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2020 DIGILAW 1180 (JHR)

New India Assurance Co. Ltd. v. Muni Jerai

2020-12-15

KAILASH PRASAD DEO

body2020
JUDGMENT : 1. The appeal has been preferred by New India Assurance Company Limited against the order dated 11.07.2013 passed by learned District Judge-I-cum-MACT, Chaibasa in Compensation Case No.25/2010, whereby the amount of Rs.50,000/-has been awarded in favour of the claimant, Muni Jerai, widow of the deceased Man Singh Jerai for herself and on behalf of her minor son namely, Bamia Jerai as guardian for 'no fault liability' on account of death of Man Singh Jerai to be paid within one month from the date of order, failing which, the claimants are entitled to get interest @ 9% per annum on the said amount from the date of order till its realization. 2. Learned counsel for the appellant, Mr. Alok Lal has submitted that the Insurance Company has filed additional show-cause on 23.04.2012 stating therein that account payee cheque no.693582 of Rs.13,777/-towards the premium of the policy was sent to the Bank concerned for collection, but it was informed by the bank that due to insufficient fund, the cheque was dishonored. Then Insurance Company immediately cancelled the policy and accordingly intimated the insured through letter No.119 dated 31.05.2007 with a copy to concerned District Transport Office. The alleged dated of accident was 10.12.2007 and the policy was cancelled on 31.05.2007, but even then the learned Tribunal has directed the Insurance Company to pay ad-interim compensation under Section 140 of the Motor Vehicles Act to the claimants, holding that proceeding under Section 140 of the Motor Vehicles Act is a summary proceeding and the moment either it is admitted or proved that the vehicle involved in the alleged accident was insured, the Tribunal will make an award under Section 140 of the Motor Vehicles Act and direct the Insurance Company to pay the amount to the claimants and all other objections shall be considered at the time of final adjudication of the case under Section 166 of the Motor Vehicles Act. 3. Learned counsel for the appellant has submitted that Section 140 of the Motor Vehicles Act comes within Chapter 10 of the Motor Vehicles Act, where the liability is of the owner and has placed reliance upon a judgment passed by Apex Court in the case of Deddappa Vs Branch Manager, National Insurance Co. Ltd. reported in 2008 (2) SCC 595 . Paras-26 and 28 of the same have been referred, which is profitably quoted hereunder:- “26. Ltd. reported in 2008 (2) SCC 595 . Paras-26 and 28 of the same have been referred, which is profitably quoted hereunder:- “26. WE are not oblivious of the distinction between the statutory liability of the Insurance Company vis-a-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. 28. HOWEVER, as the appellant hails from the lowest strata of society, we are of the opinion that in a case of this nature, we should, in exercise of our extra-ordinary jurisdiction under Article 142 of the Constitution of India, direct the Respondent No.1 to pay the amount of claim to the appellants herein and recover the same from the owner of the vehicle viz., Respondent no.2, particularly in view of the fact that no appeal was preferred by him. We direct accordingly.” 4. Learned counsel for the appellant has further relied on the judgment of this Court passed in the case of National Insurance Company Limited Vs. Ramjee Pandey and Another reported in 2009 1 JLJR 95 . Para-7 of which is profitably quoted hereunder:- “7. Coming back to the instant case, indisputably the insurance policy was cancelled on 04.04.1996 because of dishonor of cheque issued in favour of the Insurance Company by the owner of the vehicle towards payment of premium and the owner of he vehicle was duly informed. After the policy was cancelled on 04.04.1996, the alleged accident took place on 08.04.1996. The owner of the vehicle instead of disputing cancellation of policy, took a fresh policy on 12.4.1996 on payment of premium in cash. In spite of service of notice of the claim case before the Tribunal, the owner neither filed any written statement nor took any defence in the suit. Even in this appeal, in spite of notices issued on several occasions, the respondent has not appeared. In the aforesaid premises, the Tribunal ought not to have held that the Insurance Company is liable to pay compensation. The aforesaid findings with regard to liability determined by the Tribunal cannot be sustained in law.” 5. Even in this appeal, in spite of notices issued on several occasions, the respondent has not appeared. In the aforesaid premises, the Tribunal ought not to have held that the Insurance Company is liable to pay compensation. The aforesaid findings with regard to liability determined by the Tribunal cannot be sustained in law.” 5. Learned counsel for the appellant has further relied upon the judgment of this Court passed in the case of United Indian Insurance Company Limited Vs. Kiran Singh reported in 2008 3 JLJR 78 . Paras-6 and 7 of the said judgment is profitably quoted hereunder:- “6 There is no dispute with regard to legal proposition that an award of interim compensation can be passed against the Insurance Company only when prima facie it is proved or admitted that the vehicle was insured with the Insurance Company. If the vehicle is not insured by obtaining a proper insurance policy, the question of payment of interim compensation by the Insurance Company does not arise at all. The Tribunal, therefore, committed serious illegality in holding that the question with regard to insurance of the vehicle shall be considered at the final stage. The impugned award, therefore, connot be sustained in law. 7. This appeal is, therefore, allowed and the impugned order is set aside. Consequently, the interim compensation awarded by the Tribunal is to be paid by the owner of the vehicle and not by the appellant-Insurance Company.” 6. Considering the same, learned counsel for the appellant has submitted that the impugned order may be set aside and owner of the vehicle may be held responsible for payment of the same. 7. Learned counsel for the appellant, Mr. Alok Lal, has further submitted that though this award has already been complied by Insurance Company by depositing a cheque of Rs.50,000/-vide Cheque No.021147 dated 08.05.2018 before learned Tribunal, as such, the right may be given to the Insurance Company to recover the same from owner of the offending vehicle in case the cheque has been encashed by the claimants. 8. Learned counsel for the respondent-owner, Mr. Kripa Shankar Nanda has submitted that vehicle was insured and if there is dispute with regard to the Insurance of the vehicle that will be further adjudicated at the time of hearing of the application under Section 166 of the Motor Vehicles Act on the basis of evidence adduced by the parties. 9. 8. Learned counsel for the respondent-owner, Mr. Kripa Shankar Nanda has submitted that vehicle was insured and if there is dispute with regard to the Insurance of the vehicle that will be further adjudicated at the time of hearing of the application under Section 166 of the Motor Vehicles Act on the basis of evidence adduced by the parties. 9. Heard, learned counsel for the appellant and learned counsel for the respondent-owner. 10. In view of the judgment passed by the Apex Court as well as Division Bench of this Court, it appears that the owner is liable to pay the same, if the Insurance Policy has already been cancelled and communicated to the concerned authority, as such, the finding recorded by the learned Tribunal that “no such letter has been filed by the New India Assurance Company Limited to show that said policy was cancelled by Insurance Company and in absence of cancellation of policy, in the light of above referred decisions of Hon'ble Apex Court, it will be presumed that policy was valid on the date of accident for the third party” is hereby set aside. 11. Since the cheque has already been deposited by the Insurance Company and there is no stay by this Court, it is presumed that claimants cannot be suffered and as such, the amount which has already been paid to the claimants shall be recoverable by the Insurance Company from the owner of the vehicle while adjudicating application under Section 166 of the Motor Vehicles Act. 12. If the application under Section 166 of the Motor Vehicles Act has not been filed, the Secretary, District Legal Services Authority, Chaibasa is directed to look into the matter and provide legal aid to the claimants, who may be in dire need of legal assistance under Section 12 of the Legal Services Authority Act. 13. However, parties are at liberty to adduce their evidence on the issue framed at the time of adjudication of application under Section 166 of the Motor Vehicles Act, since the cheque of Rs.50,000/-has already been deposited in the year 2018 by the Insurance Company under Section 140 of the Motor Vehicles Act. 14. 13. However, parties are at liberty to adduce their evidence on the issue framed at the time of adjudication of application under Section 166 of the Motor Vehicles Act, since the cheque of Rs.50,000/-has already been deposited in the year 2018 by the Insurance Company under Section 140 of the Motor Vehicles Act. 14. The statutory amount deposited by the Insurance Company to the tune of Rs.25,000/-shall be remitted to the Insurance Company by the Registrar General of this Court within a period of four weeks from the date of filing of the requisition by the learned counsel for the appellant. 15. Accordingly, the instant miscellaneous appeal is disposed of. 16. Consequently, I.A. No.9202/2013 is allowed for the reason assigned in the said I.A. as no counter affidavit has been filed by the owner of the offending vehicle, the contesting respondent.