Supreme Court Holds That Motor Accident Claims Filed Under Section 163A Can Be Treated as Section 166 Claims When Negligence Is Pleaded

Case Name: S. Shakul Hameed v. Tamil Nadu State Transport Corporation Limited
Citation: 2026 INSC 29
Date of Judgment/Order: 06 January 2026
Bench: Justice Ahsanuddin Amanullah and Justice K. Vinod Chandran

Held: The Supreme Court held that even if a motor accident claim petition mentions Section 163A of the Motor Vehicles Act, it must be treated as a claim under Section 166 when the pleadings and material on record clearly allege rash and negligent driving and seek fault-based compensation, and the claimant is entitled to just and reasonable compensation accordingly.

Summary: The appellant, who suffered permanent disability in a motor accident, sought enhancement of compensation awarded by the Tribunal and marginally increased by the High Court. Although the claim petition referred to Section 163A of the Motor Vehicles Act, the pleadings alleged negligence on the part of the transport corporation’s driver and claimed a higher amount than permissible under the structured formula. The Supreme Court examined the nature of the pleadings, noted the absence of strict proof of income, relied on precedent to assess a reasonable notional income, and corrected the High Court’s error in reducing the disability percentage without an appeal by the insurer, while also applying future prospects to a self-employed claimant.

Decision: The appeal was allowed, the compensation was substantially enhanced by recalculating loss of income on the basis of notional income, appropriate multiplier, future prospects, and 50% disability, the amounts awarded under conventional heads were left undisturbed, and the respondent was directed to pay the enhanced compensation with interest at 7.5% per annum within three months, with all pending applications disposed of.