You are at the wheel of a sedan belonging to your friend or maybe your own spouse for that matter. In the event of an unfortunate mishap rendering you a victim, would you or your family be able to claim compensation for permanent disability or death as the case may be?

The Supreme Court held in the affirmative thus disabusing the common notion that a driver himself cannot be the third party. What the apex Court has propounded is that apart from the insured-owner, everyone else involved in a mishap taking place to an insured motor vehicle, is a third party. This is the pith and substance of the Supreme Court verdict in National Insurance Company Ltd v. Sinitha & others delivered on November 23. 2011.

The Court also clarified that when a structured compensation — a predetermined one on the basis of the age and income of the victim —is claimed under the summary regime contained in Section 163A of the Motor Vehicles Act that spares the claimant the burden of proof of negligence or default on the part of the insured, he cannot have best of both the worlds by simultaneously pursuing a higher compensation under the normal regime with the onus of proof thrown on him.

The moral of the story is if you pursue a summary remedy, it forecloses the normal route even if appears that the latter would have gotten for you a higher compensation. Claimants have to thus take their call carefully — unless they are absolutely confident of being able to adduce proof and wangle a higher compensation, they should not give up the summary remedy option.

In a sombre moment, one should not push the envelope but instead settle for the hassle-free and certain, albeit potentially lesser, compensation under the summary regime unless he is fully equipped and has the stomach for the gruelling and uncertain proceedings ahead in a normal regime with an eye on wangling a higher compensation.

(The writer is a Delhi-based chartered accountant)

Related Topics
comment COMMENT NOW