In Brief
In a landmark decision on motor vehicle accident compensation, the Supreme Court held that insurers cannot raise negligence as a defence in claims under Section 163-A of the Motor Vehicles Act, 1988. Section 163-A provides final compensation based on a structured formula without requiring proof of fault—a 'no-fault liability' scheme designed to avoid delays inherent in fault-based proceedings. The Court disagreed with an earlier two-judge bench decision (Sinitha), holding that allowing such a defence would contradict the legislative purpose and effectively merge Section 163-A proceedings with fault-based Section 166 proceedings. The Court ordered release of 50% of deposited compensation pending final resolution.
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