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2014 DIGILAW 139 (PNJ)

ANARKALI v. NARESH KUMAR

2014-01-16

K.KANNAN

body2014
JUDGMENT : K. Kannan, J. The appeal by the claimants is both as regards the quantum as well as liability. The claimants were the widow and 3 minor children besides the mother and sister of the deceased. The Tribunal assessed a compensation of Rs. 9,27,500 and directed the amount to be paid against respondent Nos. 1 and 2 being the driver and owner only. Insurance company was exonerated on the ground that on the date when the accident took place (6.1.2007), the insurance policy that had been already issued had been cancelled for non-payment of premium and the owner had also been informed about the same. The appeal challenges the exoneration of the insurance company as in contravention of section 149(1) and the appellants also want an assessment to quantum to be reappraised in the light of the judgment of the Supreme Court in Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121 as reappraised in Reshma Kumari and Others Vs. Madan Mohan and Another, (2013) 9 SCC 65 . The case which was brought by the insurance company at the time of trial was that the cheque issued in the name of the insurance company on 7.12.2006 towards premium for the policy had bounced for want of sufficient funds by the drawee banker on 12.12.2006 and the insurance company had issued a notice on 14.12.2006 about the fact of dishonour and the cancellation of policy on that ground. At the trial, the insurer therefore filed the copy of the cheque which had been returned as dishonoured (R2) with the advice by the drawee banker that the cheque had been dishonoured (R3). R4 was proof of collection charges obtained by the insured's banker for the dishonoured cheque, R5 was copy of the letter and R6 was the registration receipt. Since the owner denied having received any such notice, it was elicited in the cross-examination that he was staying only at the address where notice had been issued. Considering the fact that the registration receipt was also filed, the Tribunal accepted the contention that the policy had been cancelled and the owner had been informed through notice dated 14.12.2006 itself about the fact of cancellation of policy. Considering the fact that the registration receipt was also filed, the Tribunal accepted the contention that the policy had been cancelled and the owner had been informed through notice dated 14.12.2006 itself about the fact of cancellation of policy. Accident was admittedly subsequent to the said date, namely, on 6.1.2007 and the insurer was, therefore, contending for exoneration of liability, as held in several judgments of the Supreme Court. 2. The issue of the effect of cheque bouncing and the insurer issuing a notice cancelling the policy has been the subject of consideration in National Insurance Co. Ltd. Vs. Smt. Sobina Iakai and Others, (2007) 7 SCC 786 ; Deddappa and Others Vs. The Branch Manager, National Insurance Co. Ltd., (2008) 2 SCC 595 and National Insurance Co. Ltd. Vs. Abhaysing Pratapsing Waghela and Others, (2008) 9 SCC 133 , all holding that if the cancellation of policy had been prior to the date of accident, the insurance company would not be liable and if there should be a cancellation subsequent to the accident, the insurance company was still liable to answer the claim but the insurer is entitled to recover from the insured for violation of terms of policy. This point was reaffirmed in a recent judgment of the Apex Court in United India Insurance Co. Ltd. Vs. Laxmamma and Others, (2012) ACJ 1307, where on particular facts, the court found that the cancellation of policy had taken place subsequent to the accident and, therefore, the insurance company was made liable but it was given the right of recovery. 3. The crucial point therefore would be as to when the cancellation of policy is effected. The Insurance Act contains through provisions of section 64-VB that no insurance company would be made liable unless premium is paid. Non-liability of an insurance company in a situation where premium had not been collected is secured through an independent statutory provision and it must be given full effect. Counsel reads to me section 149(1) that sets out that notwithstanding an insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, an insurer shall, subject to the provisions of section 149, pay to the person entitled to the benefit of the decree any sum not exceeding the sum established payable thereunder. Counsel reads to me section 149(1) that sets out that notwithstanding an insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, an insurer shall, subject to the provisions of section 149, pay to the person entitled to the benefit of the decree any sum not exceeding the sum established payable thereunder. The reliance on this provision is erroneous for two reasons: (i) section 149(1) contemplates a situation where an insurer is made payable under a decree as an insurer of a person against whom a decree is passed. It is a post-decree defence that will make impermissible for the insurer to contend that the policy had been cancelled. If the insurer is already made a party and an adjudication regarding liability were to be pressed by the insurer, it will have to be considered depending on whether there existed a valid contract of insurance or not; (ii) the second reason why reliance on section 149 cannot be placed is that that section is not to be read as in conflict with the provisions of the Insurance Act. There exists no non obstante clause to make the insurer liable even in a case where policy has been cancelled for non-payment of premium. It is only on account of these two differences that there have been line of authorities absolving the insurer of liability whenever the insurance policy is cancelled for nonpayment of premium before the accident and the same is communicated to the insured. 4. I have no doubt in my mind that the owner had received the notice of cancellation as his admission itself showed that the address mentioned in the copy of the notice was his address. Petitioner could have only a registration receipt of the post office and there ought to be presumption drawn in favour of valid service. There are decisions however which hold the view that it is rebuttable presumption and the addressee can prove that it was not served on him. I would accept the onus to be applied against the addressee, if he shall bring to evidence that there were some fallibilities in the address or there were some other circumstances which would show against the receipt of notice. A bare denial against a statutory presumption cannot avail to him. Even that apart, I find the owner of the vehicle to be not a witness for truth. A bare denial against a statutory presumption cannot avail to him. Even that apart, I find the owner of the vehicle to be not a witness for truth. He went as far as to deny the accident and he also stated that he had not received a copy of the notice. I discard such evidence as false one. I will therefore find no reason to modify the finding of the Tribunal exonerating the insurance company. 5. The deceased was said to be a fruit and vegetable vendor and assessed to income tax. His wife gave evidence to the effect that her husband used to give her Rs. 9,000 for household expenses. At the trial, the income tax return for assessment year 2006-07 was produced through RW 2 in Exh. P4. The deceased had shown profit of Rs. 96,500, but there had been no document produced for the assessment year 2005-06. The Tribunal observed that apart from the fact that the income tax return filed was only for one year, the fact that the income tax return furnished for the year 2006-07 was on 22.12.2006, and it was not accompanied with any computation sheet as the returns stated, made it unreliable. The Claims Tribunal, therefore, discarded this document and merely took the income at Rs. 6,000 prior to his death. 6. I have examined the records. P3 was a Saral Form which bears the income tax seal dated 18.12.2006 which was prior to the accident. It was produced from proper custody through the witness from the Income Tax Department and it showed the total income to be Rs. 49,500 for the period 1.4.2004 to 31.3.2005. P4 was for the period of 1.4.2005 to 31.3.2006 which returned an income of Rs. 96,500 which also bears the Income Tax Department seal dated 22.12.2006. I have no reason to suspect that these are manufactured for the purpose of the case. Considering the fact that deceased was aged less than 30 years, I will make provision for a prospect of increase of income at 50 per cent and take the average income at Rs. 13,500 per month. If the assessment to compensation is made on the scales suggested by Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121 , as examined in Reshma Kumari and Others Vs. 13,500 per month. If the assessment to compensation is made on the scales suggested by Smt. Sarla Verma and Others Vs. Delhi Transport Corporation and Another, (2009) 6 SCC 121 , as examined in Reshma Kumari and Others Vs. Madan Mohan and Another, (2013) 9 SCC 65 , the loss of dependence after applying a 74th deduction would be Rs. 18,58,950 (Rs. 13,500 x 74 x 12 x 17 - 10 per cent tax). I will make a provision of Rs. 1,00,000 towards loss of consortium to the wife and Rs. 50,000 each towards loss of love and affection to children, Rs. 20,000 towards funeral expenses and Rs. 10,000 towards loss to estate. The total compensation will be Rs. 21,38,950. The whole amount will be paid only against the respondent Nos. 1 and 2. The finding of the court below regarding exoneration of insurance company is maintained. 7. The entire amount of compensation shall be distributed amongst the wife, children, mother and sister in the ratio of 2:2: 2:2:1:1. Having regard to the fact that the accident took place in the year 2007 and I have applied a multiplier of 17, I will allow for 40 per cent of the amount to be permitted to be withdrawn in favour of the wife and 60 per cent shall be held in deposit, split in 10 portions, the first portion for maturity in 1 year, the second in 2 years and so on up to 10 years, and as regards the minor children, the amount shall be retained in bank deposit during the period of minority and on attaining majority, 75 per cent of the same will be permitted to be withdrawn and 25 per cent of the amount shall be retained in deposit for a further period of 3 years split into 3 equal portions, the first portion for a period of one year and the second portion for a period of two years and so on and released on the respective dates of majority. As regards the share of the mother, the same will be released without having to retain the same. As regards the share of the mother, the same will be released without having to retain the same. As regards the share of the sister, 50 per cent of the same will be released to her at the time of her attaining majority and another 50 per cent will be released at the time of her marriage or for further educational expenses when a petition is filed therefore. The award is modified and the appeal is allowed to the above extent.