M/s National Insurance Company Ltd v. Dasondhi Ram & Anr.

Mr. Ashwani Talwar, Advocate for the appellant. Mr. Munsh Gupta, Advocate for the respondent No.1. Mr. Ashwani Arora, Advocate for the respondent No.2. CORAM : HON'BLE MR.JUSTICE K.C.PURI. K.C.PURI. J. Appellant-National Insurance Company Ltd. has directed the present appeal against the award dated 2.12.2008 passed by Shri S.K.Garg, Motor Accident Claims Tribunal, SAS Nagar Mohali for setting aside the same and the appellant be absolved from the liability. Factual matrix comprising the claim petition shorn of unnecessary details is that on 9.7.2007 the claimant was to go to attend some marriage party. He alongwith his grand son Ajay Chaudhary and Bhupinder Singh was waiting for other family members and was standing in front of his house on his side. Kulwinder Singh-respondent FAO No. 1671 of 2009 2 No.1 came with a high speed on a motor cycle which was being driven rashly and negligently. He tried to overtake the car going ahead of him from his wrong side and he struck the same against him, as a result of which the claimant fell on the ground. He was taken to Sector 32- Hospital and from where he was referred to PGI but on the way his condition became serious and he was admitted in a nearby hospital where he was operated upon. He remained unconscious for many days. He received multiple injuries on his head. He has not yet recovered from the disability suffered by him in the accident such as memory power and hearing power and cannot move without assistance and has become permanent disabled. FIR No.121 of 10.7.2007 under Sections 279, 337 and 338 of the Indian Penal Code was also got registered by grand son of the claimant. On notice, respondent no.1 appeared and filed written statement admitting the accident. It is alleged that the accident has taken place due to the negligence of the claimant himself. There was no negligence on his part as he was driving his motor cycle at slow speed and was observing the traffic rules and is, therefore, not liable to pay any compensation. Respondent No.2 Insurance Company filed written statement alleging that no information qua accident was received from respondent No.1, therefore, no accident has taken place. Moreover, if at all the accident has taken place, the Insurance Company is not liable to pay compensation because respondent No.1 was not holding a valid driving licence at the time of alleged accident. The amount claimed is FAO No. 1671 of 2009 3 highly inflated and exaggerated and prayer for dismissal of the claim petition has been made. Following issues were framed :-

1. Whether claimant Dasondhi Ram, received injuries in the accident,which was caused by respondent No.1 at 8.15P.M., on 9.7.2007 in the area of Mohali, while driving motor cycle No.PB-10-BH/2802 rashly and negligently ?OPP.

2. Whether the claimant is entitled to recover compensation? If so, to what extent and from whom ? OPP.

3. Whether the respondent No.1 was not holding a valid and effective driving licence at the time of accident ? OPR. 4. Relief. The parties have led their respective evidence on the aforesaid issues. The learned Tribunal after appreciating the evidence on record, accepted the claim petition and awarded compensation of Rs.2,60,000/- on account of injuries sustained by the claimant along with interest @ 8% p.a. from the date of filing of the petition till payment. Both the respondents were held jointly and severally liable to make the payment of compensation amount. Feeling dis-satisfied with the aforesaid award, appellant- M/s National Insurance Company Ltd. has filed the instant appeal for absolving it from its liability. I have heard the learned counsel for the parties and have gone thorough the records of the case. Learned counsel for the Insurance Company has submitted that there was no valid insurance policy in respect of offending vehicle. FAO No. 1671 of 2009 4 The owner of the offending vehicle has simply filled in the proposal form on 16.4.2007, which was valid from 16.4.2007 to 15.4.2008. The accident has taken place on 9.7.2007. The vehicle was not previously insured with any Insurance Company. According to the Rules if the vehicle has not been insured prior to the proposal form, in that case, the Insurance Company fill up the proposal form and it is only after getting the vehicle checked from the authorities valid insurance policy is issued since there was no insurance policy and as such the liability of Insurance Company has been wrongly held. In reply to the above noted submissions, learned counsel for the owner and driver have supported the judgment of the Tribunal. The learned Tribunal after appreciating the evidence on the file came to the conclusion that Insurance Company is liable to pay the compensation. On reappraisal of the evidence, no ground for interference is made out. RW-1 Naresh Kumar is the agent, who has filled in the proposal form for insurance of the vehicle in question. He has also admitted the fact that premium was received by him. The proposal form covers the risk of the intervening period of the accident. The Insurance Company has also examined Shri O.P.Makkar RW-2 Branch Manager, who has stated that Insurance Company has not received any premium regarding the insurance of motor cycle bearing registration No. PB-10/BH/2802 on 16.4.2007. This evidence is contradicting the statement of RW-1 Naresh Kumar, agent, who has FAO No. 1671 of 2009 5 stated that amount of premium has been mentioned to be received in cash. The Insurance Company wants to avoid the liability on the ground that it is a merely proposal form and vehicle has not been shown before issuing proposal form. It is not out of place to mention here that in the proposal form the risk has been shown to be covered from 16.4.2007 to 15.4.2008 and the accident has taken place on

9.7.2007 i.e. about three months after the proposal form is filled. In Division Bench authority of Madhya Pradesh High Court (Jabalpur Bench) reported in Oriental Insurance Co. Ltd. Bilaspur vs. Indrapal s/o Shyamlal Kalar and others 2008 (3) RCR (Civil) 349 held that even if the agent of the Insurance Company has defrauded the Insurance Company or the transaction made by him is to the detriment of the principal, the Insurance Company will still bound by the transaction made by the owner of the vehicle because the owner of the vehicle has acted in a good faith. In the present case, the agent has not disputed the receipt of the amount. So, in these circumstances, in authority Oriental Insurance Company vs. Bhal Nalkantha Khadi Gramodyog Mandal and others 2004 ACJ 1209, while dealing with Section 64 VB of the Motor Insurance policy, it is held therein that where the premium has been received by the agent, although the amount may not have deposited by the agent with the principal, the Insurance Company is liable to pay the compensation. The ratio of the judgment is that the matter is between Insurance Company and the authorized agent and the insured is not concerned. It is not disputed that RW-1 was authorized agent of the Insurance Company. FAO No. 1671 of 2009 6 In view of the above discussion, the appeal is without any merit and the same stands dismissed. A copy of this judgment be sent to the trial Court for strict compliance. May 13th , 2010 ( K.C.PURI ) JUDGE