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Usha Devi vs New Assurance India

An unfortunate incident can occur anytime which is why insurance is required. Insurance can help a person to be prepared for any future financial losses and to cover their needs for lifetime. Insurance is of different types, for example Life Insurance, Health Insurance, Fire Insurance, Auto Insurance etc which can help protect any event of unforeseen calamity or damage which could disrupt someone's entire life in wink of an eye.

The following case is related to motor vehicle insurance where the insurance company was able to protect its client from an unforeseen incident. The motor vehicle insurance is covered under the Motor Vehicle Act 1988.

Facts Of The Case
Petitioner: Usha Devi and Ors. v/s Respondent: New India Insurance Company Ltd. and Ors.
Court: Supreme Court Of India - Judges: U.U. Lalit and Vineet Saran, JJ.
Case Number: Civil Appeal No. 8352 of 2019 (Arising out of SLP (Civil) No. 26261 of 2019 and Arising out of Diary No. 20934 of 2019)
  1. Ashok Kumar met with an accident on 4th September 2003 while he was driving a motorcycle and died in collision with the Jeep. In this accident Ashok Kumar parents Madan Mohan and Lakshmi Devi were also present where they were all seated on the motorcycle and met with the accident and had suffered minor injuries however Ashok Kumar died.
  2. To claim insurance the deceased's parents filed a petition in the Motor Accident Claims Tribunal, Gangapur City, Rajasthan.

At The Tribunal
Argument By The Petitioner:

According to this claim the jeep was driving at a very fast speed and negligently on the wrong side of the road and thereby hit the motorcycle of the deceased and caused the accident therefore it is the responsibility of the jeep driver to compensate the loss of the petitioners.

Argument By The Respondent:
However, the written statement filed on behalf of the jeep driver stated that it was not the jeep driver who was negligent but the deceased motorcycle driver who was driving negligently due to which the accident took place.

Moreover, in the written statement filed by the insurance company following points were mentioned which are as follows that the insured vehicle number RJ 0 1 /C 0214 had no link with the accident.

The paper statement given by the claimant has been told to be the accident-causing vehicle however the accident-causing vehicle is different in reality and wrong FIR has been filed which shall also be one of the reasons for which the case should be dismissed.

Moreover, they also stated that the vehicle which has been mentioned in the charge sheet by the police were false and true facts were hidden and twisted by the applicants as there are no substances evidence to prove that the vehicle was involved in the accident.

The Motor Accident Claims Tribunal passed order on 11th June, 2006 in favour of the petitioner and a total sum of Rs 4,66,000 was awarded to the applicants by the respondents where the respondents were directed to compensate the petitioner by writing the cheque on behalf of Tribunal of Registry through which yearly sum of One lakh shall be transferred to the Usha Devi, the deceased's wife.

At The High Court:
The Insurance Company appealed before the High Court to look into the matter again for denying it's liability and the High Court accepted the plea raised by the Insurance Company and observed that:
In the initial version given in the FIR the accident took place due to the negligent driving of the Jeep driver bearing registration number RJ 25C 1052 however Jeep bearing registration number was RJ 01C 0214(Insured Vehicle) was involved in the case. Basically, Jeep bearing registered number RJ 25C 1052 caused the accident.

Due to this contradiction of facts the court stated that an "adverse inference is liable to be drawn against the claims" but due to the pendency of the appeal 50% of the amount awarded by the Tribunal was given over to the claimants while the remaining 50% was still in deposit with the Registry of the Tribunal.

Hence The High Court had ordered for the insurance company to refund 50% of the sum from the Registry of the Tribunal.

The matter was later taken to the Supreme Court for further evaluation.

The issue of the cases is:
Whether the insurance company can refund the amount already given to the claimant?

Legal Analysis
According to the given case the following Act and the Sections are attracted:
Motor Vehicle Act 1988
  • 140. Liability to pay compensation in certain cases on the principle of no fault
  • 160. Duty to furnish particulars of vehicle involved in accident.
  • 163. Scheme for payment of compensation in case of hit and run motor accidents
  • 183. Driving at excessive speed, etc.
  • Driving dangerously
  • Punishment for offences relating to accident.

Chapter Xi Insurance Of Motor Vehicles Against Third Party Risks

  • Sec 145 to 164 of the Motor Vehicle Act 1988
  • Sec 182 & 211 of Indian Penal Code
  • The Sections of the Act are related to the case where following is the explanation of each section involved
  • Section 140 and 160 involves the duties of the offender to compensate the loss.
  • Sec 163 is also a punishable offence where the driver shall be liable to pay fine or imprisonment for three months or both
  • Sec 183 and 184 are punishable offence where the negligent driver is required to pay fine or imprisonment up to 6 months or both

Moreover, the Motor Vehicle Act 1988 mentions that if anybody meets with an accident which results in the death of any person the fees of rupees 2000 or such higher amount must be paid and if a person has resulted serious injuries from the motor car accident a sum of rupees 50000 of higher should be paid, therefore the Tribunal had ordered to pay the jeep owner the given amount but later in this case as it was found the insured car was not the car accident which was involved in the accident the owner of the car and the insurance company and the jeep owner is not liable to pay the amount.
In this case if the insured Jeep would have actually caused the accident resulting in the death of the plaintiff's husband the above mention sections would have applied and punishments would have been given accordingly but as the matter was related to the question of fact because the FIR which was filed for the respect to Jeep was not the Jeep involved in the case punishments would not be the same.
As Sec 182 and 211 of IPC according to which if any person has lodged a false FIR against an individual the individual under section 182 of IPC can file a complaint with the police officer with whom such FIR has been launched and can even apply to the high court for quashing the false FIR large against him.

Evidently in this case such actions had been taken by the Insurance Company due to which the High Court quashed the order of the Tribunal.

The judgement of the Supreme Court upheld the decision of the High court in which the court had granted Insurance company to reclaim the 50 % of the amount given to the Tribunal of Registry. The Supreme Court stated that it would be in appropriate if they would refund the amount from the claimant. The judgement was a landmark judgement.

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