IN THE HIGH COURT OF MADHYA PRADESH

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AT GWALIOR

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BEFORE

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HON'BLE SHRI JUSTICE HIRDESH

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ON THE 20

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th

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OF FEBRUARY, 2026

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MISC. APPEAL No. 6796 of 2023

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FUTURE GENERALI INDIA INSURANCE CO. LTD.

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Versus

SHAFIUDDIN THROUGH LEGAL REPRESENTATIVE MOTHER SMT.

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ISMAT BANO AND OTHERS

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Appearance:

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Shri Bal Krishna Agrawal - Advocate for the appellant/Insurance Company.

Shri Dharmendra Kumar Garg-Advocate for respondent No.1/claimant.

ORDER

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This appeal under Section 173(1) of the Motor Vehicles Act, 1988 has been preferred

by the appellant–Insurance Company challenging the Award dated 31/08/2023 passed

by the learned Fourth Additional Member, Motor Accident Claims Tribunal, District

Vidsiha (M.P.) in Claim Case No. 05/2020, whereby compensation has been awarded

to the claimant. The appellant seeks reduction of the amount of compensation so

awarded.

2. By the impugned Award, the Claims Tribunal has awarded a total compensation

of Rs. 4,05,800/- along with interest from the date of filing of the claim petition till its

realization on account of injuries sustained by claimant-Shafiuddin in a motor accident.

3. Brief the facts of the case are that on 24/09/2018 claimant and his family were

traveling in the vehicle in question, a car bearing registration No. MP04-CP-2366.

While attempting to save an animal near the Kirravada culvert, the car in question

collided with the culvert, causing serious injuries to the claimant. He was admitted

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to the Civil Hospital, Bina, from where he was referred to Bansal Hospital,

Bhopal. He received treatment while admitted there. On the date of the accident a

case was registered against the driver of the offending vehicle. After investigation, a

charge-sheet was filed before the competent Court.

4. The owner of the offending vehicle was proceeded ex-parte and the Insurance

Company filed his written statement denying the averments made in the claim petition.

5.After framing the issues and recording evidence adduced by the parties, the Claims

Tribunal passed the impugned Award granting compensation as stated hereinabove.

6. Learned counsel for the appellant–Insurance Company submitted that the Award

passed by the Claims Tribunal is contrary to law and the material available on record.

It is contended that the claimant himself was negligent and solely responsible for the

accident and, therefore, the claimant was not entitled to any compensation. It is further

submitted that the Tribunal erred in fastening liability upon the Insurance Company, as

the driver does not fall within the definition of a third party and no additional premium

was paid under the policy to cover the risk of the driver. On these grounds, it is prayed

that the impugned Award be modified.

7. Per contra, learned counsel for the claimant supported the impugned Award and

prayed for dismissal of the appeal.

8. Heard learned counsel for the parties and perused the record of the Claims

Tribunal.

9. The contention of the learned counsel for the Insurance Company is

that the claimant was not in the position of the owner of the offending

vehicle and, therefore, the claimant was not entitled to claim

compensation under Section 163-A of the Motor Vehicles Act.

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10. The High Court of Kerala in the case of Vijayarajan (supra)

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in

para 5 has held as under:-

"5. Per contra, learned counsel for the appellant would contend that the

deceased cannot be treated as a driver within the meaning of the

personal accident cover. According to him, the insurance policy

provides for compensation as contained in the policy of insurance, if the

accident occurs when it is driven by the owner who is also the driver. In

order to resolve this controversy, it is necessary to refer to the terms of

the policy. It is true that in the premium an amount of Rs.50/- has been

paid for the compulsory PA to owner-driver and it may at first blush

appear to support the case of respondents 1 to 4. However, on a further

scrutiny of the elaborate clauses contained in the policy, we feel that the

question is to be answered against respondents 1 to 4. The policy speaks

about it being a liability only policy and thereafter it provides for

dealing with liability with the parties. Thereafter, it provides personal

accident cover for owner-driver. "

11. However, in the present case, it is undisputed that the claimant

was driving the offending vehicle at the time of the accident. Hence, the

claimant stepped into the shoes of the owner and, accordingly, was

covered under the insurance policy only to the extent of the premium paid

for “Personal Accident Cover for Owner-Driver”.

12. The Apex Court in the case of Ramkhiladi and another vs.

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United India Insurance Company and another, 2020(1) T.A.C. 353 (SC)

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in para 5.4 to 5.6 has held as under :-

"5.4 An identical question came to be considered by this Court in

Ningamma [Ningamma v. United India Insurance Co. Ltd., (2009) 13

SCC 710 : (2009) 5 SCC (Civ) 241 : (2010) 1 SCC (Cri) 1213] . In that

case, the deceased was driving a motorcycle which was borrowed from

its real owner and met with an accident by dashing against a bullock cart

i.e. without involving any other vehicle. The claim petition was filed

under Section 163-A of the Act by the legal representatives of the

deceased against the real owner of the motorcycle which was being

driven by the deceased. To that, this Court has observed and held that

since the deceased has stepped into the shoes of the owner of the

vehicle, Section 163-A of the Act cannot apply wherein the owner of the

vehicle himself is involved. Consequently, it was held that the legal

representatives of the deceased could not have claimed the

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compensation under Section 163-A of the Act. Therefore, as such, in the

present case, the claimants could have even claimed the compensation

and/or filed the claim petition under Section 163-A of the Act against

the driver, owner and insurance company of the offending vehicle i.e.

motorcycle bearing Registration No. RJ 29 2M 9223, being a third party

with respect to the offending vehicle. However, no claim under Section

163-A was filed against the driver, owner and/or insurance company of

the motorcycle bearing Registration No. RJ 29 2M 9223. It is an

admitted position that the claim under Section 163-A of the Act was

only against the owner and the insurance company of the motorcycle

bearing Registration No. RJ 02 SA 7811 which was borrowed by the

deceased from the opponent-owner Bhagwan Sahay. Therefore,

applying the law laid down by this Court in Ningamma [Ningamma v.

United India Insurance Co. Ltd., (2009) 13 SCC 710 : (2009) 5 SCC

(Civ) 241 : (2010) 1 SCC (Cri) 1213] , and as the deceased has stepped

into the shoes of the owner of the vehicle bearing Registration No. RJ

02 SA 7811, as rightly held by the High Court, the claim petition under

Section 163-A of the Act against the owner and insurance company of

the vehicle bearing Registration No. RJ 02 SA 7811 shall not be

maintainable.

5.5 It is true that, in a claim under Section 163-A of the Act, there is no

need for the claimants to plead or establish the negligence and/or that

the death in respect of which the claim petition is sought to be

established was due to wrongful act, neglect or default of the owner of

the vehicle concerned. It is also true that the claim petition under

Section 163-A of the Act is based on the principle of no-fault liability.

However, at the same time, the deceased has to be a third party and

cannot maintain a claim under Section 163-A of the Act against the

owner/insurer of the vehicle which is borrowed by him as he will be in

the shoes of the owner and he cannot maintain a claim under Section

163-A of the Act against the owner and insurer of the vehicle bearing

Registration No. RJ 02 SA 7811. In the present case, the parties are

governed by the contract of insurance and under the contract of

insurance the liability of the insurance company would be qua third

party only. In the present case, as observed hereinabove, the deceased

cannot be said to be a third party with respect to the insured vehicle

bearing Registration No. RJ 02 SA 7811. There cannot be any dispute

that the liability of the insurance company would be as per the terms and

conditions of the contract of insurance. As held by this Court in Dhanraj

[Dhanraj v. New India Assurance Co. Ltd., (2004) 8 SCC 553 : 2005

SCC (Cri) 363] , an insurance policy covers the liability incurred by the

insured in respect of death of or bodily injury to any person (including

an owner of the goods or his authorised representative) carried in the

vehicle or damage to any property of a third party caused by or arising

out of the use of the vehicle. In the said decision, it is further held by

this Court that Section 147 does not require an insurance company to

assume risk for death or bodily injury to the owner of the vehicle.

5.6 In view of the above and for the reasons stated above, in the present

case, as the claim under Section 163-A of the Act was made only against

the owner and insurance company of the vehicle which was being driven

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by the deceased himself as borrower of the vehicle from the owner of

the vehicle and he would be in the shoes of the owner, the High Court

has rightly observed and held that such a claim was not maintainable

and the claimants ought to have joined and/or ought to have made the

claim under Section 163-A of the Act against the driver, owner and/or

the insurance company of the offending vehicle i.e. RJ 29 2M 9223

being a third party to the said vehicle."

13. Applying the principle laid down in the aforesaid judgment, it is

clear that since the claimant had borrowed the offending vehicle and was

driving it at the time of the accident, he stepped into the shoes of the

owner. Therefore, the claimant is entitled only to the amount payable

under the “Personal Accident Cover for Owner-Driver” as per the terms

of the insurance policy.

14. Learned counsel for the Insurance Company has submitted that

as per the insurance policy, the amount of personal accident cover for

owner-driver is Rs.2,00,000/-. Therefore, the claimant is entitled to

receive only Rs.2,00,000/- towards compensation.

15. In view of above discussion, the just and proper amount of

compensation in the instant case is Rs.2,00,000/-

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as against the award of

the Claims Tribunal of Rs.4,05,800/-

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.

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Accordingly, the compensation

amount is reduced from Rs.4,05,800/-

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to Rs.2,00,000/-.

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16. In the result, the appeal is partly allowed

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by reducing the

compensation amount to a sum of Rs.2,00,000/-.

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. The said amount shall

bear interest @ 6 per cent

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from the date of the filing of the claim petition

till its realization. All other findings recorded by the Claims Tribunal

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(HIRDESH)

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JUDGE

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shall remain intact. Insurance Company is entitled to get excessive

amount (if already deposited) from the Claims Tribunal in accordance

with law.

With the aforesaid modification, the appeal is partly allowed

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and

stands disposed of.

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Prachi

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