MACT Cannot Decide Personal Accident Claims of Vehicle Owners: Madras High Court Sets Aside Rs. 15 Lakh Award

"Owner/Insured, Not Being A Third Party, Is Not Entitled To Claim Compensation Under Section 163A Before The Motor Accident Claims Tribunal", In a significant ruling that clarifies the jurisdictional limits of Motor Accident Claims Tribunals, the Madras High Court on April 10, 2026 set aside a compensation award of Rs. 15,00,000 granted to the family of a deceased motorcycle owner, holding that the MACT has no jurisdiction to adjudicate personal accident cover claims of an owner-insured — who is not a "third party" under the Motor Vehicles Act.

Justice K. Govindarajan Thilakavadi allowed the appeal filed by M/s. Cholamandalam MS General Insurance Company Limited and directed the claimants — parents and brother of the deceased — to directly approach the insurer under the personal accident cover, and if unsuccessful, to seek redressal before the Consumer Forum or any other appropriate forum.

Background of the Case

On April 9, 2021, at around 2:00 AM, one Ruthick was riding his Bajaj Pulsar motorcycle (Registration No. TN-70-AE-5855) from Ambur towards his native place on the Krishnagiri–Hosur Road. Near the Melumalai Forest Area — a stretch without electric lights and without eyewitnesses — an unknown vehicle hit the motorcycle from behind and fled. Ruthick died on the spot. Truck drivers informed the police about the death. Since the unknown vehicle could not be traced, the Gurubarapalli Police registered a case in Cr. No. 75/2021 under Sections 279 and 304A IPC against the untraced driver.

The deceased's parents and brother filed MCOP No. 688 of 2021 before the Special District Court for Motor Accident Claims Cases, Krishnagiri, under Section 163A of the Motor Vehicles Act, 1988, claiming Rs. 30,00,000 with interest at 12% per annum. They relied on the personal accident package policy taken by the deceased, under which a sum of Rs. 15,00,000 was assured.

The Tribunal awarded the full insured sum of Rs. 15,00,000 with interest at 7.5% per annum, holding the Insurance Company liable based on the personal accident coverage under the package policy. Aggrieved, the Insurance Company filed the present appeal.

Legal Issues

The central question before the Court was whether the Motor Accidents Claims Tribunal has jurisdiction to entertain a compensation claim filed under Section 163A of the Motor Vehicles Act by the legal heirs of a deceased who was himself the owner-insured of the vehicle — with the claim being grounded not on third-party liability but on personal accident coverage under a package policy.

A connected question was whether the Supreme Court's pending reference on this very issue — and its recent ruling in Manjusha v. United India Assurance Co. Ltd. — would preclude the High Court from deciding the appeal on merits.

Court's Observations and Judgment

On Jurisdiction and the Scope of Section 147

Justice Thilakavadi was unambiguous in holding that the MACT is a forum constituted to adjudicate third-party claims. The compulsory insurance requirement under Section 147 of the Motor Vehicles Act covers the risk to third parties — not to the owner of the vehicle himself. The personal accident coverage that the deceased had paid for is a contractual benefit, not a statutory third-party liability.

Relying on the Division Bench ruling of the Madras High Court in Tata AIG General Insurance Company Limited v. Shanmugam, 2024 (2) TN MAC 305 (DB), the Court held that the principles laid down therein were "squarely applicable to the case on hand." "The owner/insured, not being a third party, is not entitled to claim compensation under Section 163A of the Motor Vehicles Act, 1988, before the Motor Accident Claims Tribunal for the injuries sustained by him relying upon the personal accident coverage."

The Court made clear that this finding does not extinguish the claimants' rights altogether. They retain the right to approach the Insurance Company directly on the basis of the personal accident cover, and if the insurer fails to compensate them, the Consumer Forum or other appropriate forum remains available. "It is open to the owner of the vehicle to directly approach the insurer on the basis of the personal accident cover. In case, the Insurance Company fails to compensate him, it is well open to him to approach the Consumer Forum or any other appropriate forum."

On the Supreme Court Reference in Wakis Afrin

The respondents' counsel pointed out that the Supreme Court had, in its order dated August 1, 2025 in SLP (Civil) Nos. 15447–48 of 2024 (Wakis Afrin (Minor) v. National Insurance Co. Ltd.), referred to a larger bench the very question of whether legal heirs of a vehicle owner who dies in an accident can claim compensation under Section 163A — noting conflicting views of coordinate benches. The argument was that in light of this pending reference, the Division Bench precedent could not be applied.

The Court rejected this contention. The High Court's binding precedent in Tata AIG v. Shanmugam had already settled the position within this jurisdiction and remained applicable until overruled. The mere pendency of a reference before the Supreme Court does not suspend the operation of a binding coordinate bench ruling.

On the Distinction From Manjusha

The respondents placed heavy reliance on the Supreme Court's decision in Manjusha and Others v. United India Assurance Company Limited and Another, 2025 SCC Online SC 1512, in which the Supreme Court had allowed the claimants' appeal against the insurer. However, Justice Thilakavadi distinguished that decision on a critical factual ground: in Manjusha, the Insurance Company had not raised the plea of limited liability either before the Tribunal or in its Memorandum of Appeal, and the Supreme Court allowed the claimants' appeal on that ground alone.

In the present case, the Insurance Company had specifically and expressly raised the question of limited liability in its Memorandum of Appeal before the High Court. "But, in the case on hand, the Insurance Company has raised the question of limited liability in the Memorandum of Appeal. Hence, the said decision is not applicable to the facts of the present case."

This distinction is of significant practical importance for insurance litigation: an insurer who fails to raise the jurisdictional or liability objection at the appellate stage may lose the right to rely on it, as happened in Manjusha. The present case confirms that timely pleading of the objection preserves the insurer's right to contest jurisdiction.

The Civil Miscellaneous Appeal was allowed. No costs were imposed. The award dated March 4, 2024 passed by the Tribunal was set aside. The respondents/petitioners were directed to approach the insurer directly under the personal accident cover, and if unsuccessful, to approach the Consumer Forum or other appropriate forum.

Date of Decision: April 10, 2026