9 yr fight with vehicle insurer: Wife & kids win Rs 20L

When Mr. Dhanraj (name withheld) made a claim for personal injury under a 3rd party motor insurance after a motorcycle accident, he faced multiple objections. To fight against this denial of insuance claim, he filed an appeal with the Motor Accident Claims Tribunal (MACT), where he was awarded a compensation of Rs 18 lakh along with 9% interest. The High Court later increased this amount to Rs 20 lakh. However, the insurance company decided to appeal this decision in the Supreme Court.

One major reason why the insurance company was reluctant to honour this claim was that Dhanraj passed away while the court proceedings were ongoing. After the accident, Dhanraj was left with 100% disability and eventually succumbed to his injuries on April 24, 2024. The insurance company argued that since the claim was for personal injury compensation, the legal representatives couldn’t continue the proceedings , citing Section 306 of the Indian Succession Act, 1925.

On September 26, 2025, the Supreme Court of India ruled in favour of the late Dhanraj, stating that his legal heirs would receive Rs 20 lakh (20,30,095) with 9% interest from the date the claim petition was filed until the payment is made. Read on to find out how Dhanraj’s legal heirs won this case. Advocate Shail Kumar Dwivedi represented the appellants (Dhanraj's legal heirs).

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Supreme Court analysis of Indian Succession law
Justice K. Vinod Chandran and Justice N. V. Anjaria of the Supreme Court in their judgement (2025 INSC 1177) dated September 26, 2025 said that at first they need to deal with the preliminary objection raised against the continuation of the proceedings after the victim died.

The Full Bench of the Madhya Pradesh High Court on an interpretation of the provisions of the Motor Vehicles Act, 1988, especially Section 166, juxtaposed with Section 306 of the Indian Succession Act, 1925 held : “…that a claim for personal injury filed under Section 166 of the Motor Vehicles Act, 1988 would abate on the death of the claimant and would not survive to his legal representatives except as regards the claim for pecuniary loss to the estate of the claimant.”

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The Supreme Court said that the answer is simple and clear in so far as the insertion of sub-section (5) to Section 167 by Act 32 of 2019 with effect from 01.04.2022, which reads as under:

“[(5) Notwithstanding anything in this Act or any other law for the time being in force, the right of a person to claim compensation for injury in an accident shall, upon the death of a person injured, survive to his legal representatives, irrespective of whether the cause of death is relatable to or had any nexus with the injury or not.]”

The Supreme Court said that the right to claim compensation for the injuries caused in a motor vehicle accident hence survives on the legal representatives of the injured even if the injured dies in the course of the proceedings for reasons not relatable to or having any nexus with the injuries sustained.

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In this present case Dhanraj –the injured died in 2024, after the insertion to Section 166 by amendment. The Supreme Court said: “We also have a difference of opinion with the declaration of law in Bhagwati Bai which we need not dilate upon in the facts of this case where the inserted provision is squarely applicable.”

An extract of the finding in Jasmail Singh Kahlon and Meena judgement was reproduced by the Supreme Court, which reads as follows:

• “5. At the outset, the learned counsel for the claimants relied on Oriental Insurance Company Limited v. Kahlon @ Jasmail Singh Kahlon to impress upon us that despite the death of the injured, the legal representatives of the deceased can pursue the claim since the property under the Act would have a much wider connotation than the conventional definition and would include the estate left behind by the deceased.
• It was held that if the legal heirs can pursue claims in case of death, there is no reason to prohibit the legal representatives to pursue claims for loss of a property, akin to estate of the injured, if the injured dies subsequently.
• We see, absolutely no reason to differ from the declaration of law and the insurer also raises no objection on the same. We would consider the enhancement sought by the original applicant, which if granted before her death would have accrued to her estate or rather compensated the loss of her estate; caused by reason of the accident, which the legal heirs are entitled to succeed to.”

Supreme Court judgement
The Supreme Court said that the High Court adopted the following formula for deciding the compensation:- Rs 9,000 x 12 x 125% x 11 = Rs 14,85,000. The total compensation would be, hence Rs 20,37,095.

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The Supreme Court said that on the contention raised with respect to the restriction of the interest paid i.e., from the date of application till 07.11.2016 as restricted by the High Court without any rationale. The interest on the total award of Rs 20,30,095 at the rate of 9% would run from the date of the filing of the claim petition till the payment is made.

The Supreme Court said: “If any amounts are already paid, the same shall be deducted and the balance shall be paid within a period of three months from the date of this judgment.”