Insurer can’t raise negligence issue

The Supreme Court has ruled that an insurance company cannot raise the defence of negligence against a road accident victim when the Motor Vehicles Act provides a structured formula for computing compensation irrespective of negligence. Section 163A of the Act has introduced the second schedule to calculate the compensation. It is meant to speed up payment of compensation without going into the fault of the owner/driver or the victim of the accident. The judges had differed on the question whether the insurer could raise the question of negligence on the part of the victim. Therefore that question was referred to a three-judge bench. This bench, in the case United India Insurance Co vs Sunil Kumar, settled the law. The judgment asserted that the formula was introduced to cut short long delay in arriving at the amount of compensation. If insurers are allowed to raise the issue of negligence, it would defeat the object of the beneficial legislation, the court said. However, insurers can raise the question of negligence in applications moved under other provisions of the Act.