Tata Aig General Insurance Co. Ltd. vs Kiran Tiwari & Ors.

$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of decision: 17 July 2026

+ MAC.APP. 210/2013
TATA AIG GENERAL INSURANCE CO. LTD. .....Appellant
Through: Ms. Meenakshi Midha and Ms.
Yadavi Malhotra, Advocates.
versus

KIRAN TIWARI & ORS. .....Respondents
Through: Mr. Zain Haider, Advocate with
Mr. Atul Chakma, Advocates for
respondent nos. 1 to 5.
Mr. Kundan Kr. Lal, Adv. for R-6
& 7.

CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT


ANISH DAYAL, J (ORAL)
1. This appeal has been filed by the Insurance Company challenging
th
the award dated 09 January 2013, passed by the Motor Accidents
Claims Tribunal (‘ MACT/Tribunal ’) Tis Hazari Courts, in Suit No.
90/2012, claiming that they should have been completely exonerated
from liability and without prejudice to the same, in the alternative, they
should get a right of recovery against the driver/owner.
th
2. The accident occurred on 11 January 2012, when the deceased
travelling on his motorcycle, was hit from behind by offending car
bearing registration no. DL-5 CD-991 (‘ Offending Vehicle ’). The owner
and the driver denied their involvement and stated that the accident was
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 1 of 10

caused by another vehicle, Tata Safari , which had hit their vehicle and,
thereafter, they had collided with the motorcycle. After assessment of the
testimonies and evidence on record, the MACT concluded that the death
had been caused due to the rash and negligent driving of the driver.
3. On the issue of liability, the Insurance Company had placed their
evidence through R3W1 stating that they had served notice upon the
owner of the vehicle under Order XII Rule 8 of Code of Civil Procedure,
1908 (‘ CPC ’); however, the same had not been complied with or replied
to.
4. The Insurance Company brought the original proposal form
submitted by the insured at the time of obtaining the insurance coverage
and the insurance policy for the offending vehicle, exhibit Ex. R3W1/C
and Ex. R3W1/B , respectively.
5. It was stated that at the time of obtaining the insurance coverage,
the insured had submitted his previous insurance policy for a period of
th th
09 January 2011 to 08 January 2012 issued by M/s IFFCO Tokio
General Insurance Company Ltd . On the basis of previous insurance of
M/s IFFCO Tokio General Insurance Company Ltd , the appellant herein
th th
had provided an insurance from the period of 09 January 2012 to 08
January 2013, which covered the period of the accident.
6. The previous insurance policy issued by M/s IFFCO Tokio
General Insurance Company Ltd . was found to be fake and, therefore,
the Insurance Company raised an issue of false document/ false
representation/forgery. Accordingly, a defence under Section 149 (2) of
the Motor Vehicles Act, 1988 (‘ MV Act ’).
7. There was no cross-examination of R3W1 by the driver and the
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 2 of 10

th
owner as noted by the MACT on 18 December 2012.
8. R3W2 , an official from the M/s IFFCO Tokio General Insurance
Company Ltd . had been summoned and stated that the Insurance Policy
st
was issued in the name of one Bale Ram for a period of 21 November
th
2010 to 20 November 2011 for Mahindra Bolero , but no such insurance
policy was issued in the name of Trilok Chand , the owner of the
th th
offending vehicle in this case, for a period of 09 January 2011 to 08
January 2012.
9. On being shown the Insurance Policy which had been propounded
by the owner, Trilok Chand , he stated that the same was fake. There was
no cross-examination of R3W2 also by the driver and the owner despite
opportunity being given.
10. In these circumstances, it is contended by Ms. Meenakshi Midha ,
counsel for the Insurance Company, that they should be exonerated
considering that they had issued the insurance policy on the basis of a
fake document.
11. The MACT, however, has analysed this contention raised by the
Insurance Company and noted that the Insurance Company cannot be
exonerated on account of their own omission to inspect the vehicle prior
to providing insurance.
12. It is contended by the counsel for insurance company that,
inspection was not required in case a previous insurance policy was
being shown; it was only a matter of procedure and not as per any
provision of the statute or any rules.

13. The Insurance Policy issued by appellant is not being disputed and
the same covers third party liability, accordingly, the MACT directed
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 3 of 10

that the Insurance Company shall pay the compensation of Rs.
66,92,300/- along with interest @ 9% per annum.
14. When an appeal was filed by the Insurance Company before this
th
Court, vide order dated 08 April 2013, stay was directed on the
execution of the impugned award subject to depositing the entire
awarded amount with the Registrar General of this Court along with the
accrued interest. It was further directed that on deposit, the Registrar
General shall release of 50% of the amount in favour of the claimants as
per the terms and conditions fixed by the Tribunal.
15. The Court does not find this assessment by the MACT amiss in
any manner, for the following reasons:

15.1. Firstly , it was incumbent upon the Insurance Company to either
verify the particulars of the previous insurance policy furnished by the
insured or, alternatively, inspect the vehicle. However, the Insurance
Company chose not to undertake either course of action in accordance
with its internal procedures, which are not backed or sanctified by any
statutory provision.
15.2. Secondly , in any event, third-party liability insurance under the
MV Act is mandatory. The requisite premium was paid by the insured,
th th
and the policy was issued for the period from 09 January 2012 to 08
January 2013. The accident occurred during the subsistence of the said
policy, and there is no dispute in this regard.
15.3. Thirdly , there is no justification for saddling claimant with a
dispute inter se between the Insurance Company and the owner/insured,
thereby depriving claimant of his legitimate entitlement arising out of
third-party liability under the MV Act.
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 4 of 10

16. Having failed in her plea seeking exoneration, Ms. Meenakshi
Midha , counsel for the Insurance Company, alternatively contends that,
at the very least, recovery rights ought to be granted in its favour,
considering that the Insurance Company was misled by the insured's
production of a fake insurance policy, on the basis of which it issued the
policy in question.
17. It is not in dispute that the insured/owner had produced a fake
policy, in view of the testimony of the witness from M/s IFFCO Tokio
General Insurance Company Ltd . and the documents brought on record,
as noted above.
18. Furthermore, no attempt was made by the driver or the owner to
cross-examine the witness from M/s IFFCO Tokio General Insurance
Company Ltd ., nor was any documentary evidence adduced to rebut the
said testimony.
19. The issue that, therefore, arises for consideration is whether
recovery rights ought to be granted to the insurer against the insured on
account of the latter having produced a forged insurance policy.
20. To this Mr. Kundal Kumar Lal , counsel for respondent nos. 6-7,
contends that the issue of fake policy would be irrelevant considering
that even if they had approached the Insurance Company for a fresh
insurance policy covering third party liability, there would have been no
need for inspection.
21. This argument, however, is specious for the reason that it is not
about whether inspection ought to have been carried out by the Insurance
Company or not. In any event, as contended, there is no procedure of
mandatory inspection under the rules or statute, but the fact that a policy
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 5 of 10

had been procured on the basis of a fake document.
22. If Mr. Lal's contention is taken on the face of it, then nothing
prevented the owner/insured from propounding a fake policy, instead of
simpliciter seeking a fresh insurance policy covering third party liability,
which he chose not to do.
23. Whatever the reasons might have been for the insured owner to
propound a fake policy in order to get “ renewal ”, the fact that the
previous policy propounded was fake cannot be disputed.
24. Reliance has been placed by counsel for respondent nos. 6-7 on
the Supreme Court's decision in United India Insurance Co. Ltd. v.
Santro Devi, (2009) 1 SCC 558.

25. The matter related to the owner of a truck which had been
hypothecated to a bank; the owner died in 1991, and the vehicle was
insured with the appellate Insurance Company. The renewal of the
contract of insurance used to be done by the bank. Despite the death of
the owner no steps were taken by the bank or by the legal representatives
to get the registration transferred in their names. The insurance policy
therefore continued to be renewed in name of deceased. While the
insurance policy was valid, the vehicle met with an accident and a claim
was filed.
26. The High Court opined that the insurance company at the time of
renewal of the policy should have verified whether the owner was alive
or not.
27. The Supreme Court held that the provisions of compulsory
insurance have been framed to advance a social object and is part of the
social justice doctrine. When a certificate of insurance is issued, in law,
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 6 of 10

the Insurance Company is bound to reimburse the owner. There cannot
be any doubt that a contract of insurance must fulfil the statutory
requirements of formation of a valid contract, but in case of third-party
risk, the question has to be considered from a different angle .
28. On the issue of the omission by the bank or by the legal heirs, the
court then noted as under:
“ 26. In this case, the statute itself takes care of validity
of the contract. It is mandatory. Once a valid contract
is entered into, only because of a mistake or otherwise,
the name of the original owner has been mentioned in
the certificate of registration and/or the documents of
hypothecation of the vehicle with the bank had still
been continuing in his name, it cannot be said that the
contract itself is void unless it was shown that in
obtaining the said contract a fraud had been practised.
Not only the particulars of fraud had not been pleaded,
but even no witness was examined on behalf of the
appellant. It cannot, thus, be said that a case of fraud
in the matter of entering into the contract of insurance
had been made out by the appellant. ”

29. Based on the aforesaid observation of the Court, Ms. Midha , has
argued that they have made a plea of fraud which therefore will need to
be investigated.
30. In Santro Devi ( supra ), the Court observed that the case could not
be treated as one involving fraud, as no witness had been examined on
behalf of the Insurance Company. The position in the present case,
however, is materially different as the Insurance Company has examined
their witness on issue of fake policy, who did not get examined cross-
examined by the driver and the insurer.
31. Mr. Lal’s claims that they had been appearing in the proceedings
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 7 of 10

but at that particular date they were not present. However, when queried,
Mr. Lal states there was no application moved to cross-examine witness
or any other steps which were taken in order to secure the right to rebut
the evidence on fake policy that was provided by the insurance witness.
32. It is also noted that notice under Order XII Rule 8 of CPC was
issued by the Insurance Company to which there was no response by the
insured. In this scenario, the right of recovery ought to be granted to the
Insurance Company considering their plea that they were misled into
providing the renewal of the insurance policy on the basis of a fake
policy. The driver and the owner chose not to rebut the evidence
provided and therefore will have to suffer the consequences.

33. Accordingly, the recovery rights are granted to the Insurance
Company against the owner of the offending vehicle.
34. It is pointed out that the Insurance Company had previously filed
an appeal being MAC.APP. 210/2013 before this Court challenging the
issue of the proof of negligence and involvement of the offending
vehicle.
rd
35. On 03 May 2016, this Court set aside the impugned judgment
and remanded the matter back to the Tribunal for further enquiry in
accordance with law.
36. This decision was challenged before the Supreme Court by
Special Leave Petition No. 30857/2017 and Supreme Court by order
th
dated 15 May 2018 stated that “ since we are satisfied that the defence
taken that the insurance policy was fake, was found against the
Insurance Company, we feel that this is not a case which should have
been remanded for leading of other evidence. We, therefore, set aside the
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 8 of 10

judgment of the High Court. The appeal that was filed by the Insurance
Company will now be heard on merits by the High Court ”. Thereafter,
this matter has been subsisting on the board of this Court for hearing on
merits.
37. Ms. Meenakshi Midha , counsel for the Insurance Company,
submits that the Insurance Company is not assailing the finding of
negligence attributed to the offending vehicle and is confining its
challenge solely to the issue of the fake policy produced by the insured.
Directions
38. The compensation amount, along with accrued interest thereon, to
the extent not already deposited, shall be deposited with the Registrar
General of this Court within a period of six weeks.
39. Counsel for the claimant submits that an amount of approximately
Rs. 11,00,000/- has already been received by them pursuant to the
previous directions of this Court.
40. Considering that the disbursement scheme framed by the MACT
was intended to remain operative for a period of approximately twelve
years and that thirteen years have, in any event, lapsed during the
pendency of the present appeal, a prayer has been made for release of the
entire balance amount.
41. This Court finds merit in the aforesaid plea.
42. Accordingly, the entire amount shall be released to the claimants
in terms of the apportionment directed by the MACT in the impugned
award.

43. Statutory deposit, if any, shall be refunded to appellate/Insurance
Company only upon deposit of the awarded amount along with the
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 9 of 10

accrued interest.
44. Appeal is disposed of accordingly. Pending applications, if any,
are rendered infructuous.
45. Judgment be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
JULY 17, 2026/RK/ zb
Signature Not Verified
Digitally Signed By:RAHUL
KUMAR CHOUDHARY
Signing Date:23.07.2026
12:07:38
MAC. APP. 210/2013 Page 10 of 10