Andhra HC (Pre-Telangana)
Oriental Insurance Co., Ltd., ... vs Pinjary Hussainamma And Others on 1 March, 2000
Equivalent citations: II(2000)ACC170, 2002ACJ597, 2000(4)ALD337, 2000(3)ALT109
JUDGMENT
1. The appellant-Insurance Company has filed this appeal against the judgment and decree in MVOP No.518 of 1990 dated 6-7-1994 on the file of the I Additional District Judge-cum-Motor Vehicle Accident Claims Tribunal at Kumool.
2. The first respondent in this appeal is the claimant before the Tribunal. The 2nd respondent in this appeal is the owner of the offending vehicle bearing No. AEK. 5659. The Tribunal, on consideration of the evidence, held that due to rash and negligent driving of the driver of the bus bearing No. AEK 5659 belonging to the 2nd respondent herein and insured with the appellant herein, the first respondent received injuries. The Tribunal, therefore, awarded a compensation of Rs.41,200/-payable by the Insurance Company as well as the owner of the offending vehicle, jointly and severally.
3. The only ground raised by the appellant in this appeal is that the cheque issued by the owner of the offending vehicle was dishonoured, and therefore the policy was cancelled by issuing a covering not, and hence, the Insurance Company is not liable to pay the awarded compensation.
4. Admittedly, the cover note was issued covering the risk for a period from 13-9-1990 to 12-9-1991 and the accident took place on 16-10-1990. Though it was stated that cover note was cancelled on 15-9-1990 for dishonour of the cheque issued by the owner of the vehicle, the same was not communicated to the registering authority as contemplated under Section 147 of the Motor Vehicles Act. The learned Judge rightly held that once the insurance policy was issued by covering the risk and if any accident occurs during currency of the said policy, the 3rd parties are entitled for the compensation and it is for the Insurance Company to proceed against the owner for the laches on the part of the owner and that the Insurance Company cannot escape from its liability to pay the awarded compensation. The Hon'ble Supreme Court also held in Oriental Insurance Company Limited v. Inderjit Kaur, AIR 1998 SC 588, that under Sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant is liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof, notwithstanding its entitlement to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured. It also observed that the policy of insurance, that the appellant issued, was a representation upon which the authorities and third parties were entitled to act and the appellant was not absolved of its obligations to third parties under the policy, because it did not receive the premium and its remedies in this behalf lay against the insured. The Apex Court further held as follows: "It must also be noted that it was the appellant itself who was responsible for its predicament. It had issued the policy of insurance upon receipt only of a cheque towards the premium in contravention of the Provisions of Section 64-VB of the Insurance Act. The public interest that a policy of insurance serves must, clearly, prevail over the interest of the appellant."
5. Therefore, I do not agree with the contention of the learned Counsel for the appellant that the owner alone is liable to pay the compensation and the Insurance Company is not under obligation to pay the compensation on the ground that the cheque issued by the owner of the offending vehicle was dishonoured. The Tribunal rightly held that even cancellation of the coverage was also not intimated to the registering authority. I do not see any merit in this appeal and the same is accordingly dismissed. No costs.