Insurer is estopped from belatedly disputing policy coverage after failing to raise or prove it before the Tribunal.

On 17 May 1987, Rabindranath Nayak was travelling in a trekker bearing registration No. OAX-227 from Gop to Nimapara when it collided with another trekker, bearing registration No. OSU-8485, allegedly driven rashly and negligently from the opposite direction.

The claimant sustained fracture injuries, underwent treatment at Capital Hospital for approximately 20 days, and claimed compensation of ₹1,20,000 under Section 110-A of the Motor Vehicles Act, 1939.

The Third Motor Accident Claims Tribunal, Puri, held the offending vehicle responsible and awarded ₹15,000 with interest at 9% per annum from 7 September 1987, fastening liability on the appellant-insurance company.

The insurer challenged the award under Section 173 of the Motor Vehicles Act, 1988, contending that no valid insurance policy had been produced or proved.

The Court applied Section 173 of the Motor Vehicles Act, 1988, governing appeals against awards of the Motor Accident Claims Tribunal.

The Court considered the claimant’s claim under Section 110-A of the Motor Vehicles Act, 1939.

It applied the principle that the existence or validity of an insurance policy is a mixed question of fact and law requiring an appropriate plea and supporting evidence before the Tribunal; an insurer that fails to specifically contest the issue or produce rebuttal evidence cannot ordinarily raise the contention belatedly in appeal.

The Court also recognised that a passenger or claimant would not ordinarily be expected to possess or produce the insurance policy of the offending vehicle.

The Tribunal had recorded that the claimant pleaded that the vehicles were insured with the appellant-insurance company, while the insurer did not produce the policy or lead evidence disproving insurance coverage or establishing invalidity of the policy.

Since the owner did not contest the proceedings and was set ex parte, and the insurer failed to discharge its evidentiary burden through rebuttal evidence, the Tribunal was entitled to accept the claimant’s unrebutted case regarding insurance coverage.

The High Court held that the insurer’s challenge involved a mixed question of fact and law and could not be successfully introduced for the first time in appeal after failure to raise and prove it before the Tribunal.

However, considering the age of the accident and the pendency of the appeal, the Court exercised its discretion to reduce the interest rate from 9% to 6% per annum.

The appeal was dismissed, and the Tribunal’s award fastening liability on the appellant-insurance company was upheld.

The interest component was modified: the insurer was directed to deposit the awarded sum with interest at 6% per annum from the date of filing of the claim application until realization, within eight weeks if not already deposited.

Upon production of proof of deposit, the statutory deposit and accrued interest were directed to be released to the insurance company, and the Tribunal was directed to disburse the awarded amount to the claimant in accordance with law.