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2014 DIGILAW 1458 (HP)

Oriental Insurance Company Ltd. v. Dinesh Sharma

2014-10-17

MANSOOR AHMAD MIR

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JUDGMENT : Mansoor Ahmad Mir, J. Subject matter of this appeal is the award, dated 11th January, 2007, passed by Motor Accident Claims Tribunal, Shimla, H.P., (hereinafter referred to as the Tribunal), in Claim Petition No.17-S/2 of 2003, titled Dinesh Sharma vs. Surjeet Singh and others, whereby compensation to the tune of Rs.4,92,600/-, with interest at the rate of 7.5% per annum from the date of filing of the claim petition till its realization, was awarded in favour of the claimant (respondent No.1 herein) and the insurer/appellant was directed to satisfy the same, (for short, the impugned award). 2. The insurer/appellant has questioned the impugned award mainly on the ground that on the date of accident, the insurance risk was not covered and no insurance policy was subsisting on the said date, and the Tribunal has fallen in error in saddling the appellant with the liability. The other ground urged is that the accident was the outcome of contributory negligence and the owner and the driver of the Jeep, involved in the accident, were liable to be saddled with the liability. 3. The owner/insured and the driver have not questioned the impugned award on any count, thus the same has attained finality so far as it relates to them. 4. The question is – Whether the insurer/appellant has been wrongly saddled with the liability? 5. In order to determine the said issue, it is necessary to give flash back of the case, the womb of which has given birth to the present appeal. 6. Claimant Dinesh Sharma (respondent No.1 herein) filed a Claim Petition before the Tribunal for grant of compensation to the tune of Rs.8.00 lacs, as per the break-ups given in the Claim Petition, on the ground that on 27th September, 2001, at about 9.00 p.m., while he was going from Shogi to Khawara Chowki in Jeep No.HPR-32, where his Karyana shop was situated, when he reached near the Petrol Pump Shogi, the said Jeep was hit by truck bearing registration No.HP-12- 8759, being driven by the driver, namely, Raj Kumar rashly and negligently, as a result of which he sustained injuries. 7. The driver and the owner of the offending truck resisted the Claim Petition on the ground that the claimant had driven the Jeep rashly and negligently and that the accident was not the outcome of rash and negligent driving of the truck driver. 8. 7. The driver and the owner of the offending truck resisted the Claim Petition on the ground that the claimant had driven the Jeep rashly and negligently and that the accident was not the outcome of rash and negligent driving of the truck driver. 8. During the pendency of the Claim Petition, it appears that the insurer/appellant had filed an application under Order 1 Rule 10 read with Section 151 of the Code of Civil Procedure for arraying one Kailash Chand, son of Shri Parash Ram as respondent, being the owner of the Jeep, was rejected by the Tribunal. Neither the insurer nor the owner and the driver of the offending truck have questioned the said order, has attained finality. 9. On the pleadings of the parties, the following issues came to be settled: 1. Whether the petitioner has suffered injuries because of the rash and negligent driving of truck No.HP-12-8759, by respondent Raj Kumar? OPP 2. In case Issue No.1 is proved in affirmative, to what amount the petitioner is entitled? OPP 3. Whether the petition in the present form is not maintainable? OPR-3 4. Whether the petition is bad for non-joinder and mis-joinder of necessary parties? OPR 5. Whether the petitioner is estopped to file the petition by his acts and conduct? OPR 6. Whether the vehicle in question was being driven by an unauthorized person who was not having valid and effective driving licence at the time of the accident? OPR 7. Whether the vehicle in question was being plied in violation of the terms and conditions of the insurance policy? OPR 8. Relief. 10. In order to prove his case, the claimant examined PW-1 Sudesh Thakur, PW-2 Puran Chand, PW-3 V.S. Panwar, PW-4 Sunita Seth, PW-5 H.C. Mohan Lal, PW-6 Ram Lal, PW-7 Rajinder Kumar, PW-8 Dr. P. Sharma and the claimant himself stepped into the witness box as PW-9. The owner and the driver of the offending truck examined two witnesses, namely, Raj Kumar (driver himself) and S.I. Prem Singh as RW-2/1 and RW-2, respectively. 11. The insurer opted not to lead any evidence. Thus, the evidence led by the claimant remained un-rebutted, as far as insurer is concerned. At the cost of repetition, it may be stated that the owner and the diver have not questioned the impugned award. 11. The insurer opted not to lead any evidence. Thus, the evidence led by the claimant remained un-rebutted, as far as insurer is concerned. At the cost of repetition, it may be stated that the owner and the diver have not questioned the impugned award. Thus, the findings recorded by the Tribunal on issues No.1, 3, 4, 5, 6 and 7 are upheld. 12. The argument of the learned counsel for the appellant/insurer that the accident was caused by the claimant while driving the Jeep is devoid of any force and far fetched for the reason that it has not led any evidence to prove the said fact and the owner and the driver of the offending truck accepted the impugned award. Moreover, no such ground was taken by the insurer in the reply filed before the Tribunal. Accordingly, the argument is turned down. 13. During the pendency of the appeal, the insurer/appellant has filed an application under Order 41 Rule 27 read with Section 151 CPC, (CMP No.247 of 2007), to prove the fact that the cheque issued by the insured towards the payment of premium was bounced and, thus, the insurer was not liable. This ground has not been taken by the insurer before the Tribunal nor such evidence was led. The application appears to have been filed just to delay the disposal of the case, which is against the concept of granting compensation. 14. It was for the insurer to inform the owner of the offending truck that the cheque had bounced and in case the accident takes place in between, the insurer had to satisfy the liability. 15. In terms of Section 64-VB of the Insurance Act, 1938 (hereinafter referred to as ?the Insurance Act?) read with the provisions of Sections 147 to 149 of the MV Act, the insurer has to intimate the insured about the bouncing of the cheque, which has not been done in the present case, and if intimation is not given and during that period, the accident happens, it is the insurer, who is liable. 16. The Apex Court in the case titled as New India Assurance Co. 16. The Apex Court in the 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.? 17. 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. 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. 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 extraordinary 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. 18. 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 and conveyed and if the accident occurs till the cancellation is made, 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.? 19. Having said so, the application is dismissed. 20. The learned counsel for the appellant/insurer further argued that at the time of the accident, the insurance policy was not subsisting. The insurance policy has been proved on record as Ext.RW- 2/B, which does disclose that the vehicle was duly insured with the same Company. The date of issue of the insurance policy has been mentioned as 27.9.2001 at 1.00 p.m. and as per column 4, it was to expire on 27th September, 2002. However, in column 3 of the policy document, effective date and time of commencement of insurance is recorded as 28th September, 2001 at 10.00 a.m. 21. The question is whether the insurer is liable from 27th September, 2001 at 1.00 p.m. or from 28th September, at 10.00 a.m. The answer to the same is that the insurer is liable from 27th September, 2001 for the reason that the previous insurance policy was also issued by the same Company and that was subsisting during the night of 27th September, 2001. The owner has taken all steps to deposit the premium and obtain cover note on 27th September, 2001 at 1.00 p.m. and the accident had taken place on 27th September, 2001 at 9.00 p.m. Thus, the insurance policy is valid. 22. The Apex Court in case titled as Oriental Insurance Co.Ltd. vs. Dharam Chand & Ors., reported in 2010 (4) T.A.C. 15 (S.C.), held that the insurance cover was valid from the date & time of deposit of the insurance premium. It is apt to reproduce paragraph 2 of the said decision hereunder: ?2. In this case, the premium cheque for the insurance policy was received by the appellant, the Insurance Company, on 7th May, 1998 at 4.00 pm and a cover note was issued at the same time. It is apt to reproduce paragraph 2 of the said decision hereunder: ?2. In this case, the premium cheque for the insurance policy was received by the appellant, the Insurance Company, on 7th May, 1998 at 4.00 pm and a cover note was issued at the same time. In columns 3 & 4 of the cover note, however, it was stated that the insurance would commence from 8th May, 1998 and expire on 7th May, 1999.? 23. Applying the ratio of the judgment (supra) to the present case, the risk was covered and the insurer is liable. 24. Having said so, the findings recorded by the Tribunal are upheld and the appeal is dismissed.