Insurer cannot avoid liability for absence of a permit without cogent evidence proving policy breach.

The claimants challenged the award dated 13 May 2019 passed by the 1st Additional Motor Accident Claims Tribunal, Raipur, in Claim Case No. 552/2017, seeking enhancement of compensation awarded in relation to the death arising from a motor accident.

The Insurance Company filed a connected appeal seeking exoneration on the ground that the offending vehicle was being operated without a valid permit and, alternatively, contending that the compensation was excessive.

The Tribunal had assessed the deceased’s monthly income at ₹8,000, applied a 40% addition towards future prospects, deducted one-half towards personal expenses, applied a multiplier of 18, and awarded total compensation of ₹12,39,600, without awarding consortium.

1. Whether the Insurance Company established a breach of the insurance policy conditions by proving that the offending vehicle lacked a valid permit on the date of the accident, thereby entitling it to exoneration?

2. Whether the compensation payable to the claimants required enhancement by reassessing the deceased’s income in accordance with the applicable minimum wages and by awarding appropriate amounts under the conventional heads, including consortium?

The Court exercised appellate jurisdiction under Section 173 of the Motor Vehicles Act, 1988.

An insurer seeking exoneration on the ground of breach of a policy condition must establish the alleged breach through cogent evidence; a mere pleading that the vehicle lacked a valid permit is insufficient.

For computing motor accident compensation, the Court relied on National Insurance Co. Ltd. v. Pranay Sethi, which governs addition towards future prospects and conventional heads; Sarla Verma v. Delhi Transport Corporation, which provides principles relating to deduction for personal expenses and selection of multiplier; and Magma General Insurance Co. Ltd. v. Nanu Ram, concerning consortium.

The Court also applied the Chhattisgarh minimum-wages notification issued by the Labour Commissioner to determine the deceased’s monthly income.

The Insurance Company failed to produce evidence proving that the offending vehicle did not possess a valid permit on the date of the accident.

Since the alleged policy breach was unsupported by cogent evidence, the Tribunal correctly refused to exonerate the insurer, and no interference was warranted on that issue.

On the claimants’ appeal, the Court held that the deceased’s income should have been assessed at ₹10,000 per month rather than ₹8,000, in accordance with the applicable minimum-wages notification.

Applying a 40% addition for future prospects, deducting one-half towards personal expenses, and using the multiplier of 18, the Court calculated the loss of dependency at ₹15,12,000.

It further enhanced loss of estate and funeral expenses to ₹18,000 each and awarded consortium of ₹48,000 to each of the two claimants, totalling ₹96,000 under that head.

The claimants were held entitled to an additional ₹4,04,400, carrying interest at 9% per annum from the date of filing of the claim application until realization.

The Insurance Company was directed to deposit the enhanced compensation within three months from receipt of the order.

The Insurance Company’s appeal seeking exoneration was dismissed, and the remaining conditions of the Tribunal’s award were left undisturbed.