MACApp./244/2013
2025 Latest Caselaw 8172 Gua

Gauhati High Court

MACApp./244/2013 on 30 October, 2025

GAHC010251092013                                                        2016:GAU-AS:12772




                                                  2016:GAU-AS:12771

               IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)

                        MACAPP. NO. 244 OF 2013

                        National Insurance Company Ltd.
                        Represented by its Regional Manager
                        Regional Office, Bhangagarh, Guwahati-5.
                                                    .......Appellant

                                   -Versus-

                   1.   Smti. Dipali Hira,
                        (name struck off vide court order dated
                        03.08.2022)

                   2.   Smti. Lakhi Prava Hira,
                        Both are resident of Vill. Pachim Salmara,
                        P.S. Raha, Dist. Nagaon, Assam.
                   3.   Sri Anirban Patar
                        S/o Sri Tileswar Patar
                        Vill. Pachim Salmara
                        P.S. Raha, Dist- Nagaon, Assam.

                   4.   Sri. Jayanta Bora,
                        S/o- Mr. G.C. Bora
                        Vill- Kachalukhowa
                        P.S. Nagaon, Dist- Nagaon, Assam.

                                            ....... Respondents




                                                          Page 1 of 9
                          -BEFORE-                                    2016:GAU-AS:12772


       HON'BLE MR. JUSTICE KAUSHIK GOSWAMI

For the Petitioner(s)    : Ms. R. D. Mozumdar, Advocate.

For the Respondent(s) : Mr. K. Bhattacharjee, Advocate.

Date of Hearing          : 30.10.2025.

Date of Judgment         : 30.10.2025.

                  JUDGMENT & ORDER (ORAL)

Heard Ms. R. D. Mazumdar, learned counsel, appearing for the appellant. Also heard Mr. K. Bhattacharjee, learned counsel appearing for the respondent No. 2 (claimant).

2] It appears from the Office Note dated 31.01.2022 in the I.A.(Civil) 1625/2018 connected with the present MACApp., that the service report in respect of respondent No. 3 (owner of the offending vehicle) and respondent No. 4 (driver) has been received back with the process service remark "notice was duly served." The said service report is available in the file and is marked as "Flag-A." It further appears that in the I.A.(Civil) No. 1625/2018, this court was further pleased to observe that notice in respect of the respondent Nos. 3 & 4 has been duly served. Despite, notice having been duly served as indicated above, today when the matter is called for hearing, there is no representation on behalf of respondent Nos. 3 & 4.

3] It is pertinent to mention that during the pendency of the case, the respondent No. 1 expired; hence, the name

of respondent No. 1 was struck off from the cause title by the 2016:GAU-AS:12772 order of this court dated 03.08.2022. Accordingly, the matter is taken up today for final disposal.

4] The present appeal has been preferred under Section 173 of the Motor Vehicle Act, 1988, against the judgment and award dated 21.05.2012 passed in M.A.C. Case No. 84/2008 by the learned Member, Motor Accident Claims Tribunal, Nagaon, Assam, (hereinafter referred to as the "Tribunal") awarding a compensation of Rs. 2,80,540/- to the claimants for the death of the deceased, and the liability to pay such compensation has been fastened upon the appellant/insurance company.

5] Ms. R. D. Mazumdar, learned counsel, appearing for the appellant, submits that it is clearly established before the learned Tribunal that the accident occurred on 29.11.2007 at about 9.15 am, and the vehicle was insured with the appellant insurance company on the same day at about 1.32 pm. She accordingly submits that since there has been a clear finding recorded by the learned Tribunal that at the time of the accident the offending vehicle was not covered under any subsisting policy of insurance, and the policy was obtained only subsequent to the occurrence of the accident, therefore fastening the liability upon the appellant/insurance company is wholly unsustainable in law. In support of her aforesaid submission, she relies upon the decision of the coordinate bench of this court passed on 13.12.2018 in Oriental Insurance Co. Ltd v. Sahizuddin @ Sahazuddin Admed and Ors., in MACApp./190/2014.

6] Per contra, Mr. K. Bhattacharjee, learned counsel 2016:GAU-AS:12772 appearing for the respondent No. 2/claimant, seeks to sustain the award, submitting that since the vehicle was subsequently insured with the appellant/insurance company, the Tribunal has rightly fastened the liability upon the appellant/insurance company. He further vehemently opposed the submission made by the learned counsel and submitted that the Apex Court has clearly indicated in the case of National Insurance Company Limited v. Sunita Devi, reported in 2025 STPL 8338 SC, that the liability of an insurance company remains as long as the insurance policy is alive and is operational at the time of the accident, notwithstanding that due to the lapse of the premium there was a break in the insurance policy. He further relies upon the decision of the coordinate bench of this court in the case of United India Insurance Company Limited v. Smti Damyanti Lahkar and Anr., passed on 15.12.2022 in MACApp./110/2016, to buttress his argument that even if a driver of an offending vehicle does not possess a valid driving license, the principle of pay and recover can be ordered. He further submits that in the said decision, the coordinate bench of this court has also held that the third-party victim shall not be allowed to suffer and therefore is to be compensated accordingly.

7] I have given my prudent consideration to the arguments advanced by the learned counsels for both the parties and have perused the material available on record. I have also duly considered the case laws cited at the bar.

8] The core issue involved in this appeal is whether the 2016:GAU-AS:12772 insurance company can be held to be liable for payment of compensation to the victim of an accident involving an offending vehicle when it is established by evidence before the Tribunal that at the time of such accident the offending vehicle was not insured. In other words, whether the subsequent insurance of an offending vehicle post the time of accident would fasten any liability upon the insurance company. Undoubtedly, a victim should not suffer, but at the same time, my conscience does not permit me to allow an insurance company to be fastened with the liability of an accident at the time of which there was no insurance policy in operation. In the present case, it is evident from the finding recorded by the learned Tribunal itself that the accident took place on 29.11.2007 at about 9.15 am, whereas the policy of insurance was obtained on the same day at about 1.32 pm, i.e., subsequent to the time of the accident. The learned Tribunal has further come to the clear finding that "On careful perusal of the exhibited document and the evidence of the witnesses it appears that at the time of accident the vehicle was not insured and immediately after the accident the owner of the vehicle with the help of police insured the vehicle with the insurance company." Thus, it is an admitted position that at the time of the accident, there was no valid or subsisting insurance coverage in respect of the offending vehicle.

9] It is well settled that the liability of the insurer to indemnify the insured or to satisfy the award arises only when

there is a valid contract of insurance covering the vehicle in 2016:GAU-AS:12772 question on the date of the accident. In the absence of such a contract, the insurer cannot be held liable to satisfy the award. The subsequent issuance of a policy after the occurrence of the accident cannot relate back to the date of the accident to create liability where none existed.

10] Reference in this regard is made to the decision of the coordinate bench of this court in the case of Oriental Insurance Co. Ltd (supra), wherein this court has clearly held that no liability can be fastened upon the insurance company when at the time of the accident there was no existence of a valid insurance policy. Relevant paragraphs of the aforesaid decision read as under: -

"5. As noted above, the appeal has been preferred on a limited point that the appellant as insurance company does not have any liability in this case. The said plea is based on the fact that the appellant had never issued any insurance policy in favour of the respondent No.2. In paragraph 16 of the written statement filed before the Tribunal, the appellant had made the following statements :-

'16. That, the answering opp. Party at this stage unable to admit whether the interest of the vehicle allegedly involved in the accident was insured with the opp. Party at the relevant time of accident unless further and better particulars regarding the policy is directed to be produced by the owner of the vehicle otherwise the opp. Party insurance Co. is not responsible to pay any compensation.'

6. Thereafter, the DW 1, who is the Branch Manager of the Dhubri Branch of the appellant company, has deposed before the learned Tribunal that there is no record of any

policy having been issued in favour of the respondent No.2. 2016:GAU-AS:12772 However, the learned Tribunal had rejected the aforesaid plea of the appellant on the ground that the averments made in paragraph 16 of the written statement did not amount to specific denial and hence, would be construed as admission of the fact. I am afraid, such a finding of the learned Tribunal cannot be accepted by this Court. What has been stated in paragraph 16 of the written statement is that the appellant Insurance Company is unable to take a specific stand on the claim of the respondent No.1/claimant in the absence of better particulars. There was no admission by the appellant of the existence of a valid insurance policy. It transpires from the record that the code number planted in the aforesaid certificate also did not tally with the records maintained by the company.

7. It is also to be noted herein that the owner and driver of the vehicle did not appear before the learned Tribunal despite service of notice. If there was, in fact, a valid insurance policy then there was nothing preventing the owner from appearing before the Tribunal and producing the same in which event he would have naturally been absolved of any liability for payment of compensation but the respondent No.2/owner has failed to do so.

8. The fact that there is no valid insurance policy covering the vehicle of the respondent No.2 is a negative fact and the Insurance company cannot be asked to prove a negative fact by leading evidence. On the contrary, since the claimant has made a claim that the vehicle was insured, the burden to establish the said fact was upon the claimant, which burden he has failed to discharge. In the aforesaid circumstances, I am of the view that the learned Tribunal was not correct in holding that the vehicle was insured with the appellant. As such, no liability could have been fastened upon the

appellant company in the facts and circumstances of this 2016:GAU-AS:12772 case.

9. In the result, this appeal stands allowed to the extent indicated above. The direction of the learned Tribunal asking the appellant company to pay the compensation stands set aside. It is, however, clarified that the liability would now be wholly upon the respondent No.2 and the respondent No.1/claimant would be at liberty to proceed with the execution of the award against the said respondent."

11] In view of the aforesaid, this Court finds that the learned Tribunal erred in fastening the liability upon the appellant/insurance company despite the clear finding that there was no insurance coverage operating on the date of the accident. Accordingly, the impugned award, to the extent it fastens liability upon the appellant/insurance company, cannot be sustained.

12] As regards the case of National Insurance Company Limited (supra), relied on by the learned counsel appearing for the respondent, it appears that in that case, during the time of the lapse of the premium, an accident took place, and since subsequently the vehicle was insured by the same insurance company, the Apex Court held that the said insurance company is liable to compensate the claimant in that case; however, there is no material whatsoever to indicate in the present case that the vehicle was insured with the appellant insurance company pre time of the accident. On the contrary, it is clearly evident from the judgment under appeal that at the time of the accident the offending vehicle was not insured, and immediately after the accident the

owner of the vehicle, with the help of police, insured the 2016:GAU-AS:12772 vehicle with the insurance company. Therefore, the aforesaid decision is of no consequence in the context of the facts and circumstances of the present case.

13] The judgment dated 21.05.2012 passed by the learned Tribunal; to the extent it fastens liability upon the appellant/insurance company, is accordingly hereby set aside. Hence, the appeal is allowed in part. It is clarified that the claimant/respondent No.2 shall, however, be at liberty to realize or execute the award as against the respondent No.3/owner of the offending vehicle in accordance with law.

14] The amount, if any, deposited by the appellant/insurance company before the learned Tribunal or before this Court in compliance with the statutory requirement or otherwise, shall be refunded to the appellant after due verification.

15] Accordingly, the impugned award stands modified to the extent indicated above.

Return the TCR.

JUDGE

Comparing Assistant