Contractual claims arising out of personal insurance cover can’t be decided by MACT: Delhi High Court

The Delhi High Court recently observed that Motor Accident Claims Tribunals (MACT) cannot delve into disputes involving contractual entitlements under a personal insurance policy.

Justice Anish Dayal made the observation while dealing with an accident case where a man died in a car accident. The man was driving his father's car when it was hit by a truck.

The truck or its owners/ drivers could not be traced to fix liability on them. Therefore, the deceased man's mother filed an insurance claim before MACT seeking compensation from the insurer of the car he drove.

After the MACT dismissed her claim, she moved the High Court for relief.

By a July 1 ruling, the High Court dismissed her appeal after noting that the case did not involve a third party insurance claim; rather this case involved contractual disputes over the terms of a personal insurance cover which the MACT could not delve into.

"Expanding the jurisdiction of MACT to cover claims of this nature would be extending the motor accidents jurisprudence to an illogical extremity,” the Court stated.

The judge underscored that specialised tribunals like the MACTs have a specific statutory remit and it cannot be expanded beyond the confines of the Motor Vehicles Act and cannot be twisted and contorted in order to accommodate all kinds of claims.

The fateful accident occurred in 2022 when a truck collided with the Innova driven by the deceased, who had borrowed the car from his father. It was a hit and run case, and the truck was never traced. 

The mother of the deceased moved the MACT against the father, who was the owner of the car, and the insurance company of the car for compensation.

She submitted that since the deceased was an occupant of the car or a "third party", he would be covered as a third party in the insurance policy.

The insurance company said that the policy cover provided by them for the Innova car was a comprehensive/ package policy, which covered basic third-party liability and a personal accident cover for the owner-driver and additional accident cover for seven passengers.

Amicus Curiae Dr Amit George submitted that ‘fetishising’ the specialised jurisdiction of MACT by over-extending their remit to cover cases like the present one could weaken its ability to swiftly disburse compensation.

The Court observed that the mother’s compensation claim made under Section 166 of the Motor Vehicles Act was liable to be dismissed since negligence could not be proved in this case as the offending truck remained untraced.

"Claim made by a third party is, therefore, inextricably intertwined with proof of negligence of the driver of offending vehicle. If that causation is not established, followed by proof of negligence, the link for a third party claimant breaks in claiming compensation in tort, covered by the insurer of offending vehicle ... An insurance cover would be triggered only if there is a liability to pay by the insured to a third party," it observed.

The Court went on to note that the present claim, therefore, moved to a purely contractual arena. The MACT, being a creature of statute, could not examine such contractual matters, it said.

With these observations, the Court suggested that the mother to iron out her claim with the insurance company in accordance with the intricacies of the insurance policy.

The Court stated that in case the claim is rejected by the insurance company, the mother has the liberty to approach the consumer forum or any other competent forum.

Advocates Varun Sarin and Parul Dutta appeared for the deceased’s mother.

Amicus Curiae Dr. Amit George assisted the Court along with Advocate Dushyant Kishan Kaul.

Advocate Sameer Nandwani appeared for the insurance company.

[Read Judgment]