High Court - Since the claim is a very old claim,
High Court to consider the matter as expeditiously as
possible. F

Deepal Girishbhai Soni v. United India Insurance Co.
Ltd., (2004) 5 SCC 385; Oriental Insurance Co. Ltd. v. Meena
Variyal, (2007) 5 SCC 428; Oriental Insurance Co. Ltd. v.
Rajni Devi, (2008) 5 SCC 736; New India Assurance Co. Ltd. G
~ v. Sadanand Mukhi and Ors., (2009) 2 SCC 417; Raj Rani
& Ors. v. Oriental Insurance Co. Ltd. & Ors., [C.A. Nos. 3317-
3318 of 2009 decided by S.C. on 06.05.2009] and Nagappa
v. Gurudaya/ & Ors., (2003) 2 SCC 274, referred to.
683 H
684 SUPREME COURT REPORTS [2009] 8 S.C.R.

A Case Law Reference:
(2004) 5 sec 385 referred to Para 15
(2001) 5 sec 428 referred to Para 15
(2008) 5 sec 736 referred to Para 17
B
(2009) 2 sec 417 referred to Para 17
~·'
(2003) 2 sec 214 referred to Para 23
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
c 3538 of 2009.
From the Judgment & Order dated 19.11.2007 of the High
Court of Karnataka, Bangalore in Review Petition No. 337 of
2007 in Miscellaneous First Appeal No. 4152 of 2005.
D WITH
)'

C.A. No. 3540 of 2009.

Shekhar G. Oevasa, B.V. Pinto, Rohit Pandey (for V.N.
E Raghupathy) for the Appellant.
K.l..Nandwani (for Debasis Misra) for the Respondent.

The Judgment of the Court was delivered by
)'-

F DR. MUKUNDAKAM SHARMA, J. 1. Leave granted.

2. Since both these appeals arise out of the same set of
facts and involve similar questions of law, we propose to
dispose of both these appeals by this common judgment.

G 3. The present appeals arise out of a motor accident
claim. The claimant no. 1 and 2 are the wife and ·son ~
respectively of the deceased-Ramappa. On 09.09.2000, the
deceased was traveling on Hero Honda Motor Cycle, which he
borrowed from its real owner for going from llkal to his native
H place Gudur. When the said motor cycle was proceeding on
-.. '),
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 685
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]

llkal-Kustagl, National Highway, a bullock cart pro~eeding A
ahead of the said motor cycle carrying iron-sheet suddenly
stopped and consequently deceased-Ramappa who was
proceeding on the said motor cycle dashed against it.
Consequent to the aforesaid incident, he sustained fatal injuries
over his vital part of body and on the way to Govt. Hospital, llkal, B
he died. The doctor of the general hospital, llkal conducted post
_,--'!'.
mortem examination over dead body of the deceased and gave
his opinion that the death of the deceased was caused due to
hemorrhage and shock due to the injury to his liver. The
aforesaid motor cycle in which the deceased was traveling at c
the time of accident was insured with the Insurance Company,
namely, the United India Insurance Co. Ltd. and the said motor
cycle was owned by one Paranagouda.
/ .. 4. On 04.10.2000 Appellant No. 1, the wife of the
deceased and Appellant No. 2 - minor son of the deceased D
filed a claim petition under Section 163-A of Motor Vehicles
Act, 1988 (in short 'the MVA') before the Motor Accident
Claims Tribunal No. VI, Bijapur, Karnataka (in short 'the
Tribunal') being M.V.C. No. 896/2000 praying for compensation
of Rs. 8, 10,000/- along with future interest etc. on the ground E-
that at the time of accident the deceased was a healthy person,
j
aged about 32 years and engaged in agriculture, earning Rs.
_, 5,000/- per month and was the sole earning member in their
family.
F
5. The Tribunal received evidence and tested the claim.
The Tribunal held that in absence of definite and cogent proof
of income, the income of the deceased was to be considered
as Rs. 60/- per day as per the provisions of the Minimum
Wages Act. Accordingly, the monthly income of the deceased
-1-
G
was ascertained as Rs. 1,800/- and yearly income as Rs.
21,600/- from which 1/3 was to be deducted leaving thereby
Rs. 14,400/- as the net income of the deceased. Since the age
of the deceased was found to be in between 30 to 35 years,
the relevant multiplier to be applied was '17'. ·.
H
686 SUPREME COURT REPORTS [2009] 8 S.C.R. -
<"
A 6. Accordingly, the Tribunal under its award dated
09.02.2005 partly allowed the claim petition filed by the
appellants holding that the said appellants are entitled to
receive a total compensation amount of Rs. 2,59,800/- along
with interest at the rate of 8% p.a. from the respondent -
B Insurance Company. It is required to be stated at this stage that
compensation as determined by the Tribunal was paid and
received by the legal representatives of the deceased, namely ~ ~

the widow and the minor son.

7. Aggrieved by the said decision, the Insurance Company
c preferred an appeal being Miscellaneous First Appeal No.
4152/2005 before the High Court of Karnataka on the ground
that the accident occurred due to the fault of the deceased and
claim petition before the Tribunal was not maintainable as
Section 163-A of the Act is not applicable unless there was ~ '
D another vehicle involved in the accident. The other ground of
challenge was that the Tribunal erred in allowing the claim
petition when the total income of the deceased was stated to
be more than Rs. 40, 0001- per annum.

E 8. The High Court by its judgment and order dated
08.08.2007 allowed the appeal holding that the claim petition
before the Tribunal was not maintainable as there was no tort-
feasor involved. It was also held that the claim Section 163-A .,_
of the Act was barred when the income of the claimant is stated
F to be above Rs. 40,000/- per annum. Consequently, the High
Court set aside the judgment and award passed by the Tribunal
and directed the appellants herein to refund the amount of
compensation to the Insurance Company.

9. Aggrieved by the aforesaid decision, the appellants filed
G a review petition bearing no. 337/2007. However the same was
dismissed on 19.11.2007 by the High Court with costs of Rs.
5001-.
10. Consequently, the appellants preferred two Special
H Leave Petitions, one bearing No. 25497/2008 against the
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 687
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]
-)

judgment and order dated 08.08.2007 passed in Mis~.ellaneous A
First Appeal No. 4152/2005 by the High Court of Karnataka,
Bangalore and another bearing No. 24236/2008 which is
against the judgment and order dated 19.11.2007 passed in
Review Petition No. 337/2007.
B
11. The counsel appearing for the appellants contended
./ ' before us that the High Court erred in setting aside the judgment
and order of the Tribunal as the Tribunal acted within its
jurisdiction in directing payment of compensation on structured
formula basis under Section 163-A of the MVA. It was also
submitted that the High Court erred in ignoring the jurisdiction
c
of the Tribunal to determine the "Just Compensation" which must
be done in accordance with law and not on the basis of the
pleading of a party who invoked its jurisdiction. It was also
, contended that the High Court erroneously held that the Tribunal
" D
erred in law in not deciding the claim petition as one under
Section 166 of the MVA.

12. On the other hand, the counsel for the respondent has
argued that the High Court rightly set aside the judgment and
order of the Tribunal since in order to become eligible for E
compensation for the loss caused due to the use of motor
vehicle as provided under Section 163-A of the MVA, the
..;

-j
person who has suffered the loss must be a third party under
the MVA and since in the present case the deceased or the
appellants are not the third party, therefore, judgment rendered F
by the High Court did not call for any interference. It was further
submitted that the driver is a representative of the owner if he
was driving under the owner's instructions or permission and
is thus owner qua insurance company and not a third party.

..._ 13. In the light of the aforesaid submissions, the question G
.
,, that falls for our consideration is whether the legal
representatives of a person, who was driving a motor vehicle,
after borrowing it from the real owner meets with an accident
without involving any other vehicle, would be entitled to
compensation under Section 163-A of MVA or under any other H
688 SUPREME COURT REPORTS [2009] 8 S.C.R. ...
f'~

A provision(s) of law and also whether the insurer who issued the
insurance policy would be bound to indemnify the deceased or
his legal representative? Before dwelling further, it would be
useful to discuss the relevant paras of Section' 163-A and 166
of the MVA applicable in the present case.
B
"163-A. Special provisions as to payment of
compensation on structured formula basis.-
f '

(1) Notwithstanding anything contained in this Act or in any
other law for the time being in force or instrument having
c the force of law, the owner of the motor vehicle of the
authorised insurer shall be liable to pay in the case of death
or permanent disablement due to accident arising out of
the use of motor vehicle, compensation, as indicated in the
Second Schedule, to the legal heirs or the victim, as the ). '
D case may be.

(2) In any claim for compensation under sub-section (1),
E the claimant shall not be required to plead or establish that
the death or permanent disablement in respect of which
the claim has been made was due to any wrongful act or
"
neglect or default of the owner of the vehicle or vehicles i-
concerned or of any other person.
F
(3) The Central Government may, keeping in view the cost
of living by notification in the Official Gazette, from time to
time amend the Second Schedule."

166. Application for compensation- (1) An application for
G compensation arising out of an accident of the nature
specified in sub-section (1) of section 165 may be made-
.... ~

....
(a) by the person who has sustained the injury; or

H
(b) by the owner of the property; or
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 689
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]
--,~
(c) where death has resulted from the accident, A
by all or any of the legal representatives of the
deceased; or

(d) by any agent duly authorised by the person
injured or all or any of the legal B
representatives of the deceased, as the case
...... __,
may be:

Provided that where all the legal representatives of the
deceased have not joined in any such application for
compensation, the application shall be made on behalf of c
or for the benefit of all the legal representatives of the
deceased and the legal representatives who have not so
joined, shall be impleaded as respondents to the
application.
"' D

14. Section 163-A of the MVA was inserted by Act 54 of
1994 by way of a social security scheme. It is needless to say
that the said provision is a code by itself. The said provision E
has been inserted to provide for c: new predetermined
structured formula for payment of compensation to road
accident victims on the basis of age/income of the deceased
or the person suffering permanent disablement. In view of the
language used in said section there could be no manner of F
doubt that the said provision has an overriding effect as it
contains a non obstante clause in terms whereof the owner of
the motor vehicle or the authorised insurer is liable to pay
compensation in the case of death or permanent disablement
due to accident arising out of the use of motor vehicle, as G
indicated in the Second Schedule, to the legal heirs or the
victim, as the case may be.

i 5. A number of decisions have been rendered by this
Court in respect of the Section 163A of the MVA. In Deepal H
690 SUPREME COURT REPORTS (2009] 8 S.C.R.

1~ ..
A Girishbhai Soni v. United India Insurance Co. Ud.,(2004) 5
SCC 385, at page 402, one of us (Hon'ble Justice S. B. Sinha)
has observed as follows:

"42. Section 163-A was, thus, enacted for grant of
immediate relief to a section of the people whose annual
B
income is not more than Rs 40,000 having regard to the
fact that in terms of Section 163-A of the Act read with the
t- ~
Second Schedule appended thereto, compensation is to
be paid on a structured formula not only having regard to
the age of the victim and his income but also the other
c factors relevant therefor. An award made thereunder,
therefore, shall be in full and final settlement of the claim
as would appear from the different columns contained in
the Second Schedule appended to the Act. The same is
not interim in nature. The note appended to column 1 which ,.
D deals with fatal accidents makes the position furthermore
clear stating that from the total amount of compensation
one-third thereof is to be reduced in consideration of the
expenses which the victim would have incurred towards
maintaining himself had he been alive. This together with
E the other heads of compensation as contained in columns
2 to 6 thereof leaves no manner of doubt that Parliament
intended to lay a comprehensive scheme for the purpose
of grant of adequate compensation to a section of victims

F
who would require the amount of compensation without
fighting any protracted litigation for proving that the accident
"
occurred owing to negligence on the part of the driver of
the motor vehicle or any other fault arising out of use of a
motor vehicle.

This Court further observed in Oriental Insurance Co. Ltd.
G
v. Meena Variyal, (2007) 5 SCC 428, at page 428:

"18. In New India Assurance Co. Ltd. v. Asha Rani this
Court had occasion to consider the scope of the
expression "any person" occurring in Section 147 of the
H
NINGAMMA & ANR. v. UNITED INDiA INSURANCE 691
. ..
, CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]
Act ihis Court held: (SCC p. 235, para 26) A
"... that the meaning of the words 'any person'
must also be attributed having regard to the context
In Which they have been used i.e. 'a third party'.
Keeping in view the provisions of the 1988 Act, we
are of the opinion that as the provisions thereof do B
... ~ not enjoin any statutory liability on the owner of a
vehicle to get his vehicle insured for any passenger
fravelllng in a goods vehicle, the insurers would not
be liable therefor."
c
In other words, this Court clearly held that the apparently
wide words "any person" are qualified by the setting in
which they occur and that "any person" is to be understood
~
as a third party.
" D
27. We think that the law laid down in Minu 8. Mehta v.
Balkrishna Ramchandra Nayan was accepted by the
legislature while enacting the Motor Vehicles Act, 1988 by
introducing Section 163-A of the Act providing for payment
of compensation notwithstanding anything contained in the
Act or in any other law for the time being in force that the E

,,. owner of a motor vehicle or the authorised insurer shall be
liable to pay in the case of death or permanent
-4
disablement due to accident arising out of the use of the
motor vehicle, compensation, as indicated in the Second
Schedule, to the legal heirs or the victim, as the case may F
-'
be, and in a claim made under sub-section (1) of Section
163-A of the Act, the claimant shall not be required to
plead or establish that the death or permanent disablement
in respect of which the claim has been made was due to
any wrongful act or neglect or default of the owner of the G
vehicle concerned. Therefore, the victim of an accident or
his dependants have an option either to proceed under
Section 166 of the Act or under Section 163-A of the Act.
Once they approach the Tribunal under Section 166 of the
Act, they have necessari!y to take upon themselves the H
692 SUPREME COURT REPORTS [2009] 8 S.C.R.
1-·

A burden of establishing the negligence of the driver or owner
of the vehicle concerned. But if they proceed under Section
163-A of the Act, the compensation will be awarded in
terms of the Schedule without calling upon the victim or his
dependants to establish any negligence or default on the
part of the owner of the vehicle or the driver of the vehicle.
B
28. In Pushpabai Purshottam Udeshi v. Ranjit Ginning & f- •
Pressing Co. (P) Ltd., two of the learned Judges who
constituted the Bench in Minu B. Mehta held that when a
car is driven by the owner's employee on owner's business,
c the normal rule was that it was for the claimant for
compensation to prove negligence. When the Manager of
the owner while driving the car on the business of the owner
took in a passenger, it would be taken that he had the

D
authority to do so, considering his position unless
otherwise shown. If due to his negligent driving an accident
~
-
,

occurred and the passenger died, the owner would be
liable for compensation. The Court noticed that the modern
trend was to make the master liable for acts of his se1vant
whicn may not fall within the expression "in the course of
E his employment" as formerly understood. With respect, we
think that the extensions to the principle of liability have
been rightly indicated in this decision". ~

)..
16. The aforesaid decisions make it quite clear that the
Parliament by introducing Section 163-A in the MVA provided ~-
F for payment of compensation on structured formula basis by
mandating that the owner of a motor vehicle or the authorised
insurer would be liable to pay compensation, as indicated in
the Second Schedule in the case of death or permanent
disablement due to accident arising out of the use of the motor
G vehicle, to the legal heirs or the victim, as the case may be in a
claim made under sub-section (1) of Section 163-A of the MVA.
...
In order to prove a claim of this nature the claimant would not
be required to p_lead or establish that the death or permanent
disablement in respect of which the claim has been made was
H due to any wrongful act or neglect or default of the owner of the
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 693
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]
...'"t
vehicle concerned. A

17. However, in the facts of the present case, it was
forcefully argued by the counsel appearing for the respondent
that the claimants are not the 'third party', and therefore, they
are not entitled to claim any benefit under Section 163-A of the
B
MVA. In support of the said contention, the counsel relied on
the decision of this Court in the case of Oriental Insurance Co.
Ltd. v. Rajni Devi, (2008) 5 SCC 736; and New India
Assurance Co. Ltd. v. Sadanand Mukhi and Ors., (2009) 2
sec 417. c
18. In the case of Oriental Insurance Company Ltd. v.
Rajni Devi and Others, (2008) 5 SCC 736, wherein one of us,
namely, Hon'ble Justice S.S. Sinha is a party, it has been
categorically held that in a case where third party is involved,
,.,
the liability of the insurance company would be unlimited. It was D
also held in the said decision that where, however,
compensation is claimed for the death of the owner or another
passenger of the vehicle, the contract of insurance being
governed by the contract qua contract, the claim of the claimant
against the insurance company would depend upon the terms E
thereof. It was held in the said decision that Section 163-A of
the MVA cannot be said to have any application in respect of
. ,. an accident wherein the owner of the motor vehicle himself is
_..
involved. The decision further held that the question is no longer
res integra. The liability under section 163-A of the MVA is on F
the owner of the vehicle. So a person cannot be both, a claimant
as also a recipient, with respect to claim. Therefore, the heirs
of the deceased could not have maintained a claim in terms of
Section 163-A of the MVA. In our considered opinion, the ratio
of the aforesaid decision is clearly applicable to the facts of
G
the present case. In the present case, the deceased was not
.J the owner of the motorbike in question. He borrowed the said
motorbike from its real owner. The deceased cannot be held
to be employee of the owner of the motorbike although he was
authorised to drive the said vehicle by its owner, and therefore,
H
694 SUPREME COURT REPORTS [2009] 8 S.C.R.

A he would step into the shoes of the owner of the motorbike.

19. We have already extracted Section 163-A of the MVA
hereinbefore. A bare perusal of the said provision would make
it explicitly clear that persons like the deceased in the present
8 case would step into the shoes of the owner of the vehicle. In a
case wherein the victim died or where he was permanently
disabled due to an accident arising out of the aforesaid motor
vehicle in that event the liability to make payment of the
compensation is on the insurance company or the owner, as
C the case may be as provided under Section 163-A. But if it is
proved that the driver is the owner of the motor vehicle, in that
case the owner could not himself be a recipient of
compensation as the liability to pay the same is on him. This
proposition is absolutely clear on a reading of Section 163-A
of the MVA. Accordingly, the legal representatives of the
D deceased who have stepped into the shoes of the owner of the
motor vehicle could not have claimed compensation under
Section 163-A of the MVA.

20. When we apply the said principle into the facts of the
E present case we are of the view that the claimants were not
entitled to claim compensation under Section 163-A of the MVA
and to that extent the High Court was justified in coming to the
conclusion that the said provision is not applicable to the facts ' .
and circumstances of the present case. However, the question
F remains as to whether an application for demand of
compensation could have been made by the legal
representatives of the deceased as provided in Section 166
of the MVA. The said provision specifically provides that an
application for compensation arising out of an accident of the
G nature specified in sub-section (1) of section 165 may be made
by the person who has sustained the injury; or by the owner of
the property; or where death has resulted from the accident, by
all or any of the legal representatives of the deceased; or by
any agent duly authorised by the person injured or all or any of
H the legal representatives of the deceased, as the case may be.
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 695
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]
•--;
When an application of the aforesaid nature claiming A
compensation under the provisions of Section 166 is received,
the Tribunal is required to hold an enquiry into the claim and
then proceed to make an award which, however, would be
subject to the provisions of Section 162, by determining the
amount of compensation, which is found to be just. Person or B
persons who made claim for compensation would thereafter be
~ __., paid such amount. When such a claim is made by the legal
representatives of the deceased, it has to be proved that the
deceased was not himself responsible for the accident by his
rash and negligent driving. It would also be necessary to prove c
that the deceased would be covered under the policy so as to
make the insurance company liable to make the payment to the
heirs. In this context reference could be made to relevant paras
of Section 147 of the MVA which reads as follows:-
" 147. Requirements of policies and limits of liability- ( 1) D
In order to comply with the requirement of this Chapter, a
policy of insurance must be a policy which-

(a) is issued by a person who is an authorised
insurer; or E

(b) insurer the person or classes of persons specified
~ in the policy to the extent specified i,1 sub-section (2)-
_..
(i) against any liability which may be incurred by him
in respect of the death of or bodily [injury to any person, F
including owner of the goods or his authorised
representative carried in the vehicle] or damage to any
property of a third party caused by or arising out of the use
of the vehicle in a public place;
G
....._ (ii) against the death of or bodily injury to any
passenger of a public service vehicle caused by or arising
out of the use of the vehicle in a public place:

Provided that a policy shall not be required-
H
696
.
SUPREME COURT REPORTS [2009] 8 S.C.R.
f .•
A (i) to cover liability in respect of the death, arising
out of and in the course of his employment, of the
employee of a person insured by the policy or in
respect of bodily injury sustained by such an
employee arising out of and in the course of his
B employment other than a liability arising undert he
Workmen's Compensation Act, 1923 (8 of1923)
in respect.of his death of, or bodily injury to, any ,.. '
such employee-

(a) engaged in driving the vehicle, or
c
(b) if it is a public service vehicle engaged as
conductor of the vehicle or in examining tickets on
the vehicle, or

D (c) if its is a goods carriage, being carried in the
vehicle, or
>< -
(ii) to cover any contractual liability.

E

(2) Subject to the proviso to sub-section (1 ), a policy
of insurance referred to in sub-section (1), shall cover any '
liability incurred in respect of any accident, up to the ~

following limits, namely:-
F
(a) save as provided in clause (b), the amount
of liability incurred;

(b) in respect of damage to any property of a
G third party, a limit of rupees six thousand:
,.,,
Provided that any policy of insurance issued with any
limited liability and in force, immediately before the
commencement of this Act, shall continue to be effective
for a period of four months after such commencement or
H
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 697
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.)
till the date of expiry of such policy whichever is earlier. A

(5) Notwithstanding anything contained in any law for
the time being in force, an insurer issuing a policy of B
insurance under this section shall be liable to indemnify the
~~
person or classes of persons specified in the policy in
respect of any liability which the policy purports to cover
in the case of that person or those classes of persons.
c
21. Section 147 of the MVA provides that the policy of
insurance could also cover cases against any liability which
may be incurred by the insurer in respect of death or fatal injury
to any person including owner of the vehicle or his authorised
... representative carried in the vehicle or arising out of the use
D
of vehicle in the public place.

22. When we analyze the impugned judgment of the High
Court in terms of aforesaid discussion, we find that the counsel

-
for the insurance company himself contended before the High
Court that the policy of insurance was an Act policy and the risk E
that is covered is only in respect of persons contemplated under
Section 147 of the MVA. It is the finding of fact which we have
:•
... also upheld in this Judgment that the deceased was authorised
),
by the owner of the vehicle to drive the vehicle. When we
examined the facts of the present case in view of the aforesaid F
submission made, we are of the opinion that such an issue was
required to be considered by the High Court in the light of the
facts and evidence adduced in the case. On consideration of
the Judgment and Order passed by the High Court we find the
same to be sketchy on the aforesaid issue as to whether the G

- ~ claim could be considered under the provisions of Section 166
of the MVA. In this connection, reference can be made to a
judgment of this Court in the case of Oriental Insurance
Company Ltd. vs. Rajni Devi and Others (supra), wherein, it
was held that where compensation is claimed for the death of H
698 SUPREME COURT REPORTS (2009] 8 S.C.R.

A the owner or another passenger of the vehicle, the contract of
~ -
insurance being governed by the contract qua contract, the
/

claim of the insurance company would depend upon the terms '

thereof.

23. Recently, this Court in the case of Raj Rani & Ors. v.
B
Oriental Insurance Co. Ltd. & Ors., (C.A. Nos. 3317-3318 of
2009 @ SLP(C) Nos. 27792-27793 of 2008 pronounced on
;- '
06.05.2009], wherein one of us (Hon'ble Justice S. B. Sinha)
has taken the view that it is not necessary in a proceeding under
the MVA to go by any rules of pleadings or evidence. Section
c 166 of the MVA speaks about "Just Compensation". The court's
duty being to award "Just Compensation", it will try to arrive
at the said finding irrespective of the fact as to whether any plea
in that behalf was raised by the claimant or not. It was further
observed in the aforesaid case that although the multiplier >r
D specified in the Second Schedule appended to the MVA are
stricto sensu not applicable in a case under Section 166 of the
MVA, it is not of much dispute that wherever the court has to
apply the appropriate multiplier having regard to several factors
in mind. The Court has placed reliance 'on earlier judgment of
E this Court in Nagappa v. Gurudayal & Ors., (2003) 2 SCC 274,
wherein it was observed as follows in para 7:

"7. Firstly, under the provisions of the Motor Vehicles Act, •
,~
1988, (hereinafter referred to as "the MV Act") there is no <
restriction that compensation could be awarded only up to
F
the amount claimed by the claimant. In an appropriate case,
where from the evidence brought on record if the Tribunal/
court considers that the claimant is entitled to get more
compensation than claimed, the Tribunal may pass such
award. The only embargo is - it should be "just"
G compensation, that is to say, it should be neither arbitrary,
fanciful nor unjustifiable from the evidence. This would be
clear by reference to the relevant provisions of the MV Act.
Section 166 provides that an application for compensation
v
-
arising out of an accident involving the death of, or bodily
H
NINGAMMA & ANR. v. UNITED INDIA INSURANCE 699
CO. LTD. [DR. MUKUNDAKAM SHARMA, J.]
--;,
injury to, persons arising out of the use of motor vehicles. A
or damages to any property of a third party so arising, or
• both, could be made (a) by the person who has sustained
the injury; or (b) by the owner of the property; or (c) where
death has resulted from the accident, by all or any of the
legal representatives of the deceased; or (d) by any agent B
duly authorised by the person injured or all or any of the
"-~
legal representatives of the deceased, as the case may
be. Under the proviso to sub-section (1 ), all the legal
representatives of the deceased who have not joined as
the claimants are to be impleaded as respondents to the c
application for compensation. The other important part of
the said section is sub-section (4) which provides that "the
Claims Tribunal shall treat any report of accidents
forwarded to it under sub-section (6) of Section 158 as an
application for compensation under this Act''. Hence, the
"· Claims Tribunal in an appropriate case can treat the report
D
forwarded to it as an application for compensation even
though no such claim is made or no specified amount is
claimed."

24. There are indeed cases like New India Assurance E
Company Limited vs. Sadanand Mukhi and Others, (2009) 2
SCC 417, wherein, the son of the owner was driving the vehicle,
" who died in the accident, was not regarded as third party. In
-<.
the said case the court held that neither Section 163-A nor
Section 166 would be applicable. F
25. Undoubtedly, Section 166 of the MVA deals with "Just
Compensation" and even if in the pleadings no specific claim
was made under Section 166 of the MVA, in our considered
opinion a party should not be deprived from getting "Just
G

-- ~)
Compensation" in case the claimant is able to make out a case
under any provision of law. Needless to say, the MVA is
beneficial and welfare legislation. In fact, the court is duty bound
and entitled to award "Just Compensation" irrespective of the
fact whether any plea in that behalf was raised by the claimant
H
700 SUPREME COURT REPORTS [2009) 8 S.C.R.

~~

A or not. However, whether or not the claimants would be
governed with the terms and conditions of the insurance policy
and whether or not the provisions of Section 147 of the MVA •
would be applicable in the present case and also whether or
not there was rash and negligent driving on the part of the
B deceased, are essentially a matter of fact which was required
to be considered and answered at least by the High Court.

26. While entertaining the appeal, no effort was made by
;- .
the High Court to deal with the aforesaid issues, and therefore,
we are of the considered opinion that the present case should
c be remanded back to the High Court to give its decision on
the aforesaid issues. The High Court was required to consider
the aforesaid issues even if it found that the provision of Section
163-A of MVA was not applicable to the facts and
circumstances of the present case. Since all the aforesaid
D issues are purely questions of fact, we do not propose to deal "'
with these issues and we send the matter back to the High
Court for dealing with the said issues and to render its decision
in accordance with law. The High Court will also consider the
question of quantum of compensation, if any, to which the
E claimants might be entitled to, having regard to the earning ...
capacity of th~ deceased and "Just Compensation", if any.
Since the claim is a very old claim, we request the High Court
to consider the matter as expeditiously as possible. •
;.

F 22. In terms of the aforesaid order, we remand back both '
the matters to the High Court to dispose of the same. The
appeals are disposed of in terms of the aforesaid order.

G.N. Appeals disposed of.