Insurer Must Prove Breach Of Policy Terms Beyond Police Charge-Sheets: Telangana HC

The Telangana High Court has reinforced that insurance companies cannot escape liability for compensation by merely relying on police charge-sheets to claim a breach of policy conditions. The Bench ruled that the absence of independent evidence to establish a lack of a valid driving license renders the insurer's defense unsustainable. Justice C.V. Bhaskar Reddy presided over the appeal and clarified the evidentiary standards required to establish a violation of the Motor Vehicles Act, 1988. The Telangana High Court scrutinized whether a police investigation report alone suffices to prove that a driver lacked a valid license at the time of an accident.

Insurer Fails to Prove Lack of Driving License

The appellant-Insurance Company challenged the Tribunal's award, primarily contending that the driver of the motorcycle (respondent No. 6) did not possess a valid and effective driving license at the time of the accident. They pointed to the fact that the driver was charge-sheeted by the police under Section 3/181 of the Motor Vehicles Act, 1988. However, the Telangana High Court found that the insurer failed to examine any official from the Regional Transport Authority (RTA) or the Investigating Officer to corroborate this claim.

The Bench observed that "It is well settled that mere charge-sheeting by police without independent proof does not establish breach of policy conditions. Further, Ex.B1 policy was in force on the date of the accident and covered personal accident risk of the insured. In such circumstances, the finding recorded by the Tribunal holding the appellant-Insurance Company liable to pay the personal accident coverage amount does not suffer from any illegality, irregularity, or perversity warranting interference by this Court."

Owner-Cum-Insured and Personal Accident Risk

The second contention raised by the insurer was that the deceased, being the owner of the vehicle, could not be categorized as a 'third party'. While the Court acknowledged this distinction, it upheld the Tribunal's decision to grant compensation based on the Personal Accident Coverage provided in the contract of insurance.

Background

The dispute originated from a motor vehicle accident on June 16, 2013, where the deceased, Biyyala Sambaiah, was traveling as a pillion rider on a motorcycle driven by respondent No. 6. The driver allegedly lost control and hit a tree, resulting in Sambaiah's death. The claimants filed a petition under Section 163-A and 166(1)(c) of the Motor Vehicles Act, 1988 seeking compensation of Rs. 8,00,000.

The Motor Accidents Claims Tribunal-cum-Principal District Judge, Adilabad, found that the deceased was the owner-cum-insured and thus not a third party. Consequently, the Tribunal restricted the compensation to the personal accident coverage limit of Rs. 1,00,000 with 7.5% interest. The Insurance Company appealed this fastening of liability, which the Telangana High Court has now dismissed, affirming the Tribunal's findings.

Case Details:
Case No.: M.A.C.M.A.No.2477 of 2019
Case Title: United India Insurance Company Ltd. v. Biyyala Venkamma and five others

Source: 2026 CaseBase(TEL) 34920