Karnataka High Court
The Divisional Manager vs Kumar Shivanand on 13 April, 2017
Equivalent citations: 2017 (2) AKR 721
Author: H.B.Prabhakara Sastry
Bench: H. B. Prabhakara Sastry
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
1
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 13TH DAY OF APRIL 2017 R
BEFORE
THE HON'BLE DR. JUSTICE H. B. PRABHAKARA SASTRY
M.F.A.NO.21560/2009 (MV)
C/W.
M.F.A.NO.20762/2009 (MV)
IN MFA NO.21560/2009
BETWEEN:
THE DIVISIONAL MANAGER
THE NATIONAL INSURANCE CO. LTD.,
DIVISIONAL OFFICE,
SUJATA TALKIES COMPLEX
NEAR OLD BUS STAND,
P. B. ROAD, HUBLI
... APPELLANT
(BY SRI. RAJASHEKHAR S. ARANI, ADVOCATE)
AND:
1. KUMAR SHIVANAND, S/O. NETAJI MOHITE
AGE: 9 YEARS, OCC: STUDENT
R/O. POST:NIGADI, TQ. & DIST. DHARWAD
REP. BY HIS NATURAL GUARDIAN
FATHER NETAJI, S/O. TANAJI MOHITE
AGE: 43 YEARS, OCC: BUSINESS
R/O. NIGADI, TQ. & DIST. DHARWAD
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
2
2. KANYAPPA, S/O. VITAPPA CHANDRAGI
AGE: 55 YEARS, OCC:OWNER OF
DELIVERY VAN BEARING NO KA 25/A 1983
R/O. HALLIKERI,
TQ. & DIST. DHARWAD
... RESPONDENTS
(BY SRI. V. S. KALASURMATH FOR SRI.ANIL KALE,
ADVOCATE FOR R1; R2 - SERVED)
THIS MFA IS FILED UNDER SECTION 173(1) OF THE
MOTOR VEHICLES ACT,1988 AGAINST THE JUDGMENT AND
AWARD DATED:27/09/2008 PASSED IN M.V.C.NO.343/2004
ON THE FILE OF THE I ADDL. CIVIL JUDGE (SD.) AND
MOTOR ACCIDENTS CLAIMS TRIBUNAL, DHARWAD,
AWARDING A COMPENSATION OF RS.1,20,000/- WITH
INTEREST AT 6% P.A..
IN MFA No.20762/2009
BETWEEN:
SHIVANAND S/O NETAJI MOHITE
AGE: 8 YEARS, OCC: STUDENT
R/O. NIGADI, TQ/DIST: DHARWAD
THROUGH HIS FATHER SRI. NETAJI MOHITE
AGE: 42 YEARS, OCC: BUSINESS
R/O. NGADI, TQ/DIST. DHARWAD
AS A MINOR GUARDIAN
... APPELLANT
(BY SRI. V. S. KALASURMATH FOR SRI. ANIL KALE,
ADVOCATE)
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
3
AND:
1. KANYAPPA
S/O VITHAPPA CHANDARIGI
AGE: 54 YEARS, OCC: OWNER OF
DELIVERY VAN BEARING NO.
KA-25/A-1983, R/O.HALLIGERI
TQ. & DIST: DHARWAD.
2. THE DIVISIONAL MANAGER
THE NATIONAL INSURANCE CO. LTD.,
DIVISIONAL OFFICE,
SUJATA TALKIES COMPLEX
NEAR OLD BUS STAND,
P.B.ROAD,HUBLI
... RESPONDENTS
(BY SRI. RAJASHEKAR S. ARANI, ADVOCATE FOR R2;
R1 - SERVED)
THIS MFA IS FILED UNDER SECTION 173(1) OF THE
MOTOR VEHICLES ACT, AGAINST THE JUDGMENT AND
AWARD DATED:27/09/2008 PASSED IN M.V.C.NO.343/2004
ON THE FILE OF THE MACT NO.2 DHARWAD, PARTLY
ALLOWING THE CLAIM PETITION FOR COMPENSATION AND
SEEKING ENHANCEMENT OF COMPENSATION.
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 06.04.2017 AND COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
4
COMMON JUDGMENT
In MFA No.21560/2009
Mr.Rajashekhar S. Arani, Advocate for appellant
Mr.V. S. Kalasurmath for Mr.Anil Kale, Advocate for
respondent No.1
In MFA No.20762/2009
Mr.V. S. Kalasurmath for Mr.Anil Kale, Advocate for
appellant.
Mr.Rajashekar S. Arani, Advocate for respondent R2.
1. The appellants have filed these appeals under
Section 173(1) of the Motor Vehicles Act, challenging the
judgment and award passed by the Court of I Addl. Civil
Judge (Sr.Dn.) and M.A.C.T. No.2, Dharwad (hereinafter
referred to as 'the Tribunal', for short), in MVC
No.343/2004 on 27.09.2008.
2. The appellant in MFA No.21560/2009 has
prayed for allowing the appeal by setting aside the
judgment and award under appeal, whereas the
appellant in MFA No.20762/2009 has prayed for
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
5
enhancement of the compensation by modifying the
judgment and award under appeal.
3. The appellant/Insurance Company in MFA
No.21560/2009, in its appeal has stated that the
Insurance Policy which was extended to the owner of the
vehicle was cancelled for non-payment of the premium
amount. As such, as on the date of the accident, there
was no insurance coverage by it to the said vehicle.
Still, the Tribunal below has erroneously held the insurer
as liable to pay the compensation and subsequently to
recover the same from the owner of the vehicle. Stating
that the said finding is an erroneous finding, the
appellant/Insurance Company has prayed for setting
aside the judgment and award under appeal.
4. The appellant in MFA No.20762/2009, who was
the claimant before the Tribunal below, in the present
appeal has contended that the Tribunal below failed to
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C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
6
appreciate the gravity of the pain and suffering
sustained by a boy of tender age of 4 years. The injury
has left him to limp for the rest of his life. The Tribunal
below did not appreciate the evidence of the doctor in its
proper perspective. Shortening of the right limb by 1½
inch, thus restricting the movement of the injured was
also not appreciated by the Tribunal below. With this, he
has prayed for enhancement of the compensation
awarded by the Tribunal below.
5. On notice being issued, respondent No.1 in MFA
No.21560/2009 and respondent No.2 in MFA
No.20762/2009 are served and appeared through their
learned Counsels. Respondent No.2 in MFA
No.21560/2009 and respondent No.1 in MFA
No.20762/2009, who was placed ex-parte before the
Tribunal, was served and unrepresented. The lower
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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courts records were called for and the same are placed
before me.
6. Heard the arguments from both sides and
perused the memorandum of appeal, impugned
judgment and the entire materials placed before this
Court.
7. The points that arise for my consideration are:
i. Whether the appellant has made out
grounds to allow MFA No.21560/2009?
ii. Whether the appellant has made out
grounds to allow MFA No.20762/2009?
Since these points are interrelated to each other,
in order to avoid repetition of analysis of facts, both the
points are taken up together for analysis.
For the sake of convenience, the parties would be
referred to with the rankings they were holding in the
Tribunal below.
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
8
8. The summary of the case of the claimant in the
Tribunal below is that on 16.08.2003 at 9.15 am, when
the claimant was sitting near his house in a place near
Nigadi in Dharwad Taluka, on the side of the road of
kachcha portion, a delivery van bearing registration
No.KA-25/A-1983, being driven by its driver in a rash
and negligent manner and in a high speed, came and
dashed to him, due to which he sustained crush injury to
his leg and was shifted to the District Hospital, Dharwad.
Later, for further treatment, he was also taken to KIMS
Hospital at Hubli. He was treated as an inpatient and
surgically operated and skin grafting was done. Due to
the injuries sustained by him in the accident, he is
suffering with permanent disability, holding the owner
and alleged insurer of the vehicle, as jointly and
severely responsible to pay him the compensation, the
claimant claimed a total compensation of `3,50,000/-
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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from them. Showing that the injured claimant was of
the age of 4 years at the time of accident, one Sri.
Netaji Mohite, said to be the father and natural guardian
of the minor claimant, has preferred the claim petition.
Both in the Tribunal below as well as in this Court, the
alleged owner of the vehicle i.e., respondent No.1, did
not choose to appear even after service of notice upon
him. As such, the Tribunal placed him ex-parte and
proceeded further in the matter. The 2nd respondent
i.e., the Insurance Company, though appeared and
contested the matter, its main objection to the claim
petition was that it was no more an insurer of the
vehicle, as such, it was not liable to pay compensation.
However, the Tribunal below, after recording the
evidence led before it and going through the documents
produced and marked as exhibits and hearing the
arguments, came to a conclusion that the claimant was
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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entitled for a total compensation of `1,20,000/- with
interest thereupon. Even after giving a finding that
there was no valid insurance policy covering the vehicle
at the time of accident, the Tribunal below directed the
2nd respondent i.e., the insurer as liable to deposit the
awarded amount and then to recover the same from the
owner of the vehicle.
9. Thus, the happening of the road traffic accident
as alleged by the claimant on the date, time and place
mentioned in the claim petition and the rash and
negligent driving of the driver of the said vehicle are not
in dispute. The Insurance Company in its appeal has
disputed affixing liability upon it and not the other
aspects. So also was the argument of the learned
counsel appearing for the Insurance Company.
Therefore, the question of occurrence of accident and
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The Divisional Manager, The National Insurance Co. Ltd.,
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Kumar Shivanand S/o. Netaji Mohite and Another
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the claimant sustaining injury being not in dispute, those
facts need not be analysed again.
10. The claimant in his appeal, through his father
cum natural guardian, has contended that the Tribunal
below did not appreciate the gravity of the pain and
suffering sustained by him and also the permanent
disability he is suffering with, due to the accident and
injury. The Tribunal below has awarded the
compensation under the following heads:
Amount (`
`)
Pain and Suffering 40,000.00
Loss of amenities 30,000.00
Medical and incidental 30,000.00
expenses
Loss of education at the time 20,000.00
of treatment
Total 1,20,000.00
11. The father of the claimant, who got examined
as PW1, in his evidence, apart from reiterating the
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The Divisional Manager, The National Insurance Co. Ltd.,
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contention taken up in the claim petition, has also stated
that, due to the accident, his minor son has suffered
with permanent disability and that he can neither sit
independently, nor walk without difficulty. He is
permanently disabled and has become physically
handicapped. He got produced and marked a copy of
the Wound Certificate at exhibit P4, Medical Certificate
at exhibit P6 and X-ray film at exhibit P8. The Wound
Certificate at exhibit P4 shows that the injured sustained
a crush injury to the right leg. Exhibit P6, which is
another certificate issued by Shreyas Orthopedics and
Trauma Centre, Hubli, more specifically says that the
crush injury was to the right foot of the injured.
12. The details of the injury sustained by the
claimant can be found in the evidence of PW2 -
Dr.Mrutyunjaya, who is an Orthopedic Surgeon. Though
he is not a treating doctor, but after clinically examining
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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the injured and going through the entire medical records
pertaining to the injured and the treatment given to
him, he has given his evidence. In his evidence, he has
clearly stated that the injured was treated in his hospital
as an inpatient, where the injured underwent
debrivment and skin grafting. Even after his discharge,
he was under continuous treatment. Due to the injury,
there is deformation of the right foot, for which he has
to walk with palgus foot. Multiple skin were grafted
over the right foot. By surgery, his right lower limb was
shortened by 1½ inch. The boy is suffering with
functional disability of 45% to his right lower limb. In
his support, he has also referred to exhibits P7 and P8,
which are disability certificate and X-rays film. Nothing
could be elicited in his cross-examination to distrust the
statement of the said doctor. When compared to the
whole body, the disability percentage is 22.5%
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
14
according to PW2. These aspects very clearly establish
that a small boy of 4 years old has for lifetime became a
permanent partially disabled and his appearance, beauty
and form has been disfigured.
13. As could be seen from the wound certificate
at exhibit P4, at the initial stage, the injured was
inpatient in the hospital for about three months. Thus,
the injured has undergone a serious trauma and good
medical treatment also could not cure him completely.
The Tribunal below, without appreciating the
circumstances of the case, the age of the injured and
future impossibility of complete cure, and without
noticing that deformation in the body is a permanent
feature, with which the boy has to manage throughout
his life, has awarded a meager sum of `40,000/-
towards pain and suffering. At this stage, it is also
pertinent to note that no separate compensation
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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towards the future loss of income, if any, and future
prospects, has been awarded. As such, I am of the view
that the said compensation requires to be enhanced
reasonably, so as to include the loss of future prospects,
income etc. Thus, I intend to modify the compensation
awarded by the Tribunal below and to enhance it to
`1,50,000/-.
14. Towards loss of amenities, the Tribunal has
awarded a compensation of `30,000/-. As already
observed above, due to the injury, which has resulted in
deformation of the right limb, the boy has lost a
considerable amenity in his life. As such, I intend to
enhance the said compensation to `60,000/-.
15. Towards the 'medical reimbursement and
incidental charges', the Tribunal has awarded a
compensation of `30,000/-. The claimants have
produced medical bills at exhibit P7. A total of the same
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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would come to little bit lower than `30,000/-. As such,
I retain the said compensation awarded by the Tribunal.
16. Towards the loss of education during the
period of treatment, the Tribunal has awarded a sum of
`20,000/-. PW2 - doctor in his cross-examination has
stated that there is no problem for the injured to
prosecute his studies. Considering the aspect that the
injury would not come in the way of the boy pursuing his
further studies, I do not find any reason to enhance the
compensation awarded under the head 'loss of education
during the period of treatment'.
17. Barring the above, the claimant is not entitled
for compensation under any other head. Thus, the
claimant is entitled for compensation as shown in the
table below:
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C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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Amount (`
`)
Pain and Suffering 1,50,000.00
Loss of amenities 60,000.00
Medical and incidental 30,000.00
expenses
Loss of education at the time 20,000.00
of treatment
Total 2,60,000.00
18. The next question would be about the liability
of the respondents to pay the said compensation
amount to the claimant. Undisputedly, respondent No.1
is the owner of the vehicle and the respondent No.2 is
the insurer of the vehicle. As observed above, the said
owner has remained ex-parte in the Tribunal below.
Even in these appeals also, he has remained
unrepresented even after service of notice upon him.
19. The Tribunal below has fixed the liability as
against the owner of the vehicle i.e., respondent No.1
after noticing that the premium amount paid by the
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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owner for renewal of the policy through cheque got
dishonoured. However, it directed the 2nd respondent-
insurer to pay the awarded amount to the injured and
then to recover the same from the owner of the vehicle.
It is the said finding and award of the Tribunal, the
appellant in MFA No.21560/2009 has objected to.
20. According to the learned counsel for the
Insurance Company, as on the date of accident, there
was no policy in force. The said policy covering the
vehicle was cancelled and a notice to that effect was
duly served upon the owner of the vehicle. In his
support, he relied upon a decision of the Division Bench
of this Court in MFA No.840/2001 dated 02.03.2010,
which will be analysed at the later stage of this
judgment.
On the other hand, the learned counsel for the
claimant in his arguments submitted that in view of the
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
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case reported in (2013) 7 SCC 62 in the case of S.
Iyyapan Vs. United India Insurance Company Limited
and Another, the insurer is liable to deposit and pay the
awarded amount to the claimant and then to recover the
same from the owner of the vehicle.
21. A careful perusal of the Tribunal records and
the materials placed before this Court go to show that,
undisputedly the vehicle involved in this case, which is
owned by the respondent No.1 was originally insured
with the 2nd respondent - Insurance Company. Neither
of the parties have produced the Insurance Policy copy.
The respondent - Insurance Company, which has filed
its statement of objection to the main petition in the
Tribunal below, except making general denials, has not
taken specific contention that, prior to the date of
accident, the Insurance Company had cancelled the
policy and the same was duly intimated to the
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The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
20
insured/owner of the vehicle. The said contention in
paragraph No.6 of its statement of objection has stated
as below:
"For the present, this respondent deny the
policy coverage as the particulars furnished
do not appear to be correct"
It does not mean that the Insurance Policy was
cancelled prior to the date of accident under due
intimation to the insured/owner of the vehicle.
On its behalf, the respondent - Insurance
Company examined one Sri. Allamaprabhu, its Senior
Assistant as RW1. The said witness in his examination-
in-chief, in the form of affidavit, has stated that
originally the policy was issued covering a period from
13.03.2003 to 12.03.2004, which period includes the
date of accident in the case on hand. For the said
Insurance Policy, the owner of the vehicle had issued a
cheque for an amount of `2,312/-. According to the
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The Divisional Manager, The National Insurance Co. Ltd.,
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Kumar Shivanand S/o. Netaji Mohite and Another
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witness, when presented in the bank for realisation, the
said cheque got dishonoured. The same was intimated
to the owner of the vehicle by registered post
acknowledgement due. Despite the same, he did not
bother to pay premium of the policy. Then the policy
automatically stood cancelled. As such, as on the date
of accident, the policy was not in force. In his support,
he got marked documents at exhibits R1 to R5. The
denial suggestion made to him in his cross-examination
were not admitted as true by the said witness.
22. In the above background, the appreciation of
evidence of RW1 had to be necessarily made in the light
of the documents produced by him from exhibits R1 to
R5.
Exhibit R1 is a postal acknowledgement card,
which shows that some letter must have been sent to
the owner of the vehicle (his name is shown in the
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The Divisional Manager, The National Insurance Co. Ltd.,
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Kumar Shivanand S/o. Netaji Mohite and Another
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shorter form). The said acknowledgement bears a
postal seal dated 27.03.2003 and the date mentioned
near the signature of the addressee is 29.03.2003. As
such, it can be inferred that what was sent along with
the said acknowledgement was received by the
addressee on 29.03.2003. However, what cannot be
unnoticed is the fact that the Insurance Company
nowhere produced a copy of the letter or document or
notice said to have been sent along with the said postal
acknowledgement at exhibit R1 to the addressee.
Therefore, merely by looking at exhibit R1, it cannot be
inferred that the respondent - Insurance Company had
intimated the owner of the vehicle about the cancellation
of the policy on 29.03.2003 itself, which was prior to the
date of accident. It is not the case of the Insurance
Company also that cancellation was duly intimated to
the owner of the vehicle through the said letter said to
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The Divisional Manager, The National Insurance Co. Ltd.,
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Kumar Shivanand S/o. Netaji Mohite and Another
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have accompanied the acknowledgement. It is because
no such statement is made in the examination-in-chief
by RW1, nor he has produced the document said to have
been sent under registered post. On the other hand,
RW1 has only stated that dishonour of cheque was
intimated to Respondent No.1 / owner of the vehicle.
Exhibit R2 is a banker's memo intimating the
beneficiary of the cheque i.e., Insurance Company about
the dishonour of cheque. It is dated 18.03.2003.
From a conjoint reading of exhibits R1, R2 and
evidence of RW1, it can only be inferred that the letter
or the document sent along with exhibit R1 to the
addressee was only an intimation bringing to the notice
of the owner of the vehicle about the dishonour of
cheque issued by him and it did not contend that the
Insurance Policy has stood cancelled. This inference
gains support by the evidence of RW1 itself since in his
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The Divisional Manager, The National Insurance Co. Ltd.,
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Kumar Shivanand S/o. Netaji Mohite and Another
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examination-in-chief, he has categorically stated as
below:
"Even after receipt of the notice, respondent
No.1 - owner of the vehicle, not bothered to
pay the premium of the policy"
Which means, the alleged notice said to have been
sent along with the acknowledgement card nowhere
stated that his policy stood cancelled. On the other
hand, even after receipt of the said notice, the owner of
the vehicle had an opportunity to see that the policy
continues to be in force, probably by paying the
premium amount afresh. Though RW1 in the same
examination-in-chief has further stated that the policy
automatically stood cancelled, but it is a mere statement
without any corroboration. Had there been any clause
about automatic cancellation of the policy for dishonour
of cheque, in the policy or agreement entered into
between the parties, nothing had prevented the insurer,
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The Divisional Manager, The National Insurance Co. Ltd.,
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who is the custodian of the documents, to produce the
Insurance Policy copy or the terms of the policy to prove
that clause. This effort the respondent - Insurance
Company has not made in order to prove its case.
23. Secondly, Exhibits P3 and P4 are said to be
the notices intimating the Regional Transport Officer and
the owner of the vehicle respectively, intimating them
about the cancellation of the policy. Interestingly, both
these documents have come into existence only on
18.02.2005, i.e., nearly 1½ years after the accident and
subsequent to the date of filing of claim petition in the
Tribunal by the claimant. Thus, it can be inferred that it
is only after the filing of claim petition and service of
summons upon the Insurance Company, it woke up and
issued a notice of cancellation of the policy. Till then, no
document appears to have been in existence showing
cancellation of policy by the insurer.
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The Divisional Manager, The National Insurance Co. Ltd.,
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Kumar Shivanand S/o. Netaji Mohite and Another
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24. Exhibit P5 is another document shown to be
an endorsement schedule, which is produced by the
Insurance Company. Admittedly, it is a document of the
Insurance Company. The said document at its bottom,
though mentions 'endorsement is Cancelled Due to
Cheque Dishonour', but in its body it clearly mentions
date of expiry of policy as 12.03.2004. That document
does not bear the date of its creation. Therefore, it is
not clear as to when said document came into existence.
25. Therefore, in all probability, the benefit must
be given to the insured i.e., owner of the vehicle and the
only conclusion that can be arrived at is, though the
owner might have been intimated by the Insurance
Company about the dishonour of the cheque, but he was
not intimated about the cancellation of the Insurance
Policy till service of the letter dated 18.02.2005 to him,
which is at exhibit R4. Therefore, only if the Insurance
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
27
Company could prove that the said letter dated
18.02.2005 was duly served upon the owner of the
vehicle, then from the said date of the service alone, it
can be inferred that the Insurance Policy has stood
cancelled.
26. As such, by any unilateral act on the part of
the Insurance Company without the support of any
terms of the policy, it cannot be inferred that the policy
had stood cancelled much before the date of accident.
Had it really been cancelled much before the date of
accident, then definitely there ought to be necessarily
some documents with the Insurance Company, which it
should have necessarily produced in the Tribunal below
to substantiate its defence.
27. Insurance of the motor vehicle is a contract
between the insurer and the insured. The Insurance
Policy would be issued as a proof of Insurance Contract
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
28
with the terms and conditions stipulated therein, or
attached to it or referred therein. As such, if any terms
were to be there in the Insurance Contract or in the
Policy regarding automatic cancellation or deemed
cancellation of the policy, then by producing the said
documents, the respondent insurer would have
corroborated his evidence. The respondent-insurer
being the custodian of those documents, could have
easily produce all necessary papers pertaining to the
insurance in this case and also the copy of notice said to
have been sent by it to the respondent No.1 / owner of
the vehicle. No such effort was made by the insurer.
Except making a stray statement in his examination-in-
chief that the Insurance Policy had stood cancelled, the
insurer had not taken any steps to corroborate such
statement. Therefore, the insurer, who was expected
to have custody of the relevant documents, without
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
29
producing them, has enabled to draw adverse inference
to the effect that there was no such clause of automatic
cancellation of policy. Admittedly, when the letter
mentioning the cancellation of policy is prepared and
sent to the Regional Transport Officer as well to the
insured - owner of the vehicle, long after the occurrence
of the road traffic accident in question, it cannot be
presumed that the owner of the vehicle was notified
about the cancellation of the policy much prior to the
date of accident. Therefore, it is to be inferred that the
owner of the vehicle, who was also a policyholder, was
not intimated by the Insurance Company about the
cancellation of the policy. As such, the only main
argument of the learned counsel for the respondent -
Insurance Company, that the Insurance Policy was
cancelled even prior to the date of accident and the
same was duly intimated to the insured, cannot be
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
30
accepted.
28. The learned counsel for the claimant in his
argument relied upon the judgment of the Hon'ble Apex
Court delivered the case of S. Iyyapan Vs. United
India Insurance Company Limited and Another
reported in (2013) 7 SCC 62 and contended that, in
view of the said judgment, the insurer should pay the
awarded amount and later he can recover the same
from the owner of the vehicle.
29. In the said case, with respect to Sections
146, 147 and 149 of the Motor Vehicles Act, 1988, the
Hon'ble Apex Court was pleased to discuss the
consequence of breach of condition of the Insurance
Policy with respect to third party insurance and was
pleased to hold that, mere absence of an endorsement
in the driving licence, to the effect that the licence
holder was licensed to drive commercial light motor
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
31
vehicle, could not be a ground for the insurer to disown
its liability to pay compensation to third party, more so,
when third party has statutory right to recover the
compensation from the insurer and it was for the insurer
to proceed against the insured to recover the amount
paid to third party in case there was any breach of
condition of Insurance Policy.
30. The learned counsel for the insurer in his
argument tried to differentiate the said case from its
application to the case on hand, stating that the said
case is with respect to the possession of driving licence
by the driver of the offending vehicle and consequently,
the liability of the Insurance Company. Whereas, the
case on hand is regarding the existence of the policy as
on the date of accident.
The learned counsel relied upon the judgment of a
Division Bench of this Court in the Oriental Insurance
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
32
Co.Ltd., Vs. K. Shivarao and Another in MFA
No.840/2001 dated 02.03.2010, wherein this Court
was pleased to observe that the Hon'ble Apex Court has
discretion under Article 142 of the Constitution to direct
the insurer to make the payment and to recover the
same from the owner. High Court cannot exercise the
discretion vested with the Apex Court under Article 142
of the Constitution.
31. No doubt, it is the Hon'ble Apex Court only,
which can exercise its power and discretion under Article
142 of the Constitution of India and such power cannot
be exercised by this High Court. Further, the Apex
Court in the case of S. Iyyapan (supra) was not inclined
to exonerate the insurer from its liability towards third
party, on the premise that there was Insurance Policy in
force as on the date of the accident.
32. In the instant case, though it is the
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
33
contention of the insurer that as on the date of accident,
the alleged Insurance Policy has already stood cancelled,
but as observed above, the said contention of the
insurer, due to lack of corroboration, could not be
established. As such, it cannot be taken as proved.
Therefore, for all practical purposes, it has to be taken
that, even though the insurer had sent a notice (as
observed above, the contents of the said notice is not
brought to the notice of the Court) immediately after
dishonour of the cheque towards payment of premium
amount, however, the evidence of RW1 has shown that
opportunity was kept open for the insured to pay the
premium amount and to let the policy to continue in
force. As observed above, till 18.02.2005, there was no
cancellation of policy. As such, as on the said date, the
policy is required to be deemed in force from the view
point of a third person, who gets an advantage under
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
34
the policy.
33. The learned counsel for the claimant relied
upon a judgment of this Court in the case of Oriental
Insurance Co.Ltd. Vs. Kashamma and Others
reported in 2008 ACJ 222, wherein, even after noticing
that a cheque issued by the owner of the vehicle-insured
towards premium was dishonoured and Insurance
Company cancelled the policy under intimation to the
insured before the occurrence of the accident, even after
holding that the insurer was not liable, still the Court
held that, since the Insurance Company without waiting
for encashment of cheque, issued the policy, it has to
make payment to the third party and then recover the
same from the owner of the vehicle.
34. The case on hand slightly varies from this
fact. As already observed, no document is produced by
the insurer to show that the policy was cancelled prior to
Date of Judgment 13.04.2017 MFA No.21560/2009
C/w. MFA No.20762/2009
The Divisional Manager, The National Insurance Co. Ltd.,
Vs.
Kumar Shivanand S/o. Netaji Mohite and Another
35
the date of accident and to show that the said
cancellation intimation was given to the insured-owner
of the vehicle. As such, without relying upon the said
case of Kashamma(supra) also, it can be held that the
Insurance Company cannot be exonerated from its
liability to pay compensation to the claimant. As such
also, the contention taken up by the insurer in its
memorandum of appeal and the argument of its learned
counsel cannot be accepted.
35. As a result of the above discussion, I answer
point No.1 in the negative and point No.2 partly in the
affirmative and proceed to pass the following:
ORDER
MFA No.21560/2009 is dismissed. MFA No.20762/2009 is allowed in part. The judgment and award passed by Civil Judge (Sr.Dn.) and MACT No.2, Dharwad, in MVC No.343/2004 is modified Date of Judgment 13.04.2017 MFA No.21560/2009 C/w. MFA No.20762/2009 The Divisional Manager, The National Insurance Co. Ltd., Vs. Kumar Shivanand S/o. Netaji Mohite and Another 36 and the compensation awarded therein, which is at `1,20,000/- is enhanced to `2,60,000/- (Rupees Two Lakhs Sixty Thousand Only).
The other terms of the order of the Tribunal with respect to fixation of liability upon the respondents, rate of interest, deposit, mode and manner of disbursement of the awarded amount, remains unaltered.
There is no order as to cost.
Sd/-
JUDGE gab