The non-obstante clause in Sec.163A of the MV Act does not preclude the insurer from asserting defenses regarding liability under Sec.149(2) based on policy terms.

JUDGMENT

Could the insurer of a vehicle raise defences available to it under Sec.149(2) of the Motor Vehicles Act, 1988 (for short, "the M.V Act”) in a proceeding under Sec.163A of the said Act? That is the question raised for a decision in this appeal.

2. The first respondent while travelling on the pillion of a motor cycle sustained injuries on 04.05.2000 due to that vehicle overturning. The second respondent was riding the motor cycle at the relevant time. The first respondent filed O.P(M.V).No.138 of 2001 in the Motor Accident Claims Tribunal, Pathanamthitta (for short, "the Tribunal") under Sec.163A of the M.V Act. The appellant claimed that it has issued only an Act Only policy with respect to the vehicle involved and that the said policy did not cover risk of gratuitous passengers travelling in the motor cycle. The Tribunal assessed compensation payable to the first respondent. It refused to go into the plea raised by the appellant as to its liability taking the position that the non-obstante clause in Sec.163A of the M.V Act overrides all other provisions of the M.V Act and hence as held by the Gujarat High Court inNew India Assurance Co.Ltd. Vs. Chauhan Harisingh Padamsingh & Ors. (2010 ACJ 1896) the appellant cannot raise the plea that as it has issued only an Act Only policy, it is not liable. The appellant was directed to deposit the compensation.

3. The learned Senior Advocate for the appellant has contended that the non-obstante clause in Sec.163A of the M.V Act would not preclude the insurer from taking up defences available to it under Sec.149(2) of the M.V Act. According to the learned Senior Advocate, the non-obstante clause is only to the extent of exonerating a claimant under Sec.163A of the M.V Act from pleading and proving wrongful act, neglect or default of the owner of the offending vehicle. It is contended that since Ext.B1, policy issued with respect to the vehicle involved is only an Act Only policy, it is not required to cover risk of the insured with respect to a gratuitous passenger carried in the motor cycle. The learned Senior Advocate has placed reliance on the decisions in National Insurance Company Ltd. Vs. Swaran Singh (2004 (1) KLT 781), Deepal Girishbhai Soni Vs. United India Insurance Co. Ltd ( 2004(2) KLT 395),United India Insurance Co.Ltd. Vs. Tilak Singh (2006(2) KLT 884) and Yallwwa Vs. National Insurance Co. Ltd. ( (2007(3) KLT 91) SC).

4. The learned counsel for the first respondent has contended that the non-obstante clause in Sec.163A of the M.V Act overrides other provisions in the M.V Act including Sec.149 (2) and hence the insurer is not entitled to take up defences under Sec.149(2) in a proceeding under Sec.163A of the M.V Act. The learned counsel has drawn my attention to the object of the legislature in enacting Sec.163A of the M.V Act. It is argued that when a claim is made under Sec.163A of the M.V Act, so far as the insurer is concerned the only question is whether it has issued a policy of insurance with respect to the offending vehicle and if the answer is in the affirmative the question whether it is only an Act Only Policy or there is violation of the policy condition etc., does not arise for a decision. The learned counsel has placed reliance on the decision in New India Assurance Co.Ltd. Vs. Chauhan Harisingh Padamsingh & Ors. (supra)

5. Adv.Sri.P.B Krishnan, the learned counsel who was appointed as amicus curiae has brought to my notice the decisions inOriental Insurance Co. Ltd. Vs. Rajni Devi (2008 (4) KLT 145), National Insurance Co.Ltd. Vs. Sinitha (2011 (4) KLT 821), United India Insurance Co.Ltd