Insurer appealed against award of compensation for death in a road accident, contending the vehicle was used on hire contrary to policy conditions. The High Court held the insurer failed to specifically plead the breach in its written statement and dismissed the appeal, upholding the Tribunal's award.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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GAHC010142462016
2026:GAU-AS:8287
IN THE GAUHATI HIGH COURT HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
MACApp./923/2018
The Oriental Insurance Company Ltd. A Central Govt. Undertaking, Having its Regional Office at Guwahati, G.S.Road, Ulubari, Guwahati 781007 Represented by the Deputy Manager, Guwahati Regional Office, Ulubari, Guwahati 781007
…..Appellant
-Versus-
1. Smt Chandra Prabha Das W/O Late Upen Ch. Baruah, Uttar Pipla, Nityananda, P.S. Patacharkuchi, District Barpeta, Assam
2. Ritul Das S/O Sri Haren Das Village No. 1 Jalah Changsari P.O. And P.S. Kamalpur Dist. Kamrup Assam.
3. Manoj Bora S/O Lt. Bangshidhar Bora Village Bilangani Parbat Kash
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P.O. And P.S. Kamalpur District Kamrup Assam.
4. Miss Manjula Baruah D/O Late Kasab Baruah Village Kamarpara Outala P.S. Mangaldoi District - Darrang Assam
……Respondents
BEFORE
HON’BLE MR. JUSTICE MRIDUL KUMAR KALITA
Advocate for appellant
Advocate for respondents
Date on which judgment is reserved
Date of pronouncement of judgment
Whether the pronouncement is of the Operative part of the judgment
Whether the full judgment has been pronounced
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Judgment and Order
1. Heard Ms. R. D. Mozumdar, the learned counsel for the appellant. Also heard Mr. P. P. Borthakur, the learned counsel for the respondent No. 1/claimant as well as Mr. R. Deka, the learned counsel for the respondent No. 4.
2. It appears that by order dated 27.01.2026, this Court directed that this appeal should proceed ex-parte against respondent No.2 as the said respondent or his engaged counsel failed to appear before the Court when the appeal was called on for hearing.
3. This appeal under Section 173 of Motor Vehicle Act, 1988 has been preferred by the Oriental Insurance Company Limited, impugning the judgment and award dated 17.09.2015 passed by the learned Additional District Judge No. 3, Kamrup in MAC Case No. 1060/2013, whereby the appellant was directed to pay a compensation amount of Rs. 19,58,000/- to the claimants along with an interest at a rate of 6% per annum from the date of filing of the claim petition till realization.
4. The facts relevant for consideration of the instant appeal, in brief, are that on 08.03.2013, at about 1.35 a.m., the husband of the claimant was proceeding in a vehicle bearing Registration No. AS-01-AK-7091 (Maruti Van) from Gauripur to Dekhiajuli to attend a marriage, met with an accident. It is stated that the said vehicle suddenly hit a truck from backside. The husband of the claimant died on the spot, as a result of the accident. Thereafter, the claimant approached the Court of the learned Additional District Judge No. 3, which was also taking
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up MAC cases at that point of time, by filing an application under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for death of her husband in the aforesaid vehicular accident.
5. The said claim case was registered as MAC Case No. 1060/2013. The owner and the driver of the truck were not made party in the claim case. The present appellant, which is the insurer of the Maruti van contested the claim along with the owner of the said van by filing a written statement. The driver of the aforesaid vehicle did not contest the case and it proceeded ex-parte against him. On the basis of the pleadings of the parties, the Claims Tribunal framed following issues:
6. In support of her claim, the claimant examined herself as PW-1 and exhibited certain documents. The Insurance Company examined one Shri Tijender Dutta as its witness and exhibited the insurance policy as Exhibit-1. However, after conclusion of the inquiry, by the impugned judgment and award, the present appellant was directed to pay the
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compensation to the claimant in the manner as described in the foregoing paragraphs.
7. Ms. R. D. Mozumdar, the learned counsel for the appellant-Insurance Company has submitted that the Tribunal has erred in directing the present appellant the payment of compensation amount to the claimant. She submits that during the inquiry the Insurance Company took a specific plea in the written statement that there was a violation of the policy condition by the owner and as such, the Insurance Company is not liable to indemnify the owner, in case the owner was found liable to pay compensation. She submits that in the charge sheet, which was filed in connection with the case, which was registered after the accident against the driver of the Maruti Van, it has been specifically mentioned by the Investigating Officer that the vehicle was taken on hire by the husband of the complainant. She submits that in the insurance policy there is a clear stipulation indicating the limitation as to the use of vehicle on hire during the period of insurance cover.
8. The learned counsel for the appellant submits that the policy covers use of vehicle for any purpose other than hire or reward and certain other conditions. She submits that as hiring of the vehicle was specifically prohibited by the conditions of the policy itself, the Insurance Company could not have been made liable to indemnify the owner as there was clear violation of the condition of the insurance policy. She further submits that in Paragraph No. 12 of the written statement filed by the present appellant before the Insurance
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Company, it has been specifically pleaded by the Insurance Company that it would not be liable to indemnify the owner if there is any violation of the policy condition.
9. She submits that the Tribunal has erred in observing in the impugned judgment and award (Paragraph No. 19) that there was no pleading by the Insurance Company to that effect and the fact that it was used in commercial purpose has not been established. She submits that when it is apparent from the uncontroverted documents relied upon by the claimant, i.e., the charge sheet, that the vehicle was taken on hire by the deceased from the owner, there was no requirement of adducing any further evidence by the Insurance Company. She submits that the insurance company still adduced the evidence of one witness, who is the Administrative Officer of the Company, who deposed that from the charge-sheet, the Insurance Company came to know that the vehicle was rented on hire by the owner and thereby a condition of insurance policy was violated. She submits that in view of the materials available before the Tribunal, which clearly indicated that there was a violation of policy condition, the Insurance Company could not have been made liable to indemnify the owner.
10. The learned counsel for the appellant submits that even if Insurance Company is made to pay the compensation as awarded by the tribunal to the claimants, it may be allowed to recover the same from the owner in accordance with the guidelines laid down by the Apex Court in the case of “Oriental Insurance. Company Limited versus Shri Nanjappan & Others” reported in (2004) 13 SCC 224 .
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11. She has also submitted that in a later decision of the Apex Court in the case of “ Shamanna and Others Vs. The Divisional Manager The Oriental Insurance Company Limited and Others” reported in (2018) 9 SCC 650, which has approved the guidelines for pay and recovery to be made by the Insurance Company as was observed in the case of Nanjappan’s case . She, however, submits that the fact of the accident is not challenged by the Insurance Company, neither the quantum of compensation awarded by the Tribunal and, therefore, she submits that if this Court directs the appellant to pay the compensation, it may be allowed to recover the same from the owner in terms of the directions of the Apex Court in the case of Oriental Insurance. Company Limited versus Shri Nanjappan & Others (Supra) .
12. On the other hand, Mr. P. P. Borthakur, the learned counsel for the respondent No. 1/claimant has submitted that since this appeal is mainly directed against the judgment of the Tribunal, directing the Insurance Company to indemnify the owner and since the material on record, especially the charge sheet indicates that the offending vehicle was rent on hire by the owner in violation of the policy conditions, this Court may decide as to who has to pay the compensation.
13. However, he submits that since the offending vehicle was under a valid insurance policy coverage at the time of accident, which provides for the coverage of any damage or loss to a third party, hence, the claimants are otherwise entitled to get the compensation amount. He further submits that since the relevant provisions of Motor Vehicles Act, 1988 are benevolent provisions directed to benefit the innocent
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third party sufferers, the Insurance Company may be directed to pay the compensation to the claimants and, thereafter, recover the same from the owner. He further submits that the requirement of issuance of notice to the owner and prior attachment of offending vehicle before disbursing the amount, the payment as was described by the Apex Court in its judgment in the case of “ Oriental Insurance. Company Limited Vs. Shri Nanjappan & Others” (Supra) is not followed by the Apex Court in its later judgments. He submits that in the case of “Manuara Khatun and Others Vs. Rajesh Kr. Singh & Others” reported in (2017) 4 SCC 796, the Apex Court, after considering the benevolent object of the Act and other relevant factors, issued directions to the concerned Insurance Company to pay the awarded amount to the claimant and then recover the same from the insured without any other additional conditions.
14. He submits that many Coordinate Benches of this Court have also, after considering the judgments of the Apex Court, as well as considering the facts that there were valid insurance policies at the time of the accident directed the Insurance Companies to pay the compensation to the claimants and thereafter to recover the same from the owner. He has cited following rulings in support of his submission:-
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15. I have considered the submissions made by the learned counsel for both sides and have gone through the materials available on record. I have also gone through the rulings cited by the learned counsel for both sides in support of their submissions.
16. The point to be determined in this appeal is as to whether the Motor Accident Claims Tribunal was right in holding that the present appellant is liable to pay compensation to the claimant on account of death of her husband in the above-mentioned vehicular accident, by discarding the plea regarding the breach of policy condition by the owner of the offending vehicle.
17. Let us examine as to whether the Tribunal was right in discarding the plea raised by the learned counsel for the Insurance Company regarding breach of policy conditions by the owner of the offending Maruti Van.
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18. On perusal of the impugned judgement and award, it appears that the Tribunal declined to rely on the evidence on record suggesting breach of policy condition by the owner of the offending vehicle mainly on the ground that the said evidence was beyond the pleadings. It appears that in the paragraph No. 12 of the written statement filed by the Insurance Company before the Motor Accident Claims Tribunal, it was pleaded that “the opposite party No. 3 (the present appellant) is not liable to indemnify the owner, if there is any violation of policy conditions and the statutory provisions of the Motor Vehicles Act and the Insurance Act.” However, no specific averment has been made in the written statement, by pleading the facts which resulted in the violation of any specific policy condition, i.e., regarding the restriction of using the vehicle for purpose of hire or reward. On perusal of the insurance policy, which is exhibited as Exhibit-1, it appears that the said policy stipulates limitation as to the use of vehicle in the following manner:
“Limitation as to use
There are many other restrictions stipulated in the insurance policy for the use of the vehicle for getting the insurance coverage.
19. The law regarding denial in the written statement is contained in Order VIII Rule 3, 4 and 5 of the Code of Civil Procedure, 1908 which
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provides that the denials have to be specific and same cannot be evasive. Similarly, new facts must be specifically pleaded in the written statement by the defendants as per Order VIII Rule 2 of the Code of Civil Procedure, 1908. Though, the provisions of Code of Civil Procedure, 1908 are not strictly applicable to an enquiry under Section 166 of the Motor Vehicles Act, 1988, however, the spirit of the same is applicable to ensure fairness as well as the ends of justice. The purpose of the pleading all facts, in the written statement, which shows that the claim of claimant is not maintainable is unless same is done, it would be likely to take the claimant/owner of the offending vehicle by surprise, at a later stage of the enquiry before the Tribunal.
20. The Insurance Company is required to specifically plead, in its written statement, the specific policy condition, which it alleges to have been violated by the owner of the vehicle, for denying its liability to indemnify the owner of the insured vehicle. It is required to specifically plead all such facts which constitutes violation of any policy condition by the insured. Merely, stating in the written statement that “the Insurance Company is not liable to indemnify the owner, if there
is any violation of policy conditions” is nothing but a clear violation of the requirement of distinctly pleading the facts, which constituted breach of any specific policy condition by the insured, i.e., the owner of the offending vehicle.
21. If the distinct facts constituting the violation of specific policy conditions were not known to the Insurance Company at the time
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when they filed the written statement, it could have very well filed an additional written statement to bring such new facts on record.
22. On perusal of the order sheets of the MAC Case No. 1060/2013, it appears that such an application was indeed filed by the Insurance Company before the Motor Accident Claims Tribunal and the same was numbered as Petition No. 2619/2015, wherein a prayer was made by the Insurance Company to file an additional written statement, however, by order dated 01.09.2015, the Motor Accident Claims Tribunal dismissed the said prayer, mainly on the grounds that the petition filed by the Insurance Company was a vague petition without disclosing what new grounds the company came to know after filing of its written statement. It is also pertinent to note that the aforesaid order of the Tribunal (order dated 01.09.2015) rejecting the prayer for filing additional written statement, was not challenged by the Tribunal before any appropriate forum.
23. Under such circumstances, the fact that the Insurance Company failed to bring on record the distinct facts, which constituted the breach of policy condition distinctly, is apparent. As such, the Motor Accident Claims Tribunal in holding that the evidence regarding breach of policy condition by the owner of the offending vehicle, on record, is beyond pleading, cannot be faulted with.
24. In view of the discussions made and reasons stated in the foregoing paragraphs, this Court is of the considered opinion that the Motor Accident Claims Tribunal has committed no illegality or irregularity in not relying on the proof which is beyond pleading and thereby
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dismissing the plea of the Insurance Company regarding breach of policy condition by the owner of the offending vehicle. As such, this Court finds no ground for interfering with the impugned judgment and award.
25. This Court is, therefore, of the considered opinion that this appeal lacks merit and deserves to be dismissed.
26. Accordingly, the instant appeal is dismissed.
27. Send back the records of MAC Case No. 1060/2013 to the concerned Motor Accident Claims Tribunal.
28. The appellant shall deposit the awarded amount to the claimant, before the Registry of this Court within 30 (Thirty) days of the date of this judgment.
29. After paying of the awarded amount by the appellant, the statutory deposit deposited by the appellant at the time of filing of this appeal shall be refunded back to it by the Registry after proper verification.
JUDGE
Comparing Assistant
Amita Sharma 2026.06.11 15:39:14 +05'30'
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2 issues framed by the court
Whether an insurer can deny liability for a policy-condition breach (use of vehicle on hire) when it failed to specifically plead the facts constituting the breach in its written statement.
Whether the Tribunal erred in discarding evidence of breach as beyond the pleadings.
Colour shows how this judgement treated each authority
Oriental Insurance Company Limited versus Shri Nanjappan & OthersReferred¶10
(2004) 13 SCC 224 · Who else cites this
Manuara Khatun and Others Vs. Rajesh Kr. Singh & OthersReferred¶13
(2017) 4 SCC 796 · Who else cites this
The Oriental Insurance Company Limited Vs. Sri Jatindra Nath Deka and AnotherReferred¶14
MAC Appeal No. 472/2017
The Oriental Insurance Company Limited Vs. Md. Sahidul Islam @ Abdul Hussain and 2 OthersReferred¶14
MAC Appeal No. 36/2023
New India Assurance Company Limited Vs. Smti Madhuri Das and 2 OthersReferred¶14
MAC Appeal No. 134/2020
The Oriental Insurance Company Limited Vs. Smti Sonali Kalita and 3 OthersReferred¶14
MAC Appeal No. 467/2017
Smti Nilima Bala Mali and 2 Others Vs. Sri Ranjan Chandra Brahma and AnotherReferred¶14
MAC Appeal No. 168/2020
4 provisions across 2 enactments
The Oriental Insurance Company Ltd.
Smt Chandra Prabha Das
Ritul Das
Manoj Bora
Miss Manjula Baruah
Mridul Kumar Kalita
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
