INDIA Law and Practice Contributed by: Neeraj Tuli, Rajat Taimni, Amrit Singh and Anuj Bahukhandi, Tuli & Co
to appeal from an order passed under Section 37. However, a party may prefer a special leave petition, under Article 136 of the Constitution of India to the Supreme Court. It is at the discretion of the Supreme Court to entertain such a petition, which it does spar- ingly. In Gayatri Balasamy v ISG Novasoft Technologies Ltd , (2025) 7 SCC 1, a five-Judge Bench of the Supreme Court clarified that Courts exercising jurisdiction under Section 34 do not have a general power to modify arbitral awards. The Court nevertheless rec- ognised limited powers, including severing an invalid and severable portion of an award, correcting clerical, computational or typographical errors apparent on the face of the record, and making limited adjustments to post-award interest. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes The Supreme Court has clarified the application of the burden of proof in insurance cases, reaffirming that it rests on the party making the assertion. In Mahakali Sujatha v Branch Manager , Future Gener- ali India Life Insurance Co Ltd & Ors , (2024) 8 SCC 712, the Supreme Court emphasised that the principle of burden of proof in the law of evidence is that “he who asserts must prove”, meaning that the burden of establishing a fact lies with the party asserting it. This burden never shifts; however, the onus of proof shifts during the process of evaluation of evidence. In the context of insurance disputes, while the burden of proof remains with the insured, the onus of present- ing evidence can shift depending on the phase of the dispute and the type of evidence being evaluated. Recently, the Delhi High Court in Supermint Exports Pvt Ltd v New India Assurance Co Ltd , FAO(OS) (COMM) 286/2022 held that mere assertion of finan- cial distress or commercial pressure does not invali- date discharge vouchers unless such distress was caused by the insurer, and the insured establishes that it was compelled by the insurer to execute them through fraud, coercion, undue influence or duress.
A significant recent development has also been the increased judicial scrutiny of fraudulent motor acci- dent insurance claims. In Oriental Insurance Co Ltd v Tuni Pati & Ors , 2026 SCC OnLine SC 1710, pro- ceedings concerning allegations that an insured vehi- cle had been falsely implicated in a motor accident claim revealed concerns regarding a wider pattern of fraudulent claims, including the repeated use of the same insured vehicle in multiple accident claims. The Supreme Court consequently expanded its consid- eration of the issue on a pan-India basis and directed States to constitute dedicated Special Investigation Teams to investigate suspected fraudulent motor accident insurance claims. The Court has also placed greater responsibility on insurers in identifying and reporting suspected fraud. Insurers have been directed to refer claims indicative of fraud to the relevant Special Investigation Teams and, where a claim is rejected by a Motor Accident Claims Tribunal on grounds of fraud or collusion, to undertake an internal appraisal and refer the matter for investigation. These developments reflect a broader judicial empha- sis on evidence, contractual certainty and closer scrutiny of suspected fraudulent claims. They are also likely to result in insurers adopting more rigorous claims-verification and fraud-detection processes, particularly in relation to motor accident claims, while requiring a clear evidentiary basis for repudiation or allegations of fraud. 4.2 Policy Wordings and Interpretation Developments Courts generally construe ambiguity in insurance pol- icy wordings in favour of the insured. The Supreme Court, in Haris Marine Products v Export Credit Guar- antee Corporation Ltd , (2022) SCC OnLine SC 509, held that an ambiguous term in an insurance contract should first be construed harmoniously by reading the policy in its entirety. If the contractual term remains unclear, then the rule of contra proferentem must be applied. This principle dictates that any ambiguity in the terms of a contract should be interpreted against the drafter of the policy which, in cases of insurance, would be the insurer. However, the rule of contra pro- ferentem does not give Courts the power to rewrite the
155 I NSURANCE L I T IGATI O N 2026
CHAMBERS.COM
Powered by FlippingBook