No-Fault, No Boundaries? SC Flags a Legal Paradox in MAC for Vehicle Owners

The quiet tragedy of a toddler losing both parents in a road accident found its way to the Supreme Court this August, but the case of Wakia Afrin (Minor) v. National Insurance Co. Ltd. has stirred far more than emotion. It has ignited a doctrinal challenge to decades of precedent under the Motor Vehicles Act, 1988.

The petitioner, a two-year-old girl represented by her aunt, lost both her parents in a single-vehicle accident.

Her father was also the owner of the car involved.

The Motor Accident Claims Tribunal (MACT),Cuttack initially awarded compensation under Section 163A a no-fault liability provision designed to quickly deliver compensation to victims or their dependents without the burden of proving negligence. But the Orissa High Court rejected the claim.

Their reason? The father, being the owner of the vehicle, was named as a respondent despite being deceased. They held that a dead person cannot be a defendant, and hence, the petition was non-maintainable.

The Supreme Court has now firmly disagreed.Not only did the Court restore the compensation for the mother’s death, but it also interrogated a more thorny issue: Can a dependent of the deceased owner-driver in this case, his minor daughter claim compensation under Section 163A for the owner's death when she also legally succeeds to his estate?

The Insurance Company argued no. Their contention was logical, at least on paper: the child is both heir to the person legally liable and the claimant seeking compensation. That, in their view, created a legal contradiction.

The Court, however, pushed back.Pointing to Section 155 of the Motor Vehicles Act, the judges held that the death of the insured after the event (accident) does not nullify the claim. More critically, they invoked the very language of Section 163A a non-obstante clause meant to override not only other provisions of the MV Act but even private insurance contracts.

155. Effect of death on certain causes of action. - Notwithstanding anything contained in section 306 of the Indian Succession Act, 1925, the death of a person in whose favour a certificate of insurance had been issued, if it occurs after the happening of an event which has given rise to a claim under the provisions of this Chapter, shall not be a bar to the survival of any cause of action arising out of such event against his estate or against the insurer.

This clause, they reminded, was designed as a social welfare mechanism, introduced in response to Minu B. Mehta v. Balkrishna Nayan, which had once ruled that negligence must be proved before compensation is awarded.

Section 163A reversed that for good reason to dispense justice swiftly, especially when it involved dependents, minors, and survivors facing immense hardship.

The real jurisprudential fault line lies in whether the owner can simultaneously be the liable party and the basis for the claim. Past judgments like Dhanraj, Rajni Devi, Ningamma, and Ramkhiladi leaned heavily on the idea that Section 163A applies only to third parties.

But the Court in Wakia Afrin’s case raised a powerful counter why should a dependent be denied benefits merely because the deceased happened to be the registered owner?

If insurance is truly meant to indemnify harm, is it fair to deny it to a child whose breadwinner died not due to anyone else's negligence but due to a tragic accident?

The Court did not deliver a final ruling on this core question. Instead, it openly disagreed with the previous interpretations and referred the matter to a larger bench.

This is more than a procedural step it is a conscious break from a formalistic tradition that has often excluded owners from the protective ambit of Section 163A, even where the accident was no one’s fault.

The ruling matters for orphans of sole proprietors, for wives riding pillion with their self-employed husbands, and for lakhs of vehicle owners whose lives are entangled with their livelihood on the road.

What the Court has done is not just keep Wakia Afrin’s hopes alive, but open a door long considered shut in motor accident jurisprudence: that compensation under Section 163A, in the case of owner-drivers, may not be as foreclosed as previously thought. It is a legal question now awaiting its full answer but one that could redefine the boundaries of no-fault insurance forever.

Related Judgments:

• Dhanraj v. New India Assurance (2004) 8 SCC 553

• Ningamma v. United India Insurance (2009) 13 SCC 710

• Ramkhiladi v. United India Insurance (2020) 2 SCC 550