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2016 DIGILAW 1429 (PAT)

Veenita Kumari v. Pradeep Kumar Gope

2016-10-28

RAMESH KUMAR DATTA

body2016
JUDGMENT : Ramesh Kumar Datta, J. Heard learned counsels for the appellants and the appearing respondents. All these four appeals arise out of the same motor vehicle accident with respect to which MACT Case Nos. 38 and 43 of 2004 were respectively registered. The claimants were widow and minor children as also dependent parents of the two deceased. Dhananjay Kumar and Bechan Ravidas. Both the Motor Accident Claim Cases were disposed of by two separate judgments dated 31.8.2007 and awards dated 10.9.2007. The claimants as also the Insurance Company being aggrieved by the said judgments and awards, have filed their separate appeals. 2. The facts of the case, as per the stand of the appellants, is that the deceased Dhananjay Kumar aged about 28 years and the deceased Bechan Ravidas aged about 40 years were returning from Patna after attending Bihar Punarnirman Rally of Samata Party on 19.10.2000 by Tata Maxi bearing Registration No. BR 28-2396 and when the said Tata Maxi reached near Dehrigarh, Harnaut, a truck bearing registration No. BR-20G-0777, coming from the opposite direction, dashed against the said Tata Maxi on NH 31 on account of rash and negligent driving of the truck driver and several passengers of the Maxi sustained serious injuries and the said Dhananjay Kumar and Bechan Ravidas died during the course of treatment on 20.10.2000. Harnaut P.S. Case No. 170 of 2000 dated 20.10.2000 was registered under Sections 279, 337, 338 and 304A of the Indian Penal Code against the owner and driver of the vehicle involved in the accident. Subsequently, charge-sheet no. 236 of 2000 dated 8.12.2000 was submitted by the police after completion of investigation against the owner Pradeep Kumar Gope and driver Jagarnath Gope of the truck. Thereafter the claimant filed above mentioned cases under Section 166(1) of the Motor Vehicles Act before the Accident Claims Tribunal, Nalanda at Biharsharif. 3. The claim of the heirs of the deceased Dhananjay Kumar was that he was earning Rs. 3500/- per month. With regard to deceased Bechan Ravidas, the claim was that at the time of death he was earning Rs. 5000/- per month. However, the claimants in either of the cases could not establish the source of income and accordingly, the same was taken as Rs. 3000/- per month by the Tribunal. 4. 3500/- per month. With regard to deceased Bechan Ravidas, the claim was that at the time of death he was earning Rs. 5000/- per month. However, the claimants in either of the cases could not establish the source of income and accordingly, the same was taken as Rs. 3000/- per month by the Tribunal. 4. The Tribunal also came to the conclusion that the stand taken in the Court regarding the Tata Maxi standing for passengers to get down, was contrary to the earliest version in the F.I.R. regarding the same moving on the highway and during the course of which it met with an accident with the truck coming from the other side. 5. The owner and the Insurer of the Maxi have not been made party and finding it too late at the fag end of the trial, it was held that there was contributory negligence to the extent of 20% of the driver of the Tata Maxi and therefore the liability of the truck was to the extent of 80% only. On the basis of the materials on the record, the Tribunal has come to the conclusion that death took place on account of the accident which has taken place on 19.10.2000. 6. The stand of the Insurance Company, on the other hand, was that it was not liable at all as the Insurance Policy itself was issued for the period from 26.9.2000 to 25.9.2001 against receipt of a cheque of Rs. 8,628/- towards premium but the cheque having bounced subsequently, the owner of the truck had deposited the said amount in cash on 20.10.2000. Thereafter, on 30.10.2000 and 31.10.2000 information was received from the Bank that the cheque had been dishonoured and for the said reason the policy was cancelled as prior to deposit of cash on 20.10.2000 the accident had already taken place on 19.10.2000 which fact was not admitted by the owner of the truck before the Insurance Company. It is thus, the stand of the Oriental Insurance Company that the policy having been cancelled, no liability could be thrust upon the Insurance Company in the matter. 7. It is thus, the stand of the Oriental Insurance Company that the policy having been cancelled, no liability could be thrust upon the Insurance Company in the matter. 7. The Tribunal after examining the witnesses of the parties on the question of liability of the Insurance Company, came to the conclusion that the policy was in existence when the accident occurred and though on account of dishonour of cheque, the policy was cancelled as alleged, it will not exclude the claim for payment of compensation amount to the claimants and in any case, at present the insurer will have to indemnify the owner and later on the insurer would be entitled to reimbursement in accordance with law because the third party had no information about the dishonour of the cheque and cancellation of the policy since the period was covered at that time though the cheque was dishonoured as alleged and therefore, the door was open for the insurer to get the awarded amount on payment reimbursed. 8. Learned counsel for the claimant-appellants submits that the Tribunal has rightly held that the policy was in existence at the time when the accident had taken place and thus it was not open to the Insurance Company to wriggle out of its liability under the policy by subsequently cancelling the said policy. 9. On the other hand, learned counsel for the appellant-Insurance Company submits that the policy was obtained by the owner of the truck for the period 26.9.2000 to 25.9.2001 by cheque representing to be valid but the cheque having been dishonoured, the policy has been subsequently cancelled on 31.10.2000 and it will be void ab initio under Section 149(2)(b) of the Motor Vehicles Act, 1988 and thus the Insurance Company has no liability for the policy which is void ab initio and the vehicle cannot be held to be insured on 19.10.2000. 10. To the contrary, learned counsel for the claimants-appellants submits that the policy having been issued upon acceptance of cheque by the Insurance Company which policy was a valid policy on 19.10.2000 when the accident had taken place as it had not been cancelled until 31.10.2000 that too after accepting cash amount of Rs. 10. To the contrary, learned counsel for the claimants-appellants submits that the policy having been issued upon acceptance of cheque by the Insurance Company which policy was a valid policy on 19.10.2000 when the accident had taken place as it had not been cancelled until 31.10.2000 that too after accepting cash amount of Rs. 20,000/-, it is not open to the Insurance Company to deny the claim with respect to the claimants and thus, it cannot be absolved of its obligation to the claims under the policy on the ground that since the cheque had been dishonoured, it has not received the premium and in the said circumstances, the remedy of the claimants in the matter, would lie against the insured. 11. Learned counsels for the petitioners rely for the aforesaid proposition upon the decision of the Supreme Court in the case of United India Insurance Company Limited v. Laxmamma and others, (2012) 5 SCC 234 wherein, after discussing the previous decisions on the point, the Court negatived the contention of the appellant Insurance Company and held that it was liable in circumstances practically identical to the present matter, in paragraphs 26 and 27 of the judgment in the following terms: "26. In our view, the legal position is this : where the policy of insurance is issued by an authorised insurer on receipt of cheque towards payment of premium and such cheque is returned dishonoured, the liability of authorised 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 authorised 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 authorised 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. 27. 27. Having regard to the above legal position, insofar as facts of the present case are concerned, the owner of the bus obtained policy of insurance from the insurer for the period April 16, 2004 to April 15, 2005 for which premium was paid through cheque on April 14, 2004. The accident occurred on May 11, 2004. It was only thereafter that the insurer cancelled the insurance policy by communication dated May 13, 2004 on the ground of dishonour of cheque which was received by the owner of the vehicle on May 21, 2004. The cancellation of policy having been done by the insurer after the accident, the insurer became liable to satisfy award of compensation passed in favour of the claimants." 12. It is further submitted by learned counsel for the Insurance Company that since the premium/consideration amount cannot be said to be in existence due to non-payment on the date of accident on 19.10.2000 the policy would be void ab initio under Section 64(VB) of the Insurance Act. 13. In this regard, the reliance of the insurer is also upon the provisions of Section 149(2)(b) of the Motor Vehicles Act, 1988 which does not appear to be justified in view of the provisions of Section 147(5) and Section 149(1) of the Motor Vehicles Act, 1988 which along with Section 64(VB) of the Insurance Act are quoted below:- "Sections 147(5). Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons." Section 149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.- (1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147(being a liability covered by the terms of the policy) or under the provisions of section 163A is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely :- (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely :- (i) a condition excluding the use of the vehicle (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organized racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licenced, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular." "Section 64 (VB). No risk to be assumed unless premium is received in advance.- (1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner. (2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer. Explanation.-Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be." 14. Section 64 VB (1) and (2) along with its explanation merely provides that the Insurer shall not assume any risk in respect of an insurance business unless and until the premium payable is received by him or is guaranteed to be paid by such person or unless and until deposit of such amount is made in advance. Sub-Section (2) further clarifies that risk may be assumed not earlier than the date when the premium has been paid. Thus, there is nothing in Section 64 VB which prevents the Insurance Company from accepting the assumed risk on the receipt of cheque and the explanation makes it clear that the risk may be assumed on the date when the cheque is posted. Thus it cannot be said on the basis of the provisions of the Insurance Act that bouncing of the cheque subsequently would make the policy void ab initio. Such policy at least has effect until it has been cancelled on such just grounds by the Insurance Company. Thus it cannot be said on the basis of the provisions of the Insurance Act that bouncing of the cheque subsequently would make the policy void ab initio. Such policy at least has effect until it has been cancelled on such just grounds by the Insurance Company. Further, the provisions of Section 147(5) of the Motor Vehicles Act, 1988 clearly is an overriding provision over any other law for the time being in force, which would include the Insurance Act, 1938, clearly holding that the Insurer issuing a policy of insurance shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover with respect to such person or classes of persons. Section 149(1) further makes it clear that even in a case where the Insurer is entitled or may have avoided or cancelled the policy, it would be liable to pay the person entitled to the benefit of a decree any sum under a judgment or award in respect of that policy. 15. From the facts of the case there is absolutely no doubt that on the date of accident, i.e., 19.10.2000 the policy was very much in existence and had not been cancelled despite the bouncing of the cheque and the cancellation was made subsequently on 31.10.2000. Thus, so far as the liability of the Insurance Company to satisfy the judgment and award of the Tribunal is concerned, the same does not go away merely because the cheque had bounced. In support of the aforesaid, on very similar facts, reference may be made to the decision of a three Judges Bench of the Supreme Court in the case of Oriental Insurance Co. Ltd. v. Inderjit Kaur and others, AIR 1998 SC 588 , in paragraphs 7 and 8 of which it has been held as follows:- "7. We have, therefore, this position. Despite the bar created by Section 64-VB of the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to cover the bus without receiving the premium therefore. Ltd. v. Inderjit Kaur and others, AIR 1998 SC 588 , in paragraphs 7 and 8 of which it has been held as follows:- "7. We have, therefore, this position. Despite the bar created by Section 64-VB of the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to cover the bus without receiving the premium therefore. By reason of the provisions of Sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured. 8. The policy of insurance that the appellant issued was a representation upon which the authorities and third parties were entitled to act. The appellant was not absolved of its obligations to third parties under the policy because it did not receive the premium. Its remedies in this behalf lay against the insured." 16. The question of liability of the Insurance Company having been decided against it, the further issue to be considered is as to whether the Tribunal was justified in holding the Insurance Company liable to the extent of 80% upon the owner of the truck. 17. Learned counsel for the Insurance Company submits that since there is a clear finding that the Maxi was not standing but was moving on the highway and the accident took place with the truck, therefore, both the vehicles would be equally liable for the accident and the liability of the Insurance Company would in the present matter be to the extent of 50% only. 18. Learned counsel for the claimants-appellants, on the other hand, submits that the truck being the larger vehicle and there being clear evidence led by the different witnesses in both the cases of the Maxi being stationing and the truck moving, the liability upon the Insurance Company would be to the full extent. 19. 18. Learned counsel for the claimants-appellants, on the other hand, submits that the truck being the larger vehicle and there being clear evidence led by the different witnesses in both the cases of the Maxi being stationing and the truck moving, the liability upon the Insurance Company would be to the full extent. 19. In this regard since the learned Tribunal had relied upon the earliest version in the FIR regarding the accident having taken place while the Maxi was in movement on the highway, this Court sees no reason to take a different view of the matter so far as the liability of both the vehicles is concerned. However, in any such accident the damage caused by the larger vehicle would be much more and I am of the view that the Tribunal has rightly come to the conclusion that the liability of the owner of the Tata Maxi is to the extent of 20% only and accordingly held that 80% of the compensation has to be paid by the present Insurance Company. 20. Learned counsel for the claimant-appellants also raises the issue of not using the correct income of the two deceased as also the multiplier for the grant of compensation as also personal expenses to the extent of ?rd made by the learned Tribunal to the income which has resulted decreasing the amount of compensation. 21. On the other hand, learned counsel for the Insurance Company submits that the compensation awarded is proper in terms of the provisions of the Motor Vehicles Act. On a consideration of the judgment and award of the Tribunal, I am of the view that it has not taken into account the law laid down by the Apex Court in the case of Sarla Verma & Ors. v. Delhi Transport Corporation, (2009) 6 SCC 121 . Applying the principles of just and fair compensation as laid down in the said decision and accepting the finding of the Tribunal with regard to the income of the deceased persons, since no reliable evidence could be brought on the record by them with regard to their income that they were earning Rs. 3000/- per month, according to me, the claimants would be entitled to a higher amount of compensation as laid down below. 22. 3000/- per month, according to me, the claimants would be entitled to a higher amount of compensation as laid down below. 22. So far as the case of deceased Dhananjay Kumar is concerned, since he was 28 years old, hence the correct multiplier to be used in his case should be 17 instead of 15 as directed by the Tribunal. I further find that there being as many as five dependents/claimants in his case, the deduction for personal expenses should have been to the extent of ¼th only as held in Sarla Verma's case. Thus, after deducting ¼th from monthly income of Rs. 3000/- it comes to Rs. 2250/-, which multiplied by 12 comes to Rs. 27,000/- which in its turn multiplied by 17 comes to Rs. 4,59,000. The claimants are further entitled to be awarded Rs. 5000/- under the head 'Loss of Estate' and Rs. 5000/- towards funeral expenses. The widow is also entitled to get Rs. 10,000/- as loss of consortium. Thus, the amount of compensation payable is determined as Rs. 4,79,000/- The compensation in their case is enhanced by Rs. 1,09,500/-. 23. Similarly, in the case of Bechan Ravidas, he has been held to be aged about 40 years and thus the multiplier in his case would be 15 and thus the multiplier has been rightly taken by learned Tribunal. He has also a surviving wife and as many as 6 dependents and therefore the amount towards personal and living expenses should have been taken as ¼th instead of ?rd. Accordingly, income of Rs. 3000/- after deducting ¼th towards personal and living expenses of the deceased comes to Rs. 2250/-, which multiplied by 12 comes to Rs. 27,000/-; the same being multiplied by the multiplier of 15 the loss of dependency comes to Rs. 4,05,000/-. The heirs are also entitled to Rs. 5,000/- under the head 'Loss of Estate'. and Rs. 5,000/- towards funeral expenses. Further, the widow is entitled to Rs. 10,000/- as amount of consortium. The compensation in the case of dependents-claimants of deceased Bechan Ravidas comes to Rs. 4,25,000/-. Thus, the compensation in his case is enhanced by Rs. 55,500/- from what has been awarded by the Tribunal. 24. 5,000/- under the head 'Loss of Estate'. and Rs. 5,000/- towards funeral expenses. Further, the widow is entitled to Rs. 10,000/- as amount of consortium. The compensation in the case of dependents-claimants of deceased Bechan Ravidas comes to Rs. 4,25,000/-. Thus, the compensation in his case is enhanced by Rs. 55,500/- from what has been awarded by the Tribunal. 24. I am also in agreement with submission of learned counsel for the appellants that the claimants would be entitled to interest at the rate of 9% per annum not from the month of December, 2006 but from the date of filing of the claim petition till the date of realization. 25. A grievance has also been raised by the claimants-appellants that the amount has been directed to be placed in fixed deposit and not given in a lump sum to the claimants. So far as the said direction is concerned, the same is in accord with what has been directed by the Supreme Court in the case of General Manager, Kerala State Road Transport Corporation, Trivandrum v. Susamma Thomas (Mrs.) & Ors., (1994) 2 SCC 176 . Thus, this Court does not find any reason to interfere with that part of the order. It is however, made clear that it shall be open to the claimants to make any request or representation for payments of certain limited sum out of the said compensation amounts directed to be kept in fixed deposit, in terms of the directions contained in para-23 of Susamma Thomas case (supra). 26. Learned counsel for the appellant-Insurance Company submits that the Tribunal ought to have directed the owner of the truck to reimburse the amount of compensation paid to the Insurance Company but no such direction has been given in the order under appeal except to observe that the door is open to the insurer to get awarded amount on payment reimbursed. It is further submitted by learned counsel that the owner should be ordered to give security before the claim money is released. 27. It is further submitted by learned counsel that the owner should be ordered to give security before the claim money is released. 27. On the other hand, learned counsel for the owner of the truck submits that the owner is not liable because it is the Insurance Company which had delayed in presenting the cheques till after the accident and in the meantime when the insured approached for policy on next date of accident, he was compelled to pay cash amount for the premium and therefore the Insurance Company played fraud with him. 28. It is also submitted by learned counsel that the cheque for premium issued by the owner was not returned for insufficient funds but with the remark "Refer to Drawer". Thus according to learned counsel it was on account of the inaction of the Insurance Company to firstly, present the cheque in time, and subsequently, getting cash deposited by the owner that the situation of cheque having been returned took place. 29. In my view the aforesaid issue of liability of the owner to reimburse the Insurance Company ought to be decided by the Tribunal after taking evidence on the point by both the insurer and the insured. It is, accordingly, directed. In the above circumstances, no direction can be given to the owner to give security before the claim money is disbursed. The Registry of this Court is directed to send back the statutory amount to the Tribunal in both the appeals. M.A. Nos. 628 and 627 of 2007 are, accordingly, partly allowed. M.A. Nos. 33 and 34 of 2008 are dismissed with the directions aforesaid.