News Citation : 2026 LN (HC) 161
February 20, 2026 : In a significant ruling on motor accident liability, the High Court of Chhattisgarh has directed Shri Ram General Insurance Company Ltd. to pay compensation awarded to the families of two men killed in a road accident, while granting the insurer the liberty to recover the amount from the vehicle owner later.
The judgment, delivered on February 20, 2026, by Justice Radhakishan Agrawal, arose from two connected appeals filed by the insurance company challenging a common award passed by the First Additional Motor Accident Claims Tribunal, Bastar at Jagdalpur.
Fatal Collision on NH-16
The case relates to a midnight accident on April 30, 2012. According to the claim petitions, Kohrami Jaggu and Kohrami Chaitu were travelling on a bullock cart near Village Dilmili Dega Aamapara on National Highway 16 when a truck bearing registration number CG-18-H-0542 allegedly rammed into them from behind. Both men died on the spot, and the bullocks were also killed.
The truck was owned by Ram Kumar Soni and driven by Neharlal Sahu at the time of the accident. It was insured with Shri Ram General Insurance Company Ltd.
The families of the deceased filed separate claim petitions under Section 166 of the Motor Vehicles Act, 1988, seeking compensation. In April 2016, the Claims Tribunal awarded Rs. 3,59,000 in one case and Rs. 4,29,000 in the other, along with interest at 9 percent per annum from the date of application until realization. The tribunal held the insurer liable to pay the compensation.
Insurer’s Defence: Dishonoured Cheque
Before the High Court, the insurance company argued that although a policy had been issued for the truck for the period from April 29, 2012 to April 28, 2013, the premium had been paid through a cheque that was later dishonoured due to insufficient funds.
The company claimed that once the cheque bounced, the policy stood cancelled and a cancellation notice was sent to the vehicle owner by registered post on May 7, 2012. On that basis, it contended that the vehicle was not covered by a valid insurance policy on the date of the accident and that it should not be held liable.
However, during cross-examination, the insurer’s witness admitted that no acknowledgment receipt of the cancellation notice had been placed on record. He also conceded that neither the original dishonoured cheque nor a copy had been filed before the tribunal, and that no legal proceedings had been initiated against the vehicle owner over the bounced cheque.
These admissions, the court observed, substantially weakened the insurer’s defence.
Supreme Court Precedent Applied
The High Court relied on the Supreme Court’s ruling in United India Insurance Company Limited Vs. Laxmamma and Others, which clarified the legal position on dishonoured premium cheques.
The Supreme Court held that if an insurance policy is issued on receipt of a cheque and the cheque is later dishonoured, the insurer remains liable to third parties unless the policy was cancelled and the cancellation was communicated to the insured before the accident occurred.
Applying this principle, the High Court found no convincing evidence that the insurance policy had been validly cancelled before the accident or that the cancellation had been communicated to the vehicle owner prior to the incident.
The court emphasized that the claimants were third parties and their statutory right to compensation could not be defeated on technical grounds.
“Pay and Recover” Direction
While modifying the tribunal’s award to some extent, the High Court directed the insurance company to first pay the awarded amounts with accrued interest to the claimants within eight weeks. It then granted the insurer the right to recover the same from the owner of the offending vehicle.
Both appeals were thus partly allowed, limited to granting recovery rights to the insurer.
The ruling reinforces the protective framework of motor accident compensation law, ensuring that victims and their families are not left uncompensated due to disputes between insurers and vehicle owners.
Case Reference : MAC No. 1144 of 2016, Shri Ram General Insurance Company Ltd. through its Branch Manager, Raipur vs Smt. Sukdi and Others; and MAC No. 1142 of 2016, Shri Ram General Insurance Company Ltd. through its Branch Manager, Raipur vs Smt. Sukdi and Others; Counsel for Appellant: Mr. Deepak Gupta and Mr. Raghvendra Verma, Advocates; Counsel for Respondents (MAC 1144/2016, R-1 to 4 and MAC 1142/2016, R-1 to 3): Mr. Vikash A. Shrivastava, Advocate; No appearance for remaining respondents.
