Bajaj Alliance General Insurance Co. Ltd. v. Manuranjan Nath
2018-08-16
MIR ALFAZ ALI
body2018
DigiLaw.ai
JUDGMENT : MIR ALFAZ ALI, J. 1. Heard learned Senior counsel Mr. S. S. Sharma for appellant and MR. I. Talukdar for respondent No. 1. Also heard Mr. I. Choudhury for the respondent No. 2. 2. Both the appeals having arisen out of same accident involving vehicle No. As-01/Z8776 are taken together for hearing and disposal by this common judgment as a common question is raised in both the appeals. 3. The admitted facts which may be relevant in both the appeals are that the vehicle bearing registration No. As-01/Z-8776 owned by the respondent No. 1 and insured with the appellant/Bajaj Alliance General Insurance Company Ltd., met with an accident on 27.3.2008. As a result of the said accident, one Mofijuddin Laskar Borbhuyan died and one Raju Nath, sustained injury. The tribunal granted the compensation of Rs. 1,09,720- to the injured in MAC Case No. 212/2008 and an awarded of Rs. 1,52,000/- in MAC Case No. 163 (N)/2008. 4. Aggrieved by the judgment and award in both the cases, the Insurance Company preferred the appeal. The only point raised in both the appeals by the Insurance Company is that the cheque issued by the insured for payment of premium was dishonoured and consequently the policy was cancelled, and as such there was no policy on the date of accident. Since the policy was cancelled due to dishonour of cheque, the Insurance Company could not be saddled with the responsibility to satisfy the award, submits learned senior counsel, Mr. Sarma. Per contra, learned counsel for the respondent/owner of the vehicle submits, that the owner of the vehicle was not informed about the dishonour of cheque or cancellation of the policy and as such the Insurance Company cannot be absolved from the liability. 5. The law relating to liability of the insurer in respect of policy, cancelled due to dishonour of cheque issued by the insured for payment of premium is no longer resintegra. The Supreme Court in United India Insurance Company Ltd. Vs. Laxmamma & Ors (2012) 5 SCC 234 laid down the legal position as under:- 19.
5. The law relating to liability of the insurer in respect of policy, cancelled due to dishonour of cheque issued by the insured for payment of premium is no longer resintegra. The Supreme Court in United India Insurance Company Ltd. Vs. Laxmamma & Ors (2012) 5 SCC 234 laid down the legal position as under:- 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." 6. In view of the rival contention and the proposition of law as laid down in Laxmamma's case, the only question needs to be answered in this appeal is whether the Insurance Company informed the insured about the dishonour of cheque and the cancellation of policy. 7. In the instant case, accident took place on 23.7.2008 and the policy was issued for the period of 29.6.2007 to 28.6.2008. In order to prove, that the Insurance Company informed the insured or the concerned authority about the cancellation of the policy and dishonour of the cheque, the insurance company produced a copy of letter and marked as Ext- 'C'. Insurance company also proved Ext-A the cheque and Ext B the return memo of the bank. The bank return memo (Ext- B) shows that the cheque was dishonoured on 04.07.2017. Admittedly the policy was issued w.e.f 29.06.2007 till 28.6.2008.
Insurance company also proved Ext-A the cheque and Ext B the return memo of the bank. The bank return memo (Ext- B) shows that the cheque was dishonoured on 04.07.2017. Admittedly the policy was issued w.e.f 29.06.2007 till 28.6.2008. When the policy was cancelled due to dishonors of cheque, the Insurance Company was certainly under obligation to inform the insured and the concerned authorities with regard to such cancellation and dishonour of the cheque. Except the Ext- 'C' alleged copy of letter purportedly issued to the owner no other document was produced to substantiate that the Insurance Company informed the insured about the dishonour of the cheque and cancellation of the policy. Neither any postal receipt nor any acknowledgment card was produced. As per the law laid down by the Apex Court in Laxmamma's case, in order to avoid liability in respect of policy cancelled due to dishonour of cheque, insurance company has to establish that information regarding cancellation was given to the insured and such information reached the owner of the vehicle before the accident. Therefore insurance company is under obligation not only to show that information was sent but it must prove that such information was received by the insured. In the present case no legal evidence could be adduced by the insurance company to prove that the information regarding cancellation of the policy has reached the insured/owner before the accident. Therefore, the tribunal did not accept the plea of the Insurance Company that the dishonour of cheque was intimated to the insured. In absence of such evidence, it is difficult to believe only on the basis of the copy of a letter proved as Ext-'C' that Insurance Company discharged its burden to inform the insured regarding dishonour of cheque before the accident. The insurance company having failed to discharge its burden that the information regarding cancellation of the policy has reached the insured before the accident, it could not avoid the liability to satisfy the award in favour of a third party. 8. Being of the above view, I find both the appeals to be without merit and hence it is dismissed.