The High Court of Himachal Pradesh has held that in cases involving motor vehicle accidents, when interim compensation is awarded under Section 140 of the Motor Vehicles Act, 1988 (MVA), the registered owner of the vehicle alone is liable to pay the award, and the driver cannot be held jointly or severally responsible for such interim compensation. The Court clarified that Section 140 creates a no-fault liability on the owner and does not impose interim liability on the driver for this purpose.
The decision arose out of an appeal from the Motor Accident Claims Tribunal, where a case of a heavy-vehicle accident in a restricted residential zone had resulted in fatalities and injuries. The Tribunal had held both the vehicle’s owner and the driver jointly and severally liable to pay ₹ 50,000 as interim compensation under Section 140 MVA. The registered owner and the driver both challenged the order before the High Court.
Upon review, a single-judge bench observed that Section 140 explicitly places liability on the “owner” of the vehicle in respect of death or permanent disablement caused by an accident arising out of use of a motor vehicle, without the need to plead or prove fault. Thus, when interim compensation is awarded under Section 140, it is the owner—by virtue of registration—who is liable; there is no statutory basis for projecting liability onto the driver in respect of Section 140 interim awards. The Court held that the Tribunal’s direction making the driver liable was contrary to the statute. The Court allowed the driver’s appeal, and held him not liable for the interim compensation under Section 140, directing only the registered owner to pay. The owner’s appeal was dismissed and his liability affirmed.
In so holding, the Court reaffirmed that Section 140 is designed to ensure prompt payment of a fixed sum of compensation to victims of motor vehicle accidents (or their dependents) without regard to the owner’s fault or negligence. The scheme is for the benefit of claimants, and the liability is clearly defined in favour of the registered owner. Extending the liability to the driver would blur the statutory division of responsibility and undermine the legislative intent. The Court emphasised that the driver may still be liable under other sections of the Act (for example Section 166) or common-law tort, but such liability does not extend to interim awards specifically under Section 140.
The judgment sends a clear message that justice in motor-accident claims demands strict adherence to the statutory conditions of the Act. Interim compensation under no-fault liability must be directed to the owner, who can be indemnified by his insurer as appropriate. By removing the driver from liability for Section 140 awards, the Court has clarified and streamlined the process for payment of early relief to accident victims while preserving proper statutory allocations of responsibility under the Act.
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