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Defence of Victim Negligence by Insurer Cannot be Raised Under Section 163A of Motor Vehicle Act

The Supreme Court has held that the insurer cannot use victims negligence as his defence in the proceedings under the section 163A of the Motor Vehicle Act in the case of United India Insurance Company Ltd vs Sunil Kumar & Anr.
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The Supreme Court has held that the insurer cannot use victim’s negligence as his defence in the proceedings under the section 163A of the Motor Vehicle Act in the case of United India Insurance Company Ltd vs Sunil Kumar & Anr.

A reference has been filed before the Supreme Court against the decision of division bench of the court which held that the section 163A allows the insurer to raise the defence of the victim’s negligence. However, in the reference filed before the three judge bench, the court disregarded the above dictum given in the National Insurance Company Limited vs Sinthia & others.

Section 163A of the Motor Vehicle Act provides a structured formula basis for payment of compensation. The question in the case which has been formulated by the division bench is that whether an insurer can use negligence on the part of the victim as a defence in the proceedings under the above section?

The Bench headed by Justice Ranjan Gogoi and comprising of Justice AK Goel and Justice Navin Sinha held that the formula provided under the section 163A of the act is the final award and needs no  further evidence or proof of the negligence of the owner of the vehicle in the question and the compensation should be adjudicated finally.

However, the court noted that the negligence of the victim can be used as a defence under section 164A(2) of the Act and section 163A do not allow raising such defence and raising such defence under this section will be contrary to the intent of the section. The object of section 163A is to provide compensation on a formula in the cases of no fault liability which were taking undue long time.

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Reviewed by:
Mehak Sharma
Published on 28-Nov-2017
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