Research › Search › Judgment

Orissa High Court · body

2015 DIGILAW 629 (ORI)

National Insurance Company Ltd. v. Gopa Kumar

2015-11-16

B.P.RAY

body2015
JUDGMENT B.P.RAY, J. - This appeal has been filed by the appellant-Insurance Company against the judgment dated 07.02.2003 passed by 4th M.A.C.T., Puri in MACT. Misc. Case No.375/163 of 1994/89 whereby the Tribunal directed the appellant-Insurance Company to pay a sum of Rs.6,70,000/- along with interest @ 9% per annum from the date of filing of the amended claim application i.e. 12.07.1993 till realization. 2.Mr.S.Roy, learned Counsel appearing for the appellant-Insurance Company submitted that since no premium amount was received by the appellant-Insurance Company for covering the risk of the offending vehicle, the insurer was not liable to pay the amount. In other words, due to cancellation of policy, no liability was accrued to the appellant. In support of his contention, he cited a decision of this Court in Divisional Manager, Insurance Company Ltd. vrs. Tasri Pradhan & others reported in 96 (2003) CLT-462 and three decisions of the Apex Court in National Insurance Company Ltd. Vrs. Seema Malhotra & others reported in 2002 (I) AIR 168, Daddappa & others vrs. Branch Manager, National Insurance Company Ltd. reported in 2008 ACJ 581 and Civil Appeal No.3589/2012 (arising out of SLP (C) No.23511 of 2009) decided on 17.4.2012. 3.Mr. B. Sahoo, learned Counsel appearing for the Respondent No.1-claimant submitted that since no intimation of cancellation of policy was given to the Registering Authority (R.T.O.) or the insured-owner of the vehicle by the appellant-Insurance Company, the stand taken by the Insurance Company cannot be accepted. Further he submitted that Respondent No.1-claimant by filing cross-objection also prayed for enhancement of the compensation amount as granted by the Tribunal. In support of his contention, he cited the decisions reported in Oriental Insurance Company Ltd. vrs. Inderjit Kaur & others, AIR 1998 SC 588 , New India Assurance Company Ltd. vrs. Rula & others, AIR 2000 SC 1082 and Deddappa & others vrs. Branch Manager, National Insurance Company Ltd., AIR 2008 SC 767 . 4.Before proceeding to adjudicate the lis between the parties, it may be mentioned here that by virtue of the direction of this Court dated 30.06.2015, the appellant-Insurance Company examined the respondent No.1-claimant through their Doctor Mr. A.K. Sobhanan, who medically examined the claimant on 12.07.2015 and by way of an affidavit the appellant-Insurance Company has filed the medical report before this Court. A.K. Sobhanan, who medically examined the claimant on 12.07.2015 and by way of an affidavit the appellant-Insurance Company has filed the medical report before this Court. 5.On perusal of the impugned award, it appears that the appellant-Insurance Company, which was O.P. No.3 before the Tribunal filled its written statement, wherein amongst other grounds, it was urged that the truck was not insured with the appellant-insurer during the relevant period of accident and the driver of the offending vehicle had no valid driving license. However in course of trial, the appellant-Insurance Company examined one Kaustav Bhusan Behera, as O.P.W.-1 and also filed the cheque, letter of UCO Bank and letter of Insurance Company in Form No.B-2 marked as Exts.-A to C. The Tribunal, while dealing with the plea of the Insurance Company, which had not admitted in the written statement, relying upon certain decisions came to hold that the appellant-Insurance Company, which was O.P. No.3 before the Tribunal, is to indemnify the compensation. 6.According to the M.V.Act, 1939 and as per Section 105 of the said Act, a duty was cast upon the insurer to notify the registering authority regarding cancellation or suspension of the policy and in the said provision, a mandatory duty was cast upon the Insurance Company to intimate the Registering authority within whose records the registration of the vehicle covered by the policy of insurance is recorded or to such other authority as the State Government may prescribe. However after the amendment of the M.V. Act, Section 105 of the old Act has been repealed, but a corresponding provision has been incorporated under Sub-sec. (4) of Section 147 of the M.V. Act, 1988.The said provision is quoted hereunder : “Where a cover note issued by the insurer under the provisions of this Chapter or the rules made there under is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribed.” Central Motor Vehicle Rules contemplate that a cover note issued by the insurer is valid for a period of sixty days within which period a policy of insurance followed with certificate of insurance issued. 7. 7. On a conjoint reading of Sub-Section (4) of Section 147 of the M.V. Act and Central Motor Vehicle Rules, it is clear that if after issuance of cover note, no policy is issued then the insurer shall, within seven days of expiry of the period of validity of over note, notify the fact to the registering authority. 8.The Apex Court in the case of Deddappa (supra), while considering the plea of cancellation of policy in paragraphs-9 and 26 has observed as follows : “9. Before embarking on the said question we may notice the admitted facts. Second respondent who was driving the vehicle was also the owner thereof. The insurance policy was to remain valid for the period 17.10.1997 to 16.10.1998. Respondent No.3 issued a cheque on 15.10.1997.The said cheque was presented for encashment before the Syndicate Bank. The Bank by its letter dated 21.10.1997 issued a “Return memo” disclosing dishonor of the cheque with the remarks “fund insufficient”. First Respondent thereupon, cancelled the policy insurance. The said information was communicated to Respondent No.2.An intimation thereabout was also given to the R.T.O. concerned. 26. We are not oblivious of the distinction between the statutory liability of the Insurance Company vis-à-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. (Underlining is made by this Court). Again the Apex Court in the case of United India Insurance Co. Ltd. Vrs. Laxmamma & others reported in AIR 2012 SC 2817 , while referring to its earlier decision in Deddappa (supra) held as aforesaid. 9.In the present case, it is an admitted fact that the appellant-insurer has neither pleaded regarding cancellation of the policy in the written statement nor intimated to R.T.A. which is a mandatory requirement as per the Act. Laxmamma & others reported in AIR 2012 SC 2817 , while referring to its earlier decision in Deddappa (supra) held as aforesaid. 9.In the present case, it is an admitted fact that the appellant-insurer has neither pleaded regarding cancellation of the policy in the written statement nor intimated to R.T.A. which is a mandatory requirement as per the Act. 10.Therefore, in my opinion, since the Insurance Company has neither specifically pleaded in the written statement regarding cancellation of policy nor intimated to the R.T.A., there is no valid cancellation of policy and thus, the cover note was allowed to stand till end of its validity, the Insurance Company cannot escape from the liability and is liable to pay the compensation amount to the third party-claimant. So far as the quantum of compensation is concerned, Mr. S. Roy, learned Counsel for the Insurance Company, has not mentioned the same in the written notes of submission. As stated above, in view of the direction of this Court the claimant has been examined by the doctor of the appellant-Insurance Company. I have perused the report,the affidavit filed by the appellant-Insurance Company and the records. In the report the Doctor has opined as follows : “Conclusion – History of road traffic accident, head injury and ribs fracture, with rt. side of body and face paralysis in 1988, now the person is highly disabled, with rt. side of body and face paralysis, cannot walk, only can move with help of others with difficulty, Speech is disabled, communication with verbal commands only, Still in Ayurvedic treatment.” 11.Considering the medical report, nature of injuries sustained by the claimant, taking an approach for ends of justice and in the spirit of Lok Adalat, I feel a compensation of Rs.25,00,000/- (Rupees twenty five lakhs) would be just and proper in the facts and circumstances of the case. The appellant-Insurance Company is directed to deposit the modified compensation amount of Rs.25,00,000/- (Rupees twenty five lakhs) with interest @ 7% per annum from the date of filing of amended claim application i.e. 12.07.1993 till realization before the Tribunal within a period of eight weeks hence. On deposit of the said amount, the same shall be disbursed in favour of the claimant-respondent No.1 or his legal heirs as the case may be on proper identification. 12.With the aforesaid direction, the M.A.C.A. is disposed of. MACA disposed of.