The Madhya Pradesh High Court held that an insurer cannot deny compensation for a pillion rider’s death merely because she was the vehicle owner’s wife. The Court ruled she remains a third party under the Motor Vehicles Act, 1988.
INDORE: The Madhya Pradesh High Court has ruled that an insurance company cannot evade its liability to compensate for the death of a pillion rider solely because she was the spouse of the vehicle’s owner, even if both the owner and his wife perished in the same motor accident.
The Court clarified that a person is considered a third party under the Motor Vehicles Act, 1988, unless they are the insured individual or have legally taken on the insured’s role.
Justice Pavan Kumar Dwivedi delivered the ruling while allowing an appeal from the son and daughter of the deceased couple, who were challenging a Motor Accident Claims Tribunal decision. Although the Tribunal had quantified compensation, it denied payment by not holding the insurer liable.
The case involved a tragic accident on March 4, 2019, when Shivnarayan was riding his motorcycle with his wife, Ratanbai, as a pillion rider. Due to reckless driving, the motorcycle tipped over, causing Ratanbai to suffer severe injuries. She died en route to the hospital. Shivnarayan, who was also critically injured, succumbed to his injuries later. The motorcycle was insured with IFFCO Tokyo General Insurance Company Ltd.
Their children filed a claim petition under Section 166 of the Motor Vehicles Act, seeking compensation for their mother Ratanbai’s death alone, without making a claim for their father’s death, as he was both the owner and rider of the motorcycle.
The Claims Tribunal acknowledged that the accident was proven and correctly assessed the compensation at Rs 10.79 lakh, but ruled that the insurer was not liable, arguing that Ratanbai, being the owner’s wife, could not be considered a third party. The Tribunal reasoned that upon the owner’s death, the wife would inherit his position as the vehicle’s owner, thereby entitling her heirs from claiming compensation from the insurer.
Advocate Abhishek Gilke, representing the appellants, contended that the Tribunal had erred by mechanically classifying Ratanbai as the legal representative of the owner. He argued that since Ratanbai died before her husband, at the time of her death, the owner was still alive.
Therefore, she could not be deemed to have filled the insured’s role and remained a third party. Gilke cited various High Court judgments asserting that a relationship with the owner does not automatically negate third-party status. He relied on the judgments in The New India Insurance Company Ltd. vs. Nallasivam (2014 ACJ 1595, Madras High Court) and United India Insurance Co. Ltd. vs. Kulwant Kaur & Ors. (2015 ACJ 531, Himachal Pradesh High Court) to support his submissions.
In opposition, Advocates Sudarshan Pandit and Rajesh Pandit, representing the insurer, maintained that the claim was inadmissible since the owner was not included in the proceedings, and that the claimants had effectively inherited the vehicle upon their parents’ deaths.
They also referred to Supreme Court precedents, arguing that the insurer could not be held liable in the absence of the insured on record. He relied on the Supreme Court judgments in Ningamma & Anr. vs. United India Insurance Co. Ltd. (2009 (3) TAC 13) and Oriental Insurance Co. Ltd. vs. Sunita Rathi & Others ((1998) 1 SCC 365) in support of his submissions.
However, the High Court rejected these arguments, stating that the Tribunal misapplied the law. The Court noted that under Section 50 of the Motor Vehicles Act, ownership of a vehicle does not automatically transfer upon death but requires a statutory procedure.
Referencing Section 155 of the Act, the Court affirmed that the death of the insured does not extinguish the cause of action against the insurer.
Justice Dwivedi observed that the order of deaths was significant in this case. Since Ratanbai died before Shivnarayan, she could not have assumed the role of owner or legal representative of the insured at any time. Thus, she remained a third party, and the insurer’s obligation to indemnify was still in effect.
The Court also declared that the absence of the owner as a party did not absolve the insurer, especially when the cause of action remains valid by law. The Court distinguished the Supreme Court cases cited by the insurer, noting that they arose from materially different factual situations and were not pertinent to claims under Section 166 of the Act where negligence had been established.
The Court in reference to the Ningamma & Anr. vs. United India Insurance Co. Ltd. observed that,
“The Hon’ble Supreme Court in the backdrop of the said facts held that under Section 163- A of the MVA, it is the owner who is liable to pay compensation and as the deceased had borrowed motor cycle from owner, thus he stepped into the shoes of the owner thus, if compensation is allowed, the owner will be recipient of compensation and also liable to pay the same. However, in the present case, claim was filed under Section 166 of the MVA and the claimants never entered into the shoes of the owner, they infact filed claim for the death of their mother who died in the accident and who was a third party because she died as a pillion rider and that too before the death of the owner.”
Consequently, the High Court allowed the appeal, directing the insurance company to pay the already quantified compensation along with applicable interest, and modified the previous award accordingly.
Case Title: Ramdayal Carpenter and Others v. IFFCO Tokyo General Insurance Co. Ltd.
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