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Himachal Pradesh High Court · body

2011 DIGILAW 2456 (HP)

United India Insurance Company Ltd. v. Guddi Devi

2011-09-07

DEEPAK GUPTA

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JUDGMENT : Deepak Gupta, J. 1. These two appeals are being disposed of by one judgement since they arise out of the same award. 2. The undisputed facts are that claimants who are the widow and children of late Shri Satya Dev filed a petition for grant of compensation u/s 166 of the Motor Vehicles Act, 1988 on the ground that the deceased died as a result of injuries received by him in an accident involving Bolero HP-10-2890 (Temporary No. HP-51-9025-T) owned by Shri Jawahar Lal and driven by Shri Harinder and insured with the United India Insurance Company. The owner and driver did not appear before the trial Court and were proceeded against ex-parte. The Insurance Company in its reply took the plea that cheque issued for payment of premium for the policy had been returned by the bank for insufficient funds and that at the time when the accident took place no valid policy of insurance existed. The learned tribunal assessed the income of the deceased at Rs. 6185/- per month. The dependency of his family members at Rs. 4134/- per month and applying the multiplier of 7 assessed the compensation at Rs. 4,02,500/-. The learned Tribunal rejected the plea of the Insurance Company on the ground that it had failed to prove the fact that it had intimated the owner and the Registering and Licensing Authority about the cancellation of the policy. The learned Tribunal also held that the Insurance Company had not pleaded in its written statement that it had intimated the insured and the licensing authority about the intimation sent regarding the cancellation of the policy. 3. As far as quantum is concerned, the age of the deceased at the time when the accident took place was 54 years and 9 months. As per the law laid down in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121 , in case where the deceased is 51 to 55 years the multiplier of 11 will apply and in case where the deceased is 56 to 60 years the multiplier of 9 will apply. Since the deceased was on the cusp i.e. just about 55 years and also keeping in view the fact that the children are majors, I feel it appropriate to apply multiplier of 10 in this case. Therefore, the compensation for loss of dependency works out to Rs. Since the deceased was on the cusp i.e. just about 55 years and also keeping in view the fact that the children are majors, I feel it appropriate to apply multiplier of 10 in this case. Therefore, the compensation for loss of dependency works out to Rs. 4,96,080/-. In addition thereto claimants are entitled to Rs. 10,000/-for conventional damages, Rs. 10,000/- for funeral expenses and widow is also held entitled to Rs. 10,000/- for loss of consortium. The total compensation payable to the claimants works out to Rs. 5,26,080/- which is rounded to Rs. 5,26,000/-. 4. The Insurance Company has challenged the award of the Tribunal on the ground that in the present case it is proved that it had cancelled the policy and intimated both the insured as well as the Registering and Licensing Authority about the cancellation of the policy. Shri Harish Behal, learned Counsel appearing for the Insurance Company, has drawn my attention to the statements of the witnesses examined by the Insurance Company. RW-2 Surinder Kumar Garg, Supervisor, Canara Bank, Shimla has stated that cheque Ext.RW-1/B issued by the owner when presented to the bank was dishonoured due to insufficiency of funds and thereafter the same was returned to the Insurance Company. 5. RW-3 Ashok Negi, who at the relevant time was Assistant Divisional Manager of the Company at Shimla stated that the cover note Ext.RW-1/A was issued by the company on the receipt of the cheque and when the cheque was presented by the company to the Canara bank, Shimla the same was dishonoured. Thereafter on 18.3.2004 the policy was cancelled vide endorsement Ext.RW-1/E and insured Jawahar Lal was informed about the cancellation of the policy vide letter Ext.RW-1/C, which is signed by Ashok Negi. According to him the Regional Transport Officer was also informed about the cancellation of the policy vide letter Ext.RW-1/D. The suggestion put to this witness is that documents have been prepared at a later stage and were not actually dispatched. RW-4 Roop Chand is the dispatch clerk. He produced the dispatch register and as per the dispatch register the letter sent to the insured was entered at Sr. No. 4162 whereas the letter sent to the Regional Transport Authority was entered at Sr. No. 4163. RW-4 Roop Chand is the dispatch clerk. He produced the dispatch register and as per the dispatch register the letter sent to the insured was entered at Sr. No. 4162 whereas the letter sent to the Regional Transport Authority was entered at Sr. No. 4163. He states that the letter sent to the insured was sent by registered post and the postal receipt was on record but the letter sent to the registering authority was sent by the ordinary post. He has admitted that the dispatch register did not have page numbers and that he did not personally dispatch the letters. RW-1 Shashi Saini, Administrator of the Company has made a statement on similar lines. 6. From the evidence on record it stands proved that after the cheque was dishonoured by the bank the Insurance Company on 18th March, 2004 sent registered letter Ext.RW-1/C to the insured under the signatures of RW-3 Ashok Negi. Similarly another letter Ext.RW-1/D was sent to the RTO intimating him about the cancellation of the policy. 7. The learned Tribunal rejected the case of the Insurance Company only on the ground that in the reply filed by the Insurance Company it was not stated that such intimation had been sent and secondly according to the Tribunal the Insurance Company had not proved that the letters had actually been delivered to the addressees. 8. I am constrained to observe that the approach of the Tribunal was totally against law. This Court in FAO No. 200 of 2010 titled as Oriental Insurance Company Ltd v. Smt. Rani and Ors. decided on 24.8.2011 after discussing the judgements delivered by the Apex Court on the subject in United India Insurance Company Ltd. v. Ayeb Mohammed and Ors. 1991 ACJ 650 , Oriental Insurance Co. Ltd. Vs. Inderjit Kaur and Others, (1998) 1 SCC 371 , New India Assurance Co. Ltd. Vs. Rula and Others, (2000) 3 SCC 195 , National Insurance Co. Ltd. Vs. Seema Malhotra and Others, (2001) 3 SCC 151 , Deddappa and Others Vs. The Branch Manager, National Insurance Co. Ltd., (2008) 2 SCC 595 , National Insurance Co. Ltd. Vs. Abhaysing Pratapsing Waghela and Others, (2008) 9 SCC 133 , held that if the cheque for premium of Insurance bounces then also the Insurance Company is liable unless it informs the insured and the registering authority about the cancellation of the policy. The Branch Manager, National Insurance Co. Ltd., (2008) 2 SCC 595 , National Insurance Co. Ltd. Vs. Abhaysing Pratapsing Waghela and Others, (2008) 9 SCC 133 , held that if the cheque for premium of Insurance bounces then also the Insurance Company is liable unless it informs the insured and the registering authority about the cancellation of the policy. Once the Insurance Company cancels the policy and informs the insured as well as the registering authority about the cancellation of the policy it cannot be held liable to pay the compensation. 9. In the present case the Insurance Company has proved that it had sent intimation about cancellation of the policy to the insured by registered post and to the registering authority by ordinary post. What more can an Insurance Company prove? The law does not expect any party to do the impossible. Once a cheque bounces the Insurance Company is duty bound to inform the insured and the registering authority about the cancellation of the policy and it can do this by post and in fact this is the only proper means of cancelling the policy. In the present case the Insurance Company even produced the dispatch clerk alongwith dispatch register to show that such intimations were sent to the insured and the registering authority. Officials acts are expected to be done properly and once a party delivers letter for dispatch to postal authorities in normal course it shall be presumed that such delivery has been made. In the present case, the owner did not even contest the proceedings and did not step into the witness box to state that he had never received the letter Ext.RW-1/C. In such circumstances, the Insurance Company has done all it was expected to do to avoid its liability. Therefore, I am of the considered view that the learned Tribunal gravely erred in holding that the Insurance Company is liable to pay the compensation. 10. In view of the above discussion the appeals filed by the claimants as well as the Insurance Company are allowed and the award is enhanced from Rs. 4,02,500/- to Rs. Rs. 5,26,000/- and the claimants shall also be entitled to interest on the said amount @ 9% per annum from the date of filing of the claim petition till payment of the amount. 4,02,500/- to Rs. Rs. 5,26,000/- and the claimants shall also be entitled to interest on the said amount @ 9% per annum from the date of filing of the claim petition till payment of the amount. The awarded amount is apportioned as follows: Smt. Guddi Devi (widow): Rs.3,26,000/- Shri Kanwar Singh (son): Rs.1,00,000/- Shri Dhani Ram (father): Rs.1,00,000/- 11. However, it is only the owner and driver who shall be liable to pay the amount and the Insurance Company is exonerated of its liability since it had cancelled the policy on 18.03.2004 and sent intimation to the insured as well as the registering authority well before the date of accident, which was 7th July, 2004. 12. The appeals are disposed of accordingly. No costs.