High Court
Legal Reasoning
1 3850-19-FA.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADFIRST APPEAL NO.3850 OF 2019Shriram General Insurance Company Ltd.Through its Divisional Manager,10003-E-8 EPIP, RIICO Industrial Area,Sitapura, Jaipur, Tq. & Dist. Jaipur.Through its Branch Manager/Authorised Signatory,Branch at AurangabadAkashwani Jalna – Aurangabad Road,Dist. Aurangabad 431 005 … Appellant (Org. Respondent No.2)Versus1]Usha W/o. Ratnakar NagargojeAge: 44 Years, Occu. Household2]Shital D/o Ratnakar NagargojeAge: 26 Years, Occu. Education3]Mahesh S/o. Ratnakar NagargojeAge: 24 Years, Occu. Education4]Mayuri D/o Ratnakar NagargojeAge: 22 Years, Occu. Household,5]Baburao S/o. Madhavrao NagargojeAge: 75 Years, Occu. Agriculture,6]Pramila W/o. Baburao NagargojeAge: 69 Years, Occu. HouseholdAll R/o. Mandekhel, Tq. Ambejogai,Dist. Beed7]Sopan Marotrao Karhale (Died)Through his legal representatives7A]Laxman S/o Sopanrao Karhale,Age: 50 years, Occu. Agriculture,7B]Uttam S/o Sopanrao Karhale,Age: 45 Years, Occu. AgricultureBoth R/o Gaundgaon, Tq. Gangakhed,Dist. Parbhani … Respondents (Rspdt Nos.1 to 6 – Org. Claimants Rspdt Nos.7 – Org. Rspdt No.1)….Mr. Abhijit G. Choudhari, Advocate for AppellantSVH
Legal Reasoning
2 3850-19-FA.odtMr. B.R. Kedar, Advocate for Respondent Nos.1 to 6Mr. Mahesh P. Kale, Advocate for Respondent Nos.7A & 7B…. CORAM : NITIN B. SURYAWANSHI, J. RESERVED ON : 15th OCTOBER, 2024PRONOUNCED ON : 18th OCTOBER, 2024JUDGMENT : 1.Heard.2.Admit. Taken up for final hearing by the consent of theparties.3.Insurance Company has filed this appeal under Section173 of Motor Vehicles Act, challenging the judgment and awarddated 15/03/2019, passed by the Motor Accident Claims Tribunal,Ambajogai, in M.A.C.P. No.114/2012.4.Respondent Nos.1 to 6/claimants filed claim petitioncontending that they are legal heirs of Ratnakar Baburao Nagargoje.On 30/07/2012, he was proceeding from Parbhani to Gangakhed asa pillion rider on motor cycle bearing No.MH-22-Q-7008, driven byhis friend Dyanoba Digambar Tandale. When they reached nearMahatpuri Phata, tempo bearing No.MH-04-BU-2478 came fromParbhani i.e. back side of the motorcycle and gave forceful dash tomotorcycle, due to which deceased Ratnakar died on the spot. Theaccident occurred due to rash and negligent driving of tempo driverMunja Laxman Karhale. C.R. No.128/2012 is registered withSVH 3 3850-19-FA.odtGangakhed Police Station, Parbhani, for offence punishable underSections 279, 304-A, 337, 338 of I.P.C. and Section 184 of MotorVehicles Act, against the said driver. At the time of death deceasedwas 43 years old and was serving as Teacher at Prerna PrimarySchool, Gangakhed, District Parbhani, and was getting salary ofRs.25,263/- per month. He was the sole bread earner of the family.Claimants, therefore, claimed compensation of Rs.46,53,535/-, butbecause of their weak financial condition they restricted the claimto Rs.5,00,000/-.5.Respondent No.7, owner of the offending vehicle, failedto file written statement. He died during the pendency of claimpetition and his legal heirs were brought on record. By filing writtenstatement they denied the liability contending that offendingvehicle was insured with appellant Insurance Company and it isliable to pay the compensation.6.Appellant/Insurance Company opposed the claim byfiling written statement. It is claimed that offending vehicle waspurchased on finance and insurance premium of Rs.16,238/- wasreceived from Financer on 05/10/2011 and Policy No.10000/31/12/401873, which was to commence from 29/12/2011, was issued.Respondent No.7/owner settled his account with Financer and on18/11/2011 a request for cancellation of said policy was submitted.Accordingly the policy was cancelled. On the date of accident thereSVH 4 3850-19-FA.odtwas no subsisting policy and hence, it is not entitled to indemnifyclaimants. In the alternate, it is contended that driver of theoffending vehicle did not possess valid and effective driving license,therefore, due to breach of terms and conditions of policy it is notliable to pay the compensation. Tribunal after recording evidencepartly allowed the claim and awarded compensation ofRs.10,19,240/- along with 9% interest, to be paid jointly andseverally by appellant/Insurance Company and respondentNo.7/owner. Hence, this appeal is filed by Insurance Companyclaiming that it is not liable to pay the compensation.7.Heard learned advocate for appellant/InsuranceCompany, learned advocate for respondent Nos.1 to 6/claimantsand learned advocate for respondent Nos.7A and 7B/ legal heirs ofowner of offending vehicle.8.Learned advocate for appellant assailed the impugnedjudgment and award contending that the Tribunal has misread andmisconstrued the evidence on record. Though the Insurer hasbrought on record cancellation request form (Exhibit-66) and thefact of cancellation of policy before it’s commencement, Tribunalhas erroneously held Insurer liable to pay the compensation. Byrelying on loan account statement (Exhibit-64) and the policy(Exhibit-65) and cancellation form (Exhibit-66), he submits thatsince the policy was already cancelled before it’s commencementSVH 5 3850-19-FA.odtand premium was returned back, there was no subsisting validinsurance policy on the date of accident. It is, therefore, clear thatoffending vehicle was not insured on the date of accident andtherefore, Tribunal has erred in holding appellant liable to indemnifyclaimants.9.Per contra, learned advocate for respondent Nos.1 to6/claimants supported the impugned judgment and award. Hesubmits that the Tribunal has given elaborate reasons whilerecording finding that Insurer is liable to indemnify claimants. Byrelying on Vallabhdas and Others Vs. Pritamsingh andAnother, 2016(4) All.M.R. 225, and Oriental Insurance Co.Ltd. Vs. Vijay Ramchandra Kale, 2018(1) Bom.C.R.390, hesubmits that there is no merit in the appeal and the same is liable tobe dismissed.10.Heard learned advocate for appellant, learned advocatefor respondent Nos.1 to 6 and learned advocate for respondentNos.7A and 7B at length. Perused the record.11.Learned advocate for appellant has heavily relied oncancellation request form (Exhibit-66) for claiming that at theinstance of owner insurance policy was cancelled. Admittedly, theoffending vehicle was insured with appellant for the period from29/12/2010 to 28/12/2011 vide policy bearing No.10003/31/11/SVH 6 3850-19-FA.odt370203. Thereafter the policy in question bearing No.10003/31/12/401873 (Exhibit-76) was issued by accepting premium ofRs.16,238/-. The same is package policy.On the basis of cancellation request form (Exhibit-66)signed by original owner of offending vehicle Policy No.10003/31/12/401873 (Exhibit-76) was cancelled. Perusal of cancellation form(Exhibit-66) shows that there are interpolations in policy numberwherein earlier Policy No.10003/31/11/370203 is scored andsubsequent Policy No. 10003/31/12/401873 is written. Year of thepolicy start date is corrected from ‘10’ to ‘11’. At the bottom side, inthe column of customer policy details, there is overwriting in policynumber ‘10003’ and old policy No.10003/31/11/370203 ismentioned, so also, policy start date is mentioned as 29/12/2010and policy expiry dated is mentioned as 28/12/2011. IDV of thevehicle is mentioned as Rs.2,70,000/-, whereas in policy (Exhibit-76)which is claimed to be cancelled, IDV for the vehicle is mentioned asRs.3,74,134/-. At the bottom of policy in question (Exhibit-76),GSTIN number is mentioned.12.Perusal of evidence of appellant’s witness TusharBandale, Senior Legal Manager, shows that both policies in thepresent matter were from Jaipur, Rajasthan. Premium of the policyin question (Exhibit-76) was received on 04/11/2011, however, inthe written statement Insurer has stated that the premium isSVH 7 3850-19-FA.odtreceived on 05/10/2011, which according to him is true and correct.He has admitted that policy (Exhibit-76) was issued on 04/11/2011.However, no date of issuance is mentioned on said policy. He furtherclaimed that policy (Exhibit-76) was cancelled on 23/11/2011. Headmitted that all financial transactions of the company arecomputerised. They did not receive any request or application fromoriginal owner for cancellation of policy. He admitted theinterpolation and scoring of policy number and policy start date inthe cancellation form (Exhibit-66). Though he has denied suggestionthat cancellation form (Exhibit-66) pertains to policy of 2010-11,record speaks otherwise.13.Bare reading of cancellation form (Exhibit-66) showsthat even if it is accepted that there was request on the part oforiginal owner for cancellation of policy, the same was in respect ofpolicy of 2010-2011 and not for the policy (Exhibit-76) i.e. policy of2011-2012. Admittedly, the owner had not applied or requested theInsurer to cancel the policy. He has further admitted that in the year2011 Insurer did not have GSTIN number and GST is madeapplicable from 01/04/2018. Admittedly, on the policy (Exhibit-76)GSTIN number is mentioned. It is, therefore, clear that Insurer hasprepared cancellation form (Exhibit-66) by interpolation and scoringto deny it’s liability to indemnify claimants.14.It is claimed by Insurance Company that as the originalSVH 8 3850-19-FA.odtowner foreclosed his loan account with Financer, he requested forcancellation of policy (Exhibit-76). Admittedly, after cancellation ofpolicy the premium amount was returned to the Finance Companyas consolidated sum of different matters. If the original owner hadforeclosed the loan account with Financer, then the InsuranceCompany ought to have returned the premium amount to originalowner and not to the Finance Company. This also creates doubtabout the contention of Insurer that the policy was cancelled at thebehest of original owner. Admittedly, the IDV of previous policy was Rs.2,70,000/-and IDV of policy in question (Exhibit-76) was Rs.3,74,134/-. Incancellation request form (Exhibit-66) IDV is mentioned asRs.2,70,000/- which is of the previous policy and therefore, it cannotbe said that by cancellation form (Exhibit-66) original ownerrequested for cancellation of policy in question (Exhibit-76). 15.Admittedly, no intimation of alleged cancellation ofpolicy (Exhibit-76) is given by appellant to R.T.O. In Vallabhdasand Others (supra), this Court by relying on Oriental Insurance Co.Ltd. vs. Inderjit Kaur and Others, 1998 ACJ 123, and Daddappa andOthers vs. Branch Manager, National Insurance Co. Ltd., 2008 ACJ581, has held,“9. The provisions of Section147(4) of the said Act cast a dutyupon the insurer to notify the fact of a cover note not beingfollowed by a valid policy to the registering authority withinperiod of seven days from the expiry of period of validity to theSVH 9 3850-19-FA.odtcover note. The aforesaid provisions have been considered bythe Supreme Court in Oriental Insurance Company (supra) andDaddappa and Ors. (supra). It has been held therein that insofar as a third party is concerned, it is not concerned with thecancellation of the policy and on failure to comply withprovisions of Section 147(4) of the said Act, the insuranceCompany cannot be absolved of its liability. These decisionshave been followed by the Division Bench of Kerala High Courtin case of Wilson (supra). The decision relied upon in the caseof United India (supra) is on the aspect of fraud and isdistinguishable on facts. The legal position is therefore clear that in absenceof the insurer intimating the registering authority aboutcancellation of its cover note, its liability qua a third party doesnot get extinguished. In the present case, it is not the stand ofthe respondent No.2 that in terms of Section 147(4) of the saidAct any such intimation was given to the registering authority.Point No.1 is accordingly answered by holding that therespondent No.2 cannot be absolved of its liability qua the thirdparty.”16.In the light of above observation, there is no merit in thecontention of appellant that policy in question was cancelled andtherefore, it is not liable to indemnify claimants. Tribunal has dealtwith this defence of the Insurer in more than 22 paragraphs and hasgiven elaborate reasons for not accepting it. The Tribunal haspassed a well reasoned judgment which is not liable to be interferedwith. Appeal being devoid of merit is dismissed, with costs.17.Amount deposited by the Insurance Company be paid toclaimants along with accrued interest. (NITIN B. SURYAWANSHI, J.)SVH