Bombay HC Cuts ₹4.12 Lakh Award To ₹1 Lakh: Rider Killed By Unknown Sumo On Owner’s Bike Was Not A Third Party

Bharat Gawane died in a road accident while driving a motorcycle owned by respondent No. 7 and insured with the appellant. The motorcycle was struck by an unidentified Tata Sumo. His legal representatives brought a claim under Section 163A of the Motor Vehicles Act, 1988.

The Tribunal restricted his annual income to ₹40,000, deducted one-third for personal expenses, and awarded compensation of ₹4,12,005 against the insurer and insured.

The insurer appealed, contending that the deceased could not claim as a third party because he was driving the insured motorcycle.

The policy included compulsory personal accident cover of ₹1 lakh for the owner-driver.

Section 147 of the Motor Vehicles Act concerns compulsory third-party insurance.

Under Section 163A, as applied in Ningamma v. United India Insurance Co. Ltd., (2009) 13 SCC 710, and Ramkhiladi v. United India Insurance Co., (2020) 2 SCC 550, a person driving the insured vehicle who steps into the owner’s shoes cannot claim as a third party under that provision.

The Court referred to Deepal Girishbhai Soni v. United India Insurance Co., (2004) 5 SCC 385, in relation to the ₹40,000 annual-income limit under Section 163A.

The Court also relied on the policy’s express personal accident cover of ₹1 lakh for the owner-driver.

The Tribunal had applied the ₹40,000 income limit but had not addressed whether the deceased qualified as a third party, which the High Court regarded as pivotal.

Applying Ningamma and Ramkhiladi, the Court held that the deceased had stepped into the shoes of the motorcycle’s owner and therefore could not sustain the Section 163A award on a third-party basis.

However, because the policy in force on the date of the accident provided ₹1 lakh in compulsory personal accident cover for the owner-driver, the Court modified the award to that extent.

The insurer and respondent No. 7 were directed to pay the claimants ₹1 lakh, with interest at 8% per annum from the filing of the claim petition until deposit.

The Tribunal was directed to disburse that amount and refund any excess already deposited; if the claimants had withdrawn excess funds, they were directed to redeposit them for adjustment and return to the appellant.

The statutory deposit, with interest, was to be transferred to the Tribunal.