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by Admin
14 December 2025 5:24 PM
In a recent judgement Himachal Pradesh High Court dismissed the insurer’s attempt to evade liability by invoking a breach of policy defence based on alleged misidentification of the driver. Justice Satyen Vaidya held that police reports based on indirect information cannot override direct and consistent eyewitness testimony, particularly when supported by the confession of the actual driver. Though the quantum of compensation in two of the three related claims was slightly reduced, the insurer’s liability was affirmed.
"Insurer’s Defence of Driving by Unlicensed Deceased Fails — Admission of Driver and Eyewitnesses Hold the Field"
The core legal issue in these appeals was the identity of the person driving the car at the time of accident, which occurred on 23 March 2021, when a private Alto car (HP10B-7034) fell into a gorge on the Rohru–Sungri road. The SBI General Insurance Company, while challenging the awards passed by the Motor Accident Claims Tribunal, asserted that the car was being driven by Aman Chauhan, a deceased occupant who allegedly had no valid driving license. Based on this, it sought exoneration from liability citing breach of policy terms.
However, the Court held:
“The insurer had failed to prove its plea; as no cogent and convincing evidence had been led.” [Para 9]
Rejecting the insurer’s reliance on the FIR and police final report, the Court emphasized:
“Neither the author of FIR nor the Investigating Officer was examined. The FIR was based on ASI Roshan Lal’s second-hand version received via 108 helpline.” [Paras 12–13]
Significantly, Anil Kumar, the alleged driver, admitted in his testimony that he was driving the car and had fled the spot due to fear. The surviving occupant, Prince Chauhan, and six other independent witnesses corroborated this version.
The Court observed:
“Even if the testimony of all other witnesses is discarded, the statement of Prince Chauhan remains and is sufficient to uphold the findings recorded by the Tribunal.” [Para 17]
Thus, the Tribunal's finding that the accident occurred due to Anil Kumar’s rash and negligent driving was affirmed, and the insurer’s attempt to shift liability based on Aman Chauhan’s alleged driving was rejected.
"Notional Incomes Must Have Rational Basis" — Court Reduces Compensation by Assessing Income Based on Minimum Wages
In FAO Nos. 32 and 33 of 2023, the insurer also challenged the quantum of compensation awarded in claims filed by the legal representatives of deceased Aman Chauhan and Jasvinder, arguing that their monthly incomes were exaggerated without documentary support.
The Tribunal had assumed Aman Chauhan’s income at ₹15,000/month and Jasvinder’s at ₹12,000/month. However, the Court held:
“In absence of evidence, the Tribunal’s guesswork must be based on objective criteria such as minimum wages for skilled labour.” [Para 20.2]
Accordingly, the Court recalculated:
For Aman Chauhan:
₹10,000/month assumed income + 40% future prospects – 1/3rd deduction = ₹9,333/month dependency
Multiplier of 17 applied → ₹20,53,932 total compensation (reduced from ₹30,06,000) [Para 20.2]
For Jasvinder:
₹10,000/month assumed income + 40% future prospects – 50% deduction = ₹7,000/month dependency
Multiplier of 16 applied → ₹14,14,000 total compensation (reduced from ₹16,82,800) [Para 21.1]
In both cases, other heads of compensation such as funeral charges, loss of estate, and consortium were upheld in line with the Supreme Court’s ruling in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680.
"Award of ₹50,000 for Injury Not Excessive" — Court Declines to Interfere with Tribunal’s Finding in Prince Chauhan's Case
In FAO No. 31 of 2023, the insurer had also challenged the injury claim of ₹50,000 awarded to Prince Chauhan, who had survived the accident.
The Court held:
“By no means can it be said to be excessive and thus, no interference is required.” [Para 22]
Accordingly, FAO No. 31 was dismissed in entirety, and the Tribunal’s findings were upheld.
"FIR and Final Report Cannot Override Ocular Evidence" — Court Highlights Unreliability of Police Version Not Supported by Investigating Officer
A crucial takeaway from the judgment is the limited evidentiary value of an FIR based on hearsay, particularly when the investigating officer is not examined and eyewitnesses narrate a contrary version.
Justice Vaidya remarked:
“Even the informant ASI Roshan Lal had no first-hand version… it is not understandable how he came to know about facts from Civil Hospital, Rohru when the Rukka was recorded at the accident spot.” [Para 15]
He further noted that Prince Chauhan, the only survivor, was not examined by police until six months later, which further undermined the credibility of the police report:
“This brings the conduct of the police in doubt… Prince Chauhan was the best person to provide firsthand information.” [Para 16]
Ultimately, the Court reaffirmed that reliance must be placed on trustworthy and direct evidence, rather than flawed or delayed official reports.
Appeals Partially Allowed Only to Modify Quantum — Tribunal's Findings on Liability and Negligence Upheld
In summary, the Himachal Pradesh High Court:
Dismissed FAO No. 31/2023 filed against the ₹50,000 award to Prince Chauhan
Partially allowed FAO Nos. 32 and 33/2023, reducing compensation in the death claims of Aman Chauhan and Jasvinder
Affirmed the liability of SBI General Insurance Co. Ltd., rejecting the defence of breach of policy
Directed that interest shall continue as awarded by the Tribunal
“Even if the conduct of witnesses was questionable, the insurer failed to prove that Aman Chauhan was driving. There is sufficient material to support the Tribunal’s findings.” [Para 17]
Date of Decision: 13 October 2025
