An insurer cannot avoid liability on an unpleaded defence that the claimant was an unauthorised passenger.

Lokesh sustained injuries when a tractor collided with an electric pole. He maintained that he was walking as a pedestrian and was injured while trying to avoid the collision; the insurer alleged that he was travelling on the tractor as an unauthorised passenger.

The Motor Accident Claims Tribunal awarded ₹3,42,000 with 6% interest but held the tractor’s owner alone liable, dismissing the claim against the insurer.

Lokesh appealed, challenging both the finding on liability and the quantum of compensation.

Whether the Tribunal was justified in dismissing the claim against the insurer

Whether Lokesh was entitled to enhanced compensation

The claim was brought under Section 166 of the Motor Vehicles Act, 1988, and the appeal under Section 173(1).

The Court applied the principle that evidence unsupported by pleadings is ineffective, and held that an insurer’s witness who was not an eyewitness could not establish how the accident occurred.

In assessing compensation, the Court considered the claimant’s occupation, functional effect of the injuries on earning capacity, and the applicable multiplier.

The claimant consistently stated in the claim petition and testimony that he was a pedestrian; the FIR was based on his statement, while the wound certificate recorded the accident as resulting from the tractor overturning.

The insurer’s written statement did not specifically plead that Lokesh was travelling on the tractor, and its official witness had no personal knowledge of the accident. The Court therefore found no sufficient basis to deny insurance coverage on that ground.

On quantum, it adopted a notional monthly income of ₹9,000 for 2015 and assessed functional loss of earning capacity at 25%, rather than the Tribunal’s 18%, given the claimant’s agricultural work and the loss of grip and pinch strength in his right hand. Applying a multiplier of 16, it recalculated future income loss and revised other heads of compensation.

The insurer was directed to deposit the amount within six weeks, and the compensation with interest was ordered released to the claimant by electronic transfer.