Family Of Motorcyclist Killed In Crash Keeps ₹31.5 Lakh Award As Karnataka HC Finds Insurer Failed To Prove Policy Cancellation

On 13 December 2019, Hajisab Multani died when a cruiser vehicle collided with his motorcycle.

His legal representatives brought a claim before the Motor Accident Claims Tribunal, which awarded them ₹31,54,992 with interest at 9% per annum and directed the insurer to pay.

The insurer appealed, contending that the policy had been cancelled after the premium cheque was dishonoured and that the cruiser’s driver lacked a valid driving licence.

The Court placed the burden on the insurer to establish that the vehicle was not insured on the date of the accident and that the insured or vehicle owner had breached the policy terms.

Where cancellation is relied upon, the insurer must produce material showing that the policy was cancelled and that notice of cancellation was delivered to the insured.

The insurer also relied on Section 114 of the Indian Evidence Act, 1872, arguing that service could be presumed from posting to the correct address; the Court found the evidence insufficient to establish service.

The policy document showed coverage from 27 December 2018 to 26 December 2019, encompassing the accident date.

Although the insurer alleged that the premium cheque had been dishonoured, its witness could not establish that the cheque was issued by the insured or that the policy had been issued against that cheque; the former owner denied issuing it and disputed the signature.

The insurer also failed to prove that cancellation notice had been served on the insured.

Finally, neither the charge sheet nor other evidence established that the driver lacked a valid licence.

The insurer therefore failed to prove that the policy was ineffective on the accident date or that a policy breach entitled it to avoid liability.

It dismissed the appeal with costs, confirmed the Tribunal’s judgment and award, and directed that any amount in deposit be transmitted to the Tribunal.