The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK MACA No.102 OF 2018 From the Judgment/Order dated 02.11.2017 passed by the learned 2nd MACT, Northern Division, Sambalpur in MAC Case No.189 of 2011. Tapaswini Besan & Ors. :::: Appellants -:: VERSUS ::- Nabin Ku. Adwani & Anr. :::: Respondents
Legal Reasoning
"26. In our view, the legal position is this: where the policy of insurance is issued by an authorised insurer on receipt of cheque towards the payment of premium and such a cheque is returned dishonoured, the liability of the authorised insurer to indemnify the third parties in respect of the liability which that policy covered subsists and it has to satisfy the award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the MV Act unless the policy of insurance is cancelled by the authorised insurer and intimation of such cancellation has reached the insured before the accident. In other words, where the policy of insurance is issued by an authorised insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonoured and Page 2 of 5 // 3 // before the accident of the vehicle occurs, such insurance company cancels the policy of insurance and sends intimation thereof to the owner, the insurance company's liability to indemnify the third parties which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof." 4.2. It is also contended that the Tribunal while assessing the compensation at Rs.5,66,000/- with interest @ 7.5% per annum did not award any compensation towards future prospect as well as general damages. 4.3. It is contended that if the Tribunal would have awarded compensation towards future prospect and general damages, the total compensation amount would have been calculated at Rs.8,41,400/-. It is accordingly contended that not only the award so passed by the Tribunal is required to be enhanced to Rs.8,41,400/- but also the liability should be saddled on Respondent No. 2, with right of recovery as against Respondent No. 1 in view of the decision of the Hon’ble Apex Court as cited (supra). 5. Mr. P.K. Mahali, learned counsel appearing for Respondent No. 2-Company on the other hand does not dispute the decision of the Hon’ble Apex Court in the case of Laxmamma as cited (supra). However, it is contended that award of interest @ 7.5% per annum is on the higher side taking into account the prevailing rate of interest at the relevant point of time. It is also contended that since the award has passed against the Owner-Respondent, the Appellant- Company had no occasion to challenge the same. It is accordingly contended that since in view of the decision of the Hon’ble Apex Court as cited (supra) Company is liable to pay the compensation Page 3 of 5 // 4 // with right of recovery as against Owner-Respondent, this Court may interfere with regard to the rate of interest so allowed. 6. To the aforesaid submission of learned counsel appearing for Respondent No. 2, learned counsel for the Appellants-Claimants contended that this Court may interfere with regard to the rate of interest so allowed in the interest of justice and fair play. 7. Having heard learned counsel appearing for the Parties and considering the submissions made and placing reliance on the decision of the Hon’ble Apex Court as cited (supra), since the factum of cancellation of the policy so issued in favour of the offending vehicle was never intimated to the concerned RTO, Respondent No. 2 is liable to pay the compensation so saddled on Respondent No. 1-Owner, but with right of recovery as against the Respondent No. 1. Not only that since no compensation has been awarded towards future prospect and general damages, this Court taking into account the monthly income taken by the Tribunal, is inclined to enhance the compensation to Rs.8,41,400/-, but however with interest @ 6% per annum payable from the date of application till its realization. 7.1. This Court accordingly while holding so, directs the Appellant- Company to deposit compensation amount of Rs.8,41,400/- along with interest @ 6% per annum payable from the date of filing of the claim application till its realization within a period of eight (8) weeks from the date of receipt of this order. On such deposit of the amount, the Tribunal shall disburse the same in favour of the Claimant-Appellant in terms of the Judgment passed on 02.11.2017. Page 4 of 5 // 5 // 7.2. However, it is observed that if the amount as directed will not be deposited by the Respondent-Company within the aforesaid time period of eight (8) weeks, the compensation amount of Rs.8,41,400/- shall carry interest @ 7% per annum payable for the period starting from the expiry of the period of eight (8) weeks till its payment. 7.3. It is further observed that if any application is filed by the Respondent-Company to recover the amount from the Owner- Respondent, the Tribunal shall do well to dispose of the application in accordance with law and by giving due opportunity of hearing to the Owner-Respondent.
Arguments
For Appellants :::: Mr. P.K. Mishra, Advocate (Claimants) For Respondent :::: Mr. P.K. Mahali, Advocate (Respondent No. 2) ……… PRESENT : THE HON’BLE MR. JUSTICE BIRAJA PRASANNA SATAPATHY ---------------------------------------------------------------------------------- Date of Hearing- 12.12.2024 :: Date of Judgment- 12.12.2024 ---------------------------------------------------------------------------------- B.P. Satapathy, J. This matter is taken up through Hybrid Arrangement (Virtual/Physical) Mode. 2. Heard Mr. P.K. Mishra, learned counsel appearing for the Appellants-Claimants and Mr. P.K. Mahali, learned counsel appearing for Respondent No. 2-Company. In spite of appearance nobody is there on behalf of Respondent No. 1 when the matter was called. Page 1 of 5 // 2 // 3. The present appeal has been filed inter alia seeking enhancement of the award so passed by the Tribunal vide Judgment dtd.02.11.2017 in MAC No. 189 of 2011 and with a further prayer to direct Respondent-Company to pay the compensation amount, which has been wrongly saddled on Respondent No. 1. 4. It is contended that the compensation so assessed was saddled on the Respondent-Owner on the ground that the policy taken by the Owner of the offending vehicle was cancelled due to dishonor of the cheque so issued by the Owner-Respondent to take the policy. 4.1. However, placing reliance on the decision of the Hon’ble Apex Court in the case of United India Insurance Co. Ltd. Vs. Laxmamma, (2012) 5 SCC 234, learned counsel for the Appellants contended that in view of the said decision, since factum of cancellation of the policy was never intimated to the concerned RTO, Respondent No. 2-Company is liable to pay the compensation with right of recovery as against Owner-Respondent No. 1. Hon’ble Apex Court in Para 26 of the aforesaid Judgment has held as follows:-
Decision
8. The appeal is accordingly disposed of. (BIRAJA PRASANNA SATAPATHY) Judge Orissa High Court, Cuttack The 12th December, 2024/Sneha Signature Not Verified Digitally Signed Signed by: SNEHANJALI PARIDA Designation: Sr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Dec-2024 12:31:10 Page 5 of 5