Authority: High Court of Punjab and Haryana at Chandigarh

Order Date: 06 July 2026

Case Overview

  • Parties: Appellant – New India Assurance Company Limited; Respondents – Brijesh (claimant) and others.
  • Proceedings: Appeal against Motor Accident Claims Tribunal, Karnal award dated 31 May 2025.
  • Accident Details: Motor vehicular accident occurred on 04 August 2017 involving a truck bearing registration No. UP‑15CT‑3487.
  • Claim: Under Section 166 of the Motor Vehicles Act, 1988, claimant Brijesh sought compensation for injuries.
  • Tribunal Award: ₹2,63,977 awarded to Brijesh, with interest, holding the driver and owner jointly and severally liable, and directing the insurer to satisfy the award while granting liberty to recover the amount from the insured.
  • Insurer’s Argument: The premium cheque issued by the insured was dishonoured; the policy was subsequently cancelled. The insurer contended that, because the policy was cancelled prior to the accident, there was no valid contract of insurance and it should be exonerated from liability.
  • Key Evidence Cited: Dishonoured cheque memo, cancellation letters to the insured and the Registering Authority, and the registration details of the offending vehicle.
  • Legal Provisions Discussed: Sections 146, 147, 149 of the Motor Vehicles Act, 1988; Section 64 of the Insurance Act. Supreme Court precedents cited include Insurance Co. Ltd. v. Inderjit Kaur (1998), National Insurance Co. Ltd. v. Seema Malhotra (2001), and Ltd. v. Rula (2000).

Final Outcome

  • The Court held that the insurer’s statutory liability under Section 149 of the Motor Vehicles Act cannot be avoided merely because the premium cheque was dishonoured or the policy was cancelled thereafter.
  • The insurer is obligated to satisfy the award of ₹2,63,977 (plus interest and costs) to the claimant.
  • The direction allowing the insurer to recover the paid amount from the insured/owner remains valid and is affirmed.
  • The appeal is dismissed as devoid of merit. The insurer may initiate appropriate recovery proceedings against the insured without filing a separate civil suit.

Topics: Motor Accident Compensation, Insurance Liability