In a recent ruling, the Supreme Court of India reinstated the compensation of ₹25.82 lakh awarded by the Motor Accident Claims Tribunal to the family of a deceased driver. The deceased, who died after a tyre burst caused the vehicle to topple, was the brother of the car's owner. The ruling came in the case titled Manjusha & Ors. vs United India Assurance Co. Ltd. & Anr. (CA @SLP (C) No. 5885 of 2019).
Background of the Case
The incident occurred when a car’s tyre burst, causing the vehicle to overturn. The driver, who was also the brother of the vehicle owner, died from a head injury. His family, including his wife, children, and parents, filed a claim with the Motor Accident Claims Tribunal. The Tribunal granted compensation of ₹25,82,000 based on the deceased's income and other costs like transportation, funeral, and consortium.
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“The car was being driven with caution and moderate speed. The accident occurred solely due to a tyre burst,” the Tribunal noted.
United India Assurance challenged the Tribunal’s award, arguing:
- The driver was not a third party, so the insurer had no statutory liability under the Motor Vehicles Act.
- The insurance policy only provided a limited personal accident cover of ₹2,00,000.
The High Court accepted the insurer’s argument and reduced the compensation to ₹2,00,000, citing the limits of the personal accident cover under a comprehensive insurance policy.
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The Supreme Court bench, comprising Justices K. Vinod Chandran and Sudhanshu Dhulia, found that the insurer had never raised the issue of limited liability either before the Tribunal or in its appeal to the High Court.
“Pleadings and proof of such pleadings by valid evidence is the crux and core of any adjudicatory process,” the Court observed.
Key findings from the Supreme Court:
- The insurance policy and written statement were not part of the appeal records.
- No evidence or cross-examination supported the insurer’s claim of limited liability.
- The insurer failed to plead or prove the limited liability clause before the Tribunal or High Court.
- The IMT (Indian Motor Tariffs) guidelines alone do not bind the insured unless specifically incorporated into the policy.
“Unless it is specified in the insurance policy, the Tariff Advisory Committee’s guidelines cannot bind the insured,” the Court clarified.
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Setting aside the High Court’s decision, the Supreme Court restored the original Tribunal award. It directed United India Assurance to pay the remaining amount within two months at 8% interest per annum, after deducting any previously paid sum.
“We restore the order of the Tribunal… the amounts awarded shall be paid within two months,” the judgment concluded.
Case Name: Manjusha & Ors. vs United India Assurance Company Ltd. & Anr. (@ SLP (C) No. 5885 of 2019)