1. Road accident resulting in deaths — Claim for compensation — Liability of insurance company to indemnify owner — Challenge to MACT and High Court awards. (Para 2 , 3 , 4 , 5 )
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2024 Supreme(SC) 1335
SUPREME COURT OF INDIA
Sudhanshu Dhulia, Ahsanuddin Amanullah, JJ.
National Insurance Company Ltd. – Appellant
Versus
Maya Devi And Others
R1: Maya Devi
R2: Nitika @ Nageeta
R3: Visakha Singh @ Ravinder Singh
R4: Mohan Singh - Respondents
Civil Appeal Nos. 15016-15017 OF 2024[@ Special Leave Petition (Civil) Nos.29299-29300 of 2018]
Decided On : 02-09-2024
Advocates appeared:
For the Petitioner(s): Mr. Amit Kumar Singh, AOR Ms. K Enatoli Sema, Adv. Ms. Chubalemla Chang, Adv. Mr. Prang Newmai, Adv.
For the Respondent(s): Mr. Sahil Tagotra, AOR Mr. Chritarth Palli, Adv. Mr. Vishal Mahajan, Adv. Mr. Bipin Bihary Singh, Adv. Mr. Anil Kumar, Adv. Mr. Vinod Sharma, AOR
For the Petitioner(s): Mr. Amit Kumar Singh, AOR Ms. K Enatoli Sema, Adv. Ms. Chubalemla Chang, Adv. Mr. Prang Newmai, Adv.
For the Respondent(s): Mr. Sahil Tagotra, AOR Mr. Chritarth Palli, Adv. Mr. Vishal Mahajan, Adv. Mr. Bipin Bihary Singh, Adv. Mr. Anil Kumar, Adv. Mr. Vinod Sharma, AOR
The Insurance Company must prove any defenses against liability, including fraud, and the insurance policy was valid at the time of the accident.
Headnote:(A) Motor Vehicles Act, 1988 - Section 166 - Compensation for death in a road accident - The High Court upheld the MACT's award of Rs.67,50,000/- and Rs.8,70,000/- to the claimants, finding no reason to disbelieve the evidence presented. The Insurance Company failed to prove its defenses regarding the vehicle's involvement and the timing of the insurance coverage. (Paras 2, 4, 10, 12, 17)
(B) Insurance Liability - The burden of proof lies on the Insurance Company to establish any defenses against liability, including allegations of fraud, which must be substantiated with evidence. (Paras 10, 13, 16)
Facts of the case:
The appeals arose from the MACT's award following a road accident that resulted in the deaths of Sh. Om Prakash and Smt. Asha Rani, with the MACT holding the Insurance Company liable for compensation.
Findings of Court:
The court found that the Insurance Company did not discharge its burden of proof regarding the vehicle's involvement and the timing of the insurance policy.
Issues: The main issues included the vehicle's involvement in the accident and the validity of the insurance coverage at the time of the incident.
Ratio Decidendi: The court reiterated that the Insurance Company must prove any defenses against liability, including fraud, and that the insurance policy was valid at the time of the accident.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Insurer contended the insured vehicle was not involved in the accident and that the insurance policy was obtained fraudulently. (Para 7 , 13 )
3. The insurer failed to disprove the police report regarding vehicle involvement and failed to provide specific evidence to prove the allegation of fraud. (Para 7 , 8 , 9 , 13 , 16 )
4. The burden of proof to establish a defense or policy breach lies with the insurer; allegations of fraud must be proven with specific particulars. (Para 10 , 13 )
5. Appeals dismissed — Insurance company directed to deposit compensation as per the MACT award. (Para 17 , 18 )
6. Who bears the burden of proof to establish a defense or a breach of policy to avoid liability in motor accident claims?
The burden of proof lies with the insurance company to establish the available defenses and prove a breach on the part of the vehicle owner to avoid its liability. (Para 10 )
7. What is the legal requirement for an insurance company to successfully plead fraud to avoid liability?
Fraud must be proven by setting forth full particulars in accordance with law; general allegations are insufficient, and the onus of proof lies on the party alleging fraud. (Para 13 , 16 )
8. When does the effectiveness of an insurance policy typically commence?
The effectiveness of an insurance policy starts from the time and date specifically incorporated in the policy and not from an earlier point of time. (Para 12 )
ORDER :
Ahsanuddin Amanullah, J.
Leave granted.
FACTS:
2. These appeals arise from the common Final Judgment and Order dated 05.10.2018 rendered by a learned Single Judge of the High Court of Punjab and Haryana at Chandigarh in F.A.O. Nos.2921/2018 (O&M) and 2922/2018 (O&M) whereby, while dismissing the appeals preferred by the Petitioner-Insurance Company, the High Court upheld the compensation awarded to the claimants i.e., Respondents No.1 and 2 herein vide Award dated 01.02.2018 passed by the Motor Accidents Claim Tribunal at Gurdaspur, Punjab (hereinafter referred to as the ‘MACT’) in the claim petitions1[MACT Cases No.09/2017 and 10/2017] filed by the Respondents No.1 and 2. The MACT had awarded compensation to the tune of Rs.67,50,000/- and Rs.8,70,000/- with interest @9% per annum to the Respondent No.1, being the mother of Sh. Om Prakash and mother-in-law of Smt. Asha Rani, and Respondent No.2, being the daughter of Sh. Om Prakash and Smt. Asha Rani, who expired in an unfortunate road accident on 11.04.2017. The MACT assessed and quantified the compensation as under:
| MACT Case | No.09/2017 (On account of Sh. Om Prakash’s death) | No.10/2017 (On account of Smt. Asha Rani’s death) |
| Age of Deceased | >45 y/o | 41-45 y/o |
| Occupation of Deceased | Havaldar in the Indian Army and was doing agriculture work. | Homemaker & used to do stitching and tailoring. |
| Income of Deceased | Rs.46,129/- p.m. Abbreviation for per mensem/per month. | Rs. 5,000/- p.m. |
| Future Prospects | 30% | Nil |
| Deductions towards Personal Expenses | 1/3rd | Nil |
| Multiplier | 14 | 14 |
| Loss of Dependency | Rs.67,20,000/- | Rs.8,40,000/- |
| Loss of Love and Affection | Rs.15,000/- | Rs.15,000/- |
| Funeral Expenses | Rs.15,000/- | Rs.15,000/- |
| Total Compensation Awarded | Rs.67,50,000/- R1/Mother-Rs.17,50,000/- R2/Daughter-Rs.50,00,000/- | Rs.8,70,000/- R1/Mother-Rs.70,000/- R2/Daughter-Rs.8,00,000/- |
3. The MACT held Respondent No.3, Respondent No.4 and the Petitioner, being driver, owner and insurer, respectively, as jointly and severally liable to pay the awarded compensation to the claimants. The MACT specifically observed that the Petitioner-Insurance Company could not avoid its liability to indemnify Respondent No.4, owner of tractor bearing registration No.PB-06-Q-6846 and thus, held it liable to pay compensation to the claimants.
4. The High Court, while considering the appeals preferred by the Petitioner-Insurance Company and in view of the position on record, particularly the evidence of the claimants and Ex. R-5, the proposal form and Ex. R-6, the insurance policy, having gone unrebutted, concluded that there was no reason to disbelieve the findings recorded by the MACT after appreciation of evidence. It upheld the MACT’s Award.
5. Aggrieved by the concurrent findings of the High Court and the MACT, the Appellant (hereinafter referred to as the ‘Insurance Company’) is before us.
SUBMISSIONS, ANALYSIS, REASONING AND CONCLUSION:
6. Having heard and considered the submissions advanced by learned counsel for the parties and the facts and circumstances of the case, we find that the present petitions are misconceived.
7. First and foremost, the basic contention put forth by the Insurance Company is that the vehicle which was insured with it, was not involved in the accident and some other vehicle was mentioned in the initial Written Statement filed before the MACT. On this point, there is a detailed discussion in the Award of the MACT itself which explains that various witnesses have stated that it was the vehicle as described in the complaint which was involved in the accident and further, that one witness produced by the Insurance Company had only raised some doubt with regard to the vehicle as claimed by the complainants, but not with the make of the vehicle involved in the accident as the difference in number was that instead of the vehicle that the c
