An insurer cannot avoid liability solely on a charge-sheet alleging that an unlicensed driver caused the accident.

Swapan Das, a 35-year-old bachelor and government undergraduate teacher, died in a road accident on 26 December 2018 while travelling in an auto-rickshaw bearing registration No. TR-01-E-3478, which collided with a Tata 407/one-tonner bearing registration No. TR-01-F-1710.

His mother filed a claim petition before the Motor Accident Claims Tribunal, Bishalgarh, seeking compensation. The Tribunal held the auto-rickshaw driver responsible for the accident and directed its insurer, National Insurance Company Limited, to pay compensation of ₹19,62,000 with interest at 9% per annum.

In appeal, the insurer contended that the vehicle had been driven by Akash Debnath, the owner’s son, who allegedly possessed no driving licence, whereas the licence produced before the Tribunal stood in the name of the owner, Joydeb Debnath. The insurer alleged breach of the policy condition and sought either exoneration or application of the “pay and recover” principle. It also challenged the award of interest at 9% per annum.

The owner denied that his son was driving and deposed that he himself was driving the auto-rickshaw at the time of the accident.

Whether the insurer established, on a preponderance of probabilities, that the auto-rickshaw was being driven by the owner’s unlicensed son and that the policy condition had consequently been breached?

Whether the charge-sheet, by itself, was sufficient to displace the owner’s testimony that he was driving the vehicle?

Whether the Tribunal’s award of interest at 9% per annum required modification?

The insurer’s defence was examined within the limited statutory grounds available under Section 149(2) of the Motor Vehicles Act, 1988, including breach relating to the driver’s licence.

The insurer bears the burden of proving the alleged policy violation on the touchstone of the preponderance of probabilities.

A police FIR or charge-sheet may constitute prima facie and admissible material in motor accident claims, but it is not substantive evidence or conclusive proof and cannot be treated as infallible; where contrary evidence exists, the Tribunal must evaluate the competing evidence.

The Court considered National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297, on the “pay and recover” principle, and United India Insurance Co. Ltd. v. Shila Datta, (2011) 10 SCC 509, concerning the scope of an insurer’s defences depending on its status in the proceedings.

The Court also relied on the principle that an investigating officer’s final report or charge-sheet reflects only the officer’s opinion and is not, by itself, substantive evidence.

The insurer had not specifically pleaded in its written statement that Akash Debnath was driving the auto-rickshaw without a licence or that the owner had thereby violated the policy condition. It also adduced no independent evidence to establish that the son, rather than the owner, was driving at the time of the accident.

Although the charge-sheet named Akash as the driver and alleged that he lacked a licence, the investigating officer was not examined, and the charge-sheet could not conclusively establish the driver’s identity in the face of the owner’s direct testimony and valid driving licence.

The insurer therefore failed to prove the alleged policy breach on a preponderance of probabilities. The Court consequently found no basis to shift liability away from the insurer or to grant it recovery rights.

However, considering the date of the accident and the date of the Tribunal’s award, the Court held that 9% interest was excessive and reduced it to 7.5% per annum.

The insurer remained liable to pay the compensation of ₹19,62,000, but interest was reduced from 9% to 7.5% per annum from the date of filing of the claim petition until payment.

The directions regarding fixed deposits were maintained, and the insurer was directed to make payment within two months from receipt of the judgment.