Mere transportation of calves does not establish policy breach absent proof of prohibited use.

On 28 December 2006, the deceased, a police officer, was travelling as a pillion rider on a motorcycle while pursuing a Matador bearing registration No. GJ-7-Z-5122, allegedly being driven rashly and negligently. The Matador collided with the motorcycle, causing the deceased to fall on the road, after which the Matador ran over him and he died at the spot.

The deceased was stated to be approximately 36 years old and earning Rs.12,000 per month from the Police Department.

His legal heirs filed M.A.C.P. No.134 of 2009. The Motor Accident Claims Tribunal awarded Rs.19,71,358 with interest at 9% per annum from the date of the claim petition until realization, while exonerating certain other respondents.

The Oriental Insurance Company, the insurer of the Matador, challenged the award principally on the ground that the vehicle was being used in breach of the insurance policy by transporting calves allegedly intended for slaughter.

Whether transporting calves in the insured Matador, without proof that they were being transported for slaughter or in violation of statutory requirements, constituted a breach of the insurance policy absolving the insurer from liability.

Whether the insurer discharged its burden of proving the alleged breach of the policy conditions by cogent evidence.

Whether the Tribunal was justified in fastening liability upon the Oriental Insurance Company to satisfy the compensation award.

The Court considered Section 84 of the Motor Vehicles Act, 1988, read with Rule 76(6) of the Gujarat Motor Vehicles Rules, 1989, in relation to the transportation of animals and the alleged prohibited use of the insured vehicle.

The Court applied the principle that an insurer seeking to avoid liability on the ground of breach of policy conditions must establish the alleged breach through reliable and cogent evidence.

Mere transportation of calves does not, by itself, establish an offence or a breach of policy conditions; the relevant prohibited circumstances may include transportation in inhumane conditions, without the requisite permission, without adequate fodder and water, or for slaughter.

The Court accepted that the Matador was being used to transport calves but found that the insurer had not proved that the calves were being transported for slaughter or in any other prohibited manner.

The alleged breach could not be inferred merely from the presence of calves in the vehicle. The insurer was required to prove the particular breach relied upon, including any unlawful purpose or non-compliance with statutory conditions.

Since the insurer did not examine any witness or produce sufficient evidence to substantiate its defence, the alleged breach remained unproved.

Consequently, the Tribunal’s decision to hold the insurer liable to satisfy the award was found to be legally proper.

The insurer was directed to satisfy the awarded amount with interest forthwith.

Upon deposit, the Tribunal was directed to disburse the amount to the claimants after due verification and deduction of any deficit court fee.

The statutory deposit was directed to be transmitted to the Tribunal, with no order as to costs; the connected civil application for withdrawal/disbursement was disposed of as having become infructuous.