The Supreme Court held that under Section 163A of the Motor Vehicles Act, 1988, proof of negligence is not required for claiming compensation, as the provision operates on a structured formula basis. The Court emphasized that compensation must be computed as per the Second Schedule of the Act, excluding non-scheduled heads like loss of love and affection. It ruled that the deceased, being a third party to the offending vehicle, entitled the claimants to compensation, payable jointly and severally by the insurer of the offending vehicle. The judgment clarified that Section 163A has an overriding effect over other provisions of the Act, ensuring expedited compensation without fault liability adjudication.
Facts Of The Case:
On the night of November 15, 2006, Surender Singh was driving a truck (HR-38L/6727) when it collided with a dumper (HR-38H-9100) in the Pali Crusher Zone. Due to the impact, he sustained severe injuries and was admitted to GTB Hospital, Delhi, where he succumbed to his injuries on November 22, 2006. An FIR (No. 411/2006) was registered under Sections 279, 337, and 304-A of the IPC against the dumper driver, Islam. Surender Singh’s dependents—his wife Usha Devi, four children, and his mother—filed a claim petition under Section 163A of the Motor Vehicles Act, 1988, seeking Rs. 15 lakhs as compensation, alleging negligence by the dumper driver.The Motor Accidents Claims Tribunal dismissed the petition, holding that the claimants failed to prove negligence. On appeal, the Punjab & Haryana High Court awarded Rs. 15 lakhs as lump-sum compensation with 9% interest, holding both insurers jointly and severally liable. The insurers—New India Assurance Co. Ltd. (truck insurer) and National Insurance Co. Ltd. (dumper insurer)—challenged this in the Supreme Court, arguing that the compensation was excessive, the deceased was not a “third party,” and Section 163A barred non-scheduled heads like loss of love and affection. The Supreme Court modified the award, recalculating compensation as per the Second Schedule and holding only the dumper’s insurer liable.
Procedural History:
The case originated with a claim petition filed by the dependents of Surender Singh under Section 163A of the Motor Vehicles Act, 1988 before the Motor Accidents Claims Tribunal (MACT), Faridabad, seeking compensation for his death in a collision between his truck and a dumper. The Tribunal dismissed the petition (2011), holding that the claimants failed to prove negligence by the dumper driver.Aggrieved, the claimants appealed to the Punjab & Haryana High Court under Section 173 of the Act, which allowed the appeal (2020) and awarded a lump-sum compensation of ₹15 lakhs with 9% interest, holding both insurers jointly and severally liable.The insurers (New India Assurance Co. Ltd. and National Insurance Co. Ltd.) filed Special Leave Petitions (SLPs) before the Supreme Court, challenging the High Court’s judgment. The Supreme Court (2025) partially allowed the appeals, recalculating compensation strictly under the Second Schedule of the Act (₹4,77,839 with 8% interest) and holding only the dumper’s insurer (National Insurance Co. Ltd.) liable, while exonerating the deceased’s truck insurer. The Court affirmed that Section 163A does not require proof of negligence and overrides other provisions of the Act.
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Court Observation:
The Supreme Court made several key observations in its judgment. Firstly, it emphasized that Section 163A of the Motor Vehicles Act, 1988, operates as a no-fault liability provision, meaning claimants need not prove negligence to claim compensation. The Court clarified that compensation under this section must be strictly computed as per the structured formula in the Second Schedule, excluding non-specified heads like loss of love and affection or mental agony, as these are not recognized under the Schedule.The Court noted that the High Court erred in awarding a lump-sum compensation without adhering to the Second Schedule’s methodology. It reiterated that Section 163A has an overriding effect over other provisions of the Act, ensuring a swift and standardized compensation mechanism. Additionally, the Court held that the deceased (Surender Singh) qualified as a “third party” in relation to the offending dumper, making the dumper’s insurer (National Insurance Co. Ltd.) solely liable, while exonerating the truck’s insurer (New India Assurance Co. Ltd.).The judgment also highlighted that criminal proceedings against the deceased had abated, and no conclusive evidence was presented to establish his contributory negligence. Thus, the Court modified the compensation to ₹4,77,839 with 8% interest, aligning it with the Second Schedule’s framework, and directed its disbursement among the claimants in specified proportions.
Final Decision & Judgement:
The Supreme Court partially allowed the appeals filed by the insurance companies while modifying the compensation awarded by the High Court. It held that the compensation must be strictly computed as per the Second Schedule of the Motor Vehicles Act, 1988, reducing the total amount from ₹15 lakhs to ₹4,77,839 (including ₹4,53,339 for loss of dependency, ₹2,000 for loss of consortium, ₹5,000 for funeral expenses, ₹2,500 for loss of estate, and ₹15,000 for medical expenses). The Court directed that this amount carry interest at 8% per annum from the date of the claim petition until realization.On the question of liability, the Court ruled that only the insurer of the offending dumper (National Insurance Co. Ltd.) was liable to indemnify the claimants, as the deceased qualified as a “third party” in relation to that vehicle. It exonerated the insurer of the deceased’s truck (New India Assurance Co. Ltd.) from liability. The awarded amount was ordered to be disbursed among the claimants in specified shares, with the mother’s share reverting to the widow if she was no longer alive. The Court also directed the refund of any excess deposits made by the insurers in compliance with its modified award. The judgment reinforced the principle that Section 163A provides a self-contained, no-fault compensation scheme, overriding other provisions of the Act.
Case Details:
Case Title: The New India Assurance Company Limited & Anr. vs. Usha Devi & Ors. Citation:2025 INSC 836 Civil Appeal No.: SLP (Civil) No. 15191 of 2020) Date of Judgment:14 July 2025 Judges/Justice Name: Justice J.K. Maheshwari & Justice Aravind Kumar
Download The Judgement Here