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Negligence Of Victim Can’t Be A Defence In Proceedings U/s 163A Of Motor Vehicles Act

In SHIVAJI vs UNITED INDIA INSURANCE CO. LTD., before the Supreme Court, the insurer had raised the defence of negligence of the driver (victim) before the Karnataka High Court which had held that protection is extended only to the injured person or to the legal heirs of the deceased victim, and not to the driver who is responsible for causing the said accident. Therefore compensation could not have been awarded since the deceased driver, in this case, was the tortfeasor and responsible for causing the accident.

On appeal the three judge bench of the Supreme Court setting aside the order of the High Court and  referring to the judgment of the court in another 3 judge bench in United India Insurance Co. Ltd. v. Sunil Kumar & Anr.,  held that grant of compensation under Section 163-A of the Act on the basis of the structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit by Section 163A(2). Though the aforesaid section of the Act does not specifically exclude a possible defence of the Insurer based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be introduced by the Insurer and/or to understand the provisions of Section 163A of the Act to be contemplating any such situation would go contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the Insurer to raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention.

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