Insurance Company Cannot Claim Contributory Negligence Without Examining Driver Or Challenging Charge Sheet: AP High Court

"nowhere it could be traced that the Insurance Company filed any case challenging the charge sheet before the competent Court and in absence, the appellant/Insurance Company cannot raise this issue", Andhra Pradesh High Court, in a significant ruling dated April 6, 2026, held that an insurance company cannot claim contributory negligence or dispute police findings if it fails to examine the offending vehicle's driver or challenge the charge sheet before a competent court.

A bench comprising Justice Cheekati Manavendranath Roy and Justice Tuhin Kumar Gedela observed that raising such arguments without evidentiary backing renders them "erroneous and unwarranted and raised only for the purpose of the appeal intentionally."

The case arose from a fatal road accident in 2012 where a 38-year-old school principal, travelling as a pillion rider on a motorcycle, was struck from behind by a lorry. The Motor Accidents Claims Tribunal, Guntur, awarded a compensation of Rs. 30,05,000 to the deceased's family, holding the lorry driver, owner, and insurer jointly and severally liable. Aggrieved by the award, the insurer approached the High Court, while the claimants filed a cross-objection seeking an enhancement of the compensation.

The primary question before the court was whether the Tribunal erred in holding the lorry driver solely negligent for the accident. The court was also called upon to determine if the quantum of compensation awarded, based on the deceased's unrebutted salary evidence, was legally sustainable.

Failure To Challenge Charge Sheet

The court first addressed the insurance company's primary contention that the police had filed the charge sheet against the lorry driver in a routine manner merely to help the claimants. The bench rejected this argument outright, noting that the insurer had taken no legal steps to contest the police findings. The court observed that it could not trace any record showing the insurer had legally challenged the charge sheet, which was filed under Section 304-A of the Indian Penal Code.

"in absence, the appellant/Insurance Company cannot raise this issue and hence, the same is rejected in limine per se."

Adverse Inference For Not Examining Driver

Addressing the claim of contributory negligence on the part of the deceased motorcycle rider, the court emphasized the insurer's failure to produce vital evidence. The bench highlighted that the insurance company did not take any steps to summon or examine the lorry driver, who had remained ex parte before the Tribunal. The court ruled that this crucial omission by the insurer effectively destroyed their defense regarding the manner in which the accident occurred.

Unrebutted Evidence On Income

The court then examined the Tribunal's calculation of compensation, specifically regarding the deceased's monthly income of Rs. 30,000 as a school principal. The bench noted that the chief accountant of the school was examined to prove the salary, and the insurance company entirely failed to cross-examine this witness. Consequently, the court held that the evidence regarding the deceased's income stood admitted and unquestioned by the appellant.

Tribunal Correctly Applied Supreme Court Precedents

Upholding the quantum of compensation, the High Court observed that the Tribunal correctly applied the multiplier method and relevant statutory deductions. The court noted that the Tribunal legally deducted 20 percent towards income tax and professional tax, alongside a one-third deduction towards personal expenses. The bench affirmed that applying a multiplier of 15, as laid down by the Supreme Court in Sarla Verma v. Delhi Transport Corporation, was legally sound.

"The Tribunal rightly taken note of the judgments of the Apex Court while awarding the compensation and there is no illegality or infirmity in the order of the Tribunal to interfere with."

Award Of Consortium Affirmed

The court further endorsed the Tribunal's decision to award Rs. 1,00,000 towards loss of consortium to the widow, along with Rs. 25,000 for funeral and transportation expenses. The bench noted that this calculation was strictly in accordance with the legal principles established by the Supreme Court in Rajesh v. Rajbir Singh.

Finding no substantive merit in the insurance company's arguments, the High Court dismissed the appeal and upheld the Tribunal's award. Consequently, as the main appeal was dismissed confirming the original compensation, the court also dismissed the cross-objection filed by the claimants as infructuous.

Date of Decision: 06 April 2026