Owner or claimant must prove existence of policy, not insurer: Karnataka high court

Time of India

21-07-2025

Bengaluru: Karnataka high court has clarified that when an insurance policy is disputed, the burden of proof lies with the claimant or vehicle owner and not the insurance company.
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The Dharwad bench of HC recently ruled that insurers can't be asked to lead negative evidence proving a policy was never issued.
Justice Hanchate Sanjeevkumar made the observation while allowing an appeal filed by Bharati Axa General Insurance Company Ltd in a motor accident compensation case from Ballari.
The case stems from an accident on Sept 2, 2011, when an autorickshaw owned by Narayanaswamy overturned, leading to the death of passenger Kanti alias Kanteppa, an electrician.
Kanteppa's wife Mallamma and children sought compensation.
On July 7, 2012, the motor accident claims tribunal in Ballari awarded the family Rs 5.3 lakh with 6% annual interest, holding the insurer liable based on a cover note. Both parties appealed — the claimants for higher compensation, and Bharati Axa challenging its liability.
Justice Sanjeevkumar noted that the insurer produced only cancelled cover notes, which are proposals for insurance, not proof of policy.
Since neither the claimants nor the owner proved the existence of an actual insurance policy or presented evidence of premium payment, the court ruled the insurer couldn't be held liable.
"The insurance company isn't supposed to lead negative evidence. It's not a burden on the insurer to prove that it didn't issue a policy," the court said, pointing out that such a requirement would be illogical.
Under Rule 142(2) of the Central Motor Vehicles Rules, cover notes are valid for 60 days as provisional contracts, but require premium payment to be converted into a full policy — a step not proven in this case.
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While allowing the insurer's appeal, the court also revised the compensation amount to Rs 15.5 lakh considering the deceased's occupation as an electrician earning Rs 6,000 per month, in line with the Karnataka State Legal Services Authority's notional income chart. The revised sum will be paid by the vehicle owner, Narayanaswamy, along with 6% annual interest.