Delay In FIR Not Fatal In Motor Accident Claims; Insurer Can't Seek 'Pay & Recovery' Without Proving Policy Breach: Calcutta High Court

Observing that families of accident victims are naturally preoccupied with treatment, death and last rites rather than immediately approaching the police, the Calcutta High Court held that mere delay in lodging an FIR cannot defeat a genuine motor accident compensation claim. The Court further ruled that an insurer cannot escape liability or seek “pay and recovery” unless it strictly proves breach of policy conditions after conducting a proper enquiry and giving the vehicle owner an opportunity of hearing.

Justice Biswaroop Chowdhury emphasised that third-party motor insurance is a beneficial legislation and technical objections should not be used to deny compensation to dependants of deceased victims.

Allowing a cross-objection by the claimants and partly modifying the award, the Court enhanced compensation from ₹22.59 lakh to ₹34 lakh with 6% interest.

The case arose from the death of Suresh Keora, a BSNL employee, who sustained fatal injuries in 2015 when another motorcycle allegedly hit his bike from behind on G.T. Road near Asansol. He was hospitalised and succumbed to injuries a few days later. His wife and daughter filed a claim under Section 166 of the Motor Vehicles Act. The Motor Accident Claims Tribunal directed the insurer, National Insurance Co. Ltd., to pay ₹22.59 lakh. Both sides appealed — the insurer disputing liability and the claimants seeking enhancement.

Before the High Court, the insurer argued that the FIR was lodged 26 days after the accident, casting doubt on the claim, and contended that the rider did not possess a valid licence for the class of vehicle, amounting to policy breach. Rejecting these submissions, the Court held that the delay was satisfactorily explained, noting that family members were engaged in hospital care, death-related formalities and mourning. It observed that in Indian social conditions, rushing to the hospital rather than the police station is natural, and such delay cannot be viewed with suspicion in claim proceedings.

On the alleged licence violation, the Court ruled that even if breach is alleged, the insurer must first prove it through evidence, frame specific issues, conduct enquiry and give notice to the insured before seeking recovery. In the present case, no such steps were taken — neither was the vehicle owner examined nor transport authorities called as witnesses — and hence the insurer could not avoid liability or claim recovery rights.

Reassessing the quantum, the Court found that the Tribunal had wrongly deducted several components from salary. It clarified that only income tax and professional tax can be deducted for computing loss of dependency. Granting 15% future prospects, applying the appropriate multiplier and adding conventional heads, the Court recalculated the compensation at ₹34 lakh, terming it “just and reasonable.”

Accordingly, the insurer was directed to deposit the enhanced amount with interest within eight weeks, with liberty to the claimants to withdraw the sum.

Case: National Insurance Co. Ltd. VERSUS Sandhya Keora And Ors

Case No: F.M.A. 288 of 2024

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