Insurance company

Insurance Company Challenges Court-Awarded Compensation, Ends Up Paying Four Times More

An insurance company that challenged compensation of Rs 11.39 lakh awarded by a Motor Vehicle Claims Tribunal in a road accident case has been ordered by the High Court of Karnataka (HC) to pay around Rs 45 lakh to the victim.

The National Insurance Company approached the HC with an appeal against the 2015 judgment of the Motor Vehicle Tribunal which condemned it to pay compensation of Rs 11,39,340 to one Alwin Lobo, an engineering student.

Lobo was traveling with his brother on a motorcycle which was involved in an accident with an auto rickshaw. He was seriously injured and spent several months in hospital. He also suffered a “permanent injury” to the head.

The compensation awarded was challenged by the company who claimed that the driver Lokesh Gowda was a neighbor of Lobo and to help them get compensation the accident was fabricated.

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He claimed that only the two-wheeler was involved in the accident and not the auto rickshaw. Being the insurer of the auto-rickshaw, he was ordered to pay compensation.

Judge HP Sandesh, who heard the motion, in his recent judgment said: “In order to conclude that this was a case of fraud and involvement of the vehicle, no sufficient evidence is presented to Court. Where this is the case, I see no reason to overturn the findings of the Tribunal…”

Although the victim did not appeal an increase in compensation, the CH invoked a rule of the Code of Civil Procedure.

“In an appeal filed by the insurance company, the Court may invoke Order 41, Rule 33 of the CPC, if an injustice is caused to the victim or the deceased when awarding compensation,” a- he declared.

The HC found reasons to increase compensation, the most significant being the victim’s head injury.

“While the Claimant has suffered a number of injuries and the doctor is also being examined before the Tribunal, this is not accepted by the Tribunal. The Claimant suffers from 65% permanent physical incapacity. But, without giving of reason, the Court has reduced the disability to 25%. In a case of injury to the head, the disability cannot be converted into an injury to the limbs and the court must take into account the actual disability”, has noted the CH.

Waiver of compensation on various counts, the HC ordered: “The claimant is entitled to compensation of Rs 44,92,140 against Rs.11,39,340 awarded by the Tribunal.”

However, the interest to be paid for the amount for 2009 has been reduced from 8% to 6% taking into account the interest rate in force in the nationalized banks.