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2018 DIGILAW 618 (ORI)

Divisional Manager, Oriental Insurance Company v. Shanti Khatua

2018-06-26

B.R.SARANGI, VINEET SARAN

body2018
JUDGMENT DR. B.R. SARANGI, J. - This is an intra-Court appeal filed by the appellant-insurance company challenging the judgment dated 24.09.1999 passed by the learned Single Judge in Misc. Appeal No. 41 of 1996 by which the award passed by the 3rd Motor Accident Claims Tribunal, Balasore in Misc. Case No. 94/124(C) of 1992-90 has been modified by directing to pay a compensation of Rs.50,000/- along with interest at the flat rate of 9% per annum to the claimants. 2. The factual matrix of the case, in hand, is that the claimant-respondent no.1 filed claim misc. case no. 94/124(C) of 1992-90 before the 3rd M.A.C.T., Balasore for grant of compensation of Rs.90,000/- for the death of her son, Jitendra Khatua, who died in a vehicular accident on 27.05.1990. The vehicle involved in the accident was a truck bearing registration no. OR-B-3524. The vehicle in question, which was driven in a rash and negligent manner, dashed against the son of respondent no.1, who sustaining head injury although shifted to the District Headquarters Hospital, Balasore, but succumbed to the injury. The driver of the vehicle surrendered before the Nilagiri Police Station. The vehicle had been insured with the Oriental Insurance Company at the Branch Office, Main Road, Bhadrak, for which the owner of the vehicle and insurance company were both jointly and severally liable for the entire claim amount. The deceased Jitendra Khatua was the only son of his parents and as such, they have got no other child to look after them at their old age and the mother of the child had undergone tubectomy operation. The death of their child caused serious mental agony and imbalance and loss of earning efficiency of the parents of the child. 3. On being noticed, the owner of the vehicle did not appear and set ex-parte. The insurance company- appellant appeared and filed its written statement stating therein that the allegations made in the claim petition are baseless, unjust and concocted. The amount claimed was excessive and abnormal, without legal and equitable basis, and denied the factum of accident by the alleged truck and consequentially denied that the appellant-insurance company was neither jointly nor severally liable to pay any compensation, and otherwise it also stated that the petition was not maintainable as the claimant had not given the complete policy particulars and the name of the issuing office. Whether the premium had been paid or not by the owner of the alleged offending vehicle was not mentioned in the petition and more particularly, the driver of the truck was not made a party. The owner of the vehicle had sent a cheque of Rs.4473/- towards payment of premium, but the same was returned back by the banker of the insurance company. Thereby, the owner of the vehicle did not deposit the premium within the stipulated period and therefore, the policy was cancelled on 02.05.1990 and the accident occurred on 27.05.1990. So the insurance company is not liable to pay any compensation to the claimant. 4. The 3rd M.A.C.T., Balasore, framed as many as four issues to decide the lis between the parties and, after considering the evidence adduced before it both documentary and orally, allowed the claim misc. case by awarding compensation of Rs.50,000/- along with interest at the rate of 6% per annum from the date of filing of the application till the date of award, which the appellant-insurance company was to pay. It was further directed that the amount would be paid within a period of three months, failing which the amount would carry penal interest at the rate 12% per annum till realization and out of Rs.50,000/-, a sum of Rs.30,000/- would be deposited in shape of fixed deposit in any nationalized bank, preferably in the State Bank of India for a period of seven years in the name of respondent no.1- Smt. Shanti Khatua and also directed that the assessed consolidated hearing fees of Rs.200/- would also be paid by the insurance company. 5. As against the said judgment of the 3rd M.A.C.T., Balasore, the appellant-insurance company preferred misc. appeal no.41 of 1996 before this Court. The learned Single Judge, while upholding the quantum of compensation, modified the award so far as interest part is concerned and directed to pay interest at the flat rate of 9% per annum. Against the said judgment dated 24.09.1999 passed by the learned Single Judge, the present intra-Court appeal has been filed by the appellant-insurance company. 6. Mr. The learned Single Judge, while upholding the quantum of compensation, modified the award so far as interest part is concerned and directed to pay interest at the flat rate of 9% per annum. Against the said judgment dated 24.09.1999 passed by the learned Single Judge, the present intra-Court appeal has been filed by the appellant-insurance company. 6. Mr. M. Sinha, learned counsel appearing for the appellant argued with vehemence and contended that the policy having been cancelled due to dishonour of cheque and the insured thereafter remained silent and never paid the premium amount either by way of cash or further cheque, thereby, the determination made by the leaned 3rd M.A.C.T., Balasore for awarding of compensation of Rs.50,000/- and confirmation made thereof by the learned Single Judge cannot sustain in the eye of law and should be quashed. It is further contended that the owner of the vehicle in spite of being noticed did not appear and having not participated in the proceeding, cannot escape from liability and due to dishonor of his premium cheque, he has no right to be indemnified by the insurance company, therefore, the judgment of the learned 3rd M.A.C.T., Balasore, confirmed by the learned Single Judge is liable to be set aside. 7. Having heard learned counsel for the parties and on perusal of the records, the sole question which has emerged for consideration by this Court is that whether due to dishonor of cheque filed by the owner of the vehicle, the insurance company is liable to pay the awarded amount or not. This question had come up for discussion before the Supreme Court in Deddappa v. The Branch Manager, National Insurance Co. Ltd., AIR 2008 SC 767 . In the said case, the apex Court held that the cheque issued by the insured towards payment of premium was dishonoured, as a result policy of insurance was cancelled. Insured was intimated about cancellation much before the accident occurred. Therefore, insurer was not liable to pay compensation. However, since the claimant hailed from lowest strata of society, the apex Court directed the insurer to pay compensation and recover it from the owner. 8. Insured was intimated about cancellation much before the accident occurred. Therefore, insurer was not liable to pay compensation. However, since the claimant hailed from lowest strata of society, the apex Court directed the insurer to pay compensation and recover it from the owner. 8. Applying the above principle to the present context, since both the fact finding Courts, after considering the evidence both oral and documentary, have come to a conclusion that the insurance company is liable to pay compensation of Rs.50,000/- along with interest, in this intra-Court appeal this Court does not want to disturb such finding, which is hereby confirmed. However, keeping the judgment of the apex Court in Deddappa (supra), this Court directs the Insurance Company to pay the compensation amount along with interest to the claimant in terms of the impugned judgment passed by the learned Single Judge, if the same has not yet been paid by the insurance company. Needless to say that the entire amount of compensation along with interest, as directed by the learned Single Judge, till the date of deposit, be calculated and the same be deposited before the Claims Tribunal and on the receipt of the same the amount should be disbursed in favour of the claimant. If the amount is deposited before the Claims Tribunal, a receipt thereof be produced, whereafter the statutory deposits before this Court shall be refunded to the insurance company. However, it is open to the insurance company to recover the amount of compensation along with interest from the owner of the offending vehicle, who has insured the vehicle under the insurance company itself. The entire exercise of calculation and deposit of compensation amount along with interest shall be made within a period of six weeks from the date of communication of this order. 9. The AHO is accordingly dismissed, being bereft of merit. However, there shall be no order as to costs. AHO dismissed.