Research › Search › Judgment

Himachal Pradesh High Court · body

2006 DIGILAW 2 (HP)

NEW INDIA ASSURANCE COMPANY LTD. v. LEELA DEVI

2006-01-02

SURJIT SINGH

body2006
JUDGEMENT Surjit Singh, J. (Oral).: Heard and gone through the record. An accident involving truck No. HIB-406, which was initially owned by respondent No.3 Rafiq Hussain, had taken place on 20.6.1995, in which one Sanjiv Kumar, son of respondent Leela Devi died. A petition under Section 166 of the Motor Vehicles Act was filed by Smt. Leela Devi, respondent. The previous owner Rafiq Hussain, the owner of the vehicle at the time of occurrence of the accident, namely respondent No.4 Roshani Devi and Raj Kumar respondent No.2, who was driving the truck at the relevant time were impleaded as respondents. Besides, the appellant, i.e. the New India Assurance Company Limited was impleaded as respondent in its capacity as insurer. The insurer took the plea that the truck was not insured at the time of occurrence of the accident and hence, it was not liable to pay (he compensation, which the Tribunal might award. Respondent No.4 Rafiq Hussain took the plea that he had already transferred the vehicle to Roshani Devi and according to him the agreement had taken place in January, 1995 and the vehicle was handed over to the transferee in April, 1995. So he denied his liability to pay the compensation. 2. The Tribunal, after recording the evidence of the parties, held that respondent No.1 Leela Devi was entitled to compensation for the death of Sanjiv Kumar, her son, in the accident and ordered the Insurance Company to pay the entire amount of compensation, holding that the cover note had been issued for the insurance of the truck for a period of one year from 28th February, 1995 onwards. 3. The present appeal has been filed by the Insurance Company Challenging the findings of the Tribunal that it (the appellant) is liable to pay the compensation of money. 4. I have heard the learned counsel for the appellant as also the learned counsel representing respondents No.2 and 4. 5. Learned counsel for the appellant has urged that though a cover note was issued on 28th February, 1995 in favour of Rafiq Hussain but later on that note was cancelled, because the cheque representing the amount of premium, on being presented to the bankers of Rafiq Hussain was returned with the remarks that the account holder did not have sufficient funds in his account. He has further urged that on 20th March, 1995, an intimation was sent to Rafijq Hussain respondent that the cover note stood cancelled, as the cheque had bounced and that despite that intimation no steps were taken by Rafiq Hussain or the transferee, Smt. Roshani Devi, to get the vehicle insured. Learned counsel has placed reliance upon a pronouncement of the Apex Court is support of his contention that when the cheque bounces, agreement of insurance, automatically stand cancelled. The citation is National Insurance Company Ltd. vs. Seema Malhotra and others, [AIR 2001 Supreme Court 1197]. In the said judgment, it has been held that once the cheque given by the owner of the vehicle, in lieu of premium, bounces the insured is not entitled to be indemnified by the Insurance Company for the compensation which he may be required to pay. No precedent to the contrary has been cited on behalf of the respondents. 6. Argument of learned counsel for the respondents Roshani Devi and Raj Kumar that when the vehicle was transferred, the cover note of Insurance was given to Roshani Devi and she did not have any knowledge of its cancellation and therefore, she should not be made liable to pay the compensation. The argument has been stated only to be rejected. The remedy, if any, to respondent Roshani Devi lies against the previous owner Rafiq Hussain, for which she may approach the appropriate court/forum, if so, advised. 7. In view of the above stated factual position, which is borne out from the record and is not disputed by the learned counsel representing the respondents, as also the aforesaid precedent of Honble Supreme Court, the appeal is accepted. The award of the Tribunal to the extent it directs the appellant to pay the amount of compensation, is set-aside and respondent Roshani Devi, who was admittedly the owner of the vehicle at the relevant time and respondent Raj Kumar, who was driving the vehicle, are ordered to satisfy the award of the Tribunal. Their liability shall be joint and several.