Gujarat HC Upholds ₹37-Lakh Death Award Against SBI, Allowing Recovery From Car Owner After Fake-Policy Defence Fails

Babubhai Govabhai Desai died after a motorcycle on which he was riding pillion collided with a car on 9 March 2015.

His heirs obtained an award of ₹37,00,420 with interest from the Motor Accident Claims Tribunal, which directed the insurer of the car to pay and permitted it to recover the amount from the car’s owner or his legal heirs.

SBI General Insurance appealed, contending that the policy produced by the claimants (Exh. 66) was fabricated: the same policy number appeared on a long-term home insurance policy (Exh. 80), which it said was the genuine document.

The Tribunal rejected that defence and the High Court considered the insurer’s appeal against that finding.

Whether SBI General Insurance proved, by cogent and legally admissible evidence, that the policy relied on by the claimants was fake or fabricated.

Whether, in the circumstances, the insurer could avoid liability to the third-party claimants under the Tribunal’s pay-and-recover order.

Under Sections 166 and 173 of the Motor Vehicles Act, 1988, a claim for compensation may be pursued before the Tribunal and an award may be challenged by appeal, respectively.

Where an insurer alleges that a policy is forged or fabricated, a bare denial or assertion by an officer does not prove fabrication; the defence must be established by cogent, legally admissible evidence assessed against the whole record.

Relevant evidence may include policy-issuance records, premium accounts, policy-number records and testimony from a competent witness with knowledge of those records; these are evidentiary considerations, not a fixed checklist.

The Court also relied on National Insurance Company Ltd. v. K. Saravanan, 2026 INSC 339, for the principle that an insurer satisfied that a policy is forged or fabricated must inform the appropriate authorities.

It referred to Oriental Insurance Co. Ltd. v. Jayeshbhai Bhagubhai Patel, First Appeal Nos. 4114 and 4115 of 2009, on the protection of third-party claimants where the alleged fake-policy defence is not proved.

The insurer’s witness worked at the Ahmedabad branch, while the policies were associated with the Mumbai office, and had been employed by the insurer for only nine months; he could not identify the 2015 digital signatory or establish the basis for denying issuance.

The insurer did not produce relevant policy-issuance or premium records, and its witness acknowledged that Exh. 66 matched the vehicle’s particulars and contained a premium receipt number.

The insurer also did not establish that a police complaint led to an FIR or that it had notified the vehicle owner or the RTO; its late complaint and the manually signed Exh. 80 did not, by themselves, establish that Exh. 66 was fabricated.

The Court therefore found the insurer had failed to discharge its evidentiary burden.

It also noted that the Tribunal’s pay-and-recover order protected the insurer’s ability to seek recovery from the owner.

It dismissed the appeal, vacated any interim relief and disposed of the connected civil application; the Tribunal’s award, including its pay-and-recover direction, remained undisturbed.