To claim insurance policy, burden of proof lies with owner or claimant, not the insurance company: Karnataka HC

Bengaluru: The Dharwad bench of the Karnataka high court has said that when the existence of an insurance policy is claimed, the burden of proof lies with the owner or claimant, not the insurance company. Justice Hanchate Sanjeevkumar said this while exonerating the liability on the insurance company to pay compensation to the claimants.

The accident occurred on September 2, 2011, when Kanti alias Kanteppa, an electrician, was travelling in the autorickshaw of Narayanaswamy. The autorickshaw overturned due to rash driving and Kanti succumbed to injuries. Kanti’s wife Mallamma and children moved the tribunal seeking compensation.

On July 7, 2012, the Motor Accident Claims Tribunal, Ballari, awarded Rs 5,33,000 with 6 percent annual interest compensation, on the grounds of cover note for insurance policy issued by the insurance company. Both the parties filed appeals seeking higher compensation.

The court noted that under sub-rule 2 of Rule 142 of the Central Motor Vehicles Rules, 1989, when cover notes are issued, the validity period is only sixty days from the date of issuance of cover notes. Once, the owner of the offending vehicle pays a premium either through cash or cheque or by any other mode, then the contract would be completed.

In the case at hand, the accident had occurred on September 2, 2011while the cover note was issued on April 29, 2011. “But the owner of the offending vehicle has not discharged his burden to prove payment of premium for purchasing insurance policy. Therefore, cover notes remained as cover notes only, as they remained as proposals,” the court said.

The court further said that as per section 3 of the Indian Evidence Act, negative evidence could not be led. “The party who asserts the existence of facts, then it is a burden on him to prove the existence of the said fact. But in this case, neither the owner nor the claimant has discharged their burden to prove the existence of the insurance policy,” Justice Hanchate Sanjeevkumar said.

As per Karnataka State Legal Service Authority's notional income chart, the court enhanced the compensation to Rs 15,50,600 with 6% annual interest, considering the fact that the deceased was 38-years-old and was earning Rs 6,000 monthly. The court directed the auto rickshaw owner to pay the compensation determined to the family members of the deceased.