The Gauhati High Court has upheld the established legal position that under a standard motor insurance policy, the insurer is not liable for compensation regarding the owner-driver’s death (when the deceased is also the owner and occupant of the vehicle), except up to the maximum amount specified under the “personal accident cover.” This judgment follows and affirms existing Supreme Court and High Court precedents, and clarifies the practical limits of third-party insurance liability for lawyers handling Motor Accident Claims Tribunal (MACT) matters.
Summary
| Category | Data |
|---|---|
| Case Name | MACApp./178/2014 of NATIONAL INSURANCE CO. LTD. Vs ANIMA DEB and 6 ORS. |
| CNR | GAHC010012452014 |
| Date of Registration | 22-07-2014 |
| Decision Date | 31-10-2025 |
| Disposal Nature | Disposed Of |
| Judgment Author | HONOURABLE MR. JUSTICE BUDI HABUNG |
| Court | Gauhati High Court |
| Precedent Value |
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| Overrules / Affirms |
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| Type of Law |
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| Questions of Law | Whether the insurer of a vehicle is liable to pay compensation beyond the “personal accident cover” for death of the owner-driver under a standard policy. |
| Ratio Decidendi | The insurer’s liability for death of the owner-driver (who is also the insured) in a motor accident, under a standard insurance policy, is limited to the specific sum insured under the “personal accident cover” (Rs. 2,00,000/- in this case), and not for the entire third-party compensation awarded. The deceased, being the owner and occupant, is not a third-party for the purposes of liability beyond the specified personal accident cover. The apportionment by the Tribunal holding the appellant insurer liable for any amount beyond this cap is erroneous in law. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court | The established principle is that under the standard form insurance policy, the risk in respect of the owner-driver’s own life is not covered beyond the sum insured under the personal accident cover, except when additional premium is paid. The Tribunal’s contrary direction is unsustainable in law. The computation of compensation under Pranay Sethi (supra) governs the enhancement under conventional heads. |
| Facts as Summarised by the Court | The deceased died in a motor accident involving an Alto Car (owned and driven by the deceased) and a Truck. The Tribunal apportioned liability 75:25 (Truck:Car), directing the appellant insurer (of the Alto Car) to pay 25% of Rs. 9,22,900/-. The insurer/appellant challenged its liability for the owner-driver’s death, while the claimants sought enhancement as per Pranay Sethi. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the Gauhati High Court’s territorial jurisdiction |
| Persuasive For | Other High Courts and insurance law practitioners across India |
| Follows |
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What’s New / What Lawyers Should Note
- Reaffirms that an insurer’s liability to compensate for the death of owner-driver (who is not a third party) in a motor accident is strictly limited to the “personal accident cover” sum (Rs. 2 lakh in this case) under a standard motor insurance policy.
- Clarifies that the standard policy does not require the insurer to pay third-party compensation to heirs of the owner-driver (except to the extent of specific personal accident coverage).
- Tribunal orders apportioning compensation beyond this extent are liable to be set aside.
- The judgment freshly applies the Supreme Court’s rulings on compensation quantification under conventional heads (Pranay Sethi) to MACT cases.
Summary of Legal Reasoning
- The appellant insurer argued that the deceased, being the owner and occupant (driver) of the insured car, was not a “third party,” and therefore, its liability was limited to the sum assured under personal accident cover.
- The appellant relied on binding Supreme Court and High Court judgments: Dhanraj v. New India Assurance Co. Ltd., Oriental Insurance Co. Ltd. v. Rajni Devi, and New India Assurance Co. Ltd. v. Imkong Toshi Jamir, which state that under a standard policy, insurer’s liability does not extend to the owner’s own death except limited personal accident cover (unless special premium is paid).
- The Court, after examining the insurance policy, found clear limitation of the insurer’s liability to Rs. 2 lakh under this cover.
- The Tribunal’s division of compensation liability (assigning 25% to the Alto Car’s insurer) was set aside as contrary to law.
- For quantification of compensation, the Court considered and enhanced the amount in accordance with Supreme Court guidelines in Pranay Sethi, modifying the amounts for loss of consortium, estate, and funeral expenses, while leaving income/future prospects untouched.
- The United India Insurance Co. Ltd. (for the Truck) was directed to pay the balance after deducting Rs. 2 lakh payable by the present appellant.
Arguments by the Parties
Petitioner (National Insurance Company Ltd.):
- Submitted that the deceased was the owner-driver and not a third party; insurer is not liable beyond personal accident cover.
- Cited Dhanraj, Rajni Devi, and Imkong Toshi Jamir decisions.
- Asserted liability limited to Rs. 2,00,000/- under the policy.
Respondents No. 1, 2 & 3 / Claimants:
- Conceded to the insurer’s legal contentions regarding limitation of liability.
- Prayed for enhancement of the compensation quantum as per the Supreme Court’s Pranay Sethi judgment.
Respondent No. 6 (United India Insurance Company Ltd.):
- Supported claimants’ submissions for enhancement under Pranay Sethi.
Factual Background
- The deceased, who owned and was driving an Alto Car, died in a collision involving a Truck.
- The MACT apportioned compensation liability 75% (Truck) and 25% (Alto Car).
- The appellant insurer (of the Alto Car) was directed to pay 25% of the total compensation.
- The insurer appealed, contesting liability as the deceased was the owner-driver, not a third party.
- Claimants separately sought enhancement of compensation as per Pranay Sethi.
Statutory Analysis
- Section 173 of the Motor Vehicles Act, 1988: Appeal provision for claimants/insurers against Tribunal awards.
- Interpreted standard form motor insurance policy clauses: Court held the policy covered the owner-driver’s death only to Rs. 2,00,000/- as “personal accident cover.”
- The policy did not cover third-party risk for the owner’s own injury or death unless additional premium was paid.
Dissenting / Concurring Opinion Summary
None; single-judge decision with no concurring or dissenting opinion recorded.
Procedural Innovations
None recorded; the judgment followed established appellate procedure for MACT appeals and did not set out new procedural rules.
Alert Indicators
- ✔ Precedent Followed – When existing law is affirmed.