Summary and Analysis of Wakia Afrin (Minor) Vs. M/s National Insurance Co. Ltd

1. Heading of the Judgment

Wakia Afrin (Minor) vs. National Insurance Co. Ltd.
(Supreme Court of India, Order dated August 1, 2025)

2. Related Laws and Sections

The judgment interprets:

• Motor Vehicles Act, 1988:
  Section 155: Survival of claims against insurers after the insured's death.
  Section 163A: "No-fault liability" compensation without proving negligence.
  Section 147: Scope of third-party insurance coverage.
  Section 166: Claims requiring proof of negligence.

• Precedents:
  Conflicting interpretations on whether owners/drivers can claim under Section 163A.

3. Basic Case Details

• Parties:
  Petitioner: Wakia Afrin (minor, represented by her aunt).
  Respondent: National Insurance Co. Ltd.

• Incident:
  Both parents died in a 2016 accident when their vehicle crashed after a tire burst.
  Father owned and drove the vehicle; mother was a passenger.

• Lower Courts:
  MACT, Cuttack: Awarded compensation (₹4.08L for mother; ₹4.53L for father).
  High Court: Dismissed claims, stating:
  A dead owner cannot be a respondent.
  Owners/drivers cannot claim under Section 163A.

• Supreme Court Decision:
  Partially allowed the appeal.
  Restored compensation for the mother’s death.
  Referred the father/owner’s claim to a larger bench.

4. Explanation of the Judgment

A. Background

• Wakia Afrin’s parents died in an accident involving their own vehicle.

• MACT awarded compensation under Section 163A (no proof of negligence needed).

• High Court rejected claims, citing procedural errors and substantive limitations.

B. Core Legal Findings

(I) Survival of Claims After Owner’s Death (Section 155)

• High Court’s error: Claim not invalid because the owner died.

• Section 155: Allows claims against insurers even after the insured’s death.

• Insurer must defend claims as if the owner were alive.

(II) Mother’s Claim (As Passenger)

• Restored: Compensation reinstated as she was a third party under the insurance policy.

• No legal barrier to her claim under Section 163A.

(III) Father’s Claim (As Owner-Driver) – Key Conflict

• Insurance company argued:
  Owners cannot claim compensation from their own estate (via insurers).
  Liability under Section 147 covers only third parties, not owners/drivers.

• Conflicting precedents:
  Dhanraj v. New India Assurance (2004): Owners cannot claim under Section 166.
  Rajni Devi (2008): Owners cannot claim under Section 163A ("cannot be both claimant and recipient").

• Court’s prima facie view:
  Section 163A’s non-obstante clause overrides:
  Policy terms limiting owner-driver coverage (e.g., ₹2 lakh cap).
  Traditional "third-party-only" insurance principles.
  Social welfare intent: Section 163A is a "beneficial legislation" for all accident victims, regardless of status.

(IV) Referral to Larger Bench

• Critical question: Whether Section 163A covers owners/drivers.

• Reason: Inconsistent rulings by 2-judge benches require authoritative settlement.

• Outcome:
  Father’s claim not decided; referred to a 3+ judge bench.
  Mother’s compensation immediately payable.

Key Takeaways

1. Section 155: Claims survive against insurers despite the insured’s death.

2. Section 163A’s ambiguity:
   Current position: Most precedents bar owner/driver claims.
   Potential shift: Supreme Court hints at a broader interpretation for social justice.

3. Immediate relief: Compensation for non-owner victims (e.g., passengers) is enforceable.

4. Pending issue: Whether owners/drivers can benefit from "no-fault" compensation under Section 163A awaits a larger bench ruling.

Note: The judgment highlights tensions between traditional insurance principles (covering only third parties) and social welfare goals (compensating all accident victims swiftly). The referral to a larger bench signals a potential landmark shift in motor accident jurisprudence.