1. Rider of borrowed motorcycle, injured in single-vehicle accident, seeks compensation from owner and insurer under the Motor Vehicles Act. (Para 2 , 3 , 4 )
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2026 Supreme(Gau) 1792
THE GAUHATI HIGH COURT (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
MANISH CHOUDHURY, J.
National Insurance Company Limited - Appellant
Versus
Motiur Rahman, S/o. Late Abdul Goni - Respondent
MAC Appeal No. 248 of 2014
Decided On : 18-08-2026
Advocates Appeared:
For the Appellant : Ms. S. Roy.
For the Respondent: Ms. P. Baruah.
For the Appellant : Ms. S. Roy.
For the Respondent: Ms. P. Baruah.
A permissive user or borrower of a motor vehicle is considered to have stepped into the shoes of the owner and is not a third party; therefore, they cannot claim compensation under Section 163A of the Motor Vehicles Act, though they may be eligible for personal accident coverage under the insurance policy.
Headnote:(A) Motor Vehicles Act - Section 163A - Permissive User - A person who borrows a vehicle and meets with an accident is deemed to have stepped into the shoes of the owner; consequently, such a person cannot maintain a claim for compensation under Section 163A against the owner or the insurer as they are not a third party. (Para 18, 19)
(B) No-Fault Liability - Section 163A vs Section 166 - While Section 163A provides a structured formula for compensation without requiring proof of negligence, this benefit is restricted to third parties and does not extend to the owner or a borrower of the vehicle. (Para 15.1, 16.1)
(C) Insurance Contract - Personal Accident Coverage - Although a claim under the statutory framework of Section 163A may be maintainable only for third parties, a claimant who is the owner or borrower may still be entitled to compensation under the specific personal accident coverage provided within the terms of the insurance policy. (Para 21)
Issues: Whether a permissive user of a vehicle, who is responsible for the accident, is entitled to compensation under Section 163A of the Motor Vehicles Act.
Legal Category Hierarchy
- tort
- practice and procedure
- insurance law
Table of Contents
2. Insurer argues a permissive user borrowing a vehicle steps into the owner's shoes and cannot claim under Section 163A. (Para 11 )
3. A borrower is in the shoes of the owner; a person cannot claim against himself under Section 163A of the Motor Vehicles Act. (Para 18 , 19 )
4. A permissive user of a borrowed vehicle steps into the owner's shoes and cannot claim compensation under Section 163A against the insurer of that vehicle. (Para 15 , 16 , 18 , 19 )
5. Appeal allowed, impugned judgment set aside; insurer not liable under Section 163A, but claimant entitled to personal accident coverage under the insurance policy. (Para 19 , 21 )
6. Can a permissive user of a borrowed vehicle claim compensation under Section 163A of the MV Act against its insurer?
No, a permissive user steps into the owner's shoes and cannot claim against the owner or insurer as that would be claiming against themselves. (Para 15 , 16 , 18 , 19 )
7. What is the liability of an insurer under a contract of insurance for the owner-driver?
Under the contract, the insurer is liable to pay a third party, not the owner. For the owner-driver, liability is limited to sums like personal accident coverage. (Para 16 , 21 )
8. Can a claim petition under Section 166 of the MV Act be suo moto converted into one under Section 163A by the Tribunal?
Where the claimant is not entitled to compensation under either section, the issue of sua sponte conversion is not required to be gone into. (Para 20 )
JUDGMENT :
Manish Choudhury, J.
1. Heard Ms. S. Roy, learned counsel for the appellant and Ms. P. Baruah, learned counsel for the respondent no. 1.
2. This appeal under Section 173 of the Motor Vehicle Act, 1980 [‘the MV Act’, for short] is directed against a Judgment and Award dated 27.05.2014 passed by the learned Member, Motor Accident Claims Tribunal, Golaghat [‘the Tribunal’, for short] in MAC Case no. 108/2006. By the Judgment and Award dated 27.05.2014, the Tribunal had awarded an amount of Rs. 3,45,000/- against the appellant as the insurer of a two-wheeler [Motorcycle – Hero Honda Ambition] bearing Registration no. AS-03/D-0614, along with interest @ 6% per annum from the date of filing of the claim application till payment.
3. The claim application was filed by the respondent no. 1 herein as a claimant under Section 166 read with Section 140 of the MV Act seeking compensation of Rs. 12,50,000/- on account of injuries sustained by him in a motor vehicle accident. The claim application was registered and numbered as MAC Case no. 108/2006. In the claim application, the owner and the insurer of the two-wheeler were impleaded as the opposite party no. 1 and the opposite party no. 2 respectively. On receipt of notice, both the opposite parties contested the proceedings before the Tribunal by filing their written statement separately. Before the Tribunal, the claimant side examined two witnesses. The claimant examined himself as CW1 and one Dr. Sayed Nazim Hussain was examined as CW2 to depose in respect of the permanent physical disability sustained by the claimant due to the accident. After consideration of the evidence – oral and documentary – led before the Tribunal, the Tribunal, by the Judgment and Award dated 27.05.2014, allowed the claim application on contest by determining the compensation amount @ Rs. 3,45,000/- as just and reasonable. The Tribunal directed the appellant – insurer of the two-wheeler to pay the compensation amount to the claimant along with interest @ 6% per annum from the date of filing of the claim application, that is, 09.06.2006 till payment, in the Tribunal within a period of 60 days from the date of the Judgment and Award.
4. In the claim application, it was mentioned that in the morning hours of 07.02.2006, the claimant riding the two-wheeler, which belonged to the opposite party no. 1, was proceeding from Dergaon town side towards Jorhat side. During the journey, when he reached a place near Balijan under Dergaon Police Station on National Highway 37 at around 07-00 a.m., he lost his control of the two-wheeler due to bad road condition with stones lying on the road, and low visibility due to fog. Losing control, he fell down by the side of the road. As a result of the accident, he sustained serious injuries on his left leg, head and other parts of his person. Immediately after the accident, he was taken to a doctor in Jorhat for treatment. Subsequently, he was referred to Patna, Bihar for further medical treatment. It was stated that due to the accident, the claimant became permanently disabled and he had lost earning capacity.
5. Before the Tribunal, the opposite party no. 1 in his written statement mentioned that the two-wheeler was duly insured with the opposite party no. 2-insurer vide an Insurance Policy no. 200200/31/05/6200000541, with validity upto 27.04.2006 and therefore, he was entitled to be indemnified by the insurer for any amount of compensation to be awarded by the Tribunal.
6. One of the issues framed and decided by the Tribunal, which has relevance in the present appeal, was : whether the accident occurred due to rash and negligent driving of the two-wheeler [motorcycle] bearing Registration no. AS-03/D-0614.
7. For deciding the above issue, the Tribunal considered the testimony of the claimant, CW1. In his testimony, C.W.1 stated that on 07.02.2006, he was riding the two-wheeler, belonging to the opposite party no. 1, on the National Highway from Dergaon to Jorhat and when he re
