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Uttarakhand High Court · body

2007 DIGILAW 51 (UTT)

UNITED INDIA INSURANCE CO. LTD. v. JOGENDRA SINGH

2007-02-20

B.S.VERMA

body2007
JUDGMENT Hon. B.S. Verma, J. 1. All the four appeals under section 173 of the Motor Vehicles Act, 1988 (for short the Act), preferred by the United India Insurance Company insurer of the Truck in question, have arisen out of the same motor vehicle accident and common questions are involved for determination in all the four appeals, therefore, all these appeals are being decided by this common judgment. 2. At the outset, it may be mentioned that A.O. No. 258 of 2002 has arisen from the judgment and award dated 3-7-2002 passed by the Motor Accident Claims Tribunal/Additional District Judge, Udham Singh Nagar(for short the Tribunal Udham Singh Nagar) whereby a compensation of Rs. 61,000/- along with interest @ 7% per annum was awarded in favour of the claimant Jogendra Singh for the death of his son Ranjeet Singh, who was driver of the U.P.S.R.T.C. bus. The compensation was payable by the appellant Insurance Company. A.O. No. 260 of 2002 has arisen from the judgment and awarded dated 3-7-2002 passed by the aforesaid Tribunal whereby a compensation of Rs. 52,000/- was awarded in favour of the claimant, who is the daughter of deceased Narayan Singh, along with interest @ 7% per annum payable Rs. 26.000/- each along with interest by the appellant Insurance Company and the U.P.S.R.T.C. as mentioned in the impugned order. 3. A.O. No.389 of 2003 has arisen from the judgment and award dated 25-8-2003 passed by the Motor Accident Claims Tribunal/District Judge Haridwar (for short the Haridwar Tribunal) in Claim Petition No. 81 of 99, whereby total compensation of Rs. 2,49,500/- along with interest @ 99% per annum payable Rs. 1,24,750/- each by the U.P.S.R.T.C. and the appellant was awarded in favour of the claimants, who are legal heirs of the deceased Shambhu Lal. Rider of interest @ 99 % per annum was put if the compensation is not paid within a period of one month as directed by the Tribunal. A.O. No. 390 of 2003 passed by the Haridwar Tribunal in Claim Petition No. 78 of 1999, whereby claim petition was decreed for compensation of Rs. 99,500/- and the U.P.S.R.T.C. and the appellant Insurance Company was directed to pay Rs. 49,750/- each to the claimant Rama Devi, widow of deceased Chunni Lal. A.O. No. 390 of 2003 passed by the Haridwar Tribunal in Claim Petition No. 78 of 1999, whereby claim petition was decreed for compensation of Rs. 99,500/- and the U.P.S.R.T.C. and the appellant Insurance Company was directed to pay Rs. 49,750/- each to the claimant Rama Devi, widow of deceased Chunni Lal. Rider of interest @ 9% per annum was put if the compensation is not paid within a period of one month as directed by the Tribunal. Deceased Ranjeet Singh was driver in the roadways bus, aged 30 years and was earning Rs. 6,000/- per month as his salary. The claim petition was preferred for compensation of Rs. 20 lacs for his death. Deceased Narayan Singh was aged 55 years and earning Rs. 5000/- p.m. from agriculture was a passenger in the roadways bus and compensation of Rs. Five lacs was Claimed for his death. Deceased Shambhu Lal was said to be aged 28 years and earning Rs. 2,500/- per month as his wages, and compensation of Rs. 13,70,000 was claimed for his death. Deceased Chunni Lal was stated to be aged 60 years and earning Rs. 35,000/- per annum as contractor and the claimant had claimed total compensation of Rs.10,20,000/- for his death. 4. Relevant facts giving rise to the present appeals are that on 5.6.1999 at about 1.45 p.m. near Luxmi factory in village Khushalpur Marka within police station Najibabad (Bijnor) there was a head on collision between Truck No. USR-6988 and UPSRTC bus no. U.P. 02B-6810, which were being driven rashly and negligently by the driver of the truck and the bus, with the result several persons including the aforesaid four deceased persons sustained fatal injuries. Report of this motor vehicle accident was lodged with police station Najibabad in Case Crime No. 416/99 under Section 277/337/339/304-A I.P.C. against the driver of the roadways bus. The claim petitions were filed for compensation by the legal heirs and dependants of the deceased persons as detailed above. 5. In claim petition No. 196 of 1999 giving rise to A.O. No. 258 of 2002, Opposite Party No.1 Avtendra Kumar (owner of offending truck) filed his written statement and asserted that the motor accident can took place due to sole negligence on the part of driver of the Roadways bus involved in the accident. 5. In claim petition No. 196 of 1999 giving rise to A.O. No. 258 of 2002, Opposite Party No.1 Avtendra Kumar (owner of offending truck) filed his written statement and asserted that the motor accident can took place due to sole negligence on the part of driver of the Roadways bus involved in the accident. It was also asserted that the his truck No. USR-6988 was duly insured with O.P.No. 2-Insurance Company and he had deposited insurance amount of Rs. 3,107/- in cash with the insurer for which cover note was issued by the Insurer Company. It was also asserted that no information was received by him regarding cancellation of insurance, therefore, the Insurance Company is liable for compensation. 6. Opposite Party No.2 United India Insurance Company filed its written statement and asserted that no information of the accident was given to the insurer of the truck and the cover note produced by the owner of the truck was cancelled for non-payment of amount of insurance, therefore, the truck in question was not insured on the date of accident. 7. The U.P.S.R.T.C. filed its separate written statement and contested the claim petition and stated that the deceased was employed on contract and the accident occurred due to rashness and negligence of truck driver alone and the driver of the Roadways did not contribute to the negligence, therefore, the answering opposite party is not liable to pay compensation. It was added that the corporation had paid a sum of Rs. 2,000/- to the dependents of the deceased. 8. Similar pleas were taken in Claim Petition No. 200 of 1999, Ketki Devi Vs. Avtendra Kumar and two others, by all the three opposite parties, therefore, there is no need to reiterate the same here again. 9. In claim petition No. 81 of 1999 Smt. Kaushalya Devi and others Vs. U.P.S.R.T.C. and two others, the U.P.S.R.T.C. contested the claim petition and admitted the factum of accident, but asserted that the petition was filed without authority and against law. It was stated that the roadways bus was being driven at moderate speed in accordance with traffic rules. It was stated that at the place of accident, the driver of the offending truck dashed the bus from opposite direction out of his negligence, therefore, the owner of the truck and its insurer alone are liable for compensation. It was stated that the roadways bus was being driven at moderate speed in accordance with traffic rules. It was stated that at the place of accident, the driver of the offending truck dashed the bus from opposite direction out of his negligence, therefore, the owner of the truck and its insurer alone are liable for compensation. The corporation denied the fact relating to age, income and dependency of deceased truck driver Shambhu Prasad were denied. It was stated that the compensation claimed is excessive. 10. The owner of the truck contested the claim petition and asserted that the truck was duly insured with the United India Insurance Company- appellant for which premium of Rs. 3105/- was paid in cash and cover note of the company was obtained and the truck was insured upto 19-1-2000 as per entry made in the cover note. Therefore, for the negligence of the truck driver, the insurance company is liable to pay compensation. It was however stated that the truck was being driven slowly and the roadways bus collided with the truck due to negligence of bus driver with the result both the drivers of bus and truck including Shambhu Prasad died at the spot and many others suffered injuries. 11. Insurance Company - appellant in its written statement asserted that the claim petition was filed in collusion with truck owner and claimants. It was stated that the driver of the truck was not having a valid driving license and the truck was not duly insured on the date of accident. The insurance Company took the plea that the payment of premium was made by cheque which was dishonoured, therefore, the cover note was cancelled. The insurance company was not liable for compensation. 12. In claim Petition No. 78 of 1999 Smt. Rama Devi Vs. U.P.S.R.T.C. giving rise to A.O. No. 390 of 2003, similar stand was taken by all the three opposite parties as taken in Claim Petition No. 81 of 1999 above. 13. On the pleadings of the parties, the learned Tribunals framed necessary issues in the claim petitions. The Tribunal recorded the evidence led by the parties, heard them after perusing the evidence, it was held that the motor accident took place due to contributory negligence of the drivers of the vehicles. 13. On the pleadings of the parties, the learned Tribunals framed necessary issues in the claim petitions. The Tribunal recorded the evidence led by the parties, heard them after perusing the evidence, it was held that the motor accident took place due to contributory negligence of the drivers of the vehicles. On the point of insurance of the Truck, the contention of the insurance company is that at the time of issuance of cover note in favour of the owner of the Truck Avtendra Kumar, the payment of premium was made through cheque, which was dishonoured by the Bank, when the insurance company had not received any amount of premium, it will be deemed that the vehicle was not insured on the date of accident. On the other hand, the stand of the owner of the truck is that the amount of Rs. 3107/- was paid in cash and thereafter the cover not was issued. In the instant case, the learned Haridwar Tribunal and Udham Singh Nagar Tribunal both have dealt with the point in detail and both the Tribunal came to the conclusion that the stand taken by the appellant insurance company that the payment of premium was made through cheque, which was dishonoured by the Bank is not acceptable and the insurer failed to substantiate its contention., therefore, it was held that the truck in question was duly insured on the date of accident. On the point of validity of driving license, it was held that the driver of the truck was having a valid driving license. Ultimately after considering the material on record, the learned Tribunals have passed the impugned orders as mentioned earlier. 14. The insurance Company has assailed the impugned judgment and award passed by the Tribunal mainly on the ground that the finding of the tribunal on the point of contributory negligence to the extent of 50% is erroneous and against the evidence. It has been further contended that the payment of premium was made by the owner through cheque No. 004380 of the P.N.B. which was dishonoured by the bank on 21-2-1999 and the owner of the vehicle was informed by registered letter dated 5-2-99. It was also contended that the driver of the truck was not having a valid and effective driving license on the date of accident. 15. It was also contended that the driver of the truck was not having a valid and effective driving license on the date of accident. 15. At the outset, it may be mentioned that the U.P.S.R.T.C. has not filed any cross objection or appeal against the award of the learned Tribunal. Moreover, it is settled law that the insurance company cannot challenge the finding of the Tribunal on the point of negligence and quantum of compensation, unless there is finding of the Tribunal that the claim has been filed in collusion between the claimant and the owner of the vehicle and for that permission under Section 170 of the act is obtained from the Tribunal. 16. In these appeals, the controversy to be determined first is whether the appellant has established that the payment of premium, i.e. Rs. 3,107/- was made through the cheque, which was dishonoured by the bank. If so, its effect. 17. Before the Haridwar Tribunal in Claim Petition No. 78 of 1999, Smt. Rama Devi Vs. Prabandhak, U.P.S.R.T.C. and others, the original cover note issued by the insurance company has been filed as paper No. 19-C. From a bare perusal of this cover note , it is evident that it was issued on 20-1-1999 and it was effective from 5 p.m. 20-1-1999 upto the midnight of 19-1-2000. The cover note bears the signature of R. Vashist (Rakesh Vashist ) the authorized insurer. The amount of premium mentioned in it is Rs. 3,107/- . Admittedly, the appellant insurance company has disputed the payment of this amount and has taken a positive stand that the insured Avtendra Kumar had issued a cheque, whereas the owner’s case is that he had paid the amount of premium in cash. It is very interesting to note that the appellant insurance company had filed a cheque dated 20-1-1999 issued in favour of the appellant for Rs. 3,107/- It is not disputed that this cheque issued by one Raj Kumar had been dishonoured by the concerned Bank Punjab & Sind Bank. I am not inclined to accept the contention of the appellant that no payment was made regarding payment of premium of the amount noted in the Cover Note paper No. 19-C for the following reasons:- 18. Firstly, there is no mention of cheque in the cover note. I am not inclined to accept the contention of the appellant that no payment was made regarding payment of premium of the amount noted in the Cover Note paper No. 19-C for the following reasons:- 18. Firstly, there is no mention of cheque in the cover note. The appellant-Insurance Company does not appear to be certain and sure regarding the disputed cheque number as will be dealt with hereinafter at appropriate place. 19. Secondly, had the insured Avtendra Kumar submitted the said cheque (paper no. 54-Kha) issued by one Raj Kumar bearing number 043830, there was no reason why an endorsement was not made by the own Development Officer of the Insurance Company on the Cover Note itself that such a cheque was received especially in view of the fact that Raj Kumar was not at all a party to the contract between the appellant and the insured. The appellant-company or its Officer cannot escape their bounden obligation that the cheque is always subject to collection of amount from the Bank and in case the cheque is dishonoured, the insurance company was bound to suffer for such lapse on the part of its agent. 20. Thirdly, in the written statement (paper no. 16-Kha) filed by the appellant Insurance Company there is no such plea that the disputed cheque was offered by the insured to Indra Kumar Arora D.W.1, a witness for the appellant, and he took the insured along with Rajkumar to the Development Officer Sri Rakesh Vashist. The relevant averment on the disputed issue has been made by the appellant in paragraph no.6, which reads as under:- “That with regard to contents of para no. 17(2) of the claim petition, it is stated that Truck No. U.S.R./6988is not insured with respondent no.3. As the Cover Note No. L.R.-7970000/10331 dated 20/01/99 issued in lieu of Cheque No. 043630 dtd. 20/01/99 for an amount of Rs. 3,107/- stands cancelled in consequence of dishonour of cheque in question. Hence answering O.P. ins not at all liable to indemnify actionable negligence on part of owner of truck in question which is not insured vide Cover note No. given in the petition.” 21. I have gone through the entire written statement. None of the witnesses Sri Indra Kumar Arora, D.W.1, R.K. Arora, D.W.2 and Rakesh Vashist, D.W.3 has substantiated the pleas as raised in the written statement. I have gone through the entire written statement. None of the witnesses Sri Indra Kumar Arora, D.W.1, R.K. Arora, D.W.2 and Rakesh Vashist, D.W.3 has substantiated the pleas as raised in the written statement. Had there been any truth in the statements of the witnesses, the stand as taken in the written statement must have found corroboration from the evidence of witnesses of appellant. 22. Fourthly, the best witness to substantiate the contention of the Insurance Company was Sri Rakesh Vashist, who had issued the Cover Note, has been examined as D.W.3, who has deposed that on 20-1-99 Avtendra came to him in the day and again in the evening Avtendra and Kishan Lal both came to him along with his agent I.K. Arora. He further stated that after inspection of vehicle, he issued the Cover Note after obtaining cheque for Rs. 3107/-. He proved the cheque paper no. 54-Kha and stated that it is the same cheque which was given to him by Avtendra and the same was given for insurance of the vehicle. At a latter stage, he stated that the said cheque was dishonoured by the bank for want of sufficient funds. He has also stated that the amount of premium was not given in cash to him. Sri Rakesh Vashist Development Officer D.W.3 has appeared before the Tribunal on 19-03-2003. He has admitted that he did not know Avtendra Kumar and Kishan Lal from before. This clearly shows that he had no acquaintance with the insured Avtendra Kumar from before. In such circumstances acceptance of a cheque issued by an unknown person towards payment of premium to the credit of another unknown person by a responsible officer of the Insurance Company does not stand to reason. It is most improbable that in the circumstances as stated above, that Sri Rakesh Vashist would have accepted the premium through cheque issued by a stranger in favour of the insurance company and that too without getting it encashed, a receipt was issued by the Branch Manager. It is also pertinent to mention no endorsement was made on the Cover Note that the amount was tendered through cheque issued by Raj Kumar. It is also pertinent to mention no endorsement was made on the Cover Note that the amount was tendered through cheque issued by Raj Kumar. The whole story as stated to by the witnesses of the appellant-Insurance Company falls to the ground because no such averment was made in the written statement wherein the cheque number 043630 has specifically been mentioned to have been tendered by the owner of the truck. The evidence of Rakesh Vashist, D.W.3 is therefore not acceptable. 23. Fifthly, in the written statement the number of disputed Cheque is mentioned as 043630, while the evidence had been led by the appellant on the strength of Cheque No.043830 dated 20-01-1999. No explanation has come forth regarding this material discrepancy from the side of the Insurance Company. The Insurance Company has examined Indra Kumar Arora, Insurance Agent as D.W.1 and Sri R.K.Arora, Branch Manager of the appellant (D.W.2) but none of these two witnesses has disclosed the disputed Cheque Number in their oral testimony before the Tribunal. In such circumstances, the entire defence of the appellant regarding tender of Cheque No. 043630 by the owner of the truck falls to the ground. 24. Sixthly, in the written statement filed in claim petition No.81 of 99, the cheque no. has been mentioned as 043630 dated 20-01-1999, but in other two claim petitions, the appellant had not disclosed the disputed cheque number. Moreover, the appellant in paragraph no. 4 of the memo of appeal relating to A.O. No. 389 of 2003 and A.O. No. 390 of 2003 have disclosed the number of disputed Cheque as 004380, while the Cheque filed on record bears No. 043830 and in the written statement the cheque Number is 043630. The appellant itself is not sure of the correct cheque number before the Tribunal as well as before the appellate court. All these circumstances clearly indicate that the appellant must have received the amount of premium in cash. 25. Seventhly, the contention of the appellant Insurance Company is that the Insurance Company had cancelled the cover note No. 797000 for non payment of premium and information was sent to the owner on 5-2-1999 vide paper no. 53-C of the record of Claim Petition No. 78 of 1999. 25. Seventhly, the contention of the appellant Insurance Company is that the Insurance Company had cancelled the cover note No. 797000 for non payment of premium and information was sent to the owner on 5-2-1999 vide paper no. 53-C of the record of Claim Petition No. 78 of 1999. In this paper it is clearly mentioned that “in view of the non-payment, please note the cover stands cancelled from inception and consequently our receipt No. 0174921/21-01-99 issued to you for the payment as also our Acceptance Advice stand cancelled.” It is also significant to note that this paper no. 53-C is dated 5-2-99 while the written statement paper no. 16-Kha was filed by the appellant before the Tribunal on 22-10-1999, but in the written statement there is no reference regarding this material document paper no.53-C. Had the appellant intimated the insured regarding non-payment of premium vide pare no. 53-C, there was no reason why this fact could not find mention in the written statement. 26. Eighthly, the witness Indra Kumar Arora, Insurance Agent of the appellant in the very opening line of his statement as D.W.1 has given out the date as 30-1-1999 when the owner Avtendra, Raj Kumar and Kishan Lal came to his office, whereas the Cover Note was issued on 20-1-1999. It is very surprising that the witness D.W.1 Indra Kumar Arora, whose name does not find place in Cover Note dated 20-1-1999, has stated the date of issuance of Cover Note as 30-1-1999, which is against the own case of the appellant-insurance company. This witness D.W.1 had given his entire examination-in-chief in 14 lines and therein the entire defence story of the appellant is confined, but no such details were stated in the own written statement of the appellant, therefore, his statement as also the evidence of D.W.2 R.K.Arora the Branch Manager, does not help the appellant. 27. Ninethly, even if for the sake of argument, it may be taken that the appellant received a cheque which was dishonoured by the Insurance Policy was cancelled, even then the Insurance Company cannot escape its liability towards third party risk in view of the Apex Court judgment in the case of National Insurance Co. Ltd. Vs. 27. Ninethly, even if for the sake of argument, it may be taken that the appellant received a cheque which was dishonoured by the Insurance Policy was cancelled, even then the Insurance Company cannot escape its liability towards third party risk in view of the Apex Court judgment in the case of National Insurance Co. Ltd. Vs. Seema Malhotra and others [(2001) 3 S.C.C. page 151] wherein it was held that if the insured fails to pay the promised premium or his cheque is returned dishonoured by the bank, the insurer is under no obligation to perform his part of the contract, except in relation to his statutory liabilities in respect of third parties. It may be reiterated that in the case at hand, premium had not been paid by the owner of the truck by means of disputed cheque. The Full Bench judgment of the Kerala High Court in the case of Oriental Insurance Company Limited Vs. A.B.Sivankuty and others [I(2006) ACC 38(FB)] wherein the provisions of Section 147(5) and 149(1) of the Motor Vehicles Act, 1988 and Section 64-VB of the Insurance Act were discussed held that “Motor Vehicles Act, 1988-Sections 147(5) and 149(1) – Insurance Act, 1938-Section 64-VB- Motor Insurance- Policy cancellation of- Third party risk-Liability of Insurance Company- Whether Insurance Company is liable to third party for damages once this policy is issued and even if it is cancelled for non-payment of premium and accident has taken place after cancellation- Held, yes.” It may be stated that the story of presentation of disputed cheque issued by Raj Kumar, which was dishonoured by the Bank is either a cooked up story or that cheque might have been issued by some other owner of the vehicle on the relevant date 20-1-1999, but not by the owner of the Truck, Avtendra Kumar. Accordingly, it is held that the appellant has utterly failed to establish that the payment of premium was made by the truck owner through the disputed cheque which was dishonoured. The question is answered against the appellant-Insurance Company. 28. Apart from above, the learned Tribunals of Haridwar and Udham Singh Nagar both in their impugned judgment have elaborately discussed the entire evidence led by the appellant. The question is answered against the appellant-Insurance Company. 28. Apart from above, the learned Tribunals of Haridwar and Udham Singh Nagar both in their impugned judgment have elaborately discussed the entire evidence led by the appellant. The evidence of D.W.4 R.K.Mittal, the investigator of the Company is also of no help to the insurance company, who was deputed to investigate the matter in September 2000, while the written statement had already been filed by the appellant in October, 1999. I have perused the impugned judgment and orders and I am unable to take a different view on the point of non-payment of premium. 29. So far as the contention of the appellant that the truck driver was not having a valid driving licence, the appellant has miserably failed to lead any evidence to that effect. On the other hand, there is photocopy of the driving licence of driver Shambhu Prasad on record. The contention of the appellant that the truck driver was not having a valid driving licence has no merit. 30. No other point was urged or argued before me in these appeal. 31. For the reasons and discussion above, all the four appeals are devoid of merit and must fail. 32. All the four appeals preferred by Insurance Company are hereby dismissed with no order as to costs. The impugned judgment and awards are upheld. 33. Amount if any in deposit with this Court be remitted to the Tribunals concerned for being paid to the claimants.