Madhya Pradesh High Court
United India Insurance Company Limited ... vs Smt. Kaushalya Bai And 12 Ors. on 14 March, 2006
ORDER
1. This order shall govern the disposal of this appeal as well as Misc. Appeal No. 635/99 (M.P. State Road Transport Corporation v. Smt. Kaushalya Bai and 12 Ors.). Both the appeals arise out of the same award and relate to the same incident and were heard together. Therefore, they are being decided analogously,
2. The facts which led to filing of these appeals narrated in short are that respondents No. 1 to 9 of both the appeals filed a petition under Section 166 of the Motor Vehicles Act, 1988 (henceforth the 'Act') stating that they are the legal representatives of deceased Amar Singh. On 2-6-93 deceased Amar Singh was travelling in bus No. MIH-7926 owned by M.P. State Road Transport Corporation, the appellant in M.A. No. 635/99 and driven by Moolchand, the respondent No. 13 in both the appeals. When the bus reached near village Mehatwada, the bus colluded with truck No. MP09-D/5148, owned by Jai Prakash Sharma, respondent No. 10 in both the appeals and driven by Radheshyam, respondent No. 12 in Misc. Appeal No. 635/99 and respondent No. 11 in this appeal and insured with United India Insurance Company, the appellant in this appeal and respondent No. 11 in Misc. Appeal No. 635/99. Because of this collusion some of the passengers travelling in the bus including deceased Amar Singh died.
3. The claimants alleged that deceased Amar Singh who died on the spat, was Assistant Jailer in Sub Jail, Sendhwa. The claimants were dependents on him. At the time of death of Amar Singh his salary was Rs. 3,525/-. He was to retire in the year 2006. Till his retirement he would have earned salary of Rs. 5,000/- per month and thereafter would have received pension. They claimed a compensation of Rs. 20 Inc.
4. The claim of the claimants was denied by appellant of this appeal stating that the offending truck was not insured with it. Jai Prakash Sharma, the owner of the offending truck handed over a cheque No. 003592, dated 23-1-92 and got the truck insured but as there was no sufficient fund in the bank account of the owner of the truck, the cheque was dishonoured by the bank, In the hope that the cheque will be encashed, a covering note dated 24-11-92 and insurance policy were issued. When the bank informed it that there is no sufficient balance in the account of Jai Prakash, the Insurance Company informed him that the cheque has not boon honoured and, therefore, the covering note and insurance policy are cancelled. It also requested Jai Prakash that if he wants to get his vehicle insured, he should immediately deposit Rs. 7,425/- with the company. This communication was received by Jai Prakash but he did not pay the amount required. Thus, on the data of accident the offending truck was not insured with it.
5. The owner and driver of the truck pleaded that the truck was being driven by Radheshyam very carefully. The accident occurred due to the rash and negligent driving by the driver of the M.P.S.R.T.C. bus.
6. The appellant in M.A. No. 635/99 pleaded that the bus was being driven by their driver, Moolchand, very carefully. It was the driver of the truck who was driving the vehicle rashly and negligently and colluded with the bus, The owner and driver of the truck and the driver of M.P.S.R.T.C. bus did not submit any written statement,
7. The Claims Tribunal, after concluding the trial recorded a finding that the drivers of both the vehicles were driving their respective vehicles in a rash and negligent manner and the liability of both of them is contributory and, therefore, the owner, driver and insurer of the truck are liable to pay half of the compensation amount and the owner and driver of the bus are liable to pay rest half of the compensation amount. Regarding the liability of appellant in this appeal the Tribunal found that its liability remained unaffected by cancellation of the cover note issued by the Insurance Company and it is its duty to satisfy award against the persons insured in respect of third party risk. The Tribunal awarded a sum of Rs. 3,50,000/- to the claimants for the death of Amar Singh.
8. It is this award of the Tribunal which is the cause of grievance of the appellants in both the appeals.
9. I have heard Shri V.K. Pandey, counsel for appellant, Shri Shailendra Samaiya, counsel for respondents No. 1 to 9 and Shri A.K. Singh, counsel for respondent No. 12 in Misc. Appeal No. 559/99 and Shri A.K. Singh, counsel for appellant, Shri Shailendra Samaiya, counsel for respondents No. 1 to 9 and Shri V.K. Pandey, counsel for respondent No. 11 in Misc. Appeal No. 635/99 and perused the record of the Tribunal including the impugned award.
10. Shri V.K. Pandey, learned Counsel for the appellant/insurance company in this appeal vehemently submitted that the truck in question was not insured with the appellant-insurance company on the date of the accident. The cheque, Ex.D-2 given by Jai Prakosh, the owner of the truck, was dishonoured by the Bank of India as is clear from the memo of the Bank of India, Dhamnod Branch, Ex.D-3. As the cheque was returned as dishonoured, the insurance company issued a letter, Ex.D-4 to the insured regarding dishonour of the cheque and in the unequivocal terms cancelled the cover note. However, an option was given to the insured that if he desires them to cover the risk afresh, he may arrange to remit a sum of Rs. 7,425/-, This communication was sent to the owner of the truck by registered post, A copy of the receipt of the registered letter, Ex.D-5, a copy of the despatch register and the extract copy of postage register have been filed.
11. The crucial question that arises for determination in the present appeal is whether on the date of the accident the offending truck was not insured with the appellant in this appeal ?
12. The insurance company, appellant in this appeal, in this regard examined Sunil Rastogi, administrative officer as D.W.1. This witness has stated that the owner of the offending truck submitted a cheque of Rs. 7,704/-, Ex.D-1 to get the truck insured with the appellant. Accordingly, in the expectation of the encashment of the cheque the vehicle was insured and cover note was issued. The cheque issued by the owner of the truck was sent to the bank but the same was dishonoured. The bank by its letter, Ex.D-3, returned the cheque. Accordingly, the appellant informed the insured regarding the cancellation of the policy vide letter Ex.D-
13. From the evidence of this witness it is clear that the insurance policy or cover note was cancelled long before the date of the accident. The letter, Ex.D-4, was sent properly addressing prepaying and posting by registered post and, therefore, under Section 27 of the General Clauses Act it will be presumed that the service has been effected at the time at which the letter would be delivered in the ordinary course of post.
14. Learned Counsel for the respondents vehemently submitted that the finding of the Tribunal that the liability of the insurance company will remain uneffected by the cancellation is not impeachable. The same is based on the judgment rendered in Oriental Insurance Co. Ltd. v. Inderjit Kaur and Ors. . Despite the bar created by Section 64VB of the Insurance Act, because under Section 147(5) and 149(1) of the Act, the appellant became liable to indemnify the person in respect of the liability which that policy covered and to satisfy the award of compensation in respect thereof, notwithstanding, its entitlement to avoid or cancel the policy for the reason that the cheque issued in payment of premium thereon had not been honoured. The appellant company is liable.
15. The contention cannot be accepted, In the case of Inderjit Kaur (supra) the policy was not cancelled while in the present case it has been proved beyond any shadow of doubt that the insurance policy was cancelled long before the date of accident.
16. it is true that in New India Assurance Co. Ltd. v. Rula and Ors. , it has been held that despite the bar created by Section 64VB of the Insurance Act the cancellation of cover note subsequent to the accident will not affect the right of the third party. If the policy is cancelled after the accident, the insurance company will not be absolved but in the present case, the cover note was cancelled long before the date of the accident. Therefore, it cannot be said that on the date of the accident the contract of insurance subsisted. Thus, the finding of the Tribunal that the insurance company is liable cannot be countenanced,
17. For the reasons stated above it cannot be said that on the date of the accident the vehicle was insured with the appellant, therefore, the appellant is not liable to pay the compensation.
18. So far as the Misc. Appeal No. 635/99, filed by M.P.S.R.T.C. is concerned, learned Counsel for the appellant vehemently submitted that the finding of the Tribunal that the driver of the bus of the appellant was rash and negligent is erroneous.
19. The contention is not acceptable. The claimants examined Smt. Kamal Khare (AW-5), Narayan Joshi (AW-9), Deepak Pradhan (AW-11), Abhiuhok Kharo (AW-13), Ratanlal (AW-15), Bhagwat Singh Chouhan (AW-16) and Sukhram (AW-17). All these witnesses were travelling in the bus, Some of them produced the ticket issued by the Corporation and some of them wore injured in the accident. All these witnesses have specifically stated that the drivers of both the vehicles were driving their respective vehicles rashly and negligently. No evidence was given by the M.P.S.R.T.C. to rebut this evidence. The driver of the Corporation, Moolchand, who could have been the best person to speak about the accident, has not been examined.
20. The finding of the Tribunal that the drivers of both the vehicles were driving their respective vehicles rashly and negligently is based on proper appreciation of the evidence and circumstances of the case. The Tribunal also analyzed the factual material properly and its finding cannot be lightly brushed aside by this Court. An appellate Court should always bear in mind that if the finding of the Court below is reasonably sustainable from the evidence on record, it should not be interfered with normally except for very cogent reasons. The Tribunal given convincing reasons for recording its finding. I do not find any reason to take a contrary view. Therefore, the finding of the Tribunal that the M.P.S.R.T.C. is liable for the compensation is defensible and no case for interference in the well reasoned award passed by the Tribunal in Misc. Appeal No. 635/99 is made out.
20. As a result of aforesaid discussion, Misc. Appeal No. 559/99 stands allowed. It is held that on the date of the accident the offending truck was not insured with the appellant and, therefore, the appellant-insurance company is not liable for any compensation. So Tar as Misc. Appeal No. G35/99 is concerned, it is devoid of any merit and the same is, therefore, dismissed.