The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK M.A.C.A. No.928 of 2007 (In the matter of an appeal under Section 173 of the Motor Vehicles Act, 1988) …. Appellant National Insurance Company Ltd., Represented through its Divisional Manager, Cantonment Road (Legal Cell), Cuttack Town, Cuttack -versus- Renubala Das and others …. Respondents Appeared in this case by Hybrid Arrangement (Virtual/Physical Mode): For Appellant -
Legal Reasoning
Mr. P. Panda, Advocate. appearing on behalf of Mrs. M. Padhi, Advocate. For Respondents - None CORAM: HON’BLE MR. JUSTICE A.C.BEHERA Date of Hearing :25.09.2024 :: Date of Judgment :30.09.2024 A.C. Behera, J. This appeal under Section 173 of the M.V. Act, 1988 has been preferred by the appellant-Insurance Company challenging an award passed on dated 25.04.2007 in Misc. Case No.534 of 1995 by the learned 2nd M.A.C.T., Cuttack on the ground of cancellation of the insurance policy of the offending bus bearing Registration No.OSC-4375 due to the dishonor of the premium cheque issued by the owner has already been heard from the learned counsel for the appellant-Insurance Company for its final disposal at the stage of admission. Page 1 of 5 2. It is the settled propositions of law that, if the premium cheque of the insurance policy of an offending vehicle is dishonoured, then it should be the duties of the Insurance Company to cancel the insurance policy of the insured vehicle and to intimate about cancellation of such policy of the insured vehicle immediately to its owner (insured) as well as to the R.T.O. both and only after such intimations to them, if any, accident occurs through the use of the said offending vehicle, then the Insurance Company would not be made liable to satisfy the accidental liabilities arising out of an accident caused by that offending vehicle. On this aspect, the propositions of law has already been clarified by the Hon’ble Courts and Apex Court in the ratio of the following decisions:- (i) 2005 (II) CLR 354 and 2005 (II) OLR 442—The Oriental Fire and General Insurance Co. Ltd. Vrs. Shantilata Das & Others—(Paras 8, 9 and 11)—M.V. Act, 1939—Section 105—Death of person due to accident caused by the offending vehicle—Insurance company tried to evade liability on the ground that, the insurance policy of the offending vehicle was not valid as the premium was not paid, the cheque having bounced and that the policy was cancelled—No evidence adduced by Insurance Company to indicate that at any time any intimation was issued to the registering authorities as required under Section 105 of the M.V. Act—Held, the Insurance Company cannot be absolved of its obligation to third parties under the policy on the ground that, it did not receive the premium. the IV (2012) Civ. L.T. 539 (S.C.) —United India (ii) Insurance Co. Ltd. Vrs. Laxmamma & Ors.—(Para 19)— M.V. Act, 1988—Section 147 (5) and 149 (1)—Liability of Insurer—Premium Cheque dishonoured—Third Party obligation—Cheque given by the owner of vehicle towards premium get dishounoured—Where policy of insurance is issued by authorised insurer on receipt of cheque towards is returned payment of premium and such cheque Page 2 of 5 dishonoured, liability of authorised insurer to indemnify third parties in respect of liability which that policy covered subsists and it has to satisfy award unless policy is cancelled by authorised insurer and intimation of such cancellation reached insured before accident. According to the propositions of law enunciated in the ratio of the above decisions of the Hon’ble Courts and Apex Court, where the Insurance Company cancels the policy of the insured vehicle on account of the dishonour of the premium cheque, then it is the lawful duties of the Insurance Company first to cancel the insurance policy of that vehicle, then to intimate (communicate) about such cancellation immediately to the owner of that vehicle as well as to the R.T.O. concerned and when such duties and obligations of the Insurance Company are not complied with before an accident occurs through the said vehicle (whose policy was cancelled on account of the dishonor of the premium cheque), then in that case, the liability of the Insurance Company from bearing the accidental liabilities of the victims of the accident through the use of that offending vehicle cannot be exonerated. 3. It is clearly and unambiguously forthcoming from Paragraph No.7 of the impugned award passed by the learned Tribunal that, an accident through the offending Bus had occurred on 16.06.1995 and then the said the offending Bus was seized on 18.06.1995 and 12 days thereafter, the Insurance Company (opposite party No.2-appellant in this appeal) Page 3 of 5 intimated the R.T.A., Cuttack regarding the cancellation of insurance policy of the offending Bus on account of dishonor of premium cheque. 4. When, neither there is any material in the record to show about the cancellation of the insurance policy of the offending Bus prior to the accident on account of dishonor of premium cheque nor there is any intimation to its owner as well as R.T.A., Cuttack about the cancellation of the insurance policy of the said offending Bus prior to the accident on account of the dishonour of its premium cheque, then at this juncture, the learned Tribunal has rightly discarded the aforesaid ground of the appellant-Insurance Company (which has also been raised in this appeal for exoneration of its liability), as the lawful duties of the Insurance Company as indicated above after dishonor of the premium cheque of the offending bus have not been complied inconformity with the guidelines fixed by the Hon’ble Courts and Apex Court in the ratio of the aforesaid decisions. So, the question of interfering with the impugned award passed by the learned Tribunal in Misc. Case No.534 of 1995 through this appeal preferred by the appellant (Insurance Company) does not arise. Therefore, there is no merit in the appeal of the appellant (Insurance Company). The same must fail. 5. In result, the appeal filed by the appellant-Insurance Company is dismissed. Page 4 of 5 Registry is directed to communicate this judgment to the learned Tribunal in connection with Misc. Case No.534 of 1995 for payment of the awarded compensation amount to the claimants thereof forthwith within a month on deposit of the awarded compensation amount by the appellant-Insurance Company with interest thereon according to the award passed by the learned Tribunal. The statutory deposited amount by the appellant (Insurance Company) in this appeal shall be refunded to the appellant (Insurance Company) on submission of proper receipt about the deposit of the awarded compensation amount with interest thereon in Misc. Case No.534 of 1995 before the learned Tribunal. 6.
Decision
Accordingly, the appeal is dismissed and disposed of finally. Orissa High Court, Cuttack. 30.09.2024//Utkalika Nayak// Junior Stenographer (A.C. Behera), Judge. Signature Not Verified Digitally Signed Signed by: UTKALIKA NAYAK Designation: Junior Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 30-Sep-2024 16:12:17 Page 5 of 5