SC awards Rs 76 lakh to kin of man killed in road accident

Holding that an insurance company can’t repudiate a claim by merely alleging a fraud in obtaining of an insurance policy, the Supreme Court has ordered an insurance company to pay a compensation of Rs 76.20 lakh to the mother and daughter of a Punjab man who died along with his wife in a motor vehicle accident in 2017.

A Bench of Justice Sudhanshu Dhulia and Ahsanuddin Amanullah said that merely alleging a fraud on the part of the policy holders in obtaining of an insurance policy was not enough for an insurance company to repudiate a motor vehicle accident claim.

“The law is very clear – fraud vitiates everything, but merely alleging fraud does not amount to proving it. For, it has to be proven in accordance with law by adducing evidence, the onus of which would also lie on the person alleging fraud,” the Bench said in a recent verdict.

The National Insurance Company Ltd had alleged that the vehicle which was insured with it was not involved in the accident and some other vehicle was mentioned in the initial Written Statement filed before the MACT (Motor Accident Claims Tribunal), Gurdaspur.

However, the top court upheld the MACT’s finding that eventually in cross-examination, no suggestion was given to any of the witnesses produced by the complainants that the vehicle as claimed by the complainants was not the vehicle, which was involved in the accident and that it was some other vehicle.

Om Prakash and his wife Asha Rani had died in a road accident on April 11, 2017 and the MACT, Gurdaspur had awarded Rs 67.50 lakh and Rs 8.70 lakh to Prakash’s mother and daughter respectively on February 1, 2018. The order was upheld by the Punjab and Haryana High Court on October 5, 2018. The insurance company had challenged the HC verdict.

Writing the judgment for the Bench, Justice Amanullah held that the National Insurance Company Ltd has not been able to prove that it had not received the money/premium prior to the accident and the only stand taken was that the insurance was fraudulently obtained.

“From the record, we do not find that the Insurance Company has discharged its onus to prove the alleged fraud. Therefore, the Insurance Company’s liability under the issued insurance certificate/policy to cover the incident cannot be escaped by alleging fraud, the top court said, adding the policy coverage commences from the time and date specified in the policy document.