In Section 166 claims, tribunals must determine drivers’ negligence and contributory negligence in inter-vehicle collisions.

On 1 October 2015, a collision occurred between two motorcycles—Hawala vehicle No. GJ-03-HF-3600, driven by deceased Narendra Singh Jhala, and Bajaj Pulsar motorcycle No. GJ-03-HG-3965. Both drivers sustained serious injuries and died.

Their respective legal heirs filed claim petitions under Section 166 of the Motor Vehicles Act, 1988, being MACP Nos. 548 of 2016 and 899 of 2016.

The Tribunal awarded ₹16,26,000 in MACP No. 548 of 2016 and ₹18,88,800 in MACP No. 899 of 2016, with interest at 9% per annum.

The Tribunal did not assess the negligence or contributory negligence of either driver and proceeded substantially as though the claims were under a no-fault provision.

Bajaj Allianz, the insurer concerned in MACP No. 548 of 2016, challenged the common judgment and award before the High Court.

Whether, in claims filed under Section 166 of the Motor Vehicles Act, the Tribunal was required to determine the negligence or contributory negligence of the drivers involved in the collision before awarding compensation?

Whether the Tribunal’s failure to assess the negligence of the two drivers rendered the common judgment and awards in MACP Nos. 548 of 2016 and 899 of 2016 liable to be set aside and remanded for fresh adjudication?

Whether the findings concerning negligence in the unchallenged award in MACP No. 899 of 2016 could stand when the common judgment and award was challenged in respect of MACP No. 548 of 2016?

Claims under Section 166 of the Motor Vehicles Act, 1988 are fault-based claims, requiring adjudication of the driver’s negligence, the owner’s vicarious liability, and the insurer’s liability to indemnify the insured.

The Court relied on The Oriental Insurance Company Limited v. Meena Variyal & Ors., (2007) 5 SCC 428, which held that a claimant under Section 166 must establish that the driver was negligent and that such negligence caused the accident.

In contrast, claims under Sections 163A or 164 of the Act do not require proof of negligence.

The Court also applied the principle that, where a common judgment determines interconnected issues in two claim petitions arising from the same accident, the findings regarding negligence may affect both proceedings; consequently, the relevant findings in the unchallenged claim petition could not be allowed to remain inconsistent with the adjudication required in the challenged claim.

The High Court found that both claim petitions were expressly based on Section 166 and therefore required a determination of negligence.

Since the accident involved a collision between two motorcycles and both drivers died, the Tribunal was required to examine whether either driver, or both drivers, had been negligent and whether contributory negligence had contributed to the accident.

Instead, the Tribunal concluded that neither driver was negligent without properly assessing the issue and effectively decided the claims on a no-fault basis, contrary to the statutory scheme governing Section 166 claims.

The Court further held that the common judgment necessarily connected the findings in both MACPs.

Therefore, the negligence-related findings in MACP No. 899 of 2016 could not be preserved independently merely because that award had not been separately challenged by its insurer.

As the foundational issue of negligence had not been properly adjudicated, the High Court considered a fresh hearing necessary without expressing any view on the merits.

The common judgment and award dated 13 November 2024 in MACP Nos. 548 of 2016 and 899 of 2016 were quashed and set aside, and both claim petitions were restored to the Tribunal for fresh adjudication.

The Tribunal was directed to decide the matters afresh, particularly after determining the negligence or contributory negligence of the drivers, without being influenced by the earlier award; both parties were permitted to lead further evidence.

Amounts deposited pursuant to the earlier award were directed to be invested in fixed deposits subject to the outcome of the claims, while amounts already paid to the claimants were not to be recovered.

The High Court clarified that it had not examined the merits of the claims.