{"id":9174,"date":"2026-07-23T10:19:24","date_gmt":"2026-07-23T10:19:24","guid":{"rendered":"https:\/\/lawsandlegals.com\/english\/?p=9174"},"modified":"2026-07-23T10:19:28","modified_gmt":"2026-07-23T10:19:28","slug":"sc-insurer-cannot-deny-motor-accident-claim-solely-because-accident-occurred-in-nepal-if-policy-has-no-clear-exclusion","status":"publish","type":"post","link":"https:\/\/lawsandlegals.com\/english\/sc-insurer-cannot-deny-motor-accident-claim-solely-because-accident-occurred-in-nepal-if-policy-has-no-clear-exclusion\/","title":{"rendered":"SC: Insurer Cannot Deny Motor Accident Claim Solely Because Accident Occurred in Nepal if Policy Has No Clear Exclusion"},"content":{"rendered":"\n

New Delhi<\/strong>: The Supreme Court has ruled that an insurance company cannot deny compensation simply because a road accident took place outside India, if the vehicle had a valid permit to travel to another country, such as Nepal, and the insurance policy does not clearly exclude such accidents.<\/p>\n\n\n\n

The Court said that if an insurance company does not want to cover a particular risk, it must clearly mention the exclusion in the insurance policy. It cannot later rely on vague or unclear policy terms to reject a claim. If there is any ambiguity in the policy, it must be interpreted in favour of the insured person, not the insurance company.<\/p>\n\n\n\n

The judgment was delivered by a Bench of Justice Sanjay Karol and Justice N. Kotiswar Singh. The Supreme Court upheld the Chhattisgarh High Court’s decision and dismissed the appeal filed by Oriental Insurance Company. It held that the insurer is liable to pay compensation to the families of those who died in the accident.<\/p>\n\n\n\n

The case arose from a 2010 bus accident in Nepal. The bus was travelling from Durg, Chhattisgarh, to Nepal on a religious trip. It had a special permit issued by the Regional Transport Authority, allowing it to travel to Nepal. After crossing the border with all necessary documents, the bus met with an accident in Nepal, killing the driver and two passengers.<\/p>\n\n\n\n

The Motor Accident Claims Tribunal awarded about \u20b932.67 lakh as compensation but held the bus owner liable, saying the insurance policy did not cover accidents outside India. The bus owner challenged this before the Chhattisgarh High Court, which held that the insurance company was liable. Oriental Insurance then appealed to the Supreme Court.<\/p>\n\n\n\n

The insurance company argued that the policy mentioned only “India” under the geographical area and therefore did not cover accidents in Nepal. It also claimed that the owner had not paid the additional premium required for foreign coverage and that the driver did not have a separate licence to drive in Nepal.<\/p>\n\n\n\n

The Supreme Court rejected all these arguments. It said that an insurance policy must be read as a whole and not by picking one clause in isolation. While one part of the policy mentioned India, another part covered vehicles operating under a valid permit. Since the bus had a valid permit to travel to Nepal, the insurer could not avoid liability simply because the accident happened outside India.<\/p>\n\n\n\n

The Court further observed that if the insurer wanted to exclude accidents in Nepal or other foreign countries, it should have clearly stated this in the policy. Since it failed to do so, it could not later rely on unclear wording to deny compensation.<\/p>\n\n\n\n

On the issue of additional premium, the Court held that Section 147(5) of the Motor Vehicles Act makes the insurer liable for risks covered under the policy. Therefore, the insurer could not escape liability merely because no extra premium had been paid.<\/p>\n\n\n\n

The Court also rejected the argument regarding the driver’s licence. It noted that the driver held a valid Indian driving licence, the Nepalese authorities had verified his documents before allowing the bus to enter Nepal, and the insurance company failed to prove that the Indian licence was invalid in Nepal. The Court also referred to the 1950 India\u2013Nepal Treaty of Peace and Friendship, which provides special travel arrangements between the two countries.<\/p>\n\n\n\n

The Supreme Court also made important observations for the future. It advised the Insurance Regulatory and Development Authority of India (IRDAI) to issue clear and uniform guidelines on cross-border motor insurance coverage, so that policyholders know exactly what is covered and similar disputes can be avoided.<\/p>\n\n\n\n

The Court also reminded Motor Accident Claims Tribunals to give clear reasons for their decisions instead of only recording evidence and arguments, saying well-reasoned orders would reduce unnecessary appeals and help accident victims receive justice faster.<\/p>\n\n\n\n

Finally, the Supreme Court dismissed the insurance company’s appeal, confirmed that Oriental Insurance must pay the compensation, and directed it to deposit the amount with interest within four weeks if it had not already done so. It also ordered that a copy of the judgment be sent to IRDAI for consideration of policy reforms.<\/p>\n","protected":false},"excerpt":{"rendered":"

New Delhi: The Supreme Court has ruled that an insurance company cannot deny compensation simply because a road accident took place outside India, if the vehicle had a valid permit to travel to another country, such as Nepal, and the insurance policy does not clearly exclude such accidents. The Court said that if an insurance … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":9111,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wppp_is_locked":false,"_wppp_selected_plans":[],"footnotes":""},"categories":[1,29],"tags":[1624,1050,1621,1622,1618,1623,1619,1474,508,48,1046,1626,1036,1617,1625,1226,32,255,1620],"class_list":["post-9174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-supreme-court","category-top-stories","tag-chhattisgarh-high-court","tag-compensation-law","tag-cross-border-insurance","tag-india-nepal","tag-insurance-claim","tag-insurance-law","tag-irdai","tag-justice-n-kotiswar-singh-2","tag-justice-sanjay-karol","tag-legal-news","tag-motor-accident-compensation","tag-motor-insurance","tag-motor-vehicles-act","tag-nepal-bus-accident","tag-oriental-insurance","tag-road-accident","tag-supreme-court","tag-supreme-court-judgment","tag-vehicle-insurance"],"_links":{"self":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/comments?post=9174"}],"version-history":[{"count":1,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9174\/revisions"}],"predecessor-version":[{"id":9175,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9174\/revisions\/9175"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/media\/9111"}],"wp:attachment":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/media?parent=9174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/categories?post=9174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/tags?post=9174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}