Case at a Glance
A 49-year-old government school teacher riding pillion on a motorcycle died after being hit by a car in March 2015. The Motor Accident Claims Tribunal, Patan awarded his family Rs 37,00,420 with 9% interest, rejecting the insurer’s defence that the car’s policy was fake, but allowed the insurer to pay and recover from the owner. On the insurer’s appeal, the Gujarat High Court held that a mere denial by an insurance company that it issued a policy is not proof of forgery; the insurer must prove it with cogent evidence such as issuance records, premium accounts and a competent witness. The appeal was dismissed and deprecated as casually filed.
On 9 March 2015, a 49-year-old government school teacher, who also earned from agriculture and animal husbandry, was riding pillion on a motorcycle when it was hit by a car. He died on 14 March 2015. His family filed MACP No. 156 of 2015 before the Motor Accident Claims Tribunal, Patan, claiming Rs 65 lakh. SBI General Insurance, shown as the insurer of the car, contended that the policy produced for the car (Exh. 66) was fake and not issued by it, that the policy number actually corresponded to a long-term home policy in another person’s name, and that no premium had been received.
The insurer examined an officer and produced a police complaint. By award dated 31 August 2019, the Tribunal granted Rs 37,00,420 with 9% interest from the date of the claim petition, holding the driver, owner and insurer jointly and severally liable, but permitting the insurer to recover the amount from the owner. The insurer appealed. The High Court had stayed the award on 4 December 2019 without requiring deposit.
The Key Question Before the Court
When an insurance company claims that the motor policy produced by the vehicle owner is forged, is its denial of issuance sufficient, or must it prove the forgery with cogent evidence before it can escape liability to accident victims?
Where the Insurer’s Evidence Fell Short
Justice J.C. Doshi examined how the insurer conducted its defence. It had cross-examined the claimant without filing a written statement, and filed its written statement only on 19 June 2019, after leading its evidence. Its only witness had joined the company just nine months earlier, had no personal knowledge, and could not say who had digitally signed the policy. The document it relied on lacked a receipt number and carried a manual signature, though the company said it signed policies digitally. Its police complaint was made in 2017, about two years after the accident; it took no action against the owner or its own staff and did not inform the RTO. The Court concluded that “the Insurance Company hopelessly failed to prove that the policy at Exh.66 was fabricated and fake”.
Following the Gujarat High Court’s earlier ruling in Oriental Insurance Co. Ltd. v. Jayeshbhai Bhagubhai Patel, the Court held that “a mere denial by the insurance company that it has not issued the policy” does not establish forgery. The insurer should have produced its issuance records, premium accounts, policy-number registers and a competent witness. The Court referred to the Supreme Court’s observation in National Insurance Co. Ltd. v. K. Saravanan (2026 INSC 339) that insurers must inform the police once satisfied that a policy is forged, and reiterated that a “hyper technical approach should not be adopted by the Courts while deciding claims in Motor Accident Claim Petition.” The Tribunal’s pay-and-recover direction already protected the insurer’s interest. The Court added: “The present appeal filed by the insurance company in a casual manner is deprecated and is accordingly, deplored.”
What the Court Actually Held
- A mere denial by an insurer that it issued a policy is not proof that the policy is forged or fake.
- The burden is on the insurer to prove forgery with cogent, admissible evidence — issuance records, premium accounts, policy-number records and a competent witness.
- The Tribunal’s pay-and-recover direction protected the insurer and was legal and justified; the award of Rs 37,00,420 with 9% interest stood.
- The insurer’s first appeal was dismissed as without merit and deprecated as casually filed; interim relief was vacated.
Why This Judgment Matters
- ‘Fake policy’ defences can delay compensation to accident victims for years; this ruling insists on real proof.
- It clarifies what evidence an insurer must lead to prove forgery.
- It reinforces pay-and-recover as the fair way to protect both victims and insurers.
What Should Advocates Take Away From the Judgment?
For Claimants
- If the insurer says the policy is fake, insist that it prove the claim with records and a witness who has personal knowledge.
- Produce the policy copy and RTO records showing insurance details at the earliest.
- Ask the Tribunal for a pay-and-recover direction so compensation is not held up by disputes between insurer and owner.
For Counsel
- Cite Oriental Insurance Co. Ltd. v. Jayeshbhai Bhagubhai Patel and this judgment against bare denials of policy issuance.
- Cross-examine the insurer’s witness on personal knowledge, digital signing, receipt numbers and premium records.
- Point to delay in police complaints and absence of action against the owner or staff, relying on National Insurance Co. Ltd. v. K. Saravanan (2026 INSC 339).
Key Takeaways
- An insurer’s denial of issuing a policy is not automatic proof of forgery.
- Forgery must be proved by cogent evidence and a competent witness.
- Courts should avoid a hyper-technical approach in motor accident claims.
- Pay-and-recover protects the insurer while ensuring the victim’s family is paid.
Frequently Asked Questions
What if the insurance company says the vehicle’s policy is fake?
According to the Gujarat High Court, a mere denial is not enough. The insurer must prove forgery with records such as issuance data and premium accounts and a competent witness.
What is ‘pay and recover’?
It is a direction under which the insurer pays the compensation to the claimants first and then recovers it from the vehicle owner. The Tribunal applied it here, and the High Court upheld it.
What compensation was upheld in this case?
Rs 37,00,420 with 9% interest from the date of the claim petition, as awarded by the MACT, Patan.
Conclusion
Accident victims should not be made to wait while insurers dispute the authenticity of their own policies without real evidence. The Gujarat High Court’s ruling demands that insurers do the work — produce records, examine competent witnesses, act promptly — before invoking forgery as a shield.
Practical takeaway: In MACT cases where the insurer pleads a fake policy, put it to strict proof and seek pay-and-recover; a bare denial will not defeat the claim.
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