MACT | Insurer Must Prove Breach Of Policy Condition To Avoid Liability: Gauhati High Court Enhances Compensation By Over ₹15 Lakh

The Gauhati High Court has held that an insurer cannot avoid its liability in a motor accident claim without proving breach of policy condition by cogent evidence, and accordingly enhanced the compensation from ₹24,48,576/- awarded by the Tribunal to ₹39,87,730/-, extending the benefit to all dependents and correcting the deduction towards personal expenses.Justice Mridul Kumar Kalita observed, “To put it simply, it is for the insurance company to prove the facts of breach of any policy condition by the insured in order to avoid its liability of indemnifying the insured for payment of any compensation to any claimant in the motor accident claims case. … This Court finds no infirmity or error in the aforesaid reasoning of the Motor Accident Claims Tribunal for discarding the testimony of DW-1 and DW-2 as regards the fact of proving the lapse of validity of the driving license of the driver of the offending vehicle.”“This Court is of considered opinion that the insurance company has failed to establish the breach of policy condition by the insured by adducing admissible and cogent evidence. Accordingly, this Court is of the considered opinion that the reasoning made by the Motor Accident Claims Tribunal in paragraph No. 38 of the impugned judgment and award, cannot be faulted with and the insurance company cannot be absolved of its liability to indemnify the owner for the compensation to be paid to the claimants for death of their husband/father in the accident which occurred on 26.04.2013,” Justice Kalita added. As per the factual matrix of the case, the deceased Subhash Chandra Yadav died in a motor accident in 2013 after being hit by a bus driven in a rash and negligent manner. His wife and children thereafter filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, which awarded compensation only to the widow.The insurance company challenged the award contending that the driver of the offending vehicle did not possess a valid driving licence on the date of the accident, as it had expired earlier, and therefore there was breach of policy condition. It was also contended that the Tribunal failed to properly consider the evidence of the defence witnesses and documents produced to show lapse of the licence.On the other hand, the claimants contended that the insurance company failed to prove breach of policy condition by adducing admissible and cogent evidence, and that mere assertion regarding invalid licence would not absolve it of liability.The High Court, on consideration of the materials on record, held that the Tribunal was justified in discarding the evidence led by the insurance company regarding invalid driving licence. It said, “Apparently, it appears that the reasoning of the Motor Accident Claims Tribunal in discarding the prayer of the insurance company for summoning the DTO, Nalbari … was a fallacious reasoning. However, that cannot be a reason or that cannot stop the Motor Accident Claims Tribunal in taking a correct decision while disposing of the MAC Case … by the impugned judgment.”“This Court is of considered opinion that the reasoning of the Motor Accident Claims Tribunal in … the impugned judgment, whereby it discarded the testimony of DW-1 regarding the fact of lapse of validity of driving license of the driver of the offending vehicle, cannot be regarded as perverse,” the Court added.On the issue of compensation, the Court found that the Tribunal erred in deducting 50% of the income of the deceased towards personal expenses despite the existence of multiple dependents. It held, “…it thus become clear that on the date of accident, all the children… were minor… he left behind seven dependents… the deduction… has to be one fifth… the Tribunal has erred in deducting the 50%…”Case Title: The Oriental Insurance Co. Ltd. v. Sushila Devi & Ors.Case Number: MAC Appeal No. 95/2017 with Cross Objection No. 17/2019 Click here to read the judgment

MACT | Insurer Must Prove Breach Of Policy Condition To Avoid Liability: Gauhati High Court Enhances Compensation By Over ₹15 Lakh

Bhavya Singh

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