Introduction:
The Delhi High Court, in Simbal Singh v. Amarjit Singh & Another (MAC.APP. 532 of 2025), delivered an important judgment delineating the jurisdiction of the Motor Accident Claims Tribunal (MACT) in cases involving claims arising under Comprehensive or Package Insurance Policies. Justice Anish Dayal held that a person who is driving an insured vehicle as a borrower, and who is neither its owner nor a paid driver, cannot maintain a claim before the MACT merely on the strength of benefits available under a Comprehensive/Package Insurance Policy. The Court clarified that while the Motor Vehicles Act, 1988 creates a statutory mechanism for adjudicating claims arising out of negligence under an Act Policy, contractual benefits available under a Comprehensive Policy do not automatically fall within the jurisdiction of the Tribunal. Such contractual claims, the Court held, must be pursued before the appropriate civil court, consumer forum, or any other competent forum as provided by law.
The dispute arose from a fatal road accident involving a borrower who was driving an insured private vehicle. After the driver’s death, his legal representatives approached the Motor Accident Claims Tribunal seeking compensation under Section 166 of the Motor Vehicles Act. Their principal contention was that the vehicle was covered under a Comprehensive/Package Insurance Policy, which extended personal accident coverage and benefits to occupants of the vehicle upon payment of additional premium. They argued that since the deceased was neither the registered owner of the vehicle nor a paid employee engaged as its driver, he should be treated as an occupant or third party entitled to compensation under the policy.
The Motor Accident Claims Tribunal dismissed the claim petition, holding that such a claim was not maintainable under the Motor Vehicles Act. Aggrieved by the dismissal, the legal representatives preferred an appeal before the Delhi High Court.
The appeal required the High Court to examine the distinction between statutory insurance coverage mandated under the Motor Vehicles Act and contractual benefits flowing from Comprehensive or Package Insurance Policies. The Court was also called upon to determine whether contractual rights created through payment of additional premium could be enforced before the Motor Accident Claims Tribunal, whose jurisdiction is primarily founded upon statutory claims arising from negligence.
The judgment assumes considerable significance because Comprehensive Insurance Policies have become increasingly common and often contain various additional benefits beyond the minimum statutory requirements. By clarifying the proper forum for enforcing such contractual rights, the High Court has provided important guidance regarding the interplay between statutory compensation under the Motor Vehicles Act and contractual remedies under insurance law.
Arguments of the Parties:
The appellants, who were the legal representatives of the deceased borrower-driver, challenged the order passed by the Motor Accident Claims Tribunal on the ground that it had adopted an unduly narrow interpretation of the insurance policy. They argued that the insured vehicle was covered under a Comprehensive or Package Insurance Policy rather than a mere statutory Act Policy.
According to the appellants, unlike an Act Policy, which only satisfies the minimum statutory requirement of covering third-party risks under the Motor Vehicles Act, a Comprehensive Policy provides broader protection by extending insurance coverage to various additional risks upon payment of additional premium. These benefits commonly include personal accident cover, protection for occupants, damage to the insured vehicle, and several other contractual benefits.
The appellants submitted that the deceased was neither the owner of the vehicle nor a paid driver employed by the owner. Instead, he had borrowed the vehicle and was driving it with permission. Therefore, they argued that he occupied a legal position similar to that of an occupant travelling in the insured vehicle and should be treated as a third party for the purpose of claiming compensation under the policy.
It was further contended that denying such protection would defeat the very object of obtaining a Comprehensive Insurance Policy. Since the insurer had accepted additional premium for extending broader coverage beyond the statutory minimum, the appellants argued that the insurer could not avoid liability by relying upon technical distinctions between the owner, borrower, and occupant.
The appellants therefore urged the Court to hold that the deceased fell within the class of persons protected under the Comprehensive Policy and that the Motor Accident Claims Tribunal possessed jurisdiction to award compensation.
On behalf of the respondents, it was argued that the claim was fundamentally misconceived because the Motor Accident Claims Tribunal derives its jurisdiction from the Motor Vehicles Act and adjudicates statutory claims based upon negligence. The respondents submitted that contractual benefits available under a Comprehensive Policy stand on an entirely different footing from statutory compensation contemplated under the Act.
The respondents argued that a person driving the vehicle cannot simultaneously assert that his own negligence caused the accident and seek compensation under Section 166 of the Motor Vehicles Act. Such a claim, according to them, would be legally untenable because Section 166 proceeds upon the existence of actionable negligence attributable to another person.
They further submitted that even if the insurance contract extended certain additional benefits to the borrower-driver, enforcement of those contractual rights could only be sought before an appropriate civil court or consumer forum and not before the Motor Accident Claims Tribunal.
An Amicus Curiae was also appointed to assist the Court in examining the legal issues concerning the jurisdiction of the Tribunal and the distinction between statutory and contractual insurance claims.
Court’s Judgment:
Justice Anish Dayal dismissed the appeal and affirmed the order of the Motor Accident Claims Tribunal. The judgment carefully distinguished between statutory claims under the Motor Vehicles Act and contractual claims arising under Comprehensive Insurance Policies.
At the outset, the Court explained the statutory framework governing compulsory motor insurance. Under the Motor Vehicles Act, every owner of a motor vehicle is required to obtain an Act Policy that provides coverage against third-party risks. The purpose of this statutory requirement is to ensure that innocent third parties injured by motor accidents receive compensation irrespective of the financial capacity of the vehicle owner.
A Comprehensive or Package Insurance Policy, however, operates differently. Such policies are purely contractual in nature and provide additional benefits only because the insured pays an extra premium. These benefits are not created by the statute but arise exclusively from the contractual relationship between the insurer and the insured.
The Court observed that the Motor Accident Claims Tribunal is constituted under the Motor Vehicles Act to adjudicate statutory claims arising out of motor accidents. Its jurisdiction is therefore confined to claims contemplated by the Act and cannot automatically extend to every contractual dispute arising under an insurance policy.
Justice Dayal emphasised that merely because an insurance policy provides additional contractual benefits does not mean that every dispute concerning those benefits falls within the jurisdiction of the Tribunal. Where the claim is founded solely upon contractual rights created by payment of additional premium, the appropriate remedy ordinarily lies before the civil court, consumer forum, or any other competent forum authorised to adjudicate contractual disputes.
The Court then analysed the legal position of occupants and drivers under Section 166 of the Motor Vehicles Act. It explained that an occupant of a vehicle may maintain a claim before the Tribunal in two distinct situations.
First, where another vehicle is responsible for the accident through negligent driving, the occupant may claim compensation against the owner, driver, and insurer of the offending vehicle as a third party.
Secondly, where negligence is attributable to the driver of the very vehicle in which the occupant was travelling, the occupant may maintain a claim against the owner and insurer of that vehicle because, in relation to the owner, the occupant occupies the position of a third party.
In both categories, however, the essential foundation of the claim is negligence attributable to someone other than the claimant.
Applying these principles to the present case, the Court noted that the deceased himself was driving the vehicle at the time of the accident. Being the driver, he could not separate himself from his own conduct while seeking compensation under Section 166.
The Court observed that permitting such a claim would create an inherent legal contradiction. If the claim was founded upon the deceased’s own negligence, then he could not simultaneously claim compensation from the insurer by treating himself as a third party. Justice Dayal aptly remarked that such an argument would amount to “somebody trying to lift themselves by their own bootstraps.”
The Bench further observed that a borrower-driver assumes complete responsibility for driving the vehicle carefully and in accordance with law. If another vehicle caused the accident through negligent driving, then the borrower-driver or his legal representatives would undoubtedly be entitled to pursue compensation against the owner, driver, and insurer of that offending vehicle. However, where the claim is based solely upon the driver’s own accident and contractual personal accident cover, the dispute no longer falls within the statutory jurisdiction of the Motor Accident Claims Tribunal.
The Court therefore rejected the contention that the deceased could be treated as a third party merely because he was not the registered owner or a paid employee. His status as the person driving the vehicle at the relevant time remained decisive for determining the maintainability of the claim before the Tribunal.
Importantly, the High Court clarified that dismissal of the appeal did not extinguish any contractual rights that might be available under the Comprehensive Insurance Policy. If the policy indeed extended personal accident benefits to a borrower-driver or otherwise created enforceable contractual entitlements, those rights could still be pursued before the competent civil court, consumer forum, or any other legally recognised forum.
Accordingly, while affirming the dismissal of the claim before the Motor Accident Claims Tribunal, the Court expressly granted liberty to the appellants to seek such contractual remedies as may be available under the insurance policy.
The judgment provides valuable clarity regarding the distinction between statutory compensation under the Motor Vehicles Act and contractual claims arising under Comprehensive Insurance Policies. It reiterates that the jurisdiction of the Motor Accident Claims Tribunal is confined to statutory claims based upon negligence and cannot be expanded merely because an insurance policy provides additional contractual coverage. At the same time, the Court protected the appellants’ substantive contractual rights by making it clear that they remain free to pursue appropriate remedies before the forum competent to adjudicate contractual disputes. The decision therefore reinforces both the statutory limits of the Tribunal’s jurisdiction and the independent enforceability of contractual insurance benefits under the ordinary principles of civil law.