Insurer's Statutory Liability Persists Under Section 149(2) Notwithstanding Claimant's Misconduct or Misrepresentation of Facts

On June 29, 2009, the claimant, Anil Nath, was a pillion rider on a motorcycle that collided head-on with an Indigo car (UA-09-4848).

The claimant sustained multiple injuries, including the amputation of his right hand, resulting in 80% permanent disability.

The Motor Accident Claims Tribunal (MACT), Pithoragarh, awarded ₹1,60,265 with 8% interest, finding the car driver negligent.

Two appeals were filed: one by the Insurance Company seeking to be absolved of liability due to the claimant’s alleged fraud/misrepresentation regarding the number of riders on the motorcycle, and one by the claimant seeking enhancement of compensation.

1. Whether the Insurance Company can be absolved of statutory liability under Section 149(2) of the Motor Vehicles Act, 1988, based on the claimant’s misconduct or false statements.

2. Whether the claimant is entitled to enhanced compensation for loss of future earning capacity despite continuing to receive his full salary in government service.

The court primarily applied Section 149(2) of the Motor Vehicles Act, 1988, which exhausts the statutory defences available to an insurer to avoid liability.

It relied on National Insurance Co. Ltd. v. Swaran Singh & Ors. (2004), establishing that the insurer is statutorily liable unless a specific defence under Section 149(2) is strictly proved.

Regarding quantum, the court followed Raj Kumar v. Ajay Kumar (2011), which mandates that permanent disability compensation must be assessed based on the actual impact on earning capacity.

It further distinguished Rekha Jain v. National Insurance Co. Ltd. (2013) regarding enhancement when no loss of livelihood is proven.

The Court rejected the Insurance Company's appeal, noting that while the claimant attempted to mislead the Tribunal regarding the number of riders and caretaker expenses, such misconduct does not constitute a statutory defence under Section 149(2).

Since the vehicle was insured and the driver had a valid license, the insurer’s liability remained intact.

Regarding the claimant's appeal, the Court found that although he suffered 80% physical disability, there was no "functional disability" affecting his income, as he remained employed by the P.A.C. department with no reduction in pay.

The Court upheld the Tribunal's decision to penalize the claimant’s dishonesty by refusing compensation under unproved or exaggerated heads, noting that the ₹1,00,000 awarded for pain and suffering was just and reasonable under the circumstances.

The Insurance Company is liable as it failed to establish any statutory defence under Section 149(2); and (2) The claimant is not entitled to enhancement because he suffered no loss of future earning capacity and his conduct disentitled him from further discretionary relief.

The Tribunal's award of ₹1,60,265 with 8% interest was affirmed.