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2015 DIGILAW 1107 (HP)

Raj Kumar v. New India Assurance Co.

2015-08-14

MANSOOR AHMAD MIR

body2015
JUDGMENT Mansoor Ahmad Mir, J. 1. The awards, impugned in these appeals, passed by Motor Accident Claims Tribunal, Mandi, H.P. (for short, the Tribunal), are the outcome of one accident caused by respondent/driver Raj Kumar, while driving Tata Sumo No. HP-01-3469 rashly and negligently, on 28th November, 2004. Therefore, all the appeals are being disposed of by this common judgment. 2. The Tribunal, after examining the entire evidence, held that the claimants have proved their case and accordingly, passed separate awards in each Claim petition granting compensation in favour of the claimants and the owner of the offending vehicle came to be saddled with the liability for the reasons given in each award. 3. Feeling aggrieved, the owner has preferred appeals, being FAO Nos. 687, 688, 684 of 2008 and 118 of 2009, while the claimants have challenged the impugned awards on the ground of adequacy of compensation by the medium of FAO Nos. 657 of 2008, 24, 25 and 44 of 2009. 4. The insurer has not questioned the impugned awards, thus the same have attained finality so far as these relate to it. 5. The learned counsel for the owner has argued that the Tribunal has wrongly discharged the insurer from the liability. The learned counsel for the claimants has argued that the Tribunal has not awarded adequate compensation in favour of the claimants. 6. I have gone through the record and the impugned awards and am of the opinion that the Tribunal has fallen in an error in discharging the insurer from its liability for the following reasons. 7. Admittedly, the owner of the offending vehicle paid the premium towards renewal of the policy through cheque, which, according to the insurer, was bounced. It was for the insurer to inform the insured, by the medium of notice, about the bouncing of the cheque and also about the cancellation of the insurance policy. 8. The learned counsel for the insurer has vehemently argued that the insurer has proved on record that the owner was served with the notice in terms of the Mandate 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 Motor Vehicles Act, (for short, the MV Act). However, there is no document proved on the record by the insurer before the Tribunal to prove the said factum. However, there is no document proved on the record by the insurer before the Tribunal to prove the said factum. The learned counsel for the insurer, during the course of hearing, was specifically asked to show from the records whether any notice was issued to the owner informing him about the bouncing of cheque and the insurance policy has been cancelled, which he could not do. 9. In terms of Section 64-VB of 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. 10. The Apex Court in the case titled as New India Assurance Co. Ltd. vs. Rula and Others, AIR 2000 SC 1082 , has held that the insurer has to mandatorily intimate the owner by way of notice about the cancellation of insurance policy on the ground that the cheque through which premium was paid was dishonoured 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 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.” 11. The matter again came up for consideration before the Apex Court in Deddappa & Others vs. Branch Manager, National Insurance Co. Limited, 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. The matter again came up for consideration before the Apex Court in Deddappa & Others vs. Branch Manager, National Insurance Co. Limited, 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. In Regional Director, Employees' State Insurance Corporation, Trichur vs. 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. 12. In the case titled as United India Insurance Co. We direct accordingly. 12. In the case titled as United India Insurance Co. Ltd. vs. Laxmamma & Others, 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.” 13. Following the dictum of the Apex Court, this Court has also taken similar view in series of cases. 14. Having said so, the appeals being FAO Nos. 687, 688, 684 of 2008 and 118 of 2009, filed by the owner, are allowed and it is held that the insurer has to indemnify. The insurer is saddled with the liability and the impugned awards are accordingly modified. 15. The learned counsel for the claimant-appellants in FAO Nos. 657 of 2008, 24, 25 and 44 of 2009 have argued that the amount awarded by the Tribunal is not adequate and is required to be enhanced. It was further argued that the compensation awarded under the heads ‘loss of estate’, ‘loss of consortium’, ‘loss of love and affection’ and ‘funeral expenses’ is also on the lower side and the same needs to be enhanced to Rs. 1.00 Lac under each head. It was further argued that the compensation awarded under the heads ‘loss of estate’, ‘loss of consortium’, ‘loss of love and affection’ and ‘funeral expenses’ is also on the lower side and the same needs to be enhanced to Rs. 1.00 Lac under each head. 16. After perusal of the impugned awards, I am of the opinion that the Tribunal has rightly awarded compensation under the head ‘loss of source of dependency’. However, the claimants, in each claim petition, are held entitled to Rs. 10,000/- each under the heads ‘loss of estate’, ‘loss of consortium’, ‘loss of love and affection’ and ‘funeral expenses’. 17. Accordingly, the appeals filed by the claimants (FAO Nos. 657 of 2008, 24, 25 and 44 of 2009) are allowed to the above extent. 18. It is pointed out that the insured has deposited Rs. 25,000/- in each appeal in the Registry of this Court. The said amount is awarded as costs in favour of the claimants in each appeal and shall be released in their favour by the Registry. 19. The insurer is directed to deposit the amount, with interest as awarded by the Tribunal, within a period of ten weeks from today. 20. All the appeals stand disposed of, as indicated above. A copy of this judgment be placed on the record of each file.