Case Note & Summary
The appellants, parents of the deceased, filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for the death of their unmarried son aged 22 years in a motor vehicle accident. The deceased was earning Rs. 3,000 per month as a driver. The Tribunal awarded Rs. 1,50,000 with interest at 6% per annum, but exonerated the Insurance Company on the ground that the policy was cancelled prior to the accident due to dishonour of the cheque. The appellants appealed against the quantum and the exoneration of the Insurance Company. The Insurance Company argued that the policy was cancelled and no intimation was given to them. The High Court held that the Insurance Company failed to prove that the policy was cancelled prior to the accident, as no evidence of intimation of cancellation to the insured or the claimant was produced. The Court also noted that the Insurance Company did not examine any witness to prove the cancellation. Therefore, the Insurance Company was held liable to pay compensation. On quantum, the Court applied a multiplier of 15, deducted 1/3rd for personal expenses, and calculated the loss of dependency as Rs. 2,40,000. Adding Rs. 60,000 for loss of consortium and funeral expenses, the total compensation was enhanced to Rs. 3,00,000 with interest at 7.5% per annum from the date of petition. The appeal was allowed, and the Insurance Company was directed to pay the enhanced compensation.
Headnote
A) Motor Accident Claims - Insurance Policy - Cancellation - Burden of Proof - Section 149, 166, 168, 170, 173 Motor Vehicles Act, 1988 - The Insurance Company contended that the policy was cancelled before the accident due to dishonour of cheque, but failed to produce any evidence of intimation of cancellation to the insured or the claimant. The Tribunal erroneously exonerated the Insurance Company. Held that the Insurance Company must prove cancellation by cogent evidence, and in absence thereof, is liable to pay compensation. (Paras 1-5) B) Motor Accident Claims - Compensation - Quantum - Section 166, 168 Motor Vehicles Act, 1988 - The deceased was an unmarried son aged 22 years earning Rs. 3,000 per month. The Tribunal awarded Rs. 1,50,000 with interest at 6% p.a. The High Court enhanced compensation to Rs. 3,00,000 with interest at 7.5% p.a. from the date of petition, applying multiplier of 15 and deducting 1/3rd for personal expenses. (Paras 4-5)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation when it alleges that the policy was cancelled prior to the accident but fails to prove the same.
Final Decision
The appeal is allowed. The judgment and award of the Motor Accident Claims Tribunal, Nanded, dated 30.06.2006 in Claim Petition No. 96 of 2004 is modified. The Insurance Company is directed to pay compensation of Rs. 3,00,000 with interest at 7.5% per annum from the date of petition till realization. The Insurance Company is also directed to pay the costs of the appeal.
Law Points
- Burden of proof on insurance company to prove policy cancellation
- Motor Vehicles Act
- 1988
- Section 149
- Section 166
- Section 168
- Section 170
- Section 173
- Evidence Act
- 1872
- Section 103
