Madhya Pradesh High Court
National Insurance Co. Ltd. vs Khelli Bai And Ors. on 30 August, 2005
Equivalent citations: 2006ACJ1160, AIR 2006 (NOC) 1496 (MP), 2007 (1) AKAR (NOC) 66 (MP), 2006 A I H C 2589, (2006) 2 ACJ 1160
Author: Deepak Verma
Bench: Deepak Verma
JUDGMENT
Deepak Verma and S.K. Pande, JJ.
1. This appeal under Section 173 of the Motor Vehicles Act, 1988 is directed against the award dated 6.9.2002, passed by Second Additional Motor Accidents Claims Tribunal, Satna in Claim Case No. 5 of 1999.
2. Late Ram Karan Singh, aged about 48 years died on 2.12.1998 in an accident involving a truck bearing No. MTV 888 belonging to Harvinder Singh Sethi, respondent No. 5 and driven by Karan Singh, respondent No. 4. The case of claimants in short was that late Ram Karan Singh was working as a mason with one Manoj Biyani at Bhusawal. While he was working, driver, respondent No. 4, put the truck in reverse gear causing dash against Ram Karan Singh, who as a result fell down and the wheel of the truck passed over his waist resulting in death. Respondent Nos. 1, 2 and 3 Khelli Bai, Praveen Singh, Kirti Kumar Singh respectively widow, daughter and son filed a claim petition, claiming compensation to the tune of Rs. 8,60,000 alleging rash and negligent driving by the driver of the said truck, respondent No. 4, causing the death of late Ram Karan Singh. Owner Harvinder Singh Sethi, respondent No. 5 and driver Karan Singh, respondent No. 4, did not file their written statements, accordingly were proceeded ex pane. The appellant insurance company denied its liability to pay compensation on the ground that the cheque issued by the owner of the vehicle, respondent No. 5, towards premium of the policy was dishonoured and accordingly the policy was cancelled after giving information to the insured by registered post, prior to the occurrence of the accident. The Tribunal below relying on Oriental Insurance Co. Ltd. v. Inderjit Kaur , rejected the plea of the appellant insurance company and proceeded to award compensation to the tune of Rs. 2,50,000.
The cheque dated 31.3.1998, Exh. D1C, towards payment of premium was issued by the owner, respondent No. 5. On being presented vide memo Exh. D2C, it was sent to the Akola Urban Co-operative Bank Limited, Akola for collection. The bank concerned vide memo dated 3.4.1998, Exh. D3C, returned the cheque Exh. D1C, with a note for non-availability of funds in the account of the owner, respondent No. 5. On that basis, the appellant insurance company cancelled the policy vide memo dated 6.4.1998, Exh. D4C and sent the information per registered post to the owner, respondent No. 5, that the company shall not be liable for any risk since inception under the policy.
Appellant insurance company assailed the impugned award only on the ground that the incident wherein late Ram Karan Singh died occurred on 2.12.1998. Prior to the said incident, for non-payment of premium, the policy issued in favour of the insured-owner, respondent No. 5, was cancelled on 6.4.1998 itself. Memo cancelling the policy was sent to the owner, respondent No. 5, per registered post vide postal receipt, Exh. DSC. Even after the cancellation of policy vide memo dated 6.4.1998, the insured-owner, respondent No. 5, did not act, as such the appellant insurance company ought not to have been held liable for payment of compensation to the claimants-respondents.
Reading the judgment of Apex Court in Oriental Insurance Co. Ltd. v. Inderjit Kaur and New India Assurance Co. Ltd. v. Rula , the Division Bench of Kerala High Court in New India Assurance Co. Ltd. v. Raghu , dealt with the case of the nature herein. It has been held:
So far as the present appeals are concerned, the accident occurred after the cancellation of the policy. The question, therefore, is whether since the policy has been cancelled, can the respondent rely on the decisions referred to supra. Learned Counsel for appellant contended that for payment by the insurance company, existence of a policy is a must. If the policy is not in existence, then there is no liability to pay the amount notwithstanding that such a policy was previously issued. Thus, according to the learned Counsel for the appellant, there cannot be any dispute that on the date of accident, there should be a policy. Supposing the owner of the vehicle had failed to take a policy on the date of the accident, the insurance company cannot be compelled to pay the amount. In the same way, learned Counsel contended that supposing an insurance policy which has already been issued was cancelled and was not in existence on the date of accident, then the insurance company will not be liable to pay the amount. Section 146 of the Motor Vehicles Act states as follows:
No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter.
Thus the section clearly states that there should be in force a policy. Section 149 of the Motor Vehicles Act states that 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 (1) 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.
According to us, Section 149 of the Motor Vehicles Act does not help the present claimants in the present case. It only states that if a judgment has been passed by the Tribunal, notwithstanding the fact that the policy of insurance is liable to be cancelled then there is a liability to discharge the amount due to the insured. According to us, for a liability of the insurance company, there should be in existence a policy. That policy may not be supported by consideration. But so long as the policy exists and if an accident occurs before its cancellation, the insurance company is liable. But if the accident occurs after the cancellation of the policy, then the insurance company is not liable to pay the amount.
3. Shailendra Gond, DW 1, has stated that insured-owner, respondent No. 5, had issued the cheque dated 31.3.1998, Exh. D1G towards the payment of premium. On being presented the Canara Bank vide Exh. D2C sent it to the bank concerned, i.e., Akola Urban Co-operative Bank Limited, Akola for collection. The Akola Urban Cooperative Bank Limited, Akola vide memo dated 3.4.1998, Exh. D3C, returned the cheque, Exh. D1C, as sufficient funds in the account of the owner, respondent No. 5 were not available. As such, the cheque, Exh. D1C, being itself dishonoured appellant insurance company cancelled policy vide memo dated 6.4.1998, Exh. D4C and communicated to the owner, respondent No. 5 that company is not on risk since inception under the policy issued. Memo dated 6.4.1998, Exh. D4C, per registered post was sent to the owner, respondent No. 5 vide postal receipt, Exh. D5C.
Admittedly, the driver and the owner, respondent Nos. 4 and 5 on being served with a writ of summons in Claim Case No. 5 of 1999 did not file their written statements. As such, were proceeded ex pane.
4. The instant case on facts and under the circumstances is squarely covered by the decision of a Division Bench of Kerala High Court in New India Assurance Co. Ltd. v. Raghu . The Tribunal below erred in fastening a liability against the appellant insurance company who in fact had cancelled the policy much before the date of occurrence, i.e., 2.12.1998 under intimation to the insured.
5. Consequently, the appeal is allowed.
Appellant insurance company shall not be liable to pay any sum towards compensation to claimants-respondents under the impugned award. However, parties shall bear their costs throughout. Counsel's fee as per rules or certificate whichever is less.