Heirs of deceased riding borrowed vehicle can’t claim compensation, says Karnataka High Court

Bengaluru: The high court has said that in accident claims where an accident victim has borrowed a vehicle, the legal heirs cannot maintain a claim under section 163-A of Motor Vehicles (MV) Act against the owner and insurer of the vehicle.

Justice K Manmadha Rao relied on the Apex Court judgement on the question while directing the insurance company to pay personal accident compensation of Rs one lakh, with 7.5% interest per annum.

The insurance company had challenged the compensation of Rs 4,24,505 by the Tribunal in Belagavi. The accident had occurred on August 1, 2014, when Prakash Baburao Chigare, a resident of Shivajinagar in Belagavi, was returning from his work to his residence on a motorcycle. It was stated an unknown vehicle hit his motorcycle knocking him down near Arun Talkies on Congress Road, Tilakwadi, Belagavi. He succumbed to the injuries on August 4, 2014. The family members of Prakash Baburao claimed that he was earning Rs 40,000 per annum and was maintaining the entire family.

The insurance company contended that there was a violation of policy conditions, as the deceased was not holding a valid and effective driving licence at the time of accident. It was specifically contended by the insurance company that the deceased was not a third party, and he had borrowed the motorcycle, thereby stepping into the shoes of the owner. Therefore, the claim petition filed under Section 163-A against the insurer of the said vehicle was not maintainable.

The court noted that the issue raised by the insurance company was squarely covered by the decision by the Apex Court in the Ramkhiladi case. The top court had categorically held that though Section 163-A is based on the principle of no-fault liability, the deceased must necessarily be a third party vis-à-vis the insured vehicle.

"However, the Apex Court further held that even as per the contractual terms of insurance, the owner/driver is entitled to personal accident coverage to the extent stipulated in the policy, which, in the absence of any enhanced coverage, is Rs 1,00,000. Applying the said binding precedent to the facts of the present case, the claim under Section 163-A, insofar as it seeks compensation beyond the contractual personal accident cover, is not maintainable. Consequently, the award passed by the Tribunal fastening liability on the insurer cannot be sustained. The claimants would be entitled only to a sum of Rs 1,00,000 as personal accident compensation, with interest at 7.5% pa." Justice Manmadha Rao said.