Madras HC Remands Injured Child’s Compensation Case After Insurer Learned Only At Trial It Faced A Liability Claim

The claimant, a minor represented by his father, obtained an award in MCOP No. 175 of 2020 from the Motor Accidents Claims Tribunal, Karur, dated 21 April 2023. The Tribunal attributed 50% of the accident’s responsibility to the driver of a vehicle insured by the appellant, Shriram General Insurance Company.

Shriram challenged its liability, contending that it had been named only as a formal party in the claim petition and that the allegation against its insured vehicle arose for the first time during the cross-examination of an eyewitness, PW4. The FIR had been registered only against the driver of the vehicle insured by National Insurance Company. The claimant filed a cross-objection seeking enhancement of compensation.

The appeal was brought under Section 173 of the Motor Vehicles Act, 1988, and the claimant’s cross-objection under Order XLI Rule 22 of the Code of Civil Procedure.

The Court applied the procedural principle that a party should have a sufficient opportunity to answer a claim and present its defence before liability is determined against it; where that opportunity was lacking, remand for fresh consideration may be appropriate.

It distinguished The Branch Manager, Reliance General Insurance Company Limited v. Selvi Sudarsan and Others, 2022 ACJ 980, because the insurer in that case had not been arrayed merely as a formal party.

The Court found that Shriram had been named only as a formal party, that the allegation implicating its insured vehicle emerged during PW4’s cross-examination, and that the Tribunal had relied on that evidence to attribute negligence to the vehicle’s driver.

In those circumstances, Shriram had not been afforded a sufficient opportunity to file a comprehensive counter or otherwise defend against the claim of liability. The Court therefore considered the liability issue appropriate for fresh determination by the Tribunal, distinguishing the precedent relied on by National Insurance.

It also left the enhancement claim open for the Tribunal to decide on the evidence, while ensuring that the minor claimant could seek payment of the award amount pending that determination.

The Tribunal was directed to decide the matter within six months, including the insurers’ respective liabilities and the claimant’s enhancement claim.

The claimant was permitted to apply for payment out of the amount lying with the Tribunal, subject to safeguards applicable to a minor; the Tribunal may also direct reimbursement between insurers as warranted by its determination. The appeal and cross-objection were disposed of without costs.