Section 163A of the Motor Vehicles Act allows compensation claims regardless of the tortfeasor's status, underscoring no-fault liability for insured drivers in motor accidents.

ORDER :

1. Leave granted.

2. The appellants were the claimants before the Motor Accident Claims Tribunal-XXIV-cum-Additional Chief Judge, City Civil Court at Hyderabad. They filed for compensation on account of the death of one A. Srinivas Rao, caused in a road accident which occurred on 12.08.2005. The first claimant is the wife, the second and third claimants are the sons, and the fourth claimant is the father of the deceased. The deceased was driving a car in which his family was also travelling. To avoid a motorcyclist, coming from the opposite direction rashly and negligently, the car was swerved when it hit a culvert. The driver of the car was admitted to the hospital, and he died after about two and half months on 26.10.2005, succumbing to the injuries caused in the accident.

3. The family of the deceased, the appellants filed the claim petition. Despite finding that the accident occurred due to the rash and negligent driving of the car, which was not the contention of the claimants, the Tribunal awarded Rs. 27,45,600/- (Rupees Twenty-seven lakhs, forty-five thousand and six hundred), computing the pecuniary and non- pecuniary loss caused to the claimants. The insurance company filed an appeal on the ground that there could not have been a claim under Section 166 or 163A of the MOTOR VEHICLES ACT , 1988¹ [for short ‘the MV Act’] since the tortfeasor itself was the deceased whose loss was sought to be compensated. The High Court by the impugned judgment directed that the appellants be granted compensation of Rs. 2,00,000/- (Rupees two lakhs), since the contractual obligation for personal accident was limited to Rs. 2,00,000/- (Rupees two lakhs) by the policy. Interest was also granted at the rate of 7.5% per annum. The judgment of the High Court is impugned herein.

4. There is considerable difference of opinion with respect to whether Section 163A of the MV Act could be invoked in the case of such accidents caused by the negligence of the insured himself. This Court in Special Leave Petition (C) No. 15447-15448 of 2024 has referred the question for consideration before a larger bench after noticing the divergence of opinion and also treading a new path insofar as Section 163A of the MV Act is concerned. The contention of the insurance company, as noticed in the said reference order is at paragraph No. 3 and the reasoning insofar as the reference is in paragraph Nos. 15 and 16 which we extract hereunder:

“3. The compelling contention of the Insurance Company is that the petitioner who is the sole heir of the owner, having succeeded to the estate of the owner of the vehicle who died in the accident cannot at the same time, be the person who has the liability and the recipient of the compensation. The liability to compensate on the death of the owner falls on his estate; which the claimant succeeds to and there cannot be any further compensation on the loss of dependency, is the argument.

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15. We cannot but notice that Section 163A is a special provision brought in, which is a non-obstante clause which overrides not only the entire provisions of the MOTOR VEHICLES ACT , 1988 but also any other law for the time being in force and any instrument having the force of law. We cannot but understand the non-obstante clause having a superseding effect over the laws of insurance or even the terms in the policy, which definitely is an instrument having the force of law. It has also to be noticed that Section 163A makes liable the owner of the vehicle or the authorized insurer to pay in accordance with the IInd Schedule in the case of death or permanent disablement due to the accident arising out of the use of a motor vehicle.

16. Trite is the principle that the liability with respect to an accid