The Sikkim High Court has reaffirmed that an authorized borrower who steps into the shoes of the vehicle owner is entitled to compensation under the owner-driver personal accident cover in an insurance policy, even if a statutory claim under Sections 163A or 164 of the Motor Vehicles Act is not maintainable. This judgment follows and applies the Supreme Court rulings in Ningamma v. United India Insurance and Ramkhiladi v. United India Insurance, and is binding authority for future cases in Sikkim relating to similar insurance disputes.
Summary
| Category | Data |
|---|---|
| Case Name | MAC App./23/2024 of The Divisional Manager, National Insurance Company Limited Vs Jigmee Lepcha and Ors. |
| CNR | SKHC010002022024 |
| Date of Registration | 19-12-2024 |
| Decision Date | 29-10-2025 |
| Disposal Nature | Dismissed |
| Judgment Author | HON’BLE MR. JUSTICE BHASKAR RAJ PRADHAN |
| Court | High Court of Sikkim |
| Bench | Single (Bhaskar Raj Pradhan, J.) |
| Precedent Value | Binding within territorial jurisdiction of High Court of Sikkim |
| Overrules / Affirms | Affirms and applies Supreme Court precedents (Ningamma; Ramkhiladi) |
| Type of Law | Insurance Law / Motor Accident Claims |
| Questions of Law |
|
| Ratio Decidendi |
Where a deceased, borrowing a vehicle from the owner through a valid authorisation, meets with an accident, he is deemed to have stepped into the shoes of the owner. While statutory claims under Sections 163A or 164 MV Act are not maintainable by such persons, the terms of the insurance policy entitling “owner-driver” personal accident cover apply. The insurer is liable to pay as per policy terms since the borrower is treated as owner during authorized use. The High Court applied relevant Supreme Court judgments to reach this conclusion, dismissing the insurer’s appeal. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | The Court relied on the principle that an authorized borrower of a vehicle is deemed to step into the shoes of the owner, as recognized by Supreme Court. Statutory claims under Section 164 are not maintainable by such persons, but claims under the policy’s personal accident cover for owner-driver are, as held in Ramkhiladi and Ningamma. |
| Facts as Summarised by the Court | The deceased borrowed a motorcycle from its owner through a valid authorization; had an accident and died. The motorcycle was covered by comprehensive insurance, including personal accident cover for owner-driver. The claimants (family) pursued compensation. The Tribunal found statutory claim under Section 164 was not maintainable but allowed benefit under the policy. The insurer appealed, claiming policy benefit was not transferable. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the jurisdiction of the High Court of Sikkim |
| Persuasive For | Other High Courts and Motor Accident Claims Tribunals |
| Follows |
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What’s New / What Lawyers Should Note
- Reiterates and applies the principle that an authorized borrower is considered to have stepped into the shoes of the owner for the purposes of personal accident cover under a motor insurance policy.
- Clarifies that statutory no-fault liability claims under Sections 163A or 164 of the Motor Vehicles Act are not maintainable by such borrowers or their claimants.
- Emphasizes that claimants in this category may claim compensation as per the terms of the insurance policy, not on a statutory basis.
- Confirms that the liability of the insurer is determined strictly by the contractual terms of the policy, not by statute.
- Lawyers representing claimants or insurers should be careful to distinguish between statutory claims under the Act and contractual policy benefits.
Summary of Legal Reasoning
- The Court examined whether the family of the deceased, who had borrowed the vehicle with the owner’s authorization, was entitled to compensation under the owner-driver personal accident cover.
- Referring to Ningamma & Anr. and Ramkhiladi & Anr., the Court affirmed that a borrower, authorized by the owner, steps into the shoes of the owner for the purposes of policy terms.
- It was held that while the Motor Vehicles Act does not provide for statutory claims under Section 164 for such borrowers, the contract of insurance (i.e., policy) entitles them or their representatives to compensation as per the owner-driver personal accident cover.
- The Court noted that the deceased was covered by a valid policy and valid authorization, supporting the claim under the policy for Rs. 15,00,000.
- The insurer’s objection, that such cover is not transferable or available to borrowers, was rejected, consistent with the Supreme Court precedent.
- The insurer’s appeal was dismissed, upholding the Tribunal’s award under the policy terms, and reaffirming the jurisprudential distinction between statutory liability and contractual policy benefits.
Arguments by the Parties
Petitioner (Appellant/Insurer)
- The personal accident cover for owner-driver is not transferable to a borrower; compensation cannot be claimed for the death of a person who was not the owner-driver.
- The Tribunal having held that a claim under Section 164 of the Motor Vehicles Act is not maintainable, compensation could not have been granted under any other head.
Respondent Nos. 1 & 2 (Claimants)
- The deceased had borrowed the motorcycle with the owner’s valid authorisation and thus stepped into the shoes of the owner.
- The insurance policy specifically included a personal accident cover of Rs. 15,00,000/- for owner-driver, which should apply.
Respondent No. 3 (Owner of Motorcycle)
- Admitted that the deceased was authorized to use the vehicle via a valid authorisation letter covering the relevant period.
Factual Background
The deceased, Karma Topden Lepcha, borrowed a motorcycle from his friend, the owner, with a valid authorisation letter, and met with an accident on 23.11.2023, succumbing to his injuries on 30.11.2023. The vehicle was registered and comprehensively insured, including personal accident cover for the owner-driver. The deceased was 24 years old. The claimants, family members, sought compensation before the Tribunal. The insurance company admitted to issuing the policy, but disputed liability for a non-owner. The Tribunal dismissed the statutory claim under Section 164 but awarded compensation under the policy. The insurer appealed.
Statutory Analysis
- The Motor Vehicles Act, 1988, Sections 163A and 164, concerning statutory no-fault liability, were analyzed.
- The Court affirmed that statutory claims under these sections are not maintainable by a borrower or their family.
- The insurance policy terms regarding personal accident cover for owner-driver were interpreted as contractually binding and applicable to an authorized borrower who steps into the shoes of the owner.
- No constitutional provisions were invoked.
Dissenting / Concurring Opinion Summary
No dissenting or separate concurring opinion is indicated in the judgment; it was delivered by a single judge.
Procedural Innovations
No new procedural precedent or innovation is recorded in this judgment.
Alert Indicators
- ✔ Precedent Followed – The decision closely follows and applies Supreme Court precedent (Ningamma; Ramkhiladi).