Patna High Court

The Oriental Insurance Company Limited.versusMustari Khatoon,

Decided: 5 February 2026
Disposal: DISMISSED
Bench: RAJIV ROY

Holding

The High Court affirmed the Tribunal's award, holding that the insurer remained liable for the compensation because it failed to prove the policy was effectively cancelled at the time of the accident.

Summary

The case arose from a motor‑vehicle accident on 2 June 2010 in which a truck insured by Oriental Insurance Company collided with a stationary car, resulting in the death of Vakil Ahmad. The claimants obtained a compensation award of Rs.5,30,600 with interest from the Motor Vehicle Accident Claim Tribunal. The insurer appealed, contending that the insurance policy had been cancelled after the vehicle owner's cheque bounced and therefore it bore no liability. The High Court noted that the insurer had raised objections but failed to produce any documentary evidence or argue the points before the Tribunal. Since the policy was in force at the time of the accident and the insurer had not substantiated its cancellation claim, the Court upheld the Tribunal's award, directing payment with 6% interest by 28‑02‑2026 and imposing a cost of Rs.20,000 for any further delay.

Issues considered

Whether the claim was maintainable under the Motor Vehicle Accident Claim Tribunal.
Whether the accident was caused by rash and negligent driving of the insured truck.
Whether the death of Vakil Ahmad arose out of the accident.
Whether the claimants were entitled to compensation and, if so, the quantum and from whom.
Whether the insurer was liable despite alleged cancellation of the policy due to a bounced cheque.

Subjects

Motor vehicle accident
Insurance liability
Policy cancellation
Compensation award
Interest on damages
Appeal
Evidence

Judgment

IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.193 of 2022
======================================================
The Oriental Insurance Company Limited. at Division Office, Daya Complex,
Aghoria Bazar Chowk, Muzaffarpur through the Constituted attorney the
Deputy Manager, T.P. Hub Incharge at Regional Office, The Oriental
Insurance Company Limited, Pirmuhani, Patna.

... ... Appellant/s
Versus
1. Mustari Khatoon, W/o Nurul Huda Resident of Village-C/o Md. Taslim,
Quila Road, Mehandi Hasan Chowk, Police Station-Brahampura, District-
Muzaffarpur.
2. Nurul Huda S/o Late Md. Salim Resident of Village-C/o Md. Taslim, Quila
Road, Mehandi Hasan Chowk, Police Station-Brahampura, District-
Muzaffarpur.
3. Sri Babu Saheb Sah S/o Late Janak Sah Resident of at J.P. Colony, Ward No.
12, Madhubani, Presently at Mithanpura Chowk, Dist.-Muzaffarpur. (Owner
of the Offending Truck Bearing Reg. No. HR 38K 6456)

... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr.Sumit Kumar
For the Respondent/s : Mr.Dhannjay Kumar No. 2
======================================================
CORAM: HONOURABLE MR. JUSTICE RAJIV ROY
ORAL JUDGMENT
Date : 05-02-2026

Heard Mr. Sumit Kumar, learned counsel for the

appellant and Mr. Dhannjay Kumar, learned counsel for the

claimant-respondent.

2. The present petition has been preferred for the

following relief/s:

“against the order/judgment dated

11.02.2022 and Award dated 22.02.2022

passed in Claim Case No. 167 of 2010 by

Learned Puneet Kumar Garg, Additional
Patna High Court MA No.193 of 2022 dt.05-02-2026
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District Judge-III-cum-Motor Vehicle

Accident Claim Tribunal, Muzaffarpur [here

in after referred to as the Tribunal] by which

the learned Tribunal has awarded

compensation of Rs. 5,30,600/- with interest

@ 06% annually in favor of

Claimants/Respondents from the date of

filing of the Claim Application till

realization within 60 days. Any delay in

realization of the said award after the lapse

of 60 days would incur the interest of 7% per

annum till realization.”

3. As per the story, an accident took place on

02.06.2010 near Reliance Petrol Pump, in the district of

Darbhanga. The claimant’s son, Vakil Ahmad alongwith his

friend was standing at a place where a Bullock Cart and a

Ambassador Car were also stationed. In the meantime, a Truck

bearing registration no. HR38K-6456 came in a negligent

manner and dashed against the standing car. It, thereafter, fell

down into 25 ft. deep ditch. Wakil Ahmad who was present

there died on the spot, body taken to the Darbhanga Medical

College and Hospital, Darbhanga for post-mortem and this
Patna High Court MA No.193 of 2022 dt.05-02-2026
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followed Sadar P.S. Case No. 200 of 2010.

4. The family members, thereafter, preferred Claim

Case No. 167 of 2000 which was taken up by the Court of

learned Additional District Judge-IIIrd-cum-Motor Vehicle

Accident Claim Tribunal, Muzaffarpur. The truck was

insured with the appellant’s company, the Oriental Insurance

Company (henceforth for short ‘the Company’).

5. Notices were issued to the parties. The truck owner

failed to appear while ‘the Company’ appeared and objected to

the claim put forward by the claimant. It objected to the manner

of the accident, income as also the fact that the cheque issued by

the truck owner bounced, this followed the cancellation letters

sent. The accident took place thereafter and as such ‘the

Company’ is not bound by any liability to make payment.

6. ‘The Tribunal’ framed the issue as follows:

i. Whether the claim case as framed

maintainable?

ii. Whether the accident in question

took place due to rash and negligent

driving of Vehicle No. HR38K 6456

truck on 02-06-2010, 2.45 p.m. at

near Reliance Petrol Pump N.H. 57,
Patna High Court MA No.193 of 2022 dt.05-02-2026
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P.S. Sadar, District - Darbhanga?

Iii. Whether the deceased Vakil

Ahmed s/o Nurul Hoda died in this

accident which arises out of P.S.

Case No. 200/2010 P.S. Sadar, (O.P.

Mabbi) District Darbhanga ?

iv. Whether the applicants are

entitled to the claim propounded if

so what would be the quantum and

from whom?

7. The parties were heard. ‘The Tribunal’ thereafter

came to the conclusion that accident has taken place, it was hit

by the truck bearing registration no. HR38K-6456, was insured

with ‘the Company’. It further recorded that though ‘the

Company’ made multiple objections, it did not lead any

evidence despite several opportunities given by the Court. ‘The

Tribunal’ further recorded that the opposite party no.2, ‘the

Company’ or its counsel did not even appear for the argument,

nor filed any evidence. Again, despite grant of opportunities, it

held, that in the absence of any evidence, the claim of the

claimant cannot be denied merely on the basis of averment

made in the written statement.
Patna High Court MA No.193 of 2022 dt.05-02-2026
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8. In that background, it directed payment of

Rs.5,30,600/- with annual interest of 6% from the date of filing

of the claim petition till its realization with further observation

that in case it fails to pay in sixty days, the amount will increase

to 7%.

9. Aggrieved, the present appeal.

10. It is to be noted that on 28.07.2025, on the stand

taken by ‘the Company’ that they shall be depositing the Award

amount of Rs.5,30,600/- to ‘the Tribunal’ within a week, further

proceeding in Execution Case No. 20 of 2022 (arising out of

Claim Case No. 167 of 2010) was stayed.

11. Heard the parties.

12. Learned counsel for the appellant submits that

though ‘the Company’ is not denying the accident, the fact

remains that on the day, the accident took place, the truck was

not plying on a valid insurance certificate. He submits that the

policy was issued for the period 12.01.2010 to 11.01.2011.

However, the cheque that was provided by the vehicle owner

bounced on 15.01.2010, whereafter, intimation of cancellation

was given on 29.03.2010. The accident took place on

02.06.2010 and as such, they have no liability to make payment

and in that background, erroneous order came to be passed
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which need to be interfered.

13. Learned counsel for the appellant on the other

hand has taken this Court to the observation of ‘the Tribunal’ to

show that the said statement made by the appellant’s company

has no basis. The Tribunal has already recorded that though

multiple objections were put forward by ‘the Company’, it

chose not to lead any evidence despite several opportunities

granted. It even failed to put forward its view on the point of

argument and further did not file any evidence.

14. The submission is that any document which ‘the

Company’ is/are intends to insert at the later stage cannot

change the original position that they chose not to adduce

evidence/put forward the argument before ‘the Tribunal’.

15. This Court has gone through the facts of the case

and the submissions of the parties is also issues that were

framed by ‘the Tribunal’.

16. The admitted facts are that:

(i) an accident took place on 02.06.2010;

(ii) the vehicle involved in the insurance was a

truck bearing registration no. HR38K-6456;

(iii) it was having a policy with ‘the Company’

between 12.01.2010 to 11.01.2011;
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(iv) the claimant put forward its claim in the

aforesaid Claim Case No. 167 of 2010;

(v) though it raised number of objections, the

same were never supported by any

document/evidence.

17. Any insertion, thereafter, will not better the

original position which has been recorded by ‘the Tribunal’ and

not rebutted by the appellant company.

18. If the policy was issued subject to clearance of

the cheque and the cheque bounced, proper letter of cancellation

sent by the Insurance Company must reach the table of the

vehicle owner. Further, the documentary evidence of the vehicle

owner having received in said information must be there to

complete the chain that when the accident took place, the

vehicle owner had the knowledge about the cancellation of the

policy. The said scenario/development/chain is/are not present

in this case.

19. In that background, any plea taken at the stage

of the appeal cannot be allowed. As recorded above, the amount

in question has already been deposited with ‘the Tribunal’ when

the order of stay was granted on 28.02.2023. ‘The Company’ is

duty bound to release the amount in favour of the claimant. The
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only relief that is extended to the appellant company is that the

payment of compensation shall be made @6% interest by

28.02.2026.

20. ‘The Company will be well within its right to

take appropriate steps in accordance with the law for realization

of the amount from the truck owner, if it is able to prove the

point raised in the present appeal.

21. M.A. No. 193 of 2023 is disposed of with the

aforesaid observation.

22. It is made clear that if the if appellant company

fails to make payment by 28.02.2026, the claimant shall be

entitled to Rs. 20,000/- as cost to be released from the pocket of

the Officer who delays the payment.

23. The statutory amount, if any, has to be returned.

(Rajiv Roy, J)
Ravi/-
AFR/NAFR AFR
CAV DATE
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