Failure to produce the policy warrants an adverse inference against an insurer disputing coverage.

The claim arose from a fatal road accident involving a pedestrian and a loading rickshaw.

The Motor Accident Claims Tribunal, Ahmedabad City, awarded compensation in Motor Accident Claim Petition No. 250 of 1990; the insurer appealed under Section 173 of the Motor Vehicles Act, 1988, challenging its liability on the ground that the policy was not in force when the accident occurred.

The insurer relied on evidence that the proposal was received and the policy issued on 14 May 1990 at 3 p.m., after the accident.

The Tribunal had found that the insurer did not produce the policy or other relevant documents and held that the vehicle was insured at the material time.

The judgment contains differing dates in its account of the accident and the Tribunal’s findings; the High Court’s analysis focused on whether the insurer had established that cover began only after the accident.

Whether the insurer established that the policy did not cover the offending vehicle at the time of the accident, so as to avoid liability under the award.

Whether, if the insurer were otherwise liable to satisfy the award, it should be granted a right to pay the claimants first and recover the amount from the vehicle owner.

Section 173 of the Motor Vehicles Act, 1988, provides for an appeal against an award of a Claims Tribunal.

The Court applied the evidentiary principle that an adverse inference may be drawn where a party fails to produce material evidence within its possession that could clarify a disputed fact; here, the policy document was material to determining when insurance coverage commenced.

The judgment does not identify or apply a specific statutory provision or precedent governing the proposed “pay and recover” direction.

The insurer relied on its officer’s evidence that the proposal was received at 3 p.m. on 14 May 1990, but it did not produce the policy itself, which would have shown the commencement of risk.

The Court considered the omission unexplained and drew an adverse inference against the insurer.

It also noted that the proposal form contained a date of 14 March 1990 in the premium-related box, which the insurer’s witness did not explain; this left the insurer’s account of the relevant dates uncertain.

The Court therefore rejected the insurer’s contention that the policy was not in force at the time of the accident.

Although the insurer requested a “pay and recover” direction as an alternative, the Court dismissed the appeal without granting that relief.

It directed that any amount deposited before the High Court be transmitted to the Tribunal for disbursement to the claimants in accordance with law, and directed the Registry to return the record and proceedings to the concerned court.