Wakia Afrin (Minor) vs National Insurance Co. Ltd. 2025 INSC 919 - Insurer's Liability U/S.163A MV Act - Referred To Larger Bench

Motor Vehicles Act - Section 163A - Liability of the insurer in a claim under Section 163A qua the owner/insured - Whether a claim under Section 163A is restricted to third party risks? Referred to Larger Bench - Doubting earlier judgments by 2 Judges Benches, SC opined: When there is a valid policy issued in the name of the vehicle involved in the accident, a claim under Section 163A, as per the words employed in the provision, covers every claim and is not restricted to a third party claim; without any requirement of establishing the negligence, if death or permanent disability is caused by reason of the motor accident. This would also take in the liability with respect to the death of an owner or a driver who stepped into the shoes of the owner, if the claim is made under Section 163A dehors the statutory liability under Section 147 or the contractual liability as reduced to writing in an insurance policy. It would override the provisions under Sections 147 & 149 along with the other provisions of the M.V. Act and the law regulating insurance as also the terms of the policy confining the claim with respect to an owner-driver to a fixed sum. (Para 16-17)

Motor Vehicles Act - Section 155 - Even if the insured dies after the happening of an event which gave rise to a claim, it shall not be a bar to the survival of any cause of action arising out of the said event, against the insurer. The event which gave rise to the claim is the accident and the death occurred after the event; albeit a direct result of the accident. A third party claim for compensation would definitely survive since, on the death of the insured it would lie against his estate, which the insurer has an obligation to indemnify. The insurer, hence, can defend any claim against the insured, which the insurer has the liability to indemnify in accordance with the policy issued. (Para 2)