The Supreme Court has directed the Insurance Regulatory Development Authority of India to consider whether claims by family members, friends, or such persons other than the registered owner driving or riding borrowed vehicles, could be the beneficiaries of personal accident cover, where the accidents could not be attributed to other 'offending' vehicles or the drivers' own negligence, but other intervening circumstances. 

A division bench of Justices A.S. Bopanna and Hima Kohli issued the following interim order after hearing a number of appeals filed by this class of people who have been denied compensation:

“In these sort of matters, an appropriate consideration is required to be made by the Insurance Regulatory and Development Authority of India (for short ‘IRDAI’) to include such claims since at present, they are not considered as an occupant of the vehicle. Though, at this stage we do not express any opinion on the merits of the case, but prima facie we are of the view that such coverage should be considered firstly by the IRDAI by taking into consideration the existing tariff which is indicated to also include such cases for reimbursement.”

Before moving in that path, the Supreme Court noticed: 

First, it is claimed that no other "offending" vehicles were involved in the incidents, which are believed to have happened when a family member or a close acquaintance was operating or riding in the loaned vehicle. The result is “the insurance company, while declining to reimburse the compensation, sought to rely on the India Motor Tariff, more particularly, Section III relating to personal accident cover for owners-drivers.” This agreement states that the owner-driver of a car would receive compensation for any physical harm they experience or if the accident results in their death, provided, among other things, that the driver was the registered owner of the vehicle. 

Second, even if the Supreme Court has ruled that under these situations, the driver or passenger of a rented car "steps into the shoes" of the owner, Section III, which deals with personal coverage for the owner-driver, would still apply. The bench observed that the claims in the current circumstances were not technically regarded as being claims for compensation. This was due to the fact that the accident was not caused by the carelessness of the person operating or riding in the vehicle, but rather by other factors. “In one of the cases, a Nilgai from the wild crossed the road and the accident had occurred,” the bench illustrated.

Case Title: 1. Sujata Singh & Anr. v. Divisional Manager National Insurance Company Limited & Anr. 
2. G. Santhi & Ors. v. The Oriental Insurance Company Limited & Anr. 
Citation: Civil Appeal Nos. 7198-7199 of 2022 and Civil Appeal Nos. 7965 of 2022

Appearance  of the Advocates:-

For Parties(s) 
M/S. Ksn & Co., AOR
Mr. Siddharth Naidu, Adv.
Mr. V Balachandran, Adv.

Mr. Mahfooz Ahsan Nazki, AOR
Mr. Polanki Gowtham, Adv.
Ms. Rajeswari Mukherjee, Adv.
Ms. Niti Richhariya, Adv.
Mr. Sudhir Naagar, AOR

Mr. Abhishek Kumar Gola, Adv.
Mr. Nikhil Jain, AOR
Ms. Divya Jain, Adv.
Ms. Nupur Prasad, Adv.
Mr. Anshul Mehral, Adv.
Mr. Prashant Mohla, Adv.
Mr. Vinod Kumar Jain, Adv.