The Gujarat High Court has dismissed an appeal filed by SBI General Insurance Company Ltd., holding that the insurer failed to establish through reliable evidence that the motor insurance policy relied upon in a fatal accident compensation claim was fake or fabricated. Justice J. C. Doshi upheld the Motor Accident Claims Tribunal’s award of ₹37,00,420 with 9% annual interest, including its direction permitting the insurer to recover the amount from the vehicle owner.
Background
The dispute arose from a road accident on March 9, 2015, in which Babubhai Govabhai Desai sustained fatal injuries while travelling as a pillion rider on a motorcycle. He died on March 14, 2015, after receiving hospital treatment.
His legal heirs approached the Motor Accident Claims Tribunal (MACT), Patan, seeking ₹65 lakh in compensation. They stated that the deceased was a government schoolteacher and also earned income from agriculture and animal husbandry.
On August 31, 2019, the Tribunal awarded ₹37,00,420 with 9% annual interest. It directed the parties to pay jointly and severally, while allowing SBI General Insurance to recover any amount paid from the car owner if the policy was subsequently established to be fake.
SBI General Insurance challenged the award, claiming that the policy produced by the claimants had not been issued to cover the car involved in the accident. The company relied on another policy bearing the same number, which it described as a long-term home insurance policy issued in another person's name.
The claimants opposed the appeal, questioning the competence of the insurance company's witness and pointing out that the insurer had not produced sufficient evidence to substantiate its allegations.
Justice Doshi examined the insurance officer's cross-examination and found significant gaps in the insurer's evidence. The officer worked at the Ahmedabad branch, while the policies in dispute had originated from the company's Andheri East office in Mumbai. He also acknowledged that he could not identify the officer whose digital signature appeared on the disputed policy.
The Court emphasised that an insurer cannot establish fabrication merely by denying that it issued a policy.
"The mere assertion of an authorized officer that the policy was not issued by the company cannot, without an adequate evidentiary foundation, cannot be treated as conclusive proof of fabrication."
The judgment also referred to the Supreme Court's decision in National Insurance Company Limited v. K. Saravanan, highlighting the insurer's responsibility to inform the appropriate authorities when it discovers a forged or fabricated policy.
The Court noted that SBI General Insurance had failed to produce sufficient supporting records, including relevant premium accounts and testimony from a competent witness with knowledge of the policy issuance records. It also observed that the insurer had not adequately followed up on its complaint concerning the alleged fake policy.
The High Court held that the insurer had failed to prove that the disputed policy was fabricated. It further observed that the Tribunal's pay-and-recover direction protected the insurer's interests while safeguarding the third-party claimants' compensation rights.
"The appeal is bereft of merit and deserves to be dismissed. Accordingly, first appeal is dismissed."
The Court dismissed SBI General Insurance Company's appeal, vacated any earlier interim relief and disposed of the connected civil application.
