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2014 DIGILAW 1121 (HP)

National Insurance Company Limited v. Kanta

2014-08-22

MANSOOR AHMAD MIR

body2014
JUDGMENT : - Mansoor Ahmad Mir, Chief Justice Challenge in this appeal is to the award, dated 23rd June, 2012, passed by Motor Accident Claims Tribunal-I, Solan, H.P., (for short, the Tribunal), in Claim Petition No.23-NL/2 of 2009, titled as Kanta and others versus Vikramjeet Singh and others, whereby and whereunder compensation to the tune of Rs.4,56,200/- stands awarded in favour of the claimants (respondents No.1 to 4 herein), and against the appellant-insurer, with interest at the rate of 7.5% per annum from the date of filing of the Claim Petition till realization, (for short, the impugned award). 2. The owner-insured, the driver of the offending vehicle and the claimants have not questioned the impugned award on any count, has attained the finality so far as it relates to them. 3. The appellant-insurer has questioned the impugned award on the ground that the Tribunal has fallen in error in saddling the liability with the insurer-appellant. 4. During the pendency of the appeal, the appellant-insurer has laid an application, being CMP No.676 of 2012, under Order 41 Rule 27 of the Code of Civil Procedure, (for short, CPC), for taking on record documents, which are Photostat copies. The said application came to be granted and the documents were taken on record, with all just exceptions, vide order dated 8th August, 2014. Brief facts: 5. Though the facts are not in dispute, however, it is necessary to give a brief resume of the case, which has given birth to the instant appeal. The claimants Kanta and others, being the victims of vehicular accident, filed a Claim Petition before the Tribunal, for grant of compensation to the tune of Rs.20.00 lacs, as per the break-ups given in the Claim Petition. It is averred in the Claim Petition that on 26.4.2009, at about 3.00 p.m., deceased Krishan Baldev, while standing at Bus Stand Buranwala, was hit by truck bearing registration No.HP-12A-9768, being driven by its driver, namely, Vikramjeet Singh, (original respondent No.1), rashly and negligently, resulting in multiple injuries to the deceased, who, later on succumbed to the same. FIR No.43, dated 27.4.2009, was registered against the driver of the offending vehicle in Police Station, Barotiwala. FIR No.43, dated 27.4.2009, was registered against the driver of the offending vehicle in Police Station, Barotiwala. The claimants have further averred that the deceased was of the age of 50 years at the time of accident, was the sole source of income, was earning Rs.10,000/- per month and they were dependant upon him, have lost source of dependency, and love and affection. 6. Claim Petition was resisted by the owner, driver and the insurer by filing replies. 7. On the pleadings of the parties, following issues were framed by the Tribunal: “1. Whether the deceased had died in an accident caused due to rash and negligent driving of the respondent No.1 while driving the vehicle of respondent No.2.?OPP 2. If issue No.1 is proved in affirmative, to what amount of compensation, the petitioners are entitled and from whom? OPP 3. Whether the vehicle was being plied in violation of terms and conditions of the insurance policy and the respondent No.3 is not liable to pay the amount of compensation? OPR-3. 4. Relief.” 8. In order to prove their claim, the claimants examined PW-1 Kanta Devi (claimant), PW-2 Om Parkash, PW-3 Dr.B.S. Dhiman and PW-4 Jasvinder Singh, while the respondents examined Ghanshyam Sharma as RW-1. The claimants have also placed on record documents Exts.PW-1/A, PW-2/A, PW-3/A and PW-4/A, i.e. Affidavits of Kanta Devi and Om Parkash, post mortem report and copy of FIR, respectively. The respondents have placed on record Ext.RA (copy of registration certificate), Ext.RB (copy of insurance policy), Mark X (copy of driving licence) and Ext.RW-1/A (driving licence). 9. The Tribunal, after scanning the evidence, held that the claimants have proved, by leading oral as well as documentary evidence, that the driver, namely, Vikramjeet Singh, had driven the offending vehicle rashly and negligently on 26th April, 2009 at about 3.00 p.m. at Buranwala Bus Stand, hit the deceased, who sustained injuries and lateron succumbed to the same. The respondents have not led any evidence in rebuttal. Therefore, the findings recorded by the Tribunal under Issue No.1 are liable to be upheld. 10. Before issue No.2 is dealt with, I deem it proper to deal with issue No.3. The onus to prove this issue was on the appellant-insurer and it has failed to discharge the same. The insurer has failed to prove that the owner has committed breach of the terms and conditions of the insurance policy. 10. Before issue No.2 is dealt with, I deem it proper to deal with issue No.3. The onus to prove this issue was on the appellant-insurer and it has failed to discharge the same. The insurer has failed to prove that the owner has committed breach of the terms and conditions of the insurance policy. Thus, issue No.3 came to be rightly decided in favour of the claimants and against the insurer. 11. Coming to issue No.2, adequacy of compensation is not in dispute. However, the findings recorded by the Tribunal have been challenged by the insurer-appellant on the ground that it was wrongly saddled with the liability. 12. As discussed hereinabove, the appellant-insurer during the pendency of the appeal, has laid an application, (CMP No.676 of 2012), under Order 41 Rule 27 of the Code of Civil Procedure, for taking on record the Photostat copies of the documents. It is averred in the application that though the vehicle was insured, but the insurance policy was cancelled since the cheque issued towards payment of premium amount was bounced and the owner-insured was duly informed about the same in terms of Annexures A-16, A-17, A-18, A-19 and A-20, appended with the said application. 13. It is apt to record herein that the insurer has not taken any such ground in the reply filed by it to the Claim Petition before the Tribunal and has also not taken such ground in the memo of appeal. Thus, the insurer has not resisted the claim petition on the said ground, either before the Tribunal or before this Court. However, the insurer has moved an application under Order 41 Rule 27 CPC, without seeking leave to amend the reply in terms of Order 6 Rule 17 CPC. 14. It was for the insurer to plead and prove that the cheque issued towards payment of premium was bounced, notice was issued to the insured about the bouncing of the cheque, the insurance policy was cancelled and intimation of cancellation was reduced into writing and was conveyed to the insured. Neither there is any pleading to that effect on the file nor any proof. 15. The Apex Court in a case titled as New India Assurance Co. Neither there is any pleading to that effect on the file nor any proof. 15. The Apex Court in a case titled as New India Assurance Co. Ltd. versus Rula and others, reported in AIR 2000 Supreme Court 1082, has held that the insurer has to mandatorily intimate the owner by way of notice about the cancellation of insurance policy and if the accident occurs between the period till the cancellation is conveyed, it is the insurer, who is liable. It is apt to reproduce para 11 of the judgment herein: “11. This decision, which is a 3-Judge Bench decision, squarely covers the present case also. The subsequent cancellation of the Insurance Policy in the instant case on the ground that the cheque through which premium was paid was dishonoured, would not affect the rights of the third party which had accrued on the issuance of the Policy on the date on which the accident took place. If, on the date of accident, there was a Policy of Insurance in respect of the vehicle in question, the third party would have a claim against the Insurance Company and the owner of the vehicle would have to be indemnified in respect of the claim of that party. Subsequent cancellation of Insurance Policy on the ground of non-payment of premium would not affect the rights already accrued in favour of the third party.” 16. The matter again came up for consideration before the Apex Court in Deddappa & Ors. versus The Branch Manager, National Insurance Co. Ltd., reported in 2007 AIR SCW 7948, and the same principle has been laid down. It is apt to reproduce paras 26 to 28 of the judgment herein: “26. We are not oblivious of the distinction between the statutory liability of the Insurance Company vis-a-vis a third party in the context of Sections 147 and 149 of the Act and its liabilities in other cases. But the same liabilities arising under a contract of insurance would have to be met if the contract is valid. If the contract of insurance has been cancelled and all concerned have been intimated thereabout, we are of the opinion, the insurance company would not be liable to satisfy the claim. 27. But the same liabilities arising under a contract of insurance would have to be met if the contract is valid. If the contract of insurance has been cancelled and all concerned have been intimated thereabout, we are of the opinion, the insurance company would not be liable to satisfy the claim. 27. A beneficial legislation as is well known should not be construed in such a manner so as to bring within its ambit a benefit which was not contemplated by the legislature to be given to the party. In Regional Director, Employees' State Insurance Corporation, Trichur v. Ramanuja Match Industries [ AIR 1985 SC 278 ], this Court held : "We do not doubt that beneficial legislations should have liberal construction with a view to implementing the legislative intent but where such beneficial .legislation has a scheme of its own there is no warrant for the Court to travel beyond the scheme and extend the scope of the statute on the pretext of extending the statutory benefit to those who are not covered by the scheme." We, therefore, agree with the opinion of the High Court. 28. However, as the appellant hails from the lowest strata of society, we are of the opinion that in a case of this nature, we should, in exercise of our extra-ordinary jurisdiction under Article 142 of the Constitution of India, direct the Respondent No.1 to pay the amount of claim to the appellants herein and recover the same from the owner of the vehicle viz., Respondent No.2, particularly in view of the fact that no appeal was preferred by him. We direct accordingly.” 17. In the case titled as United India Insurance Co. Ltd. versus Laxmamma & Ors., reported in 2012 AIR SCW 2657, the Apex Court has discussed the law developed on the issue and ultimately held that if cancellation order is not made or if the accident occurs till the cancellation is made and conveyed, the insurer is liable. It is profitable to reproduce para 19 of the judgment herein: “19. Ltd. versus Laxmamma & Ors., reported in 2012 AIR SCW 2657, the Apex Court has discussed the law developed on the issue and ultimately held that if cancellation order is not made or if the accident occurs till the cancellation is made and conveyed, the insurer is liable. It is profitable to reproduce para 19 of the judgment herein: “19. In our view, the legal position is this : where the policy of insurance is issued by an authorized insurer on receipt of cheque towards payment of premium and such cheque is returned dishonoured, the liability of authorized insurer to indemnify third parties in respect of the liability which that policy covered subsists and it has to satisfy award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the M.V. Act unless the policy of insurance is cancelled by the authorized insurer and intimation of such cancellation has reached the insured before the accident. In other words, where the policy of insurance is issued by an authorized insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonored and before the accident of the vehicle occurs, such insurance company cancels the policy of insurance and sends intimation thereof to the owner, the insurance company's liability to indemnify the third parties which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof.” 18. I have also laid down the same principle, while dealing with a case of similar nature as Acting Chief Justice of this Court in FAO No. 316 of 2008, titled as M/s New Prem Bus Service versus Laxman Singh & another, decided on 23rd May, 2014 and as Chief Justice in FAO No. 35 of 2009, titled as National Insurance Company Ltd. versus Smt. Anjana Sharma & others, decided on 4th July, 2014, and FAO No.444 of 2009, titled as United India Insurance Company Ltd. vs. Smt.Sanjana Kumari & Others, decided on 11th July, 2014. 19. Until and unless notice is issued by the insurer and is served upon the insured, the contract subsists and the insurer is liable. 20. The insurer is also caught by its pleadings. 19. Until and unless notice is issued by the insurer and is served upon the insured, the contract subsists and the insurer is liable. 20. The insurer is also caught by its pleadings. In one breath, the insurer has taken the plea in appeal that it cannot be saddled with the liability for the reason that the cheque issued towards premium amount had bounced and the policy was cancelled, but in the same breath, it was specifically pleaded that the offending vehicle was being driven in violation of the terms and conditions of the insurance policy and to this effect, issue No.3 has been framed. It is apt to reproduce paragraph 5 of the preliminary submissions of the reply filed by the Insurance Company to the Claim Petition hereunder:- “5. That as per the terms and conditions of the Standard Policy, the replying respondent is entitled to contest the case on behalf of Insured in the event any claim is preferred against the Policy. The replying respondent hereby intend to contest the proceeding on behalf of insured also and for that purpose the replying respondent may be permitted to contest the claim on behalf of insured. A separate application under section 170 MV Act, 1988 is also been filed separately.” 21. In view of the above discussion, it is held that the insurer was rightly saddled with the liability. 22. Having said so, there is no merit in the appeal and the same is dismissed, and the impugned award is upheld. The compensation amount be released in favour of the claimants, strictly in terms of the impugned award.