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2013 DIGILAW 698 (JK)

Oriental Insurance Co. Ltd. v. Soma Devi

2013-12-02

JANAK RAJ KOTWAL

body2013
1. This is an appeal in a Motor Accident Claim case. 2. Heard. I have perused the record. 3. Respondent (claimant) suffered personal injuries in a Motor Accident caused due to negligence of the driver of the vehicle bearing registration No. JK0 2N 4463 on 25.07.2004. She, therefore, preferred a claim for compensation under Section 166 of Motor Vehicle Act [Refer JK'S Manual of Motor Vehicles Laws P-226] (for short the M. V. Act) before the learned Motor Accident Claims Tribunal, Jammu (for short the Tribunal). She contended that the offending vehicle at the time of accident was insured with the Oriental Insurance Company Ltd. herein appellant. She relied upon a copy of Certificate-cum-Policy Schedule showing that the offending vehicle was insured with the appellant/insurance company with effect from 30.09.2003 to 29.09.2004. 4. The appellant/Insurance Company in its objections before Tribunal pleaded that owner of the offending vehicle had issued cheque bearing No. 391385 dated 30.09.2003 valuing Rs. 6889/ towards premium of insurance and the appellant issued Policy/cover note to him. The said cheque, however, was dishonored by the Bank on 16.10.2003 with memo `insufficient funds'. The appellant, therefore, cancelled the policy and served notice dated 27.10.2003 to the owner informing him about the cancellation of the Insurance policy No. 1756 of the offending vehicle and informed RTO in this regard by Registered Post. 5. The learned Tribunal framed following issues in the case: 1. Whether an accident occurred on 25.07.2004 at Palla Morh near Samba by rash and negligent driving of offending vehicle No. JK02N 4463 in the hands of erring driver in which petitioner Soma Devi sustained grievous injuries? OPP 2. If issue No. 1 is proved in affirmative whether petitioner is entitled to the compensation, if so to what amount and from whom? OPP 3. Whether at the time of accident driver of offending vehicle was not holding a valid and effective driving licence and drove the vehicle in violation of terms and conditions of insurance policy? OPR-3 4. Relief. OP Parties. 6. After enquiry, learned Tribunal on appreciation of the evidence found that accident had occurred due to negligent driving by the driver of the offending vehicle and by its judgment and award dated 31.03.2010 awarded compensation of Rs. 1,83,000/ in favour of the petitioner with 7.5 per cent interest. The learned Tribunal imposed the liability of satisfying the award on the appellant/Insurance Company. 7. 1,83,000/ in favour of the petitioner with 7.5 per cent interest. The learned Tribunal imposed the liability of satisfying the award on the appellant/Insurance Company. 7. Appellant has questioned the impugned judgment and award mainly on the ground that due to dishonor of the cheque issued by the owner towards payment of insurance premium, the appellant had cancelled the Insurance Policy issued by it so there was no contract to indemnity between the appellant and owner of the offending vehicle, thus, the appellant was not liable to indemnify the owner by satisfying the award. 8. Mr. D.S. Chouhan, learned counsel for the appellant, would say that the learned Tribunal has ignored the plea that the cheque was dishonored by the Bank and therefore Insurance Policy was cancelled by the appellant/Insurance Company much prior to the accident with notice to the insured and the RTO. Sufficient material in this regard was produced by the appellant with its objections to the claim petition so learned Tribunal should have asked the insured as to how he would be claiming indemnity against the appellant. Mr. Chouhan, while reading the impugned judgment and award, pointed out that this aspect of the matter has not been totally ignored by the learned Tribunal inasmuch as neither any issue was framed nor there is any finding in this regard. 9. Per contra, Mr. Mohd. Latif Malik, learned counsel for the respondent No. 1, would say that appellant/Insurance Company was required to prove before the learned Tribunal that the cheque had bounced, policy was duly cancelled and the owner was intimated in this regard. He would say further that having issued the policy, the insurer cannot escape liability to the third party though it may recover the amount from the insured. 10. Indisputably, the appellant had taken a detailed and unambiguous plea before the learned Tribunal that the cheque, whereby owner of the offending vehicle had paid premium to the appellant for securing insurance cover was dishonored by the bank because of insufficient funds and the appellant had, therefore, cancelled the insurance policy earlier issued by it with notice dated 27.10.2003 to the owner and the RTO. Besides, it is admitted that the accident causing injuries had occurred after dated 27.10.2003. Besides, it is admitted that the accident causing injuries had occurred after dated 27.10.2003. Correct it is that the learned Tribunal, while passing the impugned judgement and award has totally ignored the plea of the appellant inasmuch as neither any issue in this regard was framed nor any finding recorded. 11. Law on the effect of cancellation of Insurance Policy due to dishonor of the cheque, issued towards payment of premium, is now well settled, (see Daddappa and ors. v. Branch Manager, National Insurance Co. Ltd. 2008 ACJ 581 ). Learned Tribunal, therefore, was expected to deal with the plea of the appellant graciously and not as casually as it has been done. A clear finding in this regard should have been recorded after affording parties opportunity to lead evidence. 12. It was submitted by learned counsel for the respondent (claimant) that appellant/insurance company may be directed to satisfy the award and recover the same from insured/owner having regard to the old age of the claimant. He supported his submission with a similar direction issued by this Court in case CIMA No. 62/2005 vide decision dated 25.02.2009. I have accorded consideration to the submission and am of the considered view that direction issued by this Court in that case does not seem to have laid a principle in this regard. Owner of the offending vehicle in this case allegedly had issued a cheque which was dishonored and had been driving the vehicle in spite of notice that insurance policy secured by him had been cancelled. In such a scenario, in my considered view, it would not be in fitness of things that company is asked to satisfy the award until plea raised by it is adjudicated upon. 13. For above mentioned, appeal is allowed. Impugned Judgment and Award is set aside to the extent it imposes liability of satisfying the award on the appellant. Matter is remanded back to the learned Tribunal with direction to record its finding on the following issues and pass fresh order as regards the liability the appellant: a) Was the cheque issued by the owner of the offending vehicle towards premium of insurance, dishonored by the Bank and therefore, the Insurance Company had prior to the accident cancelled the Insurance Policy and informed the owner and the RTO? OPR-3 b) In case above issue is proved in affirmative, what is its effect vis a vis the liability of the Insurance Company? OPR-3 14. These issues be decided after notice to the owner of the vehicle and allowing the parties to lead evidence. This exercise be completed expeditiously and in any case not later than six months after record of the case is received by the learned Tribunal. 15. Registry shall send back the record of the Tribunal along with a copy of this order forthwith, where the herein contesting parties shall cause their appearance on 12.12.2013.