Motor Accident | Gauhati High Court Pulls Claimant For Concealing Compensation For Vehicle Loss Received From Own Insurer, Imposes Cost

The Gauhati High Court recently set aside an Award granted by Motor Accident Claims Tribunal to a Ford Eco Sport owner, on finding that the claimant had concealed that he received compensation from his own insurer for loss of vehicle.

The claim was made for damage of the vehicle and not for any injuries sustained by any person. Claimant had received compensation from its insurer TATA AIG. He did not dispute its adequacy and yet proceeded with a claim against alleged offending vehicle's insurer.

Single judge bench of Justice Sanjay Kumar Medhi observed, “A claim for insurance is a claim out of utmost good faith. There is a legal obligation on the part of a claimant making a claim qua a contract of insurance to disclose all the relevant facts and not to suppress any material facts."

However in the present case, the bench noted, TATA AIG was not even made a party to the proceedings. "It was not disclosed either in the claim petition or the chief examination that the claimant had already successfully made a claim from his insurance company-TATA AIG and yet had made the present claim against the Insurance Company of the other vehicle.”

Counsel appearing for the appellant (offending vehicle's insurer) submitted that when claim was only for damage sustained by the claimant's vehicle and such claim was already successfully settled by own insurer, the present claim made was for double benefit which is against the very essence of the law of insurance.

On the other hand, the Counsel appearing for the claimant contended that while the claim before the Tribunal was a claim on account of a tort, the amount received from the Insurance Company for the claimant's vehicle was on account of a contract.

The Court observed the Tribunal fell into grave error in entertaining the claim itself since "any claim arising out of such contract mandatorily requires that such claim is made bona fide and with utmost good faith" which was not the case herein.

Court said claimant's attempt to seek enhancement of the Award was "audacious" and that such frivolous litigations must be nipped in the bud. It thus dismissed the claimant's appeal for enhancement of award and imposed a cost of Rs. 5,000/- upon him.

Citation: 2024 LiveLaw (Gau) 45

Case Title: Oriental Insurance Company Ltd. v. Sri Amal Borah & 2 Ors.

Case No.: MACApp./856/2018

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