The Gauhati High Court has held that a permissive user who borrows a vehicle and steps into the shoes of its owner cannot claim compensation under Section 163A of the Motor Vehicles Act against the owner and insurer of that vehicle.

Justice Manish Choudhury observed, “The claimant was a permissive user and the borrower of the two-wheeler which he borrowed from the owner. He had, thus, stepped into the shoes of the owner of the two-wheeler [motorcycle] which was involved in the accident and therefore, he could not maintain a claim application against the owner, as it would amount to maintain a claim against himself.”

The observation came in an appeal filed by National Insurance Company Limited under Section 173 of the Motor Vehicles Act against a judgment and award passed by the Motor Accident Claims Tribunal, Golaghat. The Tribunal had awarded ₹3.45 lakh as compensation along with interest at 6% per annum against the insurer of the motorcycle.

The claimant had filed the claim application under Section 166 read with Section 140 of the MV Act after sustaining injuries while riding a motorcycle belonging to the owner. According to him, he lost control of the motorcycle due to bad road conditions, stones lying on the road and low visibility caused by fog.

The Tribunal, on the basis of his evidence, found that the claimant himself was responsible for causing his injuries and held that he was not entitled to compensation under Section 166. That finding was not challenged by the claimant and had attained finality.

The Tribunal, however, suo motu converted the claim under Section 166 into one under Section 163A on the premise that rash and negligent driving was not required to be proved under Section 163A.

The insurer contended before the High Court that since the claimant was the permissive user and borrower of the motorcycle and was himself responsible for the accident, he had stepped into the shoes of the owner and was not entitled to compensation under Section 163A. It also questioned the suo motu conversion of the claim without notice to the parties.

The High Court noted that the claim application had been filed against the owner and insurer of the two-wheeler which the claimant himself was riding and that there was no involvement of any other person or vehicle in the accident.

It further noted that the Tribunal had already reached a finding that the claimant himself was responsible for causing his injuries.

“There was no involvement of any other person and vehicle in the accident, other than the claimant himself and the two-wheeler [motorcycle] bearing Registration no. AS-03/D-0614.”

The Court found that the claimant was a permissive user and borrower of the motorcycle and had, therefore, stepped into the shoes of its owner.

“This Court finds merit with the contention raised by the appellant – insurer that the claimant is not entitled to claim compensation under Section 163A of the MV Act as he stepped into the shoes of the owner as the permissive user and the borrower of the two-wheeler [motorcycle] from its owner.”

Accordingly, the High Court allowed the appeal and set aside and quashed the Tribunal's judgment and award, holding that the insurer was not liable to pay the compensation awarded by the Tribunal.

Since the claimant was found not entitled to compensation either under Section 166 or Section 163A of the MV Act, the Court held that the issue regarding suo motu conversion of the claim from Section 166 to Section 163A was not required to be gone into.

The Court, however, noted that the accident had occurred during the validity of the insurance policy and that neither side had led evidence regarding the personal accident coverage provided under it.

“Therefore, it is observed and held that the claimant shall be entitled to the sum of personal accident coverage, if any, provided in the said policy with interest @ 6% per annum from the date of filing of the claim application till realization.”

The insurer was directed to finalise the entire process relating to personal accident coverage within two months.

Case No.: MAC Appeal No. 248/2014

Case Title: National Insurance Company Limited v. Motiur Rahman & Anr.

LL Citation: 2026 LiveLaw (Gau) 170

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