The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK MACA No.1030 of 2017 and MACA No.948 of 2017 (From the judgment dated 16th August, 2017 of the 3rd M.A.C.T., Bhubaneswar in M.A.C.Case No.300/156 of 2013) --------- In MACA No.1030 of 2017 The H.D.F.C. ERGO General Insurance Company Limited represented through its Manager, Legal. …. Appellant -versus- Sumati Mallik and others …. Respondents Advocate(s) appeared in this case:- For Appellant
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 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.” 6. Further, this Court in the case of Rashmita Mohanty and 4 others vrs. Santosh Kumar Padhi and another, 2016(I) OLR-989, MACA Nos.1030 & 948 of 2017 Page 4 of 8 this Court have further observed that, 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 pay the awarded compensation amount to the claimants, with the right to recover the same from the owner of the vehicle. 7. In the case at hand, the letter of cancellation has though been produced under Ext. ‘D’, but nothing has been brought on record satisfying service of the same on the insured. Intimation to the owner and Registering Authority means service of intimation at the end of the recipient. Mere production of the letter of cancellation or entry in the official register of the sender is not enough to prove receipt of the letter by the addressee. O.P.W.1 did not say anything regarding mode of service of the letter of cancellation. The service of letter of cancellation either on the owner or on the Registering Authority is not proved on record by the Appellant. So in absence of proof of service of the letter of cancellation, it cannot be concluded that the fact of cancellation of the policy has been duly intimated to the owner and the Registering Authority. In such scenario, when issuance of policy is not denied, the onus is on the insurer to prove satisfactory service of letter of MACA Nos.1030 & 948 of 2017 Page 5 of 8 cancellation of policy on the insured. In absence of proof of satisfactory service of intimation of cancellation, the insurer cannot be absolved of its liability to indemnify the owner in terms of the policy. As such, the Appellant-Insurance Company is liable to pay compensation amount and the direction of the Tribunal regarding the same along with right of recovery granted in favour of the Insurer is confirmed. 8. With regard to quantum of compensation, the Tribunal has assessed the same as follows:- Sl.No. HEAD (i) (ii) Monthly income 1/5th of (i) deducted towards personal living and expenses. 30% of (ii) added towards future the prospect deceased Compensation multiplier of 14 is applied Loss of consortium after of Loss of care and guidance of minor children, loss of love and affection and loss of estate Funeral expenses CALCULATION = Rs.6,000/- = Rs.6,000/- Rs.1,200/- Rs.4,800/- = Rs.4,800/- Rs.1,440/- Rs.6,240/- = = Rs.6,240/- x 12 x 14 =Rs.10,48,320/- = Rs.1,00,000/- = Rs.1,00,000/- = Rs.25,000/- (iii) (iv) (v) (vi) (vii) (viii) Litigation expenses = Rs.500/- MACA Nos.1030 & 948 of 2017 Page 6 of 8 Total compensation awarded = Rs.12,73,820/- (Rupees twelve lakhs seventy-three thousand eight hundred twenty) only. 9. It is seen from above that some extra amount has been granted towards loss of consortium and loss of care, love and affection. But keeping in view the extent of future prospectus added, this Court confirms the quantification without interfering with the same. 10. As prayed on behalf of the claimants, MACA No.948 of 2017 is dismissed as withdrawn. MACA No.1030 of 2017 is also dismissed in view of the discussions made above. 11. The entire compensation amount as directed by the Tribunal including the interest shall be deposited before the Tribuanl within a period of two months from today. After deposit of the compensation amount, the Tribunal shall disburse the same in favour of both sets of claimants as per its direction contained in the impugned judgment subject to modification as prayed by the claimants that Basanti Mallik (first wife) will get a sum of Rs.5,73,000/-(Five lakhs seventy three thousand) and Sumati Mallik (second wife) will get a sum of Rs.4,50,000/-(four lakhs fifty thousand) with consequential interest thereof. MACA Nos.1030 & 948 of 2017 Page 7 of 8 12. The statutory deposit made by the Appellant in MACA No.1030 of 2017 with accrued interest thereon be refunded to him on proper application and on production of proof of deposit of the award amount before the learned Tribunal. (B.P. Routray) Judge C.R.Biswal/Secy. MACA Nos.1030 & 948 of 2017 Page 8 of 8
Arguments
: Mr.A.A.Khan, Advocate For Respondents : Mr. P.K. Mishra, Advocate (For Respondent Nos.1-3) In MACA No.948 of 2017 AND Sumati Mallik and others …. Appellants -versus- Basanta Kumar Rout and another …. Respondents Advocate(s) appeared in this case:- For Appellants : Mr.P.K.Mishra, Advocate For Respondents : Mr.A.A.Khan, Advocate (For Respondent No.2) MACA Nos.1030 & 948 of 2017 Page 1 of 8 CORAM: JUSTICE B.P. ROUTRAY JUDGMENT 20th March, 2023 B.P. Routray, J. 1. Both the appeals are directed against same judgment dated 16th August, 2017 of 3rd M.A.C.T., Bhubaneswar in M.A.C. Case No. 300/156 of 2013, wherein compensation to the tune of Rs.12,73,820/- along with interest @7% per annum from the date of filing of the application i.e., 19th August 2013 has been granted on account of death of the deceased in the motor vehicular accident dated 6th July 2013. 2. MACA No.1030 of 2017 has been filed by the Insurance Company challenging the impugned award mainly questioning the liability on its part to indemnify the compensation amount. As per the Insurance Company, the policy issued in favour of the offending vehicle was already cancelled prior to the accident for dishonor of the Cheque and thus, it should be absolved of the liability. 3. In MACA No.948 of 2017, which has been filed by the claimants, they have prayed for withdrawal of the claim application. Here, it needs to be mentioned that there are two sets of claimants, who are two wives and their respective children. The present claimants namely, Sumati Mallik and her children are stated to be the second MACA Nos.1030 & 948 of 2017 Page 2 of 8 wife of the deceased. The first wife namely, Basanti Mallik along with her children has filed MAC No.258 of 2013 before 4th MACT, Balasore, which is pending till date (as per the submission). Learned counsels for the present claimants submitted that presently both the wives and their respective children have settled their inter se disputes and they have also settled their respective share amount with specified proportion on the claim amount and further, the claim application No.258 of 2013 will be withdrawn by other set of claimants. 4. Now coming to examine the challenge advanced by the Insurer, it is seen that the offending vehicle is a Tipper bearing Registration No.OD-02-G-0238 and the accident took place when the deceased was going in his bicycle. The accident took place on 6th July, 2013 at 7.00 AM. Issuance of Policy No.2315 2005 1218 5100 000 dated 31st May, 2013 under Ext. ‘A’ in favour of the offending vehicle remains undisputed. As per the contention of insurer, the Cheque issued by the owner amounting to Rs.58,543/- towards premium of the policy was dishonoured on 5th June, 2013 and immediately thereafter an intimation was sent to the owner (Insured) on 11th June, 2013 under Ext.’D’. MACA Nos.1030 & 948 of 2017 Page 3 of 8 5. But, as seen from the record, no such document regarding service of intimation of cancellation either on the owner or on the Registering Authority has been produced by the Insurer. O.P.W.1 is the Assistant Manager of the Company. He has not stated anything regarding mode of service of such intimation. The Supreme Court in the case of United India Insurance Co. Ltd. vrs. Laxmamma, (2012) 5 SCC 234 have held as follows: