25 July 2025 Motor Accident >> Family Law  

This case of Manjusha & Others v/s United India Assurance Company Limited & Another addresses whether the family of a deceased driver, who was also the brother of the vehicle's owner, is entitled to compensation under the Motor Vehicles Act, 1988, when the car's tire burst, causing a fatal accident. The core issue revolves around the distinction between statutory liability and contractual liability under an insurance policy.

The deceased was driving his brother's car, with both families inside, when a tire burst, leading to a fatal accident. The Motor Accidents Claims Tribunal (MACT) awarded the deceased's family Rs. 25,82,000 in compensation. The insurance company appealed, arguing driver negligence and, implicitly, that the driver (stepping into the owner's shoes) was the tortfeasor. The High Court, however, reduced the compensation to Rs. 2,00,000, finding that while the comprehensive policy covered personal accident, it was limited to this amount for injury/death to the owner/driver.

The Supreme Court examined several precedents, all of which focused on the statutory liability of insurers under the MV Act, which generally excludes coverage for the owner/driver of the vehicle. However, the Court emphasized that in this case, the claim was not based on statutory liability but on the contractual liability of a personal accident cover, which was admittedly taken.

Crucially, the Court noted that the insurance company had not pleaded limited liability either before the Tribunal or in its appeal to the High Court. The primary contentions raised by the insurer revolved around driver negligence and the absence of a valid driving license, both of which were not substantiated or pressed. The Court also pointed out that the insurance policy itself, which would detail any limited liability, was not produced as evidence, nor were the guidelines from the Tariff Advisory Committee (IMT 16) that the insurance company later cited to argue for limited liability.

Ultimately, the Supreme Court found that since the argument for limited liability was never properly pleaded or proven by the insurance company, the High Court erred in unilaterally reducing the compensation based on a perceived limited liability. The Court highlighted the fundamental principle that there can be no proof without specific pleadings.

Therefore, the Supreme Court set aside the High Court's order and restored the Tribunal's original award of Rs. 25,82,000 with 8% interest, directing payment within two months.

Motor Vehicles Act, 1988