Supreme Court restores tribunal award, holds insurer liable under personal accident cover; sets aside High Court reduction

A bench of Justices Sudhanshu Dhulia and K. Vinod Chandran heard an appeal concerning whether the family of a man who died when the tyre of a car burst could claim compensation under the Motor Vehicles Act and under a personal accident cover in a comprehensive policy. The challenge arose from an order of the High Court which had reduced the tribunal's award on the ground that the insurer's liability to the owner/driver was limited to Rs.2,00,000 under the policy.

The Court allowed the appeal, set aside the High Court order and restored the Motor Accidents Claims Tribunal award of Rs.25,82,000. The judges held that the central question was contractual liability under a personal accident cover rather than the insurer’s statutory liability to third parties; as the judgment noted, "the insurer has no statutory liability to cover the risk of the owner... when the statutory liability is restricted to third party liabilities." The Court found that the insurer had not pleaded or proved any limited liability clause before the Tribunal or in the memorandum of appeal to the High Court and that the policy document and the insurer’s written statement were not placed on record in the SLP. The Court, in its reasoning, observed: "Pleadings and proof of such pleadings; by valid evidence led, is the crux and core of any adjudicatory process. Trite is the principle that there can be no proof offered without specific pleadings. The limited liability was not pleaded, by the insurance company, either before the Tribunal, as we see from the award made, nor in the appeal filed before the High Court as we see from the memorandum of appeal filed before the High Court." The Supreme Court directed payment of the awarded amount within two months with interest at 8% per annum, allowing deduction of amounts already paid and requiring the appellant to provide bank details for online transfer.

Background The claimants — widow, minor children and parents of the deceased driver — had secured a tribunal award of Rs.25,82,000 for death arising from a car accident when the right rear tyre burst and the vehicle toppled. The Tribunal found the vehicle to be covered by a comprehensive insurance policy and accepted that a personal accident premium for owner-cum-driver had been paid. The insurer appealed to the High Court, contending negligence and breach of policy conditions (including alleged invalid licence) and, alternatively, relying on policy terms or tariff guidelines to limit its personal accident liability to Rs.2,00,000. The High Court reduced the award to Rs.2,00,000.

Before the Supreme Court the insurer relied on several precedents addressing statutory no-fault liability under Sections 147/163A/166 of the Motor Vehicles Act and on the Indian Motor Tariffs (IMT) guidelines; the claimants emphasised that the dispute related to contractual personal accident cover and that the insurer had not pleaded limited liability. The Court observed the line of authorities distinguishing statutory third‑party liability (where owner/driver may not be treated as third party) from contractual personal accident cover, and reiterated that the operative question was whether the policy expressly limited the capital sum insured for the owner-cum-driver and whether such limitation had been pleaded and proved. The Court noted that neither the insurance policy nor the insurer's written statement appeared in the SLP record, and that the memorandum of appeal filed in the High Court did not raise the limited-liability ground. Applying settled principles that pleadings must be specifically made and proved, the Court found no basis to uphold the High Court's reduction and restored the Tribunal award. The final result: the appeal was allowed, the High Court order was set aside, the Tribunal award of Rs.25,82,000 (with interest at 8% per annum) was directed to be paid within two months, and interim/implementation directions required online transfer and deduction of earlier payments.

Case Details: Case No.: 2025 INSC 896 (Civil Appeal @SLP (C) No.5885 of 2019) Case Title: Manjusha & Ors. v. United India Assurance Company Limited & Anr. Appearances: For the Petitioner(s): [Counsel not specified in judgment text] For the Respondent(s): Mr. Amit Kumar Singh, Advocate (for United India Assurance Company Limited)