Srinagar Motor Accident Tribunal Awards Over ₹1 Crore In Bus Accident Case, Fines Insurance Company ₹50K For Withholding Policy Document

The Motor Accident Claims Tribunal Srinagar awarded a total of Rs 1.13 crore in four claims in connection to a 2012 bus accident, and further imposed cost of Rs 50,000 on United India Insurance Company (UIIC) for withholding a policy document indicating the commencement of risk, during course of the trial. 

The Tribunal presided by Presiding Officer Fayaz Ahmed Qureshi awarded Mushtaq Ahmad Dar Rs. 1,00,000, Raja Begum Rs. 15,04,000, Rafiqa Begum Rs. 92,83,400 and Parvaiz Ahmad Ganai Rs. 4,34,000, along with 8% interest from the date of institution till realization if paid in 30 days, else @10% after 30 days time.

The court passed the order in four claims which were heard and adjudicated together. The claims were arising out of an accident on 10/01/2012 at Wayil Sumbal in Kashmir wherein a bus going from Sadhupora to Srinagar, while reaching near Wayil had turned to the right side of the road and fell down 50 feet deep into the gorge. 

The tribunal observed:

"The insurance company has withheld a document of certificate of insurance which is part of the insurance policy as the document defines the commencement of the risk but, however, when clarification was sought regarding premium receipt number mentioned in the premium receipt and Insurance policy to resolve the incompatibility, Mr Sajad Ahmad Shah, learned counsel for the insurance company was called upon to produce fresh print out of the relevant documents relied upon by the insurance company which were provided as one set. One of the documents was a certificate showing the date of commencement of the risk. Perhaps, the same has been passed on by the company unmindful of its consequences on the disposal of the instant claims.

The entire controversy stretched over many years revolved around the "time" mentioned in the cover note/insurance policy and had the insurance company sincerely come forward with this document years ago the matter would have been decided without undue requirement of calling the witnesses of private respondents and insurance company. The Insurance company is under legal and statutory obligation to put forward a legal defence and it is not expected to conceal material information having bearing on the finding to take undue advantage. Learned counsel for the insurance Company has unnecessarily not only cited but reproduced extracts from many cited judgments in the pleadings and then supplied number of judgments rebutted by the otherside to make out a defence that risk was not covered at the time of accident"

The Tribunal said that judgments cited in the matter lays down the settled position that if there is no time mentioned in the policy, the same has to be effective from the midnight of the same day.

The Tribunal observed that the insurance company relied upon time i.e 15.14 hours on 10-01-2012 mentioned in the cover Note/insurance policy and did not submit the commencement of risk certificate which would have been useful to conveniently and expeditiously settle the controversy.

"As such, this Tribunal, in exercise of the powers under Section 35 of Code of Civil procedure read with Section 169 Motor Vehicles Act,1988, deems it appropriate to impose cost of Rs.50,000/= out of which half will be paid to each of the four petitioners and half will be paid to private respondents who suffered due to suppression of material document compelling them to adduce evidence in the inquiry stretched over many years. Accordingly, it is ordered. The Insurance company shall pay the costs within 30 days positively," the Tribunal directed. 

The insurance company had argued that it had in good faith and bona fide manner insured the offending vehicle categorically mentioning that the "risk commences w.e.f. 15:14 hours on 10/01/2012 midnight...". Therefore, the company said, that at the time of the accident i.e 10 AM on 10/01/2012 the offending vehicle was not insured with the company. 

It had said that since the offending vehicle was not insured at the time of the accident the owner of the vehicle deceitfully approached the insurance company on the same day i.e 10/01/2012 at 3 PM for insuring the vehicle by concealing the material fact that the vehicle had already met with an accident in the morning at 10AM on 10/01/2012.

The tribunal said that witness of the company had admitted that they had issued the insurance policy cover before the inspection of the vehicle. It was stated by the witness that the policy was issued in "good faith" as the vehicle was not physically inspected in this case. He had further said that it was true as per the facts that the owner had told that the vehicle is on the roadside and but when the officials went there to inspect the vehicle, the vehicle was not there.

"This is very strange that on the one hand the insurance company pleads that it has acted in good faith and issued insurance policy bona fidely without inspecting the vehicle physically or taking its traces. This is not a case of bona fide or good faith on the part of the insurance company. If the stand taken by the insurance company is accepted nowhere it flows from the conduct of the insurance company that it has acted in good faith and it cannot take the shelter under the umbrella of Uberrima fides (good faith). If it was a practice or legal requirement to get the vehicle inspected and traces taken of the chassis and engine number by the officials of the insurance company the same must have been complied by the insurance company and it ought not to have handed over the Proposal Form to the owner of the vehicle for taking traces of the chassis and engine number. This cannot be said to be bona-fide rather this is a gross negligence and carelessness of the concerned officials of the insurance company who has not followed the set procedure and practice adopted by the insurance company," the tribunal added.

Case title: Mushtaq Ahmad Dar v/s Ghulam Mohammad Makaya and Others and connected petitions

MACP/302/2018 and batch 

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