United India Insurance Co. Ltd. v. Sunil Kumar

In this unanimous 3-Judge Bench milestone, the Supreme Court authoritatively settled the scope of no-fault liability under Section 163A of the Motor Vehicles Act, 1988 (now Section 164 post-2019 amendment). Resolving conflicting views between National Insurance Co. Ltd. v. Sinitha and earlier precedents, Justice Ranjan Gogoi held that Section 163A was enacted to provide quick, structured-formula compensation to accident victims without dragging them into long trials proving driver fault. Permitting an insurance company to raise the defense of negligence or contributory negligence against the victim would defeat the core statutory purpose of Section 163A. The Court held that in proceedings under Section 163A, it is not open to the insurer to plead negligence of the victim, and claims must be computed strictly according to the statutory Second Schedule without fault adjudication.

• Absolute No-Fault Liability Scheme: Negligence and contributory negligence of the victim cannot be pleaded by the insurer under Section 163A.
• Overruling National Insurance v. Sinitha (2012): Rejected the fault-defense interpretation and restored Deepal Girishbhai Soni.
• Quick Compensation Objective: Eliminates the tedious, protracted necessity of proving driver's rashness or negligence.
• Social Security Nature of Motor Law: Protects low-income families from being denied compensation due to technical contributory negligence.
• Bedrock for Section 164 MVA (2019 Amendment): Directly shaped the amended Section 164 prescribing fixed no-fault compensation for death and grievous hurt.

The claimant Sunil Kumar sustained severe permanent injuries in a vehicular collision in Himachal Pradesh in 2006 involving a truck insured with United India Insurance Co. Ltd.

The claimant elected to institute a petition under Section 163A of the Motor Vehicles Act seeking compensation on a structured formula basis.

The insurance company contested the claim, contending that the accident occurred due to the sole negligence of the claimant himself, who was riding a scooter negligently.

The Tribunal and the High Court of Himachal Pradesh awarded compensation, holding that negligence cannot be examined under Section 163A.

A 2-Judge Bench of the Supreme Court in 2013 referred the issue to a 3-Judge Bench, doubting the correctness of Sinitha (2012) which held that insurers could plead contributory negligence under Section 163A.

The question that arises for consideration is whether in a claim proceeding under Section 163A of the Motor Vehicles Act, 1988, it is open to the insurer to plead and establish negligence or contributory negligence of the victim. Section 163A of the Act was introduced by the 1994 amendment as a special provision as to payment of compensation on structured formula basis. Sub-section (2) of Section 163A in terms provides that in any claim for compensation under sub-section (1), the claimant shall not be required to plead or establish that the death or permanent disablement was due to any wrongful act or neglect or default of the owner of the vehicle or of any other person. Permitting the insurer to raise the defense of negligence or contributory negligence would be completely contrary to the legislative intent. If an insurer is permitted to raise such a defense, the claimant would be forced to prove that there was no negligence on his part, which would convert a summary no-fault proceeding into a full-fledged fault-based trial under Section 166. We hold that in a proceeding under Section 163A of the Act, it is not open for the insurer to raise any defense of negligence on the part of the victim. The contrary view taken in National Insurance Co. Ltd. v. Sinitha is not good law and is hereby overruled. The appeals filed by the insurer are dismissed.

• Ramkhiladi v. United India Insurance Co. Ltd. (2020) 2 SCC 550: Applied Sunil Kumar, while clarifying that a borrower of a vehicle cannot sue his own insurer under Section 163A as he steps into owner's shoes.
• Shivaji v. Divisional Manager, United India Insurance Co. Ltd. (2018) 12 SCC 615: Followed Sunil Kumar to award full compensation regardless of victim's alleged fault.
• Rukmani v. New India Assurance Co. Ltd. (2019) 17 SCC 596: Applied Sunil Kumar to reverse High Court order that deducted 50% for contributory negligence under Section 163A.
• Chandan v. Oriental Insurance Co. Ltd. (2023) SCC OnLine SC 1214: Reaffirmed that no-fault claims under amended Section 164 are immune from negligence inquiries.