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2017 DIGILAW 387 (CHH)

National Insurance Co. Ltd. v. Ramtahal Dwedi

2017-08-02

P.SAM KOSHY

body2017
ORDER : P. Sam Koshy, J. The present is an appeal under Section 173 of the Motor Vehicles Act preferred by the Insurance Company assailing the award dated 28.04.2005 passed by the 9th Additional Motor Accident Claims Tribunal (FTC) Bilaspur, Chhattisgarh in Claim Case No. 121 of 2004. Vide the impugned award the Tribunal in a proceeding under Section 166 of the MV Act has awarded a compensation of Rs. 3,63,900/- with interest @ 6% per annum from the date of application. 2. The solitary ground to challenge the impugned award by the Insurance Company is that admittedly a policy was issued on a cheque being given by the owner of the offending vehicle i.e. Respondent No. 1 effective from 18.01.2002 to 17.01.2003. But the cheque which was issued got dishonoured to which Exhibits D-1 a notice dated 25.01.2002 and Exhibit D-2 a letter of termination of insurance policy dated 04.02.2002 were also issued to the owner. Counsel for the Insurance Company submits that once the policy has been terminated on account of the cheque being dishonoured, the Insurance Company could not have been fastened with the liability of payment of compensation nor can the Insurance Company indemnify the payment of compensation on behalf of the owner. Counsel for the Insurance Company relies upon the decision of the Supreme Court in the case of United India Insurance Company Limited v. Laxmamma and Others (2012) 5 SCC 234 . 3. Counsel appearing for the claimants, however, opposes the petition and submits that there is no dispute as to the issuance of the policy. So far as the policy having been cancelled because of the dishonouring of cheque, there does not appear to be any intimation in this regard to the insured owner. Thus, prayed for rejection of the appeal. 4. Having considered the rival contentions put forth on either side and on perusal of the record, if we take into consideration the judgment of the Supreme Court in the case of Laxmamma (supra), it would reflect that in the said case the policy of the Insurance Company was cancelled after the accident. In the instant case, however, it appears that the Tribunal in the course of recording of finding found that the notice Ex. D-1 and the order of termination of policy Ex. In the instant case, however, it appears that the Tribunal in the course of recording of finding found that the notice Ex. D-1 and the order of termination of policy Ex. D-2 sent by the Insurance Company could not be effectively served upon the owner for want of sufficient address of the insured. In view of the same, it cannot be said that the insured was noticed in respect of the cheque being dishonoured. 5. At this juncture, it would be relevant to refer to the decision of this High Court in the case of National Insurance Company Limited v. Pusau Ram Kurre decided on 2nd of September, 2016 in M.A. No. 98 of 2005 and connected matters. The facts of the said case are more or less similar to that of the preset case. It would be trite to refer to paragraphs-28 & 29 of the said judgment of this Court which is reproduced hereunder: "28. It would be pertinent to note that in Laxmamma case, the policy of insurance was cancelled only after the accident had taken place. 29. As far as the present matter is concerned, the Insurance Company had sent intimation on 15.05.2002 to the insured that her cheque had been dishonoured and the policy of insurance had been cancelled. Admittedly, no intimation was sent to the concerned RTO. If Section 146 of the Act is read, it is obvious that no person can use a motor vehicle unless it is properly insured. In the judgments cited here-in-above, it has been held that if the Insurance Company wants to avoid its liability, it must send intimation to the owner and the concerned RTO. The reason for sending intimation to the concerned RTO is that if the concerned RTO is informed that a vehicle is no longer insured, the said RTO can take steps to ensure that the vehicle is not plied in the public place. I am also of the considered view that to avoid third party liability as held in Deddappa case and Laxmamma case, the Insurance Company should not only cancel the policy of insurance, but also send intimation not only to the insured but also to the concerned RTO. In the present case, since the concerned RTO had not been intimated, the Insurance Company cannot be absolved of liability to make payment of compensation. In the present case, since the concerned RTO had not been intimated, the Insurance Company cannot be absolved of liability to make payment of compensation. At the same time, since the insurance Company had intimated the insured about the cancellation of the policy of insurance and the insured took no step to pay the premium, the Insurance Company should be given the right to recover the amount paid by it as compensation from the insured and for recovery of the same, it will not have to file a separate proceeding, but can take out certificate proceeding within the meaning of Section 174 of the Act." 6. In the present case also, admittedly the insured owner had taken a policy which was effective from 18.01.2002 to 17.02.2003. The policy was issued by the Insurance Company on receiving a cheque. The Insurance Company has not been able to show sufficient proof of having served Exhibit D-1 and D-2 dated 25.01.2002 and 04.02.2002 effectively upon the owner of the vehicle i.e. respondent No. 1 In the absence of which, it cannot be said that there was a deliberate lapse on the part of the owner. Thus, following the judgment of the Co-ordinate Bench in the case of Laxmamma (supra), this Court is of the opinion that it is a fit case where the Insurance Company can be directed to pay the entire amount awarded by the Tribunal with liberty of getting the amount so deposited recovered from the owner and the driver applying the principle of 'pay and recovery'. It is ordered accordingly. 7. Counsel for the claimants submits that pending the appeal before this Court, respondent No. 8, the minor son of the deceased and respondent no. 11 the father of the deceased both have expired. The death certificate in this regard has already been brought on record. In the given circumstances, it is directed that the amount of compensation has to be proportionately distributed among the remaining claimants. It is further directed that the Insurance Company, in addition to whatever amount they have already deposited till now, shall deposit the balance-amount within a period of two months from today and only thereafter they shall initiate the recovery proceeding.