NEW INDIA ASSURANCE CO. LTD. vs PRABHA DEVI .

The Supreme Court addressed the liability of the insurance company under the Motor Vehicles Act, 1988, specifically Section 166, in the context of a claim made by the legal heirs of a deceased vehicle owner. The Court held that the insurance policy's exclusion of liability for the owner as a passenger does not bar the legal heirs from claiming compensation, as the deceased was not acting in the capacity of the owner at the time of the accident. The Court upheld the MACT's award of Rs. 3,20,000 in favor of the claimants, reinforcing the principle that legal heirs can seek compensation irrespective of the owner's status at the time of the accident.