The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK MACA No.625 of 2017 &MACA No.623 of 2017 (From the judgment dated 2nd December, 2016 of learned Additional District Judge-cum-4th MACT, Keonjhar passed in MAC Nos.46/124 of 2016-14 and 47/125 of 2016-14) MACA No.625 of 2017 & 623 of 2017 Oriental Insurance Co.Ltd. (in MACA No.625/2017) Oriental Insurance Co.Ltd. (in MACA No.623/2017) …. Appellant -versus- Manglu Barik & Ors Bihuti Bhusan Rout & Ors. (In MACA No.623/2017) (In MACA No.625/2017) …. Respondents Advocate(s) appeared in this case:- For Appellant For Respondents : Mrs. P.Mishra, Advocate (in MACA Nos.625 of 2017 & MACA No.623 of 2017)
Legal Reasoning
: Mr. S.Mohanty, Advocate for Respondents (in MACA No.625 of 2017 & MACA No.623 of 2017) CORAM: JUSTICE B.P. ROUTRAY JUDGMENT 20th April, 2023 B.P. Routray, J. 1. The matters are taken up through hybrid mode. 2. Heard Mrs. P. Mishra, learned counsel for the insurer- Appellant and Mr. S. Mohanty, learned counsel for the claimant- Respondents. MACA No.625 of 2017 & 623 of 2017 Page 1 of 6 3. Both the appeals being arise out of same impugned judgment,
Decision
are heard together and disposed of by this common judgment. 4. Present appeals are directed against the impugned judgment dated 2nd December, 2016 of learned Additional District Judge-cum- 4th MACT, Keonjhar passed in MAC Nos.46/124 of 2016-14 and 47/125 of 2016-14, wherein compensation to the tune of Rs.3,20,000/- and Rs.7,52,300/- have been paid on account of death of two persons namely, Om Prakash Rout and Suresh Chandra Barik respectively, along with interest @ 6% per annum from the date of filing of the claim application, i.e., 31st July, 2014 has been granted on account of death of deceased in the motor vehicular accident dated 15th June, 2014. 5. The Common issue involved in both the appeals, as raised by Mrs. Mishra on behalf of the Appellant, is that, the certificate of insurance issued in favour of the offending vehicle i.e. Bolero Max bearing registration No.OD-19-A-5017 was not valid on the date of accident being the same was cancelled much prior to that. 6. The facts of the case are that the accident took place on 15th June, 2014 when both the deceased persons were travelling in an Auto rickshaw and the offending vehicle dashed it coming from the front. The negligence on the part of the driver of the offending vehicle as held by the Tribunal is not questioned. The only point raised is with regard to liability on the part of the Insurer as stated above. MACA No.625 of 2017 & 623 of 2017 Page 2 of 6 7. The Certificate of Insurance under Ext.F is dated 29th March, 2014 bearing No. 345900//31/2014/9777/001 and the premium was deposited on 28th March, 2014 vide cheque bearing No. 387578 dated 28th March, 2014. Subsequently, due to dishonour of cheque for insufficient funds, the insurance policy was cancelled on 4th April, 2014 and the intimation to that effect was sent to the owner- insured on 9th April, 2014 vide registered postal receipt dated 10th April, 2014 under Ext.D and D.1. Admittedly, no such intimation of cancellation of policy was sent to the Registering Authority of the offending vehicle. Mrs. Mishra, learned counsel for the Insurer placing reliance on the decision of the Supreme Court in the case of United India Insurance Company Limited vs. Laxmamma and others, (2012) 5 SCC 234 contends that since the intimation of cancellation has been sent to the insured-owner much prior to the accident, the liability cannot be saddled on the Insurer to indemnify the compensation amount. 8. The Hon’ble Supreme Court in the case of United India Insurance Company Limited vs. Laxmamma and others, (2012) 5 SCC 234 by discussing several other decisions rendered in the cases of Oriental Insurance Co. Ltd. vs. Inderjit Kaur, (1998) 1 SCC 371, New India Assurance Co. Ltd. vs. Rula, (2000) 3 SCC 195 and National Insurance Co. Ltd. vs. Seema Malhotra, (2001) 3 SCC 151, have held as follows:- “26. In our view, the legal position is this: where the policy of insurance is issued by an authorized insurer on receipt of cheque towards the payment MACA No.625 of 2017 & 623 of 2017 Page 3 of 6 of premium and such a cheque is returned dishonoured, the liability of the authorized 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 authorized 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 authorized insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonoured and 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.” 9. This Court in the case of Rashmita Mohanty and others vs. Santosh Kumar Padhi and another, 2016 (I) OLR 989 have held as follows:- the “Accordingly, no material had been produced by learned the Insurance Company before Tribunal to show that such intimation regarding cancellation of policy had been given to the concerned Registering Authority. Therefore, in absence of an intimation to the concerned Registering Authority regarding cancellation of the Insurance Policy issued in respect of the offending vehicle, as required under section 147(4) of the M.V. Act, the insurer is liable to MACA No.625 of 2017 & 623 of 2017 Page 4 of 6 pay the awarded compensation amount to the claimants, with the right to recover the same from the owner of the vehicle.” Further, in a recent judgment dated 20th March, 2023 passed in MACA No. 128 of 2021, it has been held by this Court that Insurance Company cannot be absolved of its liability to indemnify the owner if no such intimation of cancellation was sent to the registering authority. 10. In the case at hand, as stated earlier, no intimation has been sent to the Registering Authority regarding cancellation of insurance policy. Therefore, in view of the settled law the insurance company cannot be absolved of its liability from indemnifying the compensation amount to the Claimants. 11. For the reasons stated above, the contentions raised on behalf of the Insurer to absolve it from the liability are thus rejected. However, since the owner did not come to context and has been set ex-parte, the right of recovery granted in favour of the Insurer is confirmed. 12. With regard to quantum of compensation, the amount of Rs.3,20,000/- as directed in favour of the Claimants in MAC No. 46/124 of 2016-14 is confirmed since no reason is found to disturb the same. The amount of compensation directed in favour of the Claimants in MAC No.47/125 of 2016-14 is reduced to MACA No.625 of 2017 & 623 of 2017 Page 5 of 6 Rs.6,80,000/-, keeping in view the extent of future prospect to be added is 40% and the amount of general damages. This is agreed by Mr. Mohanty, learned counsel for the claimants. 13. In the result both the appeals are disposed of with a direction to the Insurer, i.e. Oriental Insurance Co. Ltd. to deposit the compensation amount of Rs.3,20,000/- and Rs.6,80,000/- in MAC No. 46/124 of 2016-14 and 47/125 of 2016-14 respectively, before the tribunal along with interest @ 6% per annum from the date of filing of the claim application i.e. 31st September 2014, within a period of two months from today; where-after the same shall be disbursed in favour of respective Claimants on such terms and proportion to be decided by learned tribunal. 14. The statutory deposits made by the insurer - Appellant before this court in both the appeals (MACA Nos. 625 of 2017 and 623 of 2017) along with accrued interest be refunded on proper application and on production of proof of deposits of the awarded amount before the tribunal. 15. An urgent certified copy of this order be issued as per rules. Sangram Das, Jr.Steno (B.P. Routray) Judge MACA No.625 of 2017 & 623 of 2017 Page 6 of 6