In a significant judgment that reinforces the rights of claimants under motor accident law, the Madhya Pradesh High Court has ruled that an insurance company cannot escape its liability to pay compensation for the death of a pillion rider simply because she was the wife of the vehicle owner.

The Court clarified that even in tragic circumstances where both the husband (owner/rider) and the wife (pillion) die in the same accident, the wife remains a "third party" for the purposes of insurance claims, provided she did not legally step into the shoes of the insured before her death.

Justice Pavan Kumar Dwivedi delivered this ruling while allowing an appeal filed by the children of a deceased couple. The High Court set aside the decision of a Motor Accident Claims Tribunal (MACT), which had earlier denied compensation on the grounds that the wife, being the owner’s spouse, was technically an "owner" herself.

The case dates back to March 4, 2019. Shivnarayan was riding his motorcycle with his wife, Ratanbai, seated behind him as a pillion rider. Due to what was later proven to be rash and negligent driving, the motorcycle lost balance.

The impact was severe. Ratanbai fell from the vehicle and suffered grievous injuries. She tragically passed away while being transported to the hospital. Shivnarayan also sustained serious injuries and succumbed to them later during the course of his treatment.

At the time of the accident, the motorcycle was covered by a valid insurance policy from IFFCO Tokyo General Insurance Company Ltd.

The couple’s children moved a claim petition under Section 166 of the Motor Vehicles Act, 1988. Interestingly, they sought compensation only for the death of their mother, Ratanbai. They did not file a claim for their father’s death, as he was the rider whose negligence caused the accident.

The Motor Accident Claims Tribunal (MACT) evaluated the case and reached a contradictory conclusion. While the Tribunal agreed that the accident occurred due to negligence and correctly quantified the compensation at ₹10.79 lakh, it refused to order the insurance company to pay.

The Tribunal’s logic was that because Ratanbai was the wife of the owner, she could not be considered a "third party." The Tribunal reasoned that upon Shivnarayan's death, his wife would automatically "step into his shoes" as the owner. Therefore, her heirs (the children) were essentially the heirs of the owner, and an owner cannot claim compensation from their own insurance policy for their own negligence.

Challenging this "mechanical" interpretation, the children approached the High Court. Representing the appellants, Advocate Abhishek Gilke argued that the Tribunal had committed a fundamental error in law.

1. The Sequence of Death Matters: The counsel pointed out a crucial factual detail: Ratanbai died before her husband. Since Shivnarayan was still alive when Ratanbai passed away, she never had the chance to "step into the shoes" of the owner. At the moment of the accident and her subsequent death, she was merely a passenger—a third party.

2. Legal Relationship vs. Legal Status: The appellants argued that the mere fact of being related to the owner does not strip a person of their "third-party" status. Under the Motor Vehicles Act, anyone who is not the insurer or the insured is generally treated as a third party.

On the other hand, Advocates Sudarshan Pandit and Rajesh Pandit, appearing for IFFCO Tokyo, argued that the claim was not maintainable because the owner (the father) was not made a party to the case. They contended that since both parents were dead, the children were now the owners of the motorcycle, and thus, the insurer had no liability to pay them.

Justice Pavan Kumar Dwivedi rejected the insurance company's arguments and found the Tribunal’s reasoning to be flawed. The Court’s judgment rested on several key legal pillars:

1. Ownership Does Not Transfer Automatically

The Court referred to Section 50 of the Motor Vehicles Act, which outlines the procedure for the transfer of ownership of a vehicle. The Court noted that when a vehicle owner dies, the ownership does not instantly and "magically" transfer to the spouse or children. There is a statutory process involving the RTO (Regional Transport Office) that must be followed.

In this case, since Ratanbai died almost immediately, the question of her becoming the owner was legally impossible.

2. The Survival of the Cause of Action

A major win for the claimants was the Court’s interpretation of Section 155 of the Act. This section ensures that the death of an insured person (the father, in this case) does not extinguish a claim. Even if the person who was supposed to be sued (the negligent driver/owner) dies, the right to seek compensation from the insurance company survives.

3. The Definition of a Third Party

The High Court clarified a point that often confuses litigants: Who is a third party? The Court held that unless a person is the "insured" (the person named in the policy) or has legally become the owner, they are a third party. A wife riding as a pillion is as much a third party as a stranger on the road, regardless of her domestic relationship with the rider.

The insurance company had relied on various Supreme Court judgments to argue that they weren't liable. However, Justice Dwivedi distinguished those cases. He noted that those precedents often involved "Personal Accident" (PA) covers or cases where negligence wasn't a factor.

In this specific case, filed under Section 166 (which deals with compensation based on negligence), the negligence of the rider was proved. Since the rider was negligent, the insurance company—which takes a premium to cover third-party risks—is duty-bound to indemnify the loss.

The High Court observed that the sequence of events was the deciding factor. Since Ratanbai was not the owner at the time of the accident and died while her husband was still alive, her status as a third party remained intact.

Allowing the appeal, the Court directed IFFCO Tokyo General Insurance Co. Ltd. to pay the full compensation amount of ₹10.79 lakh, as originally calculated by the Tribunal. The Court also ordered that this amount be paid along with applicable interest from the date of the claim petition.

This ruling is a significant victory for families affected by road accidents. It prevents insurance companies from using family relationships as a "shield" to avoid paying legitimate claims. It establishes three clear rules for the future:

Relationship is not a Bar: A spouse or child can be a "third party" if they are passengers in the vehicle.
Timing is Everything: The legal status of a person is determined at the moment of the accident/death.
Insurer's Duty: The death of the insured person does not end the insurance company's responsibility to compensate other victims of the same accident.

Case Details:

Case Title: Ramdayal Carpenter and Others v. IFFCO Tokyo General Insurance Co. Ltd.
Judgment Date: January 29, 2026
Bench: Justice Pavan Kumar Dwivedi

Disclaimer: This article is for informational purposes only and does not constitute legal advice.