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2009 DIGILAW 741 (CAL)

National Insurance Co. Ltd. v. Minoti Biswas

2009-09-15

B.Bhattacharya, Prasenjit Mandal

body2009
JUDGMENT: 1. THIS appeal is at the instance of the Insurance Company and is directed against an award dated 6th August, 2007 passed by the Motor Accident Claims Tribunal and the Additional District Judge, Second Court, Nadia in MAC Case No. 234 of 2002 thereby allowing the application by awarding a compensation to the tune of Rs.1,89,000/- in favour of the claimants with a direction upon the National Insurance Company Limited, the insurer of the offending vehicle, to pay the said amount within 60 days from the date of the award with a stipulation that in case of default, the amount would carry interest at the rate of 8% per annum from the date of filing of the application. 2. BEING dissatisfied, the Insurance Company has come up with the present appeal. There is no dispute about the involvement of the offending vehicle and the fact that the victim died due to the said accident. 3. MR. Das, the learned Advocate appearing on behalf of the appellant, has not even disputed the amount assessed by the learned Tribunal. MR. Das has, however, raised a pure question of law in support of the appeal. 4. ACCORDING to Mr. Das, in this case, the cheque issued by the owner of the vehicle for the purpose of insuring the vehicle at the relevant point of time having been dishonored, his client had no liability to make payment of the amount awarded by the learned Tribunal. To appreciate the question raised by Mr. Das, it will be profitable to refer to the following relevant dates: Date Incident 16th March, 2002 Cheque issued for the insurance of the vehicle. 19th March, 2002 Insurance commenced. 18th March, 2003 Last date of coverage of the insurer. 20th April, 2002 Date of accident. 4th April, 2004 Cheque dishonoured by the bank. 22nd April, 2002 Date of communication of the dishonour of the cheque by the Insurance Company to the insurer. 5. THE points involved herein have already been settled by the Supreme Court of India in the following cases: a) Oriental Insurance Company Ltd. vs. Inderjit Kaur and Ors., reported in 1998 ACJ at page 123; b) National Insurance Company Ltd. vs. Yellamma and Anr., reported in 2008(2) TAC 772(SC); c) Daddappa and Ors. 5. THE points involved herein have already been settled by the Supreme Court of India in the following cases: a) Oriental Insurance Company Ltd. vs. Inderjit Kaur and Ors., reported in 1998 ACJ at page 123; b) National Insurance Company Ltd. vs. Yellamma and Anr., reported in 2008(2) TAC 772(SC); c) Daddappa and Ors. vs. Branch Manager, National Insurance Company Ltd., reported in 2008 SAR(Civil) at page 163 (SO; d) National Insurance Company Ltd. vs. Abhaysingh Pratapsingh Waghela and Ors., reported in 2009(1) TAC 10 (SO). 6. IN case of INderjit Kaur (supra), the similar incident occurred and in that context, in paragraph 11 of the judgment, the Apex Court as a general proposition laid down that it was the INsurance Company itself, who was responsible for its predicament it had suffered. According to the Supreme Court, the Insurance Company had issued the policy of the insurance upon receipt of the cheque towards premium in contravention of the provision of section 64-VB oi the Insurance Act and therefore, the public interest that a police of insurance serves must, clearly, prevail over the interest of the Insurance Company. 7. THE same view has been followed in other three decisions, referred to above, and it has been held that there could be no doubt that no privity of contract came into between the Insurance Company and the owner of the vehicle and as such, the question of enforcing the purported contract of the insurance while taking recourse of section 147 of the Motor Vehicles Act did not arise. 8. THEREFORE, the sum and substance of the principles laid down by the Supreme Court in all those cases is that if the Insurance Company at its risk issues a cover note, which is equivalent to the issue of policy without ascertaining whether the cheque itself taken from the insurer as a consideration of insurance would be ultimately honoured or not, it would be its liability to make payment of compensation, if any accident occurs before the Insurance Company communicates its decision of cancellation of the policy to the insured. In the case before us, although the cheque was received by the Insurance Company on 16th March, 2002 with the assurance of commencing the policy with effect from 19th March, 2002, it did not feel necessity of communicating to the owner of the vehicle till 22nd April, 2002 that the cheque had been dishonoured on 4th April.2002. If after 4th April, 2002, the Insurance Company communicated the fact that the cheque had been dishonoured, the owner of the vehicle could also issue a fresh cheque or could make payment in cash. By not communicating the fact of dishonour of the cheque till 22nd April, 2002, the Insurance Company can not evade its liability to make payment for the accident, which occurred on 20th April, 2002 long 16 days after the dishonour of the cheque and more than one month after commencement of the insurance. 9. MR. Das, the learned Advocate appearing on behalf of the appellant, tried to impress upon us that in the contract of the insurance, there was a clause that the insurance was subject to the clearance of the cheque. 10. WE have already pointed out that the Supreme Court in case of Inderjit Kaur (supra) specifically pointed out that once the Insurance Company had issued the policy of insurance upon receipt of a cheque towards premium in contravention of the provision of section 64-VB of the Insurance Act, the public interest that a policy of insurance serves, must prevail over the interest of the Insurance Company. We, thus, find no substance in the aforesaid contention of Mr. Das. It is, however, needless to mention that the Insurance Company will be free to recover the amount from the owner of the vehicle in accordance with law. 11. THE appeal is devoid of any substance and the same is, thus, dismissed. 12. SINCE the awarded amount has been deposited by the Insurance Company with the learned Registrar General of this Court, we direct the learned Registrar General of this Court to release the amount in favour of the claimants after expiry of two months from today, provided, in the meantime, no stay order has been granted by the Supreme Court. The claimants will be entitled to execute the award impugned in accordance with law, if the amount lying with the learned Registrar General, is not sufficient to cover the entire awarded sum. The claimants will be entitled to execute the award impugned in accordance with law, if the amount lying with the learned Registrar General, is not sufficient to cover the entire awarded sum. Xerox certified copy of this order, if applied for, be given to the learned Counsel appearing for the parties within a week from the date of the application being filed.