New India Assurance Co. Ltd. Versus Shanti Bopanna and Others

Core ratio / Key holding

Headnote

Motor Vehicles Act, 1988 — Sections 147, 147(1) — Motor Accident Claims — Insurance Policy — Third Party

Motor Vehicles Act, 1988 — Section 168 — Motor Accident Claims — Compensation — Future Prospects

Issues for determination

• Whether an employee travelling in the employer's vehicle is considered a 'third party' for insurance purposes under the Motor Vehicles Act, 1988, and if the claim is excepted by Section 147(1) of the Act.
• Whether the grant of future prospects in compensation is unreasonable when the deceased is above 50 years of age, in light of the principles laid down in Sarla Verma's case.

Ratio decidendi

• An employee travelling in the employer's vehicle, not carried for hire or reward, is considered a 'third party' for the purpose of a comprehensive insurance policy, and the claim is not excepted by Section 147(1) of the Motor Vehicles Act, 1988, if the policy covers occupants.
• Future prospects can be awarded in motor accident compensation cases even if the deceased is above 50 years of age, provided there are rare and exceptional circumstances, such as holding a high post with clear promotion prospects, justifying a departure from the general thumb rule.

Important points

• Held, an employee travelling in the employer's vehicle is a 'third party' under a comprehensive insurance policy, not excepted by Section 147(1) of the Motor Vehicles Act.
• Clarified, future prospects can be awarded to a deceased above 50 years in exceptional cases, such as a Vice President with promotion prospects.
• Appeal dismissed, upholding the compensation awarded by the Tribunal and High Court.
• Mother of the deceased is at liberty to take appropriate proceedings for her alleged share in the compensation received by the widow and son.