Claimants cannot claim compensation under Section 163A of Motor Vehicle Act after dismissal under Section 166, SC to reconsider the judgment

While hearing a case regarding motor accident compensation claims, the Supreme Court (SC) bench of Justice Sudhandhu Dhulia and Justice K Vinod Chandran referred its decision in the Deepal Girishbhai Soni case, relating to compensation under the Motor Vehicle Act, to another bench for reconsideration. In the Deepal Girishbhai Soni case, the SC bench held that “where no case is made out for awarding compensation under Section 166 of the Act, the claimants cannot take the liberty of, then moving a claim under Section 163A of the Act.” Section 163A of the Act (Special provisions as to payment of compensation on a structured formula basis) was inserted in the Act via an amendment in 1994. It is beneficial legislation as it awards compensation to the claimants on a ‘no-­fault liability’ basis. 

In this case, Chacko George was traveling with his wife and two minor children in a car on   August 19, 2000, which was driven by their driver, when they met with an accident, in which the father (Chacko George), one of the minor children and the driver were killed.  The mother, her surviving child, and her in-­laws thereafter filed 5 claim petitions before the Motor Accident Claims Tribunal. The finding of the Tribunal was that the accident occurred due to the negligent driving of the driver of the car in which they were travelling and consequently, their claim petitions were dismissed. Further, the matter was taken up by the High Court which opined that since the claim was made under Section 166 of The Motor Vehicles Act and the accident occurred due to the negligence of the driver; the vehicle was covered by an ‘Act only’ policy the claim for gratuitous passengers against the insurer cannot be sustained. The owner of the car was the deceased husband and hence, the rejection of the claim petition was upheld. Further, a plea was made by the Counsel for the claimants that their claims may be treated under Section 163A of the Act which was declined by the HC by referring to the decision of the top court in the Deepal Girishbhai Soni case. The matter was, therefore, mentioned before the SC.

While hearing the matter, the SC said, “In fact, the said decision…finds introduction of Section 163A of the Act to be a social security scheme, brought about on the recommendations of a Review Committee, appointed on various representations received from different stake holders. The need for a more comprehensive scheme of 'no­fault liability' was felt, for reason of the ever­ increasing instances of motor vehicle accidents and the difficulties in proving rash and negligent driving as a cause, leading to the accident.” Further, it highlighted the benefits of Section 163A. The bench observed, “Indeed, the finding that if the accident occurred due to the fault of one's own driver, but even in such a case, the claimants would be prohibited from moving an application under Section 163A of the Act; if they had unsuccessfully moved an application under Section 166 of the Act, is a difficult proposition in law to be accepted; especially given the beneficial nature of the provision which is also one incorporated, notwithstanding the other provisions of the Act or any other law in force.”

After hearing the matter, the SC bench ordered, “The position, all the same, is that we are presently bound to follow the three-­Judge Bench decision in Deepal Girishbhai Soni. However, considering our difficulty, which we have expressed hereinabove, with all respect but purely in the interests of justice, we are of the opinion that this matter requires re­consideration by another three-­judge Bench, and therefore, we refer the matter to Hon’ble The Chief Justice of India for constituting a three­Judge Bench for re­consideration of the issue.”