Compensation under Section 163A cannot be assessed by applying Section 166 principles.

On 4 April 2010, Lobanbhai Kehjibhai Mandoriya was travelling as a pillion rider on a motorcycle with two other persons when the motorcycle met with an accident; he died from his injuries the following day.

His legal heirs filed a claim under Section 163A of the Motor Vehicles Act, 1988, seeking compensation from the driver, owner and insurer.

The Tribunal awarded ₹6,24,880 with interest at 9% per annum, but assessed compensation using principles applicable to Section 166 and awarded amounts under heads including future prospects and consortium, relying on National Insurance Co. Ltd. v. Pranay Sethi.

The insurer appealed.

Whether the Tribunal could assess a claim filed under Section 163A by applying the principles applicable to a claim under Section 166 of the Motor Vehicles Act.

Whether the matter should be remanded for fresh consideration, including consideration of any request to convert the claim to one under Section 166.

Sections 163A and 166 of the Motor Vehicles Act provide distinct statutory schemes, and a claim under one provision must be assessed in accordance with the principles governing that provision.

National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, was the authority the Tribunal relied on when awarding additional heads of compensation under Section 166 principles; the High Court held that the Tribunal’s approach could not be sustained in a Section 163A claim without due regard to the distinction between the provisions.

The Court also referred to Mohammed Siddique v. National Insurance Co. Ltd., (2023) 3 SCC 57, for the principle that triple riding, by itself, does not establish negligence or contributory negligence on the part of a pillion rider.

A claimant should not be prejudiced merely by the manner in which the claim was framed where the material may warrant consideration under the appropriate statutory provision.

The claim was expressly brought under Section 163A, yet the Tribunal assessed compensation using Section 166 principles and relied on Pranay Sethi.

Because the two provisions have distinct statutory schemes, the Court found that this approach required fresh consideration.

It also noted that the claimants may have chosen Section 163A because the deceased was one of three persons on the motorcycle, but referred to Mohammed Siddique to clarify that triple riding alone does not establish negligence by a pillion rider.

Rather than determine the proper compensation or convert the claim itself, the Court remitted the matter and directed that any conversion request be considered by the Tribunal in accordance with law.

The Tribunal was directed to decide the claim within three months of receiving the order, with both parties at liberty to lead further evidence; any request to convert the claim to one under Section 166 is to be considered in accordance with law.

The Tribunal must decide the matter on its merits without being influenced by the earlier award or the High Court’s observations.

Any deposited award amount is to remain invested pending fresh adjudication, and amounts already disbursed are not to be recovered at this stage but must be adjusted in the final determination.