Karnataka HC Orders Insurer To Pay Crash Victim First, Then Recover From Owner After Medical Records Showed Claimed Rider Was A Pillion Passenger

Manjappa claimed compensation under Section 166 of the Motor Vehicles Act, 1988, alleging that a motorcycle bearing registration No. KA-17/EG-1363 negligently collided with his motorcycle on 3 August 2012.

The MACT awarded him ₹1,38,000 with interest at 6% per annum and held the respondents jointly and severally liable.

The insurer appealed, disputing its liability and contending that the person identified as the insured motorcycle’s rider was actually its pillion passenger and that the rider lacked a driving licence.

Hospital records indicated that Shankar was riding and Manjunath was the pillion passenger, while Manjunath claimed in evidence that he had been riding.

The insurer relied on the medical records; the Tribunal had treated them as secondary evidence and preferred Manjunath’s oral testimony.

Section 166 of the Motor Vehicles Act, 1988, provides the basis for a claim for compensation arising from a motor vehicle accident, while Section 173(1) permits an appeal against a Claims Tribunal’s award.

The Court relied on North West Karnataka Road Transport Corporation v. Gourabai and Others, (2009) 15 SCC 165, for the evidentiary significance of medical records maintained in the ordinary course of business.

It also applied the principle that, in the circumstances of this third-party claim, the insurer could be directed to satisfy the award in the first instance and recover the amount from the insured without separate proceedings.

The Court stated that documentary evidence should prevail over oral testimony where the record supports that conclusion.

The hospital records recorded Shankar as the motorcycle’s rider and Manjunath as its pillion passenger, whereas Manjunath testified that he had been riding.

The Court considered the Tribunal’s decision to discount those records as secondary evidence and rely on Manjunath’s testimony contrary to the evidentiary value of the documentary material.

It therefore found the Tribunal’s liability finding perverse to that extent.

However, because the claimant was a third party, the insurer was not relieved of the obligation to satisfy the award; the appropriate modification was to permit recovery from the insured after payment to the claimant.

The award was modified to require the insurer to pay the compensation and interest to the claimant in the first instance, with liberty to recover the amount from the insured without separate proceedings.

The amount in deposit was to be transmitted to the Tribunal, the balance deposited within six weeks, and the compensation with interest released to the claimant electronically.