Personal accident coverage premium binds insurer even if the deceased driver stepped into the owner's shoes.

The appellants (legal heirs of the deceased) filed a claim petition under Section 163A of the Motor Vehicles Act, 1988, following a fatal accident involving an auto-rickshaw driven by the deceased.

Initially, the Tribunal awarded Rs. 2,64,000/-, but the High Court remanded the matter to decide "fault" grounds following the Sinitha precedent.

Evidence showed the deceased was driving a vehicle registered to Respondent No. 1, though statements suggested he may have been purchasing it on installments or renting it.

The insurance policy included a specific premium of Rs. 100/- for Compulsory Personal Accident (CPA) cover for the owner-driver.

The Tribunal dismissed the claim, holding the deceased was a tortfeasor who "stepped into the shoes of the owner" and thus could not claim against his own insurer.

1. Whether the Tribunal erred in dismissing the claim petition under Section 163A by holding that a borrower/permissive user who is also the tortfeasor is precluded from receiving compensation.

2. Whether the claimants are entitled to compensation under the Personal Accident cover of the insurance contract despite the deceased being at fault.

Section 163A of the Motor Vehicles Act, 1988, which provides for compensation on a structured formula basis without requiring proof of negligence.

Ningamma v. United India Insurance Co. Ltd. [(2009) 13 SCC 710] and New India Assurance Co. Ltd. v. Sadanand Mukhi [(2009) 2 SCC 417], establishing that a borrower or permissive user "steps into the shoes of the owner" and is not a "third party" for the purposes of Section 163A.

The principle from Ramkhiladi v. United India Insurance Co. Ltd. [(2020) 2 SCC 550], which holds that while statutory liability under Section 163A may be absent, the insurer remains liable to pay the specific sum contracted under Personal Accident coverage if a premium was paid.

The Court noted that while Section 163A generally dispenses with the need to prove a "wrongful act", it cannot be invoked by the owner or someone stepping into the owner’s shoes against their own insurer, as they are not "third parties".

Reviewing the evidence, including the investigating officer's report [Exh. 59] and the owner's statement [Exh. 60], the Court confirmed the deceased was a permissive user/purchaser on installments.

Consequently, he was correctly identified as standing in the place of the owner, barring a general claim under Section 163A. However, the Court observed that the insurer had accepted a Rs. 100/- premium for Personal Accident cover.

Following the Ramkhiladi ratio, the Court reasoned that the contractual liability for Personal Accident cover exists independently of the "third party" statutory bar.

The High Court partly allowed the appeal, setting aside the total dismissal of the claim and ordered the Insurance Company to pay Rs. 2,00,000/- to the claimants with interest at 7.5% per annum from the date of the petition until realization.