The Sikkim High Court has awarded Rs 5 lakh compensation to the legal heirs of Deepen Mukhia, who died in a motor vehicle accident in November 2019, holding that compensation could still be granted under the “no-fault” provision of the Motor Vehicles Act even after the main compensation claim was rejected.
Justice Bhaskar Raj Pradhan delivered the judgment in Rekha Chettri & Ors. v. Tata AIG General Insurance Company & Ors. on September 1, 2026.
Background of the Case
Deepen Mukhia died in a road accident on November 12, 2019. His wife Rekha Chettri, minor son Dishant Sunwar, father Bhakta Bahadur Sunwar and mother Parbati Sunwar had sought compensation of Rs 19,07,560 under Section 166 of the Motor Vehicles Act, 1988.
The Motor Accidents Claims Tribunal, Gangtok, dismissed the claim on the reasoning that the accident was caused by brake failure and that there was no rash or negligent driving by the driver, Rajendra Chettri.
The family then approached the High Court, limiting its argument to whether compensation could still be granted under Section 140 of the Motor Vehicles Act, which provides compensation on a “no-fault” basis.
Court’s Observation
The High Court examined the insurance certificate issued for the vehicle. It noted that the policy was described as an “Auto Secure Commercial Vehicle Package Policy”, but the certificate itself did not clearly explain the extent of the insurer’s liability.
The Court also observed that insurance companies should provide the complete policy and clearly explain its coverage before the Claims Tribunal.
“Every certificate of insurance issued should necessarily provide and clearly state the extent of insurance, the extent of indemnity they have undertaken and what they are liable for,” the Court said.
The Court rejected the insurer’s argument that the deceased’s heirs could not receive compensation because he was allegedly responsible for the accident. It relied on Section 140(4), which provides that a claim for no-fault compensation is not defeated by the wrongful act, neglect or default of the deceased.
Decision
The High Court held that the Tribunal could grant compensation under Section 140 even after rejecting the claim under Section 166. It further held that the vehicle owner was liable under Section 140 and that Tata AIG General Insurance Company, as insurer, was liable to indemnify the owner.
Considering the passage of time and the statutory compensation applicable at the time, the Court directed the insurer to pay Rs 5 lakh with 7% interest from February 14, 2023, until actual payment.
The appeal was accordingly allowed and disposed of.
Case Details
Case Title: Rekha Chettri & Ors. v. Tata AIG General Insurance Company & Ors.
Case Number: MAC App. No. 20 of 2024
Judge: Justice Bhaskar Raj Pradhan
Decision Date: September 1, 2026
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