Insurer Cannot Evade Liability Without Establishing Contributory Negligence; Delay in Lodging FIR Not Grounds for Claim Rejection: Jharkhand High Court

In a recent verdict, the Jharkhand High Court dismissed an appeal by an insurance company, reaffirming that in motor accident compensation cases, the burden of proving contributory negligence falls on the insurer.

Justice Sanjay Kumar Dwivedi, presiding over the matter, underscored that "with respect to contributory negligence, no evidence was produced, and the responsibility to establish it rests on the insurance company."

This ruling arose from a Motor Accident Claim Case where the insurer had challenged an award issued by the Motor Vehicles Accident Claims Tribunal (MACT), Ranchi.

Case Background

The claim was filed under Section 166 of the Motor Vehicles Act, seeking ₹21,00,000 as compensation for the death of Sandeep Oraon in a road accident. The deceased's motorcycle was allegedly struck by a speeding truck, resulting in his death and leaving behind his wife, minor son, daughter, and parents as dependents.

The insurance company contended that the Tribunal had failed to make specific findings regarding the validity of the deceased’s driving license and the insured vehicle’s roadworthiness. Additionally, it argued that the offending vehicle was falsely implicated since its registration number was absent from the FIR. The insurer also asserted that the deceased contributed to the accident through his negligence, yet the Tribunal still granted compensation.

Another argument raised by the insurer was the 38-day delay in filing the FIR, which it claimed undermined the case's credibility. The company further objected to the deceased’s father being included as a dependent in calculating personal deductions. However, the court found that a 1/4th deduction for personal expenses was correctly applied.

In deciding on dependency calculations, the High Court relied on precedents set in Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. [(2009) 6 SCC 121] and National Insurance Company Limited v. Pranay Sethi & Ors. [(2017) 16 SCC 680]. The court affirmed that even if the deceased’s father was not financially dependent, the personal deduction calculation was correctly assessed.

Court’s Observations

The High Court further observed that both documentary and oral evidence led the Tribunal to conclude that no policy conditions were breached, leading to a ruling against the insurance company. The court remarked that the Tribunal had provided a well-reasoned decision, leaving no room to entertain the insurer’s appeal.

Addressing the delay in filing the FIR, the court pointed out that the application had been submitted just a day after the accident. Therefore, the insurer’s argument regarding the late FIR was untenable, especially since the charge sheet had been filed and the post-mortem report was on record.

Ultimately, the court upheld the compensation awarded by the MACT, Ranchi, and dismissed the appeal filed by Cholamandalam MS General Insurance Co. Ltd.

Final Direction

In its concluding directive, the court ordered that the statutory amount deposited by the insurer be transferred to the Tribunal for disbursal to the claimants. If the full compensation has already been paid, the statutory deposit should be refunded to the insurance company.

Case Title: Cholamandalam MS General Insurance Co. Ltd vs. Panchi Oraon & Ors.