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2012 DIGILAW 211 (ORI)

NEW INDIA ASSURANCE CO. LTD. v. SUKUN MUNDA

2012-04-20

SANJU PANDA

body2012
JUDGMENT : Kumari Sanju Panda, J. The appellant-Insurance Company has filed this appeal challenging the award dated 27-10-1998 passed by the Second MACT, Northern Division, Sambalpur in Misc. (A) Case No. 122 of 1993 (S). 2. The facts of the case as narrated are as follows : The respondent-claimants being the legal heirs of the deceased filed an application claiming compensation of Rs. 1,50,000/- due to death of Dubraj Munda in a vehicular accident. The accident took place on 4-4-1993 at 4.00 a.m. while the deceased was returning to his house by riding a bicycle. The offending bus bearing registration number OSS 2411 came in a high speed from the Jharsuguda side and near Pipalpada Chhak dashed the deceased from his backside. He sustained injuries on his head, spinal cord and bleeding injuries on right side of the body. He was taken to the District Headquarters Hospital, Sambalpur, where he succumbed to the injuries on 7-4-1993. On being noticed, the owner of the offending vehicle being the insured and the Insurance Company being the insurer appeared and filed their written statements separately. The owner of the offending vehicle admitting the accident stated that the vehicle was validly insured with the Insurance Company. Since the policy was valid upto 21-3-1994, the Insurance Company is liable to indemnify him. The present appellant-Insurance Company had taken a plea in the written statement that there was no valid insurance policy on the date of the accident, i.e. on 4-4-1993. It had also taken a plea that the vehicle was sold by the so-called owner to one Uttam Das who issued a cheque bearing No.1194356 dated 22-3-1993 for Rs. 7075/-drawn on United Bank of India, Sambalpur towards the premium of the insurance policy of the vehicle but the said cheque was dishonoured due to lack of fund in the Bank. Therefore, the cover note No. 024644 dated 22-3-1993 issued was void. In the absence of actual acceptance of consideration money towards premium. the cover note was invalid and there was no contract of insurance from 22-3-1993 when the said cheque was dishonoured by the Bank. Accordingly, policy was cancelled and the said fact was intimated to the owner of the vehicle and the RTO, Sambalpur. As such, the insurance company is not liable to pay any compensation in the absence of valid insurance policy. Accordingly, policy was cancelled and the said fact was intimated to the owner of the vehicle and the RTO, Sambalpur. As such, the insurance company is not liable to pay any compensation in the absence of valid insurance policy. On the above pleadings, the Tribunal framed two issues, i.e. (i) Whether the accident took place on 4-4-1993 due to rash and negligent driving of the offending vehicle resulting in the death of Duhraj Munda; and (ii) whether the applicants are entitled to get any compensation? If so, to what extent and from whom? 3. The parties adduced evidence in respect of their respective pleas. The claimants examined two witnesses. The Insurance Company examined five witnesses. The FIR, post-mortem report and R.C. book were exhibited on behalf of the claimants. The Insurance Company exhibited the documents, i.e. proposal form, letter of U. Das addressed to opposite party No. 1, cheque, cover note intimation regarding dishonour of cheque. office copy and letter addressed to opposite party No. 2. office copy of the letter sent to RTO. receipt of courier service, etc. On analyzing the evidence adduced by the parties, the Tribunal came to the finding that the accident took place due to rash and negligent driving of the driver of the offending vehicle bearing registration OSS 2411 resulting in the death of Dubraj Munda. The cover note, Ex.D stands in the name of opposite party No.1 which was issued on 22-3-1993. The opposite party No. 2 being the insurer of the offending vehicle is liable to pay the compensation and the Tribunal assessed the quantum of compensation at Rs. 1,24,000/-. 4. Learned counsel for the appellant-Insurance Company submitted that the appellant duly intimated the fact to the owner that the policy was cancelled due to dishonour of the cheque and the appellant proved the intimation of cancellation of policy to the owner as well as RTO through courier service by filing a receipt thereof. The Tribunal took into consideration the said fact while disposing of the claim application. Since the insurance policy was cancelled and there was no valid insurance covering the date of the accident, the impugned award is liable to be set aside. 5. Learned counsel for the claimant-respondents submitted that the plea of the Insurance Company is not acceptable. The Tribunal took into consideration the said fact while disposing of the claim application. Since the insurance policy was cancelled and there was no valid insurance covering the date of the accident, the impugned award is liable to be set aside. 5. Learned counsel for the claimant-respondents submitted that the plea of the Insurance Company is not acceptable. The claimants being the third parties, they should not suffer as the Insurance Company issued a cover note of the policy on receipt of the cheque towards premium. 6. Considering the above facts and circumstances of the case and from the rival submissions made by the learned counsel for the parties. the questions arise for consideration to be decided in this appeal are; (a) Whether intimation of cancellation of insurance policy through courier service can be treated as sufficient in absence of any evidence to prove that the cancellation of policy was within the knowledge of the owner of the offending vehicle? (b) Whether the Insurance Company having issued the cover note of the policy on receipt of the cheque in respect of premium can claim immunity thereunder to absolve itself from the liability? 7. Law is well settled that Section 27 of the General Clauses Act, 1897 deals with topic 'Meaning of service by post' and says that where any Central Act or Regulation authorizes or requires any document to be served by post, then unless a different intimation appears, the service shall be deemed to be effected by properly addressing prepaying and posting it by registered post, a letter containing the document and unless the contrary is proved to have been effected at the time at which the letter would be delivered in ordinary course of post. The section thus raises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, prepaying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgment due is received from the addressee or not. It is obvious that in such a case the presumption is that the service shall be deemed to have been effected on the addressee to whom the communication is sent. It is obvious that in such a case the presumption is that the service shall be deemed to have been effected on the addressee to whom the communication is sent. The Court may presume that the common course of business has been followed in a particular case, that is to say, when a letter is sent by the post by pre-paying and properly addressing it, the same has been received by the addressee under the Evidence Act. The said presumptions are rebuttable but in the absence of proof to the contrary, the presumption of proper service is effected even if the addressee refused to accept the same. However, no such presumption under General Clauses Act as well as Section 114 of the Indian Evidence Act can be imputed in case of a service through courier. 8. The Apex Court in the case of State of Maharashtra v. Rashid Babubhai Mulani, reported in 2006 AIR SCW 162 has held that a ceretificate of posting obtained by a sender is not comparable to a receipt for sending a communication by registered post. When a letter is sent by registered post, a receipt with serial number is issued and a record is maintained by the Post Office. But when a mere certificate of posting is sought, no record is maintained by the Post Office either about the receipt of the letter or the certificate is sued. The ease with which such certificates can be procured by affixing ante-dated seal with the connivance of any employee of the Post Office is a matter of concern. The Department of Posts may have to evolve some procedure whereby the record in regard to issuance of certificates is regularly maintained showing a serial number, date, sender's name and addressee's name to avoid misuse. In the absence of such a record, a certificate of posting may be of very little assistance, where the dispatch of such communication is disputed or denied. Likewise though the courier services are maintained by the private persons, one cannot presume that the letter was delivered to the addressee and there is no certainty that the addressee has received the letter like registered post which was made through Post Office. Therefore, the plea of the Insurance Company that they have intimated the fact of cancellation of the policy to the owner through courier service cannot be presumed that it was a valid communication. 9. Therefore, the plea of the Insurance Company that they have intimated the fact of cancellation of the policy to the owner through courier service cannot be presumed that it was a valid communication. 9. The Apex Court in the case of Salem Advocate Bar Association, Tamilnadu v. Union of India, AIR 2005 SC 3353 , has held that service of summons through courier can be made in case the High Court makes appropriate rules and regulations and issue practice directions to ensure that such provisions of service are not abused so as to obtain false endorsements. The High Courts can consider making a provision for filing of affidavit setting out details of events at the time of refusal of service. The guidelines as to the relevant details to be given can be issued by the High Courts. The Apex Court further suggested that the High Courts would issue, as expeditiously as possible, requisite guidelines to the trial Courts by framing appropriate rules, regulations etc. However, till date no such rules or regulations have been issued to accept the service through courier treating the same as sufficient which is sent through courier service. 10. In the present case, the appellant issued notice of cancellation through courier service in the year 1994 to the owner and the authority. For the reasons stated in the above paragraphs, service of notice of cancellation through courier service cannot be treated as sufficient. 11. The Insurance Company cannot take advantage that it has duly intimated the owner of the offending vehicle and the authority regarding cancellation of policy due to dishonour of cheque. The claim of the third party cannot be defeated for the said reason. 12. This Court in the case of M/s. United India Insurance Company Ltd. v. Abada Khatun and others, 85 (1998) CLT 485, has held that the claim of the third party, therefore, cannot be defeated for the self-created predicament of the insurer in issuing a policy without receiving the premium. Hence, the Insurance Company is liable to pay the compensation which it may realise from the owner of the offending vehicle. 13. Both the questions are answered accordingly. 14. Hence, the Insurance Company is liable to pay the compensation which it may realise from the owner of the offending vehicle. 13. Both the questions are answered accordingly. 14. In view of the above position of law and taking into consideration the finding of fact reached by the Tribunal, this Court feels that the interest of justice would be best served, if the compensation amount awarded by the Tribunal is reduced from Rs. 1,24,000/-to Rs. 1,05,000/- with 6% interest per annum. 15. Accordingly, this Court reduces the compensation amount awarded by the Tribunal from Rs. 1,24,000/- to Rs. 1,05,000/- (rupees one lakh five thousand) with interest 6% per annum from the date of the award till the date of payment and directs that out of Rs. 1,05,000/-, the Insurance Company shall deposit Rs. 95,000/- (rupees ninety five thousand) in the name of the claimants in any Nationalised Bank under the fixed deposit scheme for a period of six years and the balance amount with interest shall be disbursed to the claimants on proper application/ identification. The entire exercise shall be completed within a period of four weeks from today. 16. Statutory deposit made by the Insurance Company before this Court be refunded to it after showing the receipt of deposit of the modified compensation along with interest before the Tribunal on proper application. 17. With the aforesaid modification of the impugned award, the appeal is partly allowed.