The Jammu and Kashmir and Ladakh High Court in the case Bajaj Allianz General Insurance Co. Ltd Vs Gulshan Kumar and Ors observed and has ruled that compensation which is paid under the ‘No Fault Liability’ provision adjustable in the compensation claimed as provided under Section 166 of the Motor Vehicles Act, 1988 for fault liability.
The bench headed by Justice Rahul Bharti observed while hearing an appeal in terms which the insurance company had challenged an interim award passed by the Motor Accident Claims Tribunal to the tune of Rs.50,000, wherein invoking Section 140 of the Motor Vehicles Act, 1988 (the no fault liability)
In the present case, the appellants premised their challenge on the ground that the deceased-Yashpal was a gratuitous passenger in the offending vehicle and thus the dependents of the deceased were not entitled to any compensation whatsoever from the end of the appellants as which is being by the insurer of the offending vehicle.
The bench of Justice Bharati noted in an appeal that if it is only being by a factual reference that the deceased was not a roadside walker but in fact being a gratuitous passenger that the appellant is seeking to avoid of its liability.
Further, the bench explained that weather the appellant can set up the nature of this defence to avoid the grant of interim compensation on No Fault liability provision by the Motor Accident Claims Tribunal is a very feeble petition as then in every case wherever and whenever an insurer would be taking up a different factual position qua the motor vehicle accident, then being in that eventuality, the Motor Accident Claims Tribunal will be rendered and being disabled to award an compensation on No Fault liability.
Adding to it, the court stated that encouraging such petitions of defence would culminate into rendering the very spirit and policy of section 140 of the Motor Vehicles Act as still provision, therein without any operationality.
It has also been clarified by the bench that any compensation which is made under the No-Fault liability provision and is adjustable in the compensation claimed fault liability as provided under section 166 of the Motor Vehicles Act, 1988 and in case where the appellant succeeds in proving of its defence with respect to the nature of the accident, the Motor Accident Claims Tribunal, Rajouri will be under a jurisdictional duty for considering as to the application of Pay and Recover Principle against the owner and the driver of the offending vehicle.
Accordingly, the bench dismissed the appeal, while finding the appeal premature and misconceived.