Case at a Glance
The Motor Accident Claims Tribunal, Gangtok dismissed a family’s Rs 19.07 lakh claim under Section 166 of the Motor Vehicles Act after finding that the 2019 accident which killed an occupant of the vehicle was caused by brake failure, not rash or negligent driving. On appeal, the Sikkim High Court held that no-fault compensation under Section 140 does not depend on negligence, that Section 140(4) bars the insurer’s plea that the deceased was himself a tortfeasor, and that the Tribunal could have granted it despite rejecting the Section 166 claim. Applying the beneficial approach in Ram Murti, it directed Tata AIG to pay Rs 5 lakh with 7% interest from the date of the claim.
Deepen Mukhia died in a motor vehicle accident on 12 November 2019 while he was, in the words of the judgment, “the occupant of the accident vehicle”. The vehicle was owned by Mani Kumar Chettri, driven by Rajendra Chettri and insured with Tata AIG General Insurance Company. A case under Sections 279, 337 and 304A IPC was registered at Nayabazar police station. His wife, minor son and parents filed MACT Case No. 06 of 2023 at Gangtok on 14 February 2023, claiming Rs 19,07,560 under Section 166.
The insurer did not appear before the Tribunal and was proceeded ex parte. By award dated 31 May 2024, the Tribunal dismissed the claim, holding that the accident was caused by brake failure and not by rash or negligent driving. The family appealed. Before the High Court, the insurer argued that because the deceased was a tortfeasor, his heirs could not claim compensation.
The Key Question Before the Court
When a fault-based claim under Section 166 fails because no negligence is proved, can the Claims Tribunal — and the appellate court — still award no-fault compensation under Section 140 of the Motor Vehicles Act, and must the insurer pay it?
How the High Court Revived the Family’s Claim
Justice Bhaskar Raj Pradhan first examined the policy and found “no clarity in the insurance certificate” about what its liability clause referred to; reading the insurer’s own brochure, the indemnity appeared to cover “all sums” the owner became legally liable to pay. Relying on National Insurance Company Limited v. Jugal Kishore, (1988) 02 SC CK 0045, the Court said an insurer should place the full policy with all its terms, and the applicable IRDA directions, before the court. On the merits, Section 140(4) provides that a no-fault claim “shall not be defeated by reason of any wrongful act, neglect or default” of the deceased, so the insurer’s tortfeasor argument failed.
Relying on Eshwarappa alias Maheshwarappa v. C.S. Gurushanthappa, (2010) 08 SC CK 0060, Indra Devi v. Bagada Ram, (2010) 08 SC CK 0074 and Nishan Singh v. Oriental Insurance Company Limited, (2018) 04 SC CK 0061, and an IRDA circular of 16 October 2009 making insurers liable for occupants under comprehensive or package policies, the Court held that Section 140 liability arises whether or not the vehicle was driven rashly or negligently. The Tribunal could therefore have granted Section 140 compensation despite rejecting the Section 166 claim; the owner was liable and the insurer had to indemnify him. The Section 140 figure then applicable was only Rs 50,000, but noting that in Ram Murti v. Punjab State Electricity Board the Supreme Court allowed claimants the benefit of the later Section 164 amount of Rs 5 lakh for death, and given the passage of time since 2019, the Court held that “the appellants are entitled to the amount of Rs.5 lakhs as compensation to be paid by the respondent no.1.”
What the Court Actually Held
- No-fault liability under Section 140 of the Motor Vehicles Act does not depend on proof of rash or negligent driving.
- Under Section 140(4), the claim cannot be defeated by the deceased’s own wrongful act or negligence, so the insurer’s tortfeasor plea failed.
- The Tribunal could have awarded Section 140 compensation even after rejecting the Section 166 claim; the owner is liable and the insurer must indemnify.
- Tata AIG was directed to pay Rs 5 lakh with 7% interest from 14 February 2023 till actual payment; the appeal was allowed to that extent and the Section 166 claim of Rs 19,07,560 was not granted.
Why This Judgment Matters
- Families often lose everything when an accident is blamed on mechanical failure; this ruling shows the no-fault route remains open.
- It reminds Tribunals to consider Section 140 relief on their own even when a Section 166 claim fails.
- It puts insurers on notice to produce the full policy and IRDA directions, especially on occupant coverage under package policies.
What Should Advocates Take Away From the Judgment?
For Claimants
- If negligence cannot be proved (brake failure, tyre burst), still claim no-fault compensation.
- Occupants of an insured vehicle may be covered under package policies per IRDA directions.
- Interest runs from the date of the claim petition.
For Counsel
- Plead Section 140 (or Section 164, where the amended provisions apply) as an alternative in every Section 166 petition.
- Rely on Section 140(4) to answer the ‘deceased was a tortfeasor’ defence.
- Call for the full policy schedule and endorsements where the certificate’s liability clause is unclear.
Key Takeaways
- The Section 166 claim failed for want of negligence, but no-fault compensation survived.
- Section 140(4) bars defeating the claim on the deceased’s own fault.
- The Court awarded Rs 5 lakh, relying on the beneficial approach in Ram Murti, instead of the Rs 50,000 Section 140 figure.
- Tata AIG must pay with 7% interest from 14 February 2023.
Frequently Asked Questions
What is no-fault liability under the Motor Vehicles Act?
It is fixed compensation payable for death or permanent disablement without the claimant having to prove negligence. Here the Court held it was available even though the accident was attributed to brake failure.
Can a claim be rejected because the deceased was at fault?
Not a no-fault claim. Section 140(4) says it shall not be defeated by any wrongful act, neglect or default of the deceased.
Why did the Court award Rs 5 lakh instead of Rs 50,000?
The Section 140 figure was Rs 50,000, but the Court followed Ram Murti, where the Supreme Court allowed the benefit of the later Section 164 amount of Rs 5 lakh, considering the time since the 2019 death.
Conclusion
Rekha Chettri v. Tata AIG rescues a family left with nothing after a Tribunal found no negligence. Fault-based and no-fault liability are separate tracks, and the failure of one does not shut the other.
Practical takeaway: Always plead no-fault compensation as an alternative — and if the Tribunal ignores it, raise it in appeal, where the High Court can award it with interest.
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