) Divisional Manager, M/S. National Insurance Co.Ltd. … v. Sura Das & Ors
Case Details
Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 IN THE HIGH COURT OF ORISSA AT CUTTACK MACA No. 1121 of 2018 (From the judgment dated 17th February, 2018 passed by the Additional District Judge-cum-4th MACT, Cuttack in M.A.C. Case No.235 of 2007/314 of 2017) Divisional Manager, M/S. National Insurance Co.Ltd. …… Appellant Versus Sura Das & Ors ….… Respondents Advocate(s) appeared in this case:- For Appellant : Mr. B.Dasmohapatra, Advocate
Legal Reasoning
This Court in the case of Rashmita Mohanty and others vs. Santosh Kumar Padhi and another, 2016 (I) OLR 989 have held as follows:- “Accordingly, no material had been produced by the Insurance Company before the learned 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 pay the awarded compensation amount to the claimants, with the right to recover the same from the owner of the vehicle.” MACA No.1121 of 2018 Page 4 of 7 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 Further, this Court in a recent judgment dated 20th March, 2023 passed in MACA No. 128 of 2021, have observed that in absence of proof of service of intimation of cancellation of the policy on the insured (owner) as well as the Registering Authority, the insurance company cannot be absolved from its liability under the insurance policy. 11. In the case at hand, the issuance of policy in respect to the offending vehicle with effect from 4th April 2006 to 3rd April 2007 is not disputed. Nothing has also been produced on record to substantiate the contention of the Insurer regarding service of such intimation of cancellation on the insured and the Registering Authority. Though the insurance company has examined its officer as O.P.W.1, but he is found silent regarding mode of service of the letter of cancellation on the insured and the Registering Authority. Mr. Dasmohapatra submits that since O.P.W.1 was not cross-examined by the Claimants, his statements made in the Examination-in-Chief that the intimation of cancellation has been sent to the insured as well as the RTO stands proved being unrebutted. But I fail to agree with the submission. It is for the reason that the owner did not come to context the claim before the Tribunal and the Claimants have limited scope to dispute this specific point regarding service of letter of cancellation of MACA No.1121 of 2018 Page 5 of 7 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 policy on the owner and the the RTO. The burden is on the insurer to prove their contention satisfactorily. Poor claimants cannot be allowed to suffer for the same. Since the owner did neither contest the claim before the Tribunal nor was able to submit anything in his support before this Court, the Insurer is at liberty to recover the amount of compensation form the owner. 12. In view of the discussions made above, while concluding against the Appellant-Insurer that they are liable to indemnify the compensation amount and pay the same to the Claimants, they are granted with right of recovery of the compensation of amount from the owner. 13. No further dispute is raised with regard to involvement of the offending vehicle in the accident or negligence on the part of the driver. No challenge is also advanced regarding quantification of compensation amount. 14. In the result, the appeal is disposed of with a direction to the Insurer-Appellant to deposit entire compensation amount along with interest before the Tribunal as per its direction within a period of two months from today; where-after the same shall be disbursed in favour of the claimants on same terms and proportion contained in MACA No.1121 of 2018 Page 6 of 7 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 the impugned judgment. As stated above the right of recovery is granted in favour of the Insurer-Appellant. 15. The statutory deposit made by the Appellant with accrued interest thereon be refunded to him on proper application and on production of proof of deposit of the award amount before learned Tribunal. 16. Urgent certified copy of this order be granted on proper application. Judge ( B.P. Routray) S.Das MACA No.1121 of 2018 Page 7 of 7
Arguments
For Respondents : Mr. D.Patnaik, Advocate for Respondent No.4 Mr. A.Garnaik, Advocate for Respondent No.5 CORAM : JUSTICE B.P. ROUTRAY JUDGMENT 18th May, 2023 B.P.Routray, J. 1. Heard Mr. Dasmohapatra – learned counsel for the Appellant, Mr.Patnaik – learned counsel for the Respondent No.4 and Mr. Garnaik, learned counsel for Respondent No.5. 3. Present appeal by the Insurer is directed against judgment dated 17th February, 2018 of Additional District Judge-cum-4th MACT, Cuttack in M.A.C. Case No.235 of 2007/314 of 2017, wherein compensation to the tune of Rs.3,32,400/- has been granted MACA No.1121 of 2018 Page 1 of 7 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 along with interest @6% per annum with effect from the date of filing of the claim application on account of death of the deceased in the motor vehicular accident on 16th March, 2007. 5. The sole dispute is on the question of liability on the Insurer for cancellation of the insurance policy. According to the Insurer-Appellant, the policy issued in respect of the offending vehicle i.e. passenger Bus bearing registration No. OR-05-E-7455 was cancelled for dishonour of the cheque given towards premium amount from the date of inception and therefore, the Insurer is not at all liable to indemnify the owner. 6. The accident took place on 16th March 2007. Admittedly, Insurance Policy No 163100/31/06/6300000011 was issued by the Appellant i.e. National Insurance Co. Ltd. valid from 4th April 2006 to 3rd April 2007. The cheque for Rs.17,269/- submitted towards payment of the premium dated 31st March 2006 was returned by the bank for insufficient fund. Then the Insurance Company claims to have sent the letter of cancellation of policy dated 17th April 2006 to the owner as well as the RTO, Cuttack intimating the fact of cancellation of the insurance policy from the date of inception. Copies of those letters dated 17th April, 2006 have been exhibited under Ext.D & E. MACA No.1121 of 2018 Page 2 of 7 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 7. The owner did not come to contest before the Tribunal and he was set ex-parte. Before this Court, Mr. S.K. Garnaik though appears on behalf of the owner-Respondent No.5, but he is unable to justify his non-appearance before the Tribunal. He is also unable to answer regarding cancellation of policy and dishonour of the cheque submitted by him. 8. As seen from the copies of Ext.D & E, it is mentioned at the top of those letters that the same were sent by registered post with A.D. But admittedly, no such postal receipts in proof of sending those letters, either to the insured or to the Registering Authority, have been produced on record. The acknowledgment cards, if any, satisfying service of the letter of cancellation dated 17th April 2006 on the owner and the RTO have not been filed. 9. The law is well-settled on this point. 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:- MACA No.1121 of 2018 Page 3 of 7 Signature Not Verified Digitally Signed Signed by: SANGRAM DAS Designation: Jr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 23-May-2023 12:41:05 “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 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.” 10.