Insurer’s statutory liability remains absolute absent proof of Section 149(2) defences, notwithstanding claimant’s misconduct.

On June 29, 2009, Anil Nath (the claimant) was traveling as a pillion rider on a motorcycle when an Indigo car collided with it head-on near Dehradun.

The claimant sustained grievous injuries resulting in the amputation of his right hand and an 80% permanent disability.

He filed a claim under Section 166 of the Motor Vehicles Act, 1988.

The Tribunal awarded ₹1,60,265 with 8% interest, fastening liability on the Indigo car's insurer, Reliance General Insurance.

The Insurance Company appealed (AO No. 503/2012) seeking absolution from liability due to the claimant’s alleged misstatements regarding the number of riders on the motorcycle and fabricated medical bills.

The claimant appealed (AO No. 35/2013) seeking enhancement of the compensation.

Whether the Insurance Company can be absolved of statutory liability under Section 149(2) of the Motor Vehicles Act, 1988, due to the claimant’s misconduct or false statements during proceedings?

Whether the claimant is entitled to enhanced compensation for loss of future earning capacity despite continuing to receive a full salary from his employer?

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

It relied on the landmark precedent *National Insurance Co. Ltd. v. Swaran Singh & Ors.* (2004) 3 SCC 297, which established that an insurer remains statutorily liable unless a specific defence under Section 149(2) is strictly proved.

For quantum assessment, the court applied the principles from *Raj Kumar v. Ajay Kumar* (2011) 1 SCC 343, holding that disability compensation must be linked to the actual impact on "earning capacity" rather than just physical impairment.

It further distinguished *Rekha Jain v. National Insurance Co. Ltd.* (2013) 8 SCC 389 regarding career prospect loss.

Regarding the insurer's appeal, the court reasoned that while the claimant's conduct (lying about the number of riders and submitting dubious bills) was "reprehensible," 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 could not be exonerated.

Regarding the claimant's appeal for enhancement, the court noted that the claimant failed to prove any loss of livelihood, as he remained employed by the P.A.C. department with no reduction in pay.

The court found that the claimant's attempt to mislead the Tribunal by suppressing facts and inflating caretaker expenses justified the Tribunal's decision to restrict compensation to proved medical bills and conventional heads.

Consequently, the ₹1,00,000 awarded for pain and suffering was deemed "just" given the claimant's lack of honesty.

It held that the Insurance Company is liable to satisfy the award because it failed to prove any statutory breach under Section 149(2).

It further held that the claimant is not entitled to enhancement because he suffered no actual loss of income and his dishonest conduct disentitled him to further judicial indulgence.

The claimant is entitled to ₹1,60,265 with 8% interest per annum.