Karnataka High Court
Oriental Insurance Company Limited vs Basavaraju And Ors. on 31 May, 2002
Equivalent citations: I(2003)ACC254
Author: V.G. Sabhahit
Bench: V.G. Sabhahit
JUDGMENT V.G. Sabhahit, J.
1. This appeal by the Insurance Company/second respondent in No. CWCB-4/WCA/FC/CR-2/98 on the file of Commissioner for Workmen's Compensation, Bangalore Division - IV, Bangalore is directed against the judgment and award dated 31.1.2000.
2. The essential facts of the case necessary for the disposal of this appeal are as follows:
The parties would be referred to with reference to their rank before the Workmen's Compensation Commissioner.
The parents of the deceased Sri Kumara @ Kulla filed a claim petition seeking compensation of Rs. 2,24,000/- from the respondents being the owner and insurer of the lorry bearing No. KA-05-A-8829 towards the death of Sri Kumara @ Kulla due to the injuries sustained in a motor accident that occurred on 15.11.1997 at about 2.30 a.m. on Bangalore - Mangalore (NH-48) Road near Tiptur due to the rash and negligent driving of the above said lorry by its driver.
3. The petition was resisted by the respondents. Respondent No. 2 Insurance Company contended that the cheque issued towards premium of the policy was dishonoured and thereby, the policy had been cancelled on 25.7.1997 and the same was intimated to the owner and therefore/ on the date of the accident i.e., on 15.11.1997, there was no policy covering the vehicle belonging to the first respondent and therefore, it is not liable to pay the compensation.
4. The Workmen's Compensation Commissioner after considering the material on record, by his judgment dated 31.1.2000 held that Sri Kumara @ Kulla died due to the injuries sustained in the motor accident that occurred on 15.11.1997 at about 2.30 a.m. due to the rash and negligent driving of the lorry bearing No. KA-05-A-8829 by its driver and the claimants being the parents of the deceased are entitled to compensation of Rs. 2,24,000/- with interest at 12% p.a. from 15.11.1997 till the date of the order and held that respondent Nos. 1 and 2 i.e., the owner and insurer of the vehicle are liable to pay the compensation being aggrieved by the said judgment and award insofar as it relates to saddling the Insurance Company of the liability to pay the compensation to the claimants, the Insurance Company has preferred this appeal.
5. I have heard the learned Counsel appearing for the appellant and the learned Counsel appearing for respondent Nos. 1 and 2. Respondent No. 3 though served with notice has not chosen to appear before this Court.
6. Having regard to the contentions urged, the points that arise for determination in this appeal are as follows:
(i) Whether the Workmen's Compensation Commissioner was justified in holding that the Insurance Company/the appellant herein is liable to pay the compensation awarded to the claimants?
(ii) Whether the judgment and award which is impugned in this appeal calls for interference in this appeal?
(iii) What order?
and I answer the above points for determination as follows:
(i) In the negative.
(ii) In the Affirmative
(iii) As per final order for the following reasons:
7. he Workmen's Compensation Commissioner has held that Kumara @, Kulla who was employed as a Cleaner in the lorry bearing No. KA-05-A-8829 belong to the first respondent and insured with the-second respondent died due to the injuries sustained in an accident that occurred on 15.11.1997 and the claimants are entitled to compensation from respondent Nos. 1 and 2. The Insurance Company has specifically contended before the Workmen's Compensation Commissioner that on the date of the accident i.e., on 15.11.1997, there was no policy covering the lorry bearing No. KA-05-A-8829 belonging to the first respondent as the policy that had been issued in favour of the first respondent covering the said vehicle was cancelled as the cheque which had been issued towards premium amount was dishonoured and therefore, the Insurance Company is not liable to pay the compensation. However, the Workmen's Compensation Commissioner has negatived the contention of the Insurance Company by holding that the Insurance Company is liable to indemnify the first respondent for having issued the Insurance Policy - Exhibit R-1 The Workmen's Compensation Commissioner failed to note that the evidence of R.W. 1 as also the documents produced by him clearly shows that the policy which had been issued as per Exhibit R-1 had been cancelled on 25.7.1997 itself and therefore, on the date of accident i.e., on 15.11.1997, the said policy-Exhibit R-1 was not in force. The evidence of R.W. 1 is corroborated by the documentary evidence produced by the Insurance Company. Exhibit R-5 is the letter written by the Insurance Company to the owner of the vehicle, the third respondent herein who was arrayed as first respondent before the Workmen's Compensation Commissioner wherein it is clearly stated that as the cheque which had been issued towards the premium has been dishonoured, the policy stands cancelled. The said letter has been sent through registered post to the owner and Exhibit R-6 is the postal acknowledgement which shows that the said letter was served upon the owner of the vehicle on 30.7.1997. Further, Exhibit R-7 shows that RTO had also been informed about the said cancellation of the policy and that RTO had been served through Exhibit R-7 dated 29.7.1997. Thereafter, the Insurance Company has taken steps to cancel the policy with effect from 25.7.1997 and therefore, having regard to the above said materials on record, it is clear that the policy which had been issued as per Exhibit R-1 stood cancelled on 25.7.1997 and Exhibits R-8 and R-9 have been issued to the effect that Exhibit R-l has been cancelled. Exhibit RIO is the letter written by the Insurance Company to the owner of the vehicle which also shows that the policy had been cancelled by letter dated 25.7.1997 and the same had been intimated through registered post which was served upon him on 30.7.1997 and the same had also been intimated to the RTO and therefore, it is clear that in view of the above said evidence of RW 1 and the exhibits produced by him referred to above, the policy-Exhibit R-1 had been cancelled and was not in existence on the date of the accident i.e., on 15.11.1997 as the same had been cancelled on 25.7.1997 with due intimation to the owner and the RTO. The owner of the lorry i.e., the first respondent has not produced any material to controvert the said documents and the evidence of RW 1 and therefore, it is clear from the above said material on record that the Insurance Company has clearly proved that Exhibit R 1 was not in force on 15.11.1997 as the said policy had been duly cancelled on 25.7.1997 and therefore, on the date of the accident i.e., on 15.11.1997, the second respondent was not an insurer of the lorry belonging to the first respondent.
8. The learned Counsel appearing for respondent Nos. 1 and 2 submitted that in view of the provisions of Section 149 of the Motor Vehicles Act, notwithstanding the fact that the policy had been cancelled, the Insurance Company is liable to satisfy the claim of the third parties and Section 149(5) of the Motor Vehicles Act enables the Insurance Company to recover the amount from the owner. He has relied upon a decision of the Hon'ble Supreme Court in New India Assurance Co. Ltd. v. Kumara and Others, 2001 ACJ 843.
Wherein the Hon'ble Supreme Court has held that notwithstanding the breach of the conditions of the policy, the Insurance Company would be liable to pay the compensation in view of the terms of the policy and the provisions of Section 149(2) and (5) of the Motor Vehicles Act and the Insurance Company can recover the amount from the owner. It was a case wherein a forged licence had been renewed and the Court held that there was breach of conditions of the policy as the driver of the vehicle did not had a valid driving licence on the date of the accident. The said decision would not be helpful to the respondents in the present case as in the said case, the policy issued by the Insurance Company was in force on the date of the accident and it was a case where there was breach of conditions of the policy.
9. In the present case, it is clear from the material on record that the policy had been cancelled on 25.7.1997 and the same had been duly intimated to the owner and the RTO and therefore, on the date of the accident i.e., on 15.11.1997. the policy - Exhibit R1 was not in force at all as it has been cancelled and therefore, the liability of the Insurance Company to pay the compensation under-Exhibit R1 would not arise and when there is no liability to pay the compensation in the absence of any Insurance Policy, the question of Insurance Company recovering the amount from the owner also would not arise. Therefore, the Insurance Company cannot be saddled with the liability to pay the compensation to the claimants having regard to the above said facts of the present case and I hold that the judgment and award passed by the Commissioner for Workmen' Compensation, Bangalore Division-IV, Bangalore calls for interference in the, appeal and accordingly, I answer the points for determination and pass the following order:
Appeal is allowed. The Order dated 31.1.2000 passed by the Commissioner for Workmen's Compensation, Bangalore Division-IV, Bangalore in No. CWCB-4/WCA/FC/CR-2/98 insofar as saddling the liability on the Insurance Company - respondent No. 2 before the Workmen's Compensation Commissioner is set aside and the claim petition before the Workmen's Compensation Commissioner - is dismissed against respondent No. 2-Insurance Company. It is open to the claimants to recover the compensation award from the owner and respondent No. 3 in this appeal. The amount deposited by the appellant - Insurance Company shall be refunded to the appellant.