Case Note & Summary
The appellant, Santosh Kathel, filed a First Appeal before the Bombay High Court, Nagpur Bench, against the judgment and award dated 24.7.2003 passed by the Motor Accident Claims Tribunal, Akola, in MAC Petition No.244 of 2001. The Tribunal had awarded compensation of Rs.50,000/- with interest at 9% per annum from the date of petition till realization, but directed the owner of the offending vehicle (respondent No.2) to pay the compensation, exempting the insurer (respondent No.1) from liability. The appellant, who was the claimant, was aggrieved because the insurer ought to have been held liable under the insurance policy which was operative from 13.1.2001 to 12.1.2002. The accident occurred on 13.1.2001, the same date the policy commenced. The Tribunal, without framing any issue on whether fraud was practised upon the insurer by the insurance agent and bank officials, decided the matter on conjectures and surmises and wrongly exempted the insurer. The appellant did not dispute the quantum of compensation. The High Court observed that the insurance policy (Article-B) was produced and appeared operative on the date of accident. The insurer was wrongly exempted from joint and several liability, especially when fraud was alleged but not properly pleaded or proved. The Court held that in the absence of specific pleadings and particulars of fraud, the insurer cannot escape liability. Accordingly, the appeal was allowed, and the insurer was directed to pay the compensation amount to the appellant, with the owner also being jointly and severally liable.
Headnote
A) Motor Accident Claims - Insurance Liability - Fraud Allegations - Section 149 Motor Vehicles Act, 1988 - The insurer cannot be exempted from joint and several liability to pay compensation merely on allegations of fraud without specific pleadings and proof. The Tribunal erred in deciding the controversy on conjectures and surmises without framing an issue on fraud. Held that the insurer is jointly and severally liable to pay compensation when the insurance policy was operative on the date of accident. (Paras 1-3)
Issue of Consideration
Whether the insurer can be exempted from liability to pay compensation on the ground of alleged fraud without proper pleading and proof of fraud.
Final Decision
Appeal allowed. The insurer (United India Insurance Company Ltd.) is directed to pay the compensation amount of Rs.50,000/- with interest at 9% per annum from the date of petition till realization, jointly and severally with the owner.
Law Points
- Insurance liability
- fraud allegations
- burden of proof
- Motor Vehicles Act
- 1988
- Section 149
