The Sikkim High Court affirms that a deceased borrower, lawfully authorised and driving with the owner’s written consent, is entitled to claim under the personal accident cover meant for “owner-driver” as per the insurance contract. The judgment upholds Supreme Court precedent (Ramkhiladi, Ningamma), clarifies the non-maintainability under Section 164 MV Act, and is binding in Sikkim while serving as persuasive authority elsewhere—especially relevant to insurance claim disputes involving authorised borrowers.
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 Bench |
| Precedent Value | Binding in Sikkim; persuasive elsewhere |
| Overrules / Affirms | Affirms Supreme Court precedents (Ningamma, Ramkhiladi, Oriental Insurance v. Rajni Devi) |
| Type of Law | Insurance law, Motor accident compensation, Interpretation of insurance policy |
| Questions of Law |
|
| Ratio Decidendi |
The Court held that where a deceased person had lawfully borrowed a motorcycle with the owner’s written authorisation, he “stepped into the shoes” of the owner and was entitled to compensation under the personal accident cover for owner-driver. The Court found that the claim under Section 164 MV Act was not maintainable, but the insurance policy explicitly covered the situation. In doing so, the Court relied on Supreme Court pronouncements in Ningamma and Ramkhiladi, reaffirming the contract’s supremacy and coverage scope. The Tribunal’s award of Rs.15 lakhs with interest was thus upheld. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Law regarding authorised borrowers stepping into shoes of owner; contractual nature and terms of insurance policy; Supreme Court precedents interpreting similar facts. |
| Facts as Summarised by the Court |
Deceased borrowed a motorcycle from its owner by a valid authorisation letter; had an accident and died; owner’s vehicle was insured with personal accident cover; claim was made, and the insurance company disputed liability on the ground that deceased was not an “owner-driver.” Tribunal rejected claim under Section 164 MV Act but allowed it under the insurance policy’s accidental death benefit. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts in Sikkim |
| Persuasive For | Other High Courts, Tribunals, Insurance Ombudsman, and possibly Supreme Court unless subsequently overruled |
| Follows |
|
What’s New / What Lawyers Should Note
- Affirms that a borrower with owner’s written authorisation is treated as “owner-driver” for the purposes of personal accident cover under the insurance policy.
- Clarifies that the claim under Section 164 MV Act is not maintainable by such claimants; compensation is available strictly under the personal accident clause in the insurance policy.
- Lawyers should scrutinise actual terms of the policy and the nature of authorisation to determine coverage.
- The award amount will be bound by the limits stipulated in the policy for owner-driver personal accident benefits.
- The judgment provides a precedent for claimants (or their legal representatives) in similar factual situations where the driver is not the actual owner, but a lawfully authorised borrower.
Summary of Legal Reasoning
- The Court first acknowledged that the vehicle was insured and the deceased had a valid authorisation letter to use it.
- It accepted that the premium for personal accident cover for owner-driver had been paid, and the maximum benefit as per policy was Rs. 15,00,000.
- Citing the Supreme Court in Ningamma and Ramkhiladi, the Court held that a person lawfully authorised by the owner steps into the shoes of the owner—thus qualifying as “owner-driver” for the personal accident cover in the insurance contract.
- The Court confirmed the Tribunal’s application of Rajni Devi, holding that a claim by the owner (or someone stepping into his shoes) under Section 164 MV Act is not maintainable, since that provision envisions claims against the owner.
- The contractual rights under the insurance policy are nonetheless enforceable, and the insurer’s liability under the policy is separate from the statutory regime of Section 164.
- The Court found no merit in the insurer’s appeal and upheld the Tribunal’s award, strictly limiting the liability to the insurance policy’s contractual terms.
Arguments by the Parties
Petitioner (Insurer):
- Personal accident cover for “owner-driver” is not transferable, so compensation cannot be claimed for a borrower who is not the owner-driver.
- Since the claim under Section 164 MV Act was found not maintainable, Tribunal erred in granting any compensation.
Respondents (Claimants):
- The deceased was authorised to drive the motorcycle by a valid authorisation letter, and was covered under the insurance policy’s personal accident cover.
Factual Background
The deceased, aged 24, borrowed a motorcycle from a friend (the owner) with written authorisation and met with a fatal accident. The owner’s motorcycle had a valid insurance policy, which included personal accident cover for owner-driver. The deceased’s family claimed compensation. The insurance company challenged the maintainability, arguing the deceased was not the owner-driver. The Tribunal rejected the claim under Section 164 MV Act but awarded compensation as per the policy’s accident benefit clause for owner-driver.
Statutory Analysis
- Section 164 of the Motor Vehicles Act, 1988: The Court (following Supreme Court) held that a person placed in the shoes of the owner (i.e., authorised borrower) cannot make a claim against himself as the owner, so claim under this section is not maintainable in such situations.
- The insurance policy’s clause on personal accident cover for owner-driver was interpreted to include lawfully authorised borrowers, based on payment of premium and contractual wording.
Dissenting / Concurring Opinion Summary
No dissenting or separate concurring opinions are recorded in the judgment.
Procedural Innovations
No new procedural rules or innovations have been set by the judgment.
Alert Indicators
- ✔ Precedent Followed – The decision affirms existing Supreme Court law on the scope of “owner-driver” personal accident cover for authorised borrowers (Ningamma, Ramkhiladi).