In a case involving a claim filed by the Legal Representatives of the deceased against the Insurance Company, the MACT passed an award granting compensation of an amount, of Rs. 10,57,800/- as against the claim of the LR’s of the deceased at Rs. 68,15,000/-. The Insurance Company filed an appeal before the High Court of Triupura at Agartala which further upheld the award of compensation awarded by the MACT. The Insurance Company- Appellant filed the appeal before the Supreme Court challenging the judgment and order of the MACT which was further upheld by the High Court.

The deceased met with an accident and sustained grievous injuries on his person and succumbed to his injuries subsequently. The LR’s of the deceased filed a claim petition which was concluded by granting an amount of Rs. 10,57,800/-. After the High Court upheld the order and judgment, the appellant filed an appeal stating that the claim was not just as the contract clause of indemnification extended to a personal accident of the owner-cum-driver was limited to the extent of Rs 2 lakhs. The Bench of Justice NV Ramana and Justice S Abdul Nazeer observed that the LR’s were not eligible to claim compensation under Section 166 of the MV Act which reads as follows:

  1. Application for compensation.—

(1) An application for compensation arising out of an accident of the nature specified in sub-section (1) of section 165 may be made—

(a) by the person who has sustained the injury; or

(b) by the owner of the property; or

(c) where death has resulted from the accident, by all or any of the legal representatives of the deceased; or

(d) by any agent duly authorised by the person injured or all or any of the legal representatives of the deceased, as the case may be: Provided that where all the legal representatives of the deceased have not joined in any such application for compensation, the application shall be made on behalf of or for the benefit of all the legal representatives of the deceased and the legal representatives who have not so joined, shall be impleaded as respondents to the application. 1[(2) Every application under sub-section (1) shall be made, at the option of the claimant, either to the Claims Tribunal having jurisdiction over the area in which the accident occurred, or to the Claims Tribunal within the local limits of whose jurisdiction the claimant resides or carries on business or within the local limits of whose jurisdiction the defendant resides, and shall be in such form and contain such particulars as may be prescribed: Provided that where no claim for compensation under section 140 is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant.]

The Counsel for the appellant company argued that the compensation should be in accordance with the indemnification clause i.e. Rs. 2,00,000/- only and not beyond that.  The Bench referred to the judgment in Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt) and Ors. (2007) 9 SCC 263, wherein the Court held that the claim

petition filed by his LRs was not maintainable. It was held thus:-

“10. The deceased was the owner of the vehicle. For the reasons stated in the claim petition or otherwise, he himself was to be blamed for the accident. The accident did not involve motor vehicle other than the one which he was driving. The question which arises for consideration is that the deceased himself being negligent, the claim petition under Section 166 of the Motor Vehicles Act, 1988 would be maintainable.

11. Liability of the insurer Company is to the extent of indemnification of the insured against the respondent or an injured person, a third person or in respect of damages of property. Thus, if the insured cannot be fastened with any liability under the provisions of the Motor Vehicles Act, the question of the insurer being liable to indemnify the insured, therefore, does not arise”.

Pronouncing its decision, the Bench set aside the award passed by the MACT and directed the appellant company to deposit the sum of Rs. 2,00,000/- with interest @ 9 per cent per annum from the date of the Claim Petition till the date of deposit with the Tribunal within a period of four weeks from the date of passing the judgment.


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Judgment: National Insurance Co. Ltd Versus Ashalata Bhowmik and Ors