An insurer cannot escape liability through a bare denial of coverage unsupported by evidence.

Sridhar Behera was injured in a motor-vehicle accident on 26 June 1990 and sought compensation.

The Motor Accident Claims Tribunal awarded him ₹45,000 and held the insurer liable.

The insurer appealed under Section 173(1) of the Motor Vehicles Act, 1988, denying that the offending vehicle was insured with it.

The High Court also considered the Tribunal’s award of penal interest at 12% per annum

Whether the insurer established that the offending vehicle was not insured with it and could therefore avoid liability to indemnify the owner

Whether the Tribunal’s award of penal interest at 12% per annum should be set aside or modified

Section 173(1) of the Motor Vehicles Act, 1988, provides for an appeal to the High Court from an award of a Claims Tribunal

The Court applied the evidentiary principle that merely marking a document as an exhibit does not dispense with proof of its contents; it also reasoned that an insurer’s assertion that a vehicle was uninsured does not, without supporting evidence, establish that defence

The Court held that the Tribunal’s award of penal interest at 12% per annum was contrary to law and substituted simple interest at 6% per annum

The Tribunal had found that the offending vehicle was insured with the appellant. The insurer produced only a photocopy of an insurance policy, marked as Exhibit A, and adduced no oral evidence or other material establishing that the vehicle was uninsured at the time of the accident.

The Court therefore found no basis to disturb the Tribunal’s finding on coverage, particularly in the absence of contrary evidence

However, it set aside the award of penal interest at 12% and substituted simple interest at 6% per annum

The insurer was directed to pay the ₹45,000 compensation with simple interest at 6% per annum from the date the claim was filed until realization, within eight weeks.

Any amount deposited before the Tribunal was to be disbursed to the claimant; the statutory deposit and accrued interest were to be refunded upon proof of payment to the Tribunal