Madhya Pradesh High Court
Ishwar Singh S/O Daulat Singh Agrawal vs Ashok Kumar S/O Chandmal Ji Garg And Ors. on 29 July, 1999
Equivalent citations: 2001ACJ1714, 1999(2)MPLJ598
Author: Shambhoo Singh
Bench: Shambhoo Singh
JUDGMENT Shambhoo Singh, J.
1. This judgment shall govern the disposal of M.A. Nos. 297/98, Ishwarsingh v. Ashok Kumar and Ors. and 289/98, Ashok Kumar Garg v. Ishwarchand Agrawal and Ors. as they arise out of the award dated 23-9-1997 passed in claim case No. 42/94 by Additional Motor Accident Claims Tribunal, Mandsaur, whereby compensation of Rs. 1,51,761/- was awarded to the appellant-claimant (M.A.No. 297/98) against the appellants/non-applicants (M.A. No. 289/98) Ashok Kumar Garg and Babulal, the owner and the driver of Jeep No. M.K.U. 7745.
2. The claimant's case in brief, was that on 22-6-1997 at about 8.30 p.m., when he driving his motor-cycle No. C.I.N. 7602 with his brother Yogesh Gupta as pillion rider on Mhow-Neemuch road, came infront of Hero-Honda show-room, non-applicant No. 2 Babulal came from opposite direction driving jeep No. M.K.U. 7745 belonging to non-applicant No. 1 Ashok Kumar and insured with non-applicant No. 3 National Insurance Co. in rash and negligent manner and dashed against the motor-cycle, as a result of which, he sustained fracture of 9 left side ribs and left tibia and fibula. He was taken to District Hospital Mandsaur, and therefrom to T. Choithram hospital, Indore, where he was operated twice. He also went to Bombay and spent huge amount on his treatment. He suffered permanent disability in his left hand. He filed claim case seeking compensation of Rs. 18,92,500/-. The non-applicants resisted the claim and averred that the accident was not caused by jeep No. M.K.U. 7745. Non-applicant No. 3 inter alia pleaded that the offending vehicle was not insured with it as the cheque issued by non-applicant No. 1 was not encashed by the Bank and, therefore, the cover-note and receipt issued by it had become ineffective. It was further averred that the accident occurred due to rash and negligent driving of the motor-cycle by the claimant himself. It was also pleaded that non-applicant No. 2 had no valid driving licence. The learned Tribunal held that the accident occurred due to rash and negligent driving of the offending jeep by non-applicant No. 2. However, it held that there was no payment of premium by non-applicant No. 1 and, therefore, the contract of insurance was not complete and consequently it exonerated non-applicant No. 3 from paying compensation. It awarded compensation of Rs. 1,51,761/- to the claimant against non-applicants Nos. 1 and 2 with interest at the rate of 12% per annum. The claimant filed M.A.No. 297/98 for enhancement of compensation amount and non-applicant No. 1, the owner, filed M.A.No. 289/98 for reduction of compensation amount and against the finding whereby the Insurance Company was exonerated from paying compensation amount.
3. Shri Y. I. Mehta, learned counsel for non-applicant No. 1, Ashok Kumar Garg, and Shri Samwatsar, learned counsel for the claimant, submitted that the Tribunal committed error in exonerating the Insurance Company from paying compensation. They argued that the non-applicant No. 1 had paid amount of premium to Radheshyam, the agent of Insurance Co. and cover note was issued. If the cheque issued by Radheshyam, the agent of Insurance Co. was dishonoured, it could not make the cover note ineffective and the non-applicant No. 3 was liable to indemnify the non-applicant No. 1. On the other hand, Shri Dandwate, learned counsel for the non-applicant No. 3, submitted that the non-applicant No. 1 did not pay premium to Radheshyam. As they are real brothers, therefore, after the accident, Radheshyam issued ante-dated receipt and cover note to the non-applicant No. 1. The cheque of premium was dishonoured by the Bank, therefore, there was no payment of premium and resultantly the cover note issued by non-applicant No. 3 became ineffective in view of Section 64VB, therefore, the Tribunal rightly exonerated the Insurance Co. from paying compensation amount.
4. Shri Samwatsar, LC for the claimant, submitted that the compensation awarded by the Tribunal is on lower side and inadequate. He submitted that the claimant spent more than Rs. 1,00,000/- over his treatment. He was treated at Mandsaur and in T.Choithram hospital, Indore and at Bombay. He further submitted that the Tribunal committed error in disallowing the amount of 11 bills, cash-memo Ex.P. 132 and fees charged by Physiotherapist. The Tribunal was wrong in not allowing loss of Rs. 75,000/- in agricultural work and construction work. On the other hand, Shri Y. I. Mehta and Shri Dandwate, LC for non-applicant No. 1, opposed the enhancement of compensation amount and prayed for reduction of the same.
5. We considered the arguments advanced by counsel for both sides and perused the record. The learned Tribunal has assigned proper reason for disallowing the amount of Ex.P. 102, 105, 109, 118, 120, 121, 122, 125, 179, 180 and 185 mentioned in paragraph 16 of the award as these cash-memos were allegedly issued by Alok Orthopaedic Centre and Nursing Home and Alok Mehta was not examined. Same was the case with Ex.P. 13, the cash-memo of Drug House. The amount of cash-memos Ex.P.32, 47, 49 and 54 was disallowed as the claimant did not state that he paid the amount of these cash-memos. The Tribunal also disallowed the loss of income from agricultural land on the ground that no evidence was produced. The reason assigned by the Tribunal cannot be said to be without substance. The learned Tribunal taking into consideration the oral and documentary evidence and overall facts and circumstances of the case, awarded Rs. 1,51,761/- and in our opinion, this amount cannot be said to be inadequate, it is just and reasonable and does not call for interference. We, therefore, disallow the prayer of the claimant to enhance the amount of compensation and so also the prayer of non-applicant No. I, the owner of the vehicle for reducing the same.
6. The argument of Shri Dandwate, LC for the Insurance Co. that non-applicant No. 1 did not pay premium to Radheshyam, the agent of Insurance Co. and they are brothers, therefore, after occurring of the accident, false receipt Ex. D.1 was prepared and Radheshyam issued ante-dated cover note Ex.D.2 and Radheshyam had no authority to issue cover note, is not acceptable as we find no pleading in this regard in the written statement of the non-applicant No. 3-Insurance Company. The case of the Insurance Company was that there was no payment of premium as the cheque was dishonoured, therefore, in view of Section 64VB of the Insurance Act, the cover note issued by the Insurance Company had become ineffective. Ashok Kumar (N.A.W. 1), the appellant-owner, stated that he paid Rs. 240/- as premium for insurance of his jeep No. M.K.U. 7745 to Radheshyam, the agent of non-applicant Insurance Co. He issued receipt Ex.D. 1 and cover note Ex.D.2. Radheshyam (N.A.W. 2) supported the evidence of Ashok Kumar. Admittedly, the cheque Ex.D.6 issued by Radheshyam was bounced by the bank. We fail to understand as to how the dishonouring of the cheque would make the cover note Ex.D.2 and receipt Ex.D.l ineffective which were issued by Radheshyam, the authorised agent of the non-applicant Insurance Co., after receiving premium. The witnesses of non-applicant Insurance Co., Mukesh Kumar Dabkara (N.A.W. 1) for non-applicant No. 3, the Development Officer and Sushil Kumar (N.A.W. 2), the Branch Manager, admitted that Radheshyam had authority to receive premium and insure vehicles and issue cover notes. He used to pay the amount received by him as premium, in cash or by cheque to the Insurance Co., through Development Officer. The Development Officer Mukesh Kumar Dabkara (N.A.W. 1 for N.A.W. 3) admitted in cross-examination that Radheshyam had given him the cheque of the premium of this vehicle and copy of cover note. It is, therefore, clear that premium was paid and receipt Ex.D.l and cover note Ex.D.2 were issued and contract of insurance was complete on 21-6-1993, one day before the accident. The decision of this Court in M.A.No.28/90, Bhuwan Singh v. Surajmal and Ors. decided on 16-11-1995, 1993 M.P.L.J. 215, United India Insurance Co. Ltd. v. Ratansingh and Ors., 1994 ACJ 811 (Karnataka), Oriental Insurance Co. Ltd. v. Rukmini Bai and Anr., 1995 ACJ 663 (Karnataka), Oriental Insurance Co. Ltd. v. Syaribai and Ors. and 1992 ACJ 503 (Bombay), Oriental Fire and General Insurance Co. Ltd. v. Panvel Industrial Co-operative Estates Ltd. do not help Shri Dandwate as in these cases premium was not paid as the cheques issued by the insured were dishonoured, therefore, it was held that the cover note issued without payment of premium was ineffective in view of Section 64VB of the Insurance Act.
7. As observed earlier, on 21-6-1997 contract of insurance of offending vehicle was complete as premium was paid by the insured non-applicant No. 1 and after receipt of it, cover note was issued. The accident took place on 22-6-1997, therefore, the non-applicant Insurance Co., was bound to indemnify the insured. In our opinion, the learned Tribunal committed error in absolving Insurance Co. from making payment of compensation amount on the ground that the cover note had become ineffective due to dishonouring of the cheque. Even otherwise, the dishonouring of cheque after issuance of certificate of insurance which includes the cover note, does not affect the right of third party in view of the provisions of Section 147(5) and Section 149(1) of the Motor Vehicles Act. They are quoted below :-
Section 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(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 (I) 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."
From the perusal of above provisions of Sections 147(5) and 149(1) of the M. V. Act, it is clear that if insurance policy was issued on tender of cheque which later on was dishonoured by bank, even then the insurer, notwithstanding the provisions of Section 64VB of the Insurance Act, the liability of the Insurance Co. for paying compensation amount to the third party, continues and it is bound to make the payment of compensation amount. Under such circumstances, the Insurance Co. can recover the amount from the insured.
8. As observed earlier, after payment of premium, cover note was issued, therefore, the non-applicant No. 3, was liable to pay compensation. The learned Tribunal committed error in absolving the non-applicant Insurance Co. from paying compensation to the claimant.
9. In the result, M.A. No. 297/98 and M.A. No. 289/98 arc partly allowed. The impugned award passed by the Tribunal is modified and it is directed that the appellant/non-applicant No. 1, the owner (M. A. No. 289/98) non-applicant No. 2, driver and non-applicant No. 3 Insurance Co. shall pay Rs. 1,51,761/- severally and jointly to the appellant-claimant (M.A. No. 297/98) with interest at the rate of 12% per annum from the date of filing of claim application (after adjusting the amount already deposited if any) within three months from the date of receipt of copy of this judgment. The amount, if any, paid by appellant/non-applicant No. 1 to claimant be repaid to him by non-applicant/respondent Insurance Co, No order as to costs.