Insurer must prove fundamental breach of policy through admissible evidence to avoid indemnification liability.

On April 26, 2013, Subhash Chandra Yadav was killed in a vehicular accident involving a mini city bus insured by the Appellant

The deceased's widow (Claimant No. 1) and six children filed a claim under Section 166 of the Motor Vehicles Act, 1988

The Motor Accident Claims Tribunal (MACT) awarded Rs. 24,48,576 only to the widow, ruling that the children were not dependents

The MACT deducted 50% of the income for personal expenses

The Insurance Company appealed on the ground that the driver’s license had expired in 2009, four years before the accident

The claimants filed a cross-objection challenging the 50% deduction and the exclusion of the children as dependents

1. Whether the identity of Claimant No. 1 was in doubt because she used a thumb impression on the claim petition but signed the vakalatnama and deposition in Hindi

2. Whether the Insurance Company established a fundamental breach of policy conditions regarding the driver's invalid license to avoid liability

3. Whether the Tribunal erred in deducting 50% for personal expenses despite the deceased having seven dependents

4. Whether the children of the deceased are entitled to parental consortium

The court applied Section 149 of the Motor Vehicles Act regarding the insurer's liability

National Insurance Co. Ltd. v. Swaran Singh (2004), which held that the insurer must prove the insured's negligence in allowing an unlicensed driver and that the breach was "fundamental" to the accident

Sarla Varma v. DTC and National Insurance Co. Ltd. v. Pranay Sethi (2017), establishing that for more than six dependents, personal expense deduction must be 1/5th

Magma General Insurance Co. Ltd. v. Nanu Ram (2018) to grant parental and spousal consortium

The Court rejected the identity challenge, finding that the claimant’s signature on the deposition form matched the vakalatnama

On the license issue, the Court held that the Appellant failed to provide cogent evidence; a mere investigator's report (Exhibit-A) mentioning the license expiry was insufficient as the Appellant failed to examine the District Transport Officer (DTO) to prove the document

Following Swaran Singh, the Court noted that the insurer must establish a fundamental breach contributed to the accident, which the Appellant failed to do

Regarding quantum, the Court found the children were minors at the time of the accident and thus dependents

Consequently, per Pranay Sethi, the deduction for personal expenses was reduced from 50% to 1/5th (20%)

The Court also rectified the income calculation, applying a 30% future prospects hike and awarding consortium to all seven claimants

The Court enhanced the total compensation to Rs. 39,87,730 with 7.5% interest per annum from the date of filing

The Court ordered the amount to be divided into seven equal parts for all claimants, with the minor children's shares to be held in fixed deposits until maturity