Case name: MANJUSHA & ORS. vs UNITED INDIA ASSURANCE COMPANY LIMITED & ANR.
Case number: Special Leave Petition (C) No.5885 of 2019
Judgment date: 25.07.2025
Bench / Judges: Justice Sudhnshu Dhulia, K. Vinod Chandran
Introduction
This issue before the court is that of a deceased driver’s family which is also the brother of the vehicle owner’s claim for compensation under the Motor Vehicles Act of 1988 and the insurance policy which covered the said vehicle. The decedent died of a tyre blow out while driving the car which insured party did not stand by in a limit of Rs 2 lakhs for personal accident. The Tribunal had awarded Rs 25.8 lakhs to the claimants which the High Court had in turn reduced. The Supreme Court looked into the High Court’s decision which also determined the extent of insurer’s liability.
Issues for Determination
Whether in the case of death of a driver which was due to a tyre blow out while he was operating the vehicle which was owned by his brother, does the family of the deceased (brother of the vehicle owner) have a right to claim compensation under the Motor Vehicles Act, 1988?
Was it that the insurance company’s liability under the comprehensive policy which included personal accident cover was for ₹200,000 or that the Tribunal’s award of ₹25,82,000 was in fact valid?
Whether the High Court went out of line in to reduce the Tribunal’s award by putting forth a limitation on the insurer’s liability which the insurer did not bring up at the Tribunal?
Legal Provisions Involved
Motor Vehicles Act, 1988 (MV Act): 1988 Motor Vehicles Act (MV Act):.
Section 147: Outlines what is included in policies and also the liability limits which may be of that which covers third party risks.
Section 163A and 166: For no fault and at fault liability.
Principles of Contract Law (Insurance): Principles of Insurance Law:.
The issue of personal accident coverage within a comprehensive insurance policy is a term that is put into the policy by the insurer and does not be a requirement under the MV Act.
Particularly in the case of IMT 10 which sets out the terms of coverage for personal accident benefits but only if such terms are put forth in the policy.
Appellant’s Arguments
The insurance company reported that it had a limited duty under the comprehensive policy which was to the tune of ₹2,00,000 for the owner’s death or injury they put forth that under Section 147 of the MV Act which does not require insurers to cover owner or driver’s risk that they step in the owner’s shoes. They brought up in support of their stand cases like Oriental Insurance Co. Ltd. v. Rajni Devi and Dhanraj v. New India Assurance Co. Ltd. which the company presented to prove that the High Court which had looked into the insurance policy issue did the right thing in reducing the award out which the deceased (driver) was in fact in the owner’s position.
Respondent’s Arguments
The claimants (wife, kids, parents of the deceased) reported that the issue of limited liability was never brought up by the insurer in the Tribunal or the High Court. Also they said the insurer did not present the policy guidelines or what they term as lead evidence which would prove that the compensation is a breached term of the contract. We are also to report that at the time of the accident the deceased was driving with care and attention and that the cause of the accident was a blown tire, we do not see any proof of the insurer’s claim of the deceased’s negligence.
The claimants put forth that they want the return of the Tribunal’s award of ₹25,82,000 which was based on issues of income, consortium, funeral, and transportation expenses.
Court’s Analysis
In the Supreme Court it was brought to notice that in the SLP record there was no production of the insurance policy or the insurer’s written statement to support the case of limited liability. Also it was brought out that such a issue was not raised by the Tribunal or in the insurer’s memo of appeal before the High Court. The Court looked into past judgments which included Oriental Insurance Co. Ltd. v. Jhuma Saha and Ramkhiladi v. United India Insurance Co. which had reported that statutory liability as per Section 147 of the MV Act does not pass to the owner or driver which in turn step into the owner’s shoes. But in this case the Court drew a distinction which is that the claim here is for personal accident coverage which is a issue of contract and not statute.
The Court noted that in the absence of specific pleadings and proof related to limited liability the High Court which took it upon itself to do so did in fact err. Also the Indian Motor Tariffs (IMT) guidelines put forth by the insurer did not in and of themselves take the place of policy terms unless they were specifically included in the insurance contract.
Judgment
The Supreme Court nullified the High Court\’s judgment and brought back the Tribunal’s decision of a Rs 25.82 lakhs award at an 8% annual interest rate, which insured company is to pay up in two months. What had been paid out prior will be subtracted from the total.
The Court also directed that the insurer make payment into the claimants’ bank accounts via online transfer.
Conclusion
The court reasserts that which personal accident cover is included is a issue of what is in the contract, not something which is forced by statute, also insures do not unilaterally reduce liability without producing the related policy terms and proof. The Supreme Court supported the Tribunal’s decision for the claimants which also brought to light the issue of that which the insurer must present clear pleadings and proof of the policy limitations if they wish to invoke them.
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WRITTEN BY AYUSHI TRIVEDI
