Andhra Pradesh High Court - Amravati
The New India Assurance Company ... vs Smt. J.Suseelamma And 5 Others on 1 November, 2023
THE HON'BLE SRI JUSTICE V. GOPALA KRISHNA RAO
M.A.C.M.A. No. 3818 of 2012
JUDGMENT:-
1) Aggrieved by the impugned Award and Decree, dated 13.07.2005, passed in O.P. No. 373 of 2000 on the file of the Motor Accidents Claims Tribunal-cum-VI Additional District Judge (Fast Track Court), Anantapur at Gooty, whereby, a claim of Rs.2,10,000/- was awarded towards compensation to the claimants by the Tribunal, this instant appeal is preferred by the 2nd respondent/the New India Assurance Company questioning the legal validity of the Award of the Tribunal.
2) For the sake of convenience, both the parties in the Appeal will be referred to as they are arrayed in the claim application.
3) The claim petitioners filed the petition under Section 140 & 166 of the Motor Vehicles Act, 1988 [the 'M.V. Act'] read with Rule 455 of the A.P. Motor Vehicles Rules, 1989 [the 'Rules'] against the respondents claiming compensation of Rs.2,00,000/- for the death of one 2 J. Lakshmanna [the 'deceased'], in a motor vehicle accident that took place on 08.10.1999.
4) Facts germane to dispose of the Appeal in brief is as follows: -
i. On 08.10.1999 at 9.30 A.M., the deceased along with his brother-in-law [Chinna Yellappa] went to Thimmapalli Village and while they were walking on the road, one TATA Sumo bearing registration No.AP09 AC 5132 came in a rash and negligent manner and dashed against the deceased, due to that the deceased fell down and succumbed to injures at Government Hospital, Tadipatri. A case in Crime No.40 of 1999 was registered for the offence punishable under Sections 337 and 304A of the Indian Penal Code, 1860 ['I.P.C.']. The 1st respondent is the owner and the 2nd respondent is insurer of the offending vehicle TATA sumo. Hence, both the respondents are jointly and severally liable to pay compensation to the petitioner.3
5) The 1st respondents remained ex parte.
6) The 2nd respondent/insurance company filed counter while denying the claim of the claimants pleaded that the 2nd respondent/insurance company is not liable to pay any compensation to the claimants as the premium that was offered towards policy by the 1st respondent through a cheque was cancelled subsequent to dishonor of cheque and prays to dismiss the claim against the 2nd respondent/insurance company.
7) Based on the above pleadings of both the parties, the following issues were settled for trial by the Tribunal:
1) Whether the accident occurred on 08.10.1999 due to rash and negligent driving of the TATA Sumo bearing No.AP09 AC 5132 by its driver dashed against the deceased and caused the death of deceased?
2) Whether the petitioners are entitled to compensation?
If so, to what amount and from which respondent?
3) To what relief?
8) During the course of enquiry in the claim petition, on behalf of the petitioners, PW1 and PW2 were examined and 4 Ex.A1 to Ex.A4 were marked. On behalf of the respondents, no oral or documentary evidence was adduced.
9) At the culmination of the enquiry, based on the material available on record, the Tribunal came to the conclusion that the accident occurred due to rash and negligent driving of the driver of offending TATA sumo and accordingly, allowed the claim petition and awarded an amount of Rs.2,10,000/- with proportionate costs and interest at 9% per annum from the date of petition till the date of deposit against the respondents. Aggrieved against the said Award, the appellant/Insurance company preferred the present Appeal.
10) Heard Smt. A. Jyanthi, learned Standing Counsel for the appellant/insurance company. None present for the respondents. Perused the record.
11) Now, the point for determination is:
Whether the Award of the Tribunal needs any interference of this Court, if so, to what extent? 5
12) POINT: Smt. A. Jyanthi, learned Standing Counsel for the appellant, vehemently contend that, the cover note of the policy was issued by the insurance company on 16.07.1999, which was in force till 15.07.2000, after receipt of the cheque from the owner of the offending vehicle. She would further submit that, subsequently the said cheque was dishonoured and the policy was cancelled by the appellant/insurance company on 30.07.1999 and the date of accident is on 08.10.1999 and intimation was also sent to the owner of the offending vehicle vide registered post with acknowledgment due on 02.08.1999, much prior to the date of accident, therefore, the insurance company is not liable to pay the compensation to the claimants. She would further submit that the Tribunal grossly erred in fixing the liability against the insurance company to indemnify the owner of the offending vehicle and prays to allow the appeal.
13) An appreciation of entire evidence on record, the Tribunal rightly came to conclusion that the accident in question occurred due to rash and negligent driving of the 6 driver of TATA Sumo. No appeal is filed by the respondent No. 1 against the said finding. In-fact, the appellant also not disputed the said finding given by the Tribunal.
14) The paramount question that fall for adjudication in this appeal is, whether the fact that the cheque that was issued towards payment of premium for the policy, that was taken in respect of the offending vehicle, was dishonoured subsequently that policy was cancelled on the ground that the cheque that was issued towards payment of premium was dishonoured, would be a valid legal ground to exonerate the insurance company from its liability to indemnify the owner of the said vehicle to pay the compensation to third party on account of death of the deceased in the motor vehicle accident that occurred due to rash and negligent driving of the offending vehicle by its driver?
15) The legal position, in this regard, is not res nova and the same has been well settled. The Apex Court in the case of United Insurance Company Limited Vs. Laxmamma 7 & Ors1, had an occasion to deal with the same issue. The question that fell for consideration before the Apex Court in the said case is, whether the appellant/United India Insurance Company Limited (insurer) is absolved of its obligations to the third party under the policy of insurance because of the cheque given by the owner of the vehicle towards the premium got dishonored and subsequent to the accident, the insurer cancelled the policy of insurance?
16) In that case also, the insurer raised a plea that the insurance policy was issued on 14.04.2004 covering the offending vehicle involved in the accident and the policy was issued for the period from 16.04.2004 to 15.04.2005 and the cheque that was issued towards payment of premium was dishonoured and, therefore, there was no liability on the insurance company to cover the third party risk.
17) It was also contended in the said case by the Insurance Company that the earlier view taken by the Apex Court in the case of Oriental Insurance Company 1 (2012) 5 SCC 234 8 Limited v. Inderjit Kaur2 has been diluted by the later decisions of the Supreme Court rendered in the case of National Insurance Company Limited v. Seema Malhotra3 and Deddappa v. National Insurance Company Limited4.
18) After considering the earlier Judgments rendered by the Apex Court, in this regard, in Oriental Insurance Company Limited v. Inderjit Kaur (2 supra), National Insurance Company Limited v. Seema Malhotra (3 supra) and Deddappa v. National Insurance Company Limited (4 supra) and after considering the relevant provisions in the Motor Vehicles Act i.e., Sections 147, 149 and also Section 64-VB of the Insurance Act, the Apex Court authoritatively held at para No.26 as follows:
"In our view, the legal position is this: where the policy of insurance is issued by an authorised insurer on receipt of cheque towards the payment of premium and such a cheque is returned dishonoured, the liability of the 2 (1998) 1 SCC 37 3 (2001) 3 SCC 151 : 2001 SCC (Cri)443 4 (2008) 2 SCC 595 : (2008) 1 SCC (Cri) 517 9 authorised insurer to indemnify the third parties in respect of the liability which that policy covered subsists and it has to satisfy the 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 authorised 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 authorised insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonoured 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."
19) In the present case, the material on record reveals that the cover note was issued by the insurance company to cover the period from 16.07.1999 to 15.07.1999 by receiving a cheque from the owner of the vehicle. Subsequently, the said cheque was dishonoured and the policy was cancelled on 30.07.1999. The date of accident, 10 in the case, is on 08.10.1999. Intimation was sent to the owner of the offending vehicle through registered post on 02.08.1999. Copy of the Dispatch Register of the insurance company filed by the appellant clearly shows that the intimation was sent by the insurance company on 02.08.1999 through registered post.
20) As stated supra, the date of accident, in this case, is on 08.10.1999. The policy was cancelled on 30.07.1999 and intimation was sent to the owner of the offending vehicle is on 02.08.1999, much prior to the date of accident i.e., 08.10.1999. Therefore, certainly the insurance company is not liable to pay the compensation to the claimants. Therefore, the Tribunal committed error in fastening the liability on the appellant/insurance company.
21) At this juncture, the learned Standing Counsel for the appellant has brought to the notice of this Court that by virtue of the interim order passed by this Court in the appeal, the appellant/insurance company has deposited 11 50% of the award amount with costs and interest before the Tribunal.
22) In this context, I am of the view that at this length of time, particularly in a case where the deceased died due to injuries in a road accident and the amount had already been withdrawn by the claimants and spent by them for their maintenance and in view of the death of the deceased, the claimants are starving for food, I do not feel it appropriate to direct the claimants to repay the amount, which was deposited by the insurer and already withdrawn by the claimants, as per the interim directions of this Court to the insurer, applying the principle of 'equity'.
23) In the result, the appeal is allowed. The liability fixed on the appellant/the New India Assurance Company by the Tribunal is liable to be set-aside. The appellant/the New Indian Assurance Company shall recover 50% of the compensation amount with interest and costs already deposited by it from the 1st respondent/owner of the offending vehicle by filing an execution petition and without filing any independent suit. The claimants are at 12 liberty to recover the 50% of the compensation amount from the owner of the offending vehicle, since the award is also passed against the 1st respondent by the Tribunal. The Order of the Tribunal in all other respects shall remain intact. No order as to costs.
24) As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed.
_____________________________ V.GOPALA KRISHNA RAO, J Date: 01.11.2023 Sm...
13THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO M.A.C.M.A. No. 3818 of 2012 Date: 01.11.2023 sm