Legal Heirs of a Negligent Driver Not Entitled to Compensation Under the Motor Vehicles Act: A Doctrinal Analysis of G. Nagarathna & Ors. v. G. Manjunatha & Anr. (2025)

Index

1. Introduction
2. Factual Background
3. Supreme Court’s Ruling
4. Legal Framework under Section 166
5. Relevant Case Law
6. Tort Law Principles and Self-Negligence
7. Insurance Contracts and Scope of Indemnity
8. No-Fault vs Fault-Based Claims: Section 140 and 166
9. Comparative Jurisprudence
10. Social Equity vs Legal Doctrine
11. Conclusion

Synopsis

In G. Nagarathna & Ors. v. G. Manjunatha & Anr. (SLP (Civil) Diary No. 22411/2025), the Supreme Court of India delivered a landmark ruling on 2 July 2025, reaffirming that legal heirs of a negligent driver—who himself caused the fatal accident—cannot claim compensation under Section 166 of the Motor Vehicles Act, 1988. 

The Court upheld the Karnataka High Court’s verdict that denied compensation to the family of the deceased motorcyclist, who was found solely negligent in a single-vehicle crash. The decision brings into focus several foundational elements of tort law, the contractual limits of insurance indemnification, and the scope of statutory welfare under the MV Act. This article explores the ruling's significance by contextualizing it against existing jurisprudence and examining its doctrinal, statutory, and policy implications.

Introduction

The Motor Vehicles Act, has been hitherto hailed as a beneficent and curative legislation tending to guarantee speedy and fair compensation for road accident victims. Particularly with the introduction of structured compensation provisions and the development of claim facilities, the Act has emerged as one of the most invoked statutes in India's jurisprudence. 

Though its corrective goal must be balanced with the foundational values of civil liability. Central to this tension is Section 166, which enshrines fault-based compensation and mandates the claimant to establish that the accident was caused by another's negligence or wrongful act. The ruling in this case reaffirms the priority of fault in maintaining a claim under the MV Act.

Factual Background

The plaintiff was riding his own bike when he lost control and had a fatal accident and he died after that. The FIR, the location and police investigation all made clear that the deceased was the sole actor in the case and the cause of the accident was merely because of his negligence.

There was no conspiracy or intervention of any third-party vehicle or driver. His legal successors lodged a claim under Section 166 of the MV Act with the Motor Accident Claims Tribunal on the grounds that they, being the dependents of the deceased breadwinner, would be entitled to compensation from the insurance company of the vehicle. The insurance company denied the claim based on the fact that the deceased being the tortfeasor himself, no payment was due under a third-party policy.

Although the MACT held the claim in support of the argument that the MV Act was welfare legislation and the dependents lost economic benefits, the Karnataka High Court set aside this decision in MFA No. 2850/2017 dated 23 November 2024. It decided that as the deceased was solely negligent and there was no involvement of any third-party fault, the claim under Section 166 was not sustainable. Aggrieved by it, the petitioners have moved a Special Leave Petition before the Supreme Court.

The Decision of the Supreme Court

On 2 July 2025, the Supreme Court, consisting of Justices Pamidighantam Sri Narasimha and R. Mahadevan, rejected the Special Leave Petition in G. Nagarathna & Ors. v. G. Manjunatha & Anr. The Court declined to intervene in the order of the High Court unequivocally stating in paragraph 3:

We are not disposed to intervene into the challenged order rendered by the High Court. The Special Leave Petition stands dismissed."

Although the order was succinct, its implications are doctrinally significant. By not interrupting the High Court's finding, the Supreme Court reinforced the perception that fault is the prime requirement for a claim under Section 166. One who is the cause of negligence cannot be both the victim and one who can file a claim for damages ensuing on account of that very fault. This accords with general principles of tortious liability and upholds the belief that no one shall benefit from their own fault, nor may their estate recover compensation under an insurance policy that was never meant to embrace such liability.

Legal Framework: Section 166 and the Requirement of Fault

Section 166 of the Motor Vehicles Act, 1988, allows "an injured person or the legal representatives of the deceased" to seek compensation "against the owner or driver of the vehicle involved in the accident." The judicial understanding, however, has been that such a claim is based on the proof of fault of another. The fault doctrine of liability that underlies Section 166 is very clearly stated in the Supreme Court's ruling in National Insurance Co. Ltd. v. Sinitha & Ors.

In Sinitha, it was contended by the claimants that even Section 166 must be construed as reflecting no-fault principles. The Court firmly rejected this contention. At paragraph 14, it ruled:

Claims under Section 166 have to be proved by negligence, as opposed to claims under Section 140."

The Court continued that although Section 140 allows interim compensation on a no-fault basis, Section 166 necessarily entails the establishment of the fact that the injury or death resulted from the negligent or wrongful act of another. 

Where no tortfeasor other than the deceased exists, there can be no cause of action under Section 166. Sinitha's ruling is therefore the foundation on which to reject claims where the deceased was solely negligent, as in the case of G. Nagarathna.

Foundational Precedents

The ruling of the Supreme Court in G. Nagarathna cannot be interpreted in isolation. It finds strength in a well-established precedent body that has at all times taken the view that a negligent driver cannot be regarded as a third party for the purposes of a motor vehicle insurance policy and that claims made by the legal representatives of such a tortfeasor are legally untenable unless backed by an express personal accident cover. 

Three flag judgements which distilled this rule are Oriental Insurance Co. Ltd. v. Jhuma Saha (Smt.) & Ors., New India Assurance Co. Ltd. v. Smt. Meera Bai & Ors., and United India Insurance Co. Ltd. v. Tilak Singh & Ors. 

In Jhuma Saha, the deceased was a registered owner and driver of a truck who died in a single-vehicle accident. The lawful heirs made a compensation claim under the MV Act. The question that arose before the court was whether or not the insurer is liable to compensate for the death of the owner-driver under a typical third-party policy. The Supreme Court held categorically that no such liability exists. At paragraph 10 of the judgement, the court had said:

"The owner of the vehicle was the deceased. Being a contract of indemnity, the contract of insurance, the issue of the insurer being directed to indemnify the insured against the death of the owner does not arise."

The Court reaffirmed that third-party insurance is meant for covering liabilities against third parties, not providing benefits to the insured in the case of no personal accident policy. The Court also rejected the concept that the beneficial construction of the Act could prevail over the wording of the insurance policy, reaffirming that insurance essentially is a question of contractual obligation and cannot be warped to suit sentiments.

Similarly, in New India Assurance Co. Ltd. v. Meera Bai, the deceased was the owner-driver of a two-wheeler who passed away in a single-vehicle accident. His wife and children, who were the claimants, came to the Tribunal seeking compensation under Section 166. The insurer rejected the claim, and the case went up to the Supreme Court. At paragraph 14 of the judgement, the court ruled:

Because the deceased was the owner-driver registered in the policy and the policy was an ordinary one without any personal accident cover for the owner-driver, no compensation can be paid by his legal heirs under the third-party risk cover.

The ruling went further to explain that although dependents in some instances could qualify for compensation, such qualification must stem from an insurable interest underpinned by the policy. Without any third party being at fault, and where the tortfeasor himself is dead, there is no cause of action, and the claim is precluded.

Arguably the strongest expression of this rule is in United India Insurance Co. Ltd. v. Tilak Singh. The question there was whether a gratuitous passenger or owner-driver, who fell outside the insurance contract, could be considered a third party. The Court held categorically that any individual who was not specifically covered by the policy could not claim benefits from it. In paragraph 16, the Court stressed:

"Where the policy does not indemnify against the risk of a person travelling gratuitously in a private vehicle, the insurer cannot be held liable to pay."

The Tilak Singh ruling reinforces the idea that insurance contracts are not instruments of universal indemnification. Their terms are deliberately worded and must be accorded as much.

The combined jurisprudence of these three cases leaves no room for doubt that when the deceased is not only the owner but also the negligent driver, his legal heirs cannot maintain a claim under a third-party policy. The principles established in these cases were correctly referred to and upheld in G. Nagarathna, resulting in the rejection of the Special Leave Petition. The reaffirmation of these precedents by the Court guarantees that adjudication under the MV Act continues to be consistent with both contractual realities and the fundamental doctrines of tort law. 

Fault Doctrine and the Inapplicability of Volenti Non Fit Injuria

The G. Nagarathna decision also finds support in the general principles of tort law governing liability and causation. One of them is the Latin maxim volenti non fit injuria—to a willing person, no injury is done. This doctrine, usually relied upon to negate liability where the plaintiff voluntarily agrees to take a risk, also applies to the case of self-inflicted accidents, in that it emphasises the conceptual impossibility of suing oneself for a tort.

Tort liability assumes a relationship in law between a wrongdoer and a victim. When the tortfeasor and the victim are one and the same individual, as in the instance of a motorist who perishes in an accident resulting from his own carelessness, the whole liability system comes crashing down. 

The wrongdoer's estate cannot sue on his own act, nor can anyone be plaintiff and defendant in an action. This was exactly the case in G. Nagarathna, where the claimants claimed compensation on the basis of the fault of the deceased, who was also the insured. The claim thus transgressed a basic axiom of civil liability law—that a party could not profit from their own fault.

This structural inconsistency was recognised implicitly in the judgements referred to above, but possibly most explicitly in Pushpa Bai Purshottam Udeshi v. Ranjit Ginning & Pressing Co. In the case concerned, while considering employer liability for a fatal motor accident, the court noted that civil liability rests on the imposition of a duty owed by one party towards the other, its infringement, and the resulting hurt. 

These conditions do not hold where the victim and actor are identical. The implication of this rule is extensive—it validates that civil actions based on internally inflicted injuries cannot legally continue.

Therefore, G. Nagarathna is in consonance not just with statutory interpretation but also with primary principles of tort jurisprudence. It appropriately disallows compensation where the legal order is incapable of tolerating the paradox of an individual being both perpetrator and victim.

Insurance Contracts and the Scope of Indemnity

At the core of the G. Nagarathna case is the essential question of what are the obligations that follow from a contract of insurance. The MV Act requires third-party insurance in all vehicles on Indian roads, but the form of this insurance—its scope, its beneficiaries, and exclusions—needs to be ascertained under contract law principles. It is well established that insurance is a contract of indemnity, and its ambit cannot be stretched to cover risks not intended by the parties.

A typical third-party insurance policy is intended to indemnify the insured against legal liabilities in case of injury or death to a third party. It is not a personal accident policy unless such a cover is taken separately. This contractual difference has been recognized judicially in many rulings. In Dhanraj v. New India Assurance Co. Ltd., the Supreme Court had specifically addressed this point. The owner-cum-driver of a motorcycle died in a lone accident, and his legal representatives instituted the claim. The Court ruled, at paragraphs 6 and 7, that:

"A complete policy only insures liability against third parties. It does not insure death of the owner unless a personal accident rider is present. The insurer is not bound to pay compensation to the legal heirs of the deceased."

This decision, and others, creates a doctrinal line: third-party policies shield others against the insured's negligence; they create no right of recovery for the insured or their estate. In G. Nagarathna, there was no cover against personal accident. The policy of insurance therefore could not be read as creating a benefit in favour of the legal heirs of the deceased. Such a finding would not only reshape the contract between insured and insurer but would also result in perverse outcomes, enabling people to recover for their own torts under insurance.

This principle is crucial to ensuring the actuarial equilibrium of insurance systems. If insurance companies were held responsible for self-inflicted injury under third-party policies, the entire risk pool would be skewed, premiums would become unsustainable, and the very essence of indemnity-based risk-sharing would break down. The Supreme Court judgment therefore performs the twin roles of legal harmony and commercial stability.

Section 140 vs Section 166

One argument that is sometimes made in such cases is that MV Act being a welfare legislation should permit compensation even if the deceased is also in fault, especially in the no-fault scheme. That consideration, although well-intentioned, mixes up the two different roles played by Sections 140 and 166. Section 140 is one for no-fault interim compensation, while Section 166 is fault-based and has to be separately pursued.

In Rajasthan State Road Transport Corporation v. Kailash Nath Kothari, the Court elaborated the inter-relationship between these provisions. It noted at paragraph 14:
"The amount under Section 140 is payable without proof of fault and operates as an interim measure. It does not eliminate the requirement of proving fault for final adjudication under Section 166."

That is, Section 140 is not itself a substantive remedy but a procedural device to grant speedy relief until a final decision is arrived at. It cannot be availed to circumvent the requirement of fault in Section 166. The Court in G. Nagarathna appropriately considered the claim as one under Section 166—because that was the mode in which it was made—and declined to grant any relief without fault on the part of a third party.

Moreover, even under Section 140, insurers are not liable to pay unless the policy covers the risk in question. In Jhuma Saha, discussed earlier, the Court held that even no-fault liability cannot override the basic exclusions in the policy. Therefore, even if the claimants had framed their petition under Section 140, the absence of a personal accident cover would still have rendered the insurer not liable.

The two-tiered structure of the MV Act is a conscious legislative decision: to offer limited, speedy compensation under Section 140, and complete, final compensation under Section 166 only where culpability is established. The G. Nagarathna judgment respects this design and avoids an amalgamation of two competing legal regimes.

Comparative Global Jurisprudence

This approach taken in G. Nagarathna is not available elsewhere in India alone. Juries all over the globe have long refused to award compensation to legitimate heirs when the tortfeasor happens to be the deceased. The law of English jurisdictions has never permitted a wrongdoer to recover compensation from themselves or their insurer unless the agreement expressly provides for it. In Great Central Railway Co. v. Bates, the House of Lords refused compensation where the plaintiff's own negligence had caused the harm, reiterating that the duty of care cannot be owed by oneself to oneself.

Courts in Australia have also established distinct parameters of what contracts of insurance can and cannot cover. In Government Insurance Office v. RJ Green & Lloyd Pty Ltd, the High Court decided that insurers do not cover losses that are self-inflicted by the insured unless they are specifically included under the policy. The Court noted that contractual indemnity is strictly interpreted and no cause of action can lie outside the scope of express cover.

Even in America, where there is mandatory personal injury protection in some states, courts have declined to add liability to instances where the insured is both perpetrator and victim unless statutory requirements explicitly provide for it. Those jurisdictions uphold that insurance is not a guarantee of compensation in all cases but a contractually controlled instrument of risk management.

The Indian stand, reaffirmed in G. Nagarathna, is accordingly in consonance with international standards. It preserves the line of demarcation between third-party risk and first-party claims, thus also preserving the rule that contract beneficiaries must have a sound basis in law to claim.

Social Equity vs Legal Doctrine

No doubt the decisions like G. Nagarathna look cruel considering the perspective of social justice. The loss of a breadwinner in a low-income family, regardless of fault, frequently entails severe financial distress. In such circumstances, refusal of compensation under the MV Act might look penal. Yet, judicial perception cannot cross statutory boundaries or fundaments of contract and tort law. Sympathy cannot take precedence over doctrine.

The correct forum for such issues is Parliament. Parliament, if it wants to make provision for such cases, may modify the MV Act to establish a statutory fund for relatives of self-negligent motorists or require personal accident cover in all third-party policies. Such funds have been established in some jurisdictions to cover gaps in the insurance scheme. For example, the UK Motor Insurers' Bureau and New Zealand Accident Compensation Corporation offer statutory arrangements for such edge cases.

Until these changes are undertaken in India, courts must uphold the law as it stands. G. Nagarathna shows this discipline. Despite the hardship of the claimants, the Court correctly concluded that there was no legal right. In establishing this line, the judiciary steered clear of setting a pernicious precedent whereby a weakening of the core legal principles of fault and limitation of contract would be facilitated.

Conclusion

The judgment in G. Nagarathna & Ors. v. G. Manjunatha & Anr. restores much-needed clarity and coherence to the law governing motor accident compensation in India. It confirms that Section 166 of the Motor Vehicles Act is anchored in fault-based liability, and that legal heirs of a person who caused an accident due to his own negligence have no right to claim compensation under a third-party insurance policy. The ruling aligns with established precedent in Sinitha, Jhuma Saha, Meera Bai, and Tilak Singh, and reinforces the doctrinal purity of tort law, contractual indemnity, and statutory design.

By refusing to allow recovery in cases of self-inflicted harm, the Court has reaffirmed the principle that no one can profit from their own wrong. At the same time, it has drawn a clear boundary between judicial compassion and legal enforceability. In doing so, the Supreme Court has sent a strong signal that while the MV Act is a welfare legislation, its remedial nature must be exercised within doctrinal and contractual limits.

For lawmakers, the case presents an opportunity to reflect on the statutory gaps that leave certain families uncompensated despite severe hardship. For courts and insurers, it re-establishes the principle that liability must always be legally grounded, and that sympathy cannot supplant statute

FAQs

Q1. Can the legal heirs of a driver who dies in an accident caused by his own negligence claim compensation under the Motor Vehicles Act?
No. As held in G. Nagarathna & Ors. v. G. Manjunatha & Anr., the legal heirs of a negligent driver cannot claim compensation under Section 166 of the MV Act, 1988. The section requires proof of fault by another party, which is absent when the deceased was solely responsible.

Q2. What was the key reason the Supreme Court dismissed the claim in G. Nagarathna?
The Court reaffirmed that a claim under Section 166 is fault-based. Since the deceased was himself the tortfeasor, his legal heirs had no cause of action under a third-party policy, and the insurance company bore no liability.

Q3. Would the outcome have been different if a personal accident cover was in place?
Yes. A personal accident cover specifically includes the owner-driver. In such cases, the insurer may be liable to pay compensation even if the accident was self-caused.

Q4. Can compensation be claimed under Section 140 in such cases?
Only if the policy permits it. Section 140 offers no-fault interim compensation, but the claim still requires that the insurance policy does not exclude the risk. Most standard third-party policies do not cover the owner-driver’s death.

Q5. Are there any international examples that support this position?
Yes. Courts in the UK, Australia, and the US have consistently held that self-inflicted injuries or death are not compensable under standard indemnity-based policies unless explicitly covered.

Q6. Is this ruling final and binding?
Yes. The Supreme Court's dismissal of the SLP upholding the Karnataka High Court’s judgment has binding value and affirms existing legal precedent.

Q7. What are the policy implications of this judgment?
The ruling underscores the need for legislative reform if dependents of self-negligent victims are to be protected. Until then, courts must interpret the Act within the bounds of tort and contract law.