Back
of Borrowed Motorcycle Can't Claim Compensation Under Section 163A:
In a significant ruling, the has held that a person who borrows a motor vehicle and is injured while riding it cannot claim compensation under against the owner or insurer of that vehicle. The Court clarified that such a borrower steps into the shoes of the owner and therefore cannot maintain a claim based on against the very person whose status they have assumed.
Justice Manish Choudhury , presiding over the single-judge bench, allowed an appeal by , setting aside a award of ₹3.45 lakh granted by the to the claimant, Motiur Rahman . The Court, however, directed the insurer to process any personal accident coverage available under the policy within two months.
The Accident and the Tribunal's Approach
The case stemmed from a single-vehicle accident on , on National Highway 37 near Balijan under Dergaon Police Station. Rahman, riding a motorcycle borrowed from Md. Josefuddin Ahmed , lost control allegedly due to bad road conditions, stones, and fog. He suffered serious injuries to his left leg and head, resulting in permanent disability.
Rahman filed a claim under , alleging rash and negligent driving. The Tribunal, however, found that Rahman himself was responsible for the accident—a finding Rahman did not challenge, allowing it to attain finality. Despite this, the Tribunal converted the claim to one under Section 163A , reasoning that no proof of negligence is required under that provision. It awarded ₹3.45 lakh with 6% interest from the date of filing.
Insurer's Challenge and Key Legal Question
National Insurance Company appealed, contending that Rahman, as the and borrower of the motorcycle, had . Therefore, a claim under Section 163A—which creates a liability on the owner—could not be maintained against the owner and insurer, as it would amount to a claim by the owner against themselves. The insurer also argued that the conversion was procedurally improper.
The core issue before the High Court was whether the claimant, as a borrower of the vehicle, was entitled to compensation under Section 163A.
Precedents and
Justice Choudhury examined binding precedents. In , the apex court held that the legal representatives of a deceased who borrowed a motorcycle could not claim under Section 163A because the deceased had . The Court observed that Section 163A cannot apply where the owner of the vehicle is himself the claimant, as a person cannot be both the payor and the payee.
Similarly, in , the reiterated that a borrower of a vehicle is not a vis-à-vis the insured vehicle. The liability of the insurer is contractual and extends only to third parties, not to the owner or anyone standing in the owner's shoes. The Court in that case also noted that while the claimant may not be entitled to the full structured formula compensation, they may claim personal accident coverage of ₹1 lakh as per the insurance policy.
The also relied on its own coordinate bench decision in National Insurance Company Ltd. v. Bikash Ghosh & Anr. (MAC Appeal No. 79/2020), which followed Ramkhiladi .
Court's Key Observations
Justice Choudhury made pivotal observations:
"The claimant was a and the borrower of the two-wheeler which he borrowed from the owner. He had, thus, of the two-wheeler [motorcycle] which was involved in the accident and therefore, he could not maintain a claim application against the owner, as it would amount to maintain a claim against himself."
On the scope of Section 163A, the Court noted that while the provision operates on the principle of , it still requires the claimant to be a . A borrower of the vehicle is not a vis-à-vis that vehicle.
"In a claim under Section 163A of the Act, there is no need for the claimants to plead or establish negligence... However, at the same time, the deceased has to be a and cannot maintain a claim under Section 163A of the Act against the owner/insurer of the vehicle which is borrowed by him as he will be in the shoes of the owner."
Decision and Directions
The High Court allowed the appeal, set aside the Tribunal's award, and held that National Insurance Company was not liable for the compensation granted. The Court refrained from deciding the issue of conversion since the claimant was found ineligible under both Sections 166 and 163A.
Nevertheless, the Court acknowledged that the insurance policy was valid at the time of the accident and that neither side had adduced evidence regarding personal accident coverage. Accordingly, it directed:
"The claimant shall be entitled to the sum of personal accident coverage, if any, provided in the said policy with interest @ 6% per annum from the date of filing of the claim application till realization. It is observed that the appellant – insurer shall finalize the entire process with regard to personal accident coverage within a period of two months from today."
The ruling reinforces the distinction between third-party claims and those by persons who assume the position of the owner. It serves as a clear reminder that Section 163A is a beneficial provision intended for third-party victims, not for those who borrow a vehicle and suffer injury due to their own fault.
