Motor Vehicles Act | Borrower Of Vehicle Steps Into Shoes Of Owner, Can't Claim Compensation For Accident: Madras High Court

Justice R Poornima of the Madurai bench took note of the decision of the Supreme Court in the case of Ramkhiladi and another Vs. United India Insurance Company and another, where the court had held that a claim petition under Section 163A was not maintainable by a borrower/permissible user of a vehicle against the owner/insurer of the vehicle.

“When a person borrows a vehicle from its owner and drives it, he steps into the shoes of the owner. In the present case, the deceased himself drove negligently and was solely responsible for the accident. Therefore, he cannot claim compensation from the Insurance Company, as he does not fall within the category of third party,” the court observed.

The court was hearing an appeal made by the New India Assurance Company against the order of the MACT, which directed the insurance company to pay a compensation of Rs. 3,93,500 to the wife of a deceased.

The claimant had submitted that her husband was driving the car belonging to his brother and insured with the company and was travelling from Chettikurichi to Kovilpatti. On the way, the car capsized and met with an accident, in which the claimant's husband sustained serious injury. Later, he succumbed to the injuries.

The wife argued that the husband was the only breadwinner of the family and because of his death, the family was suffering severe economic hardship. It was argued that the husband was 36 at the time of accident and was hale and healthy. The wife had thus claimed a compensation of Rs.3,93,500 for the death of her husband.

The insurance company, on the other hand, objected to the claim and submitted that the accident occurred due to the rash and negligent act of the driver. It was argued that no claim could be entertained under Section 163A of MV Act for own negligence. It was thus argued that the claim was highly excessive and not proper.

The company argued that the tribunal had failed to consider that the deceased was the brother of the owner of the vehicle and drove the vehicle in a rash and negligent manner, and could not be regarded as a third party. The company argued that the tribunal had failed to consider that the deceased was not a paid driver and thus, not eligible for compensation under the Workman's Compensation Act. it was submitted that there was no requirement to cover the brother of the insured, while driving the insured vehicle, which was insured with the insurance company.

The insurance company argued that only a third party could claim compensation from the insured and the insurer, and there was no provision to claim compensation for himself from the insurer. It was also submitted that the tort feaser himself could not himself claim compensation.

The court noted that at the time of the accident, the deceased was driving the vehicle which belonged to his brother. The court noted that while ordering compensation, the tribunal had not given any specific finding on whether the deceased was at fault or not. However, the court noted that the FIR had clearly recorded that the vehicle was being driven by the deceased himself and he was solely responsible for the negligent driving that had caused the accident.

Noting that the deceased had stepped into the shoes of the owner when he borrowed the vehicle, the court held that compensation could not be claimed. The court thus allowed the insurance company's appeal and set aside the order of the MACT

Counsel for Appellant: Mr. J. S. Murali

Case Title: The New India Assurance Company Limited v. Annalakshmi and Others

Citation: 2025 LiveLaw (Mad) 330

Case No: CMA(MD)No.1866 of 2013