Factual Background:
On 04.05.2014, Mohd. Nawaz along with one Are Srinivas was proceeding on his motorcycle and he tried to overtake a bus. In that process, he hit the lorry and the accident took place. The claimants has approached the Motor Accidents Claims Tribunal - cum - Principal District Judge, Karimnagar for award and decree of compensation. The claimants has submitted that the lorry was parked negligently in front of Raja Mess without indicators and the driver of the lorry did not take any precautions in parking the lorry. Therefore, the accident had occurred due to negligence of the driver of the lorry.
Driver and owner of the crime vehicle, has denied the compensation and contended that on account of negligence on the part of the only Mohd. Nawaz the accident had occurred. Therefore, owner of the vehicle is not liable to pay compensation. However, both owner and insured finally pleaded that since the vehicle was insured with the Insurer (M/S Liberty General Insurance), if any compensation is to be paid to the claimants, it is for the Insurer to pay the same. They are not liable to pay any compensation.
Whereas, Insurer has denied its liability, mainly on account of dishonour of cheque issued by the owner towards premium amount and, thus, it is not liable to pay the compensation.
The Tribunal has framed the following issues:
i) Whether the accident had occurred due to rash and negligent driving of the Lorry bearing by its driver?
ii) Whether the petitioners are entitled to compensation, if so, to what amount and from which of the respondents?
iii) To what relief?
iv) Whether the petitioners are entitled for compensation under Sec.163-A of Motor Vehicle Act?
The learned counsel for the appellant has contended that the accident had occurred on 04.05.2014 on account of negligence of the driver of the offending vehicle. The cheque issued by owner of the offending vehicle, towards payment of premium in respect of the offending vehicle, was dishonoured. In view of the same, the policy was cancelled and the same was intimated to the owner as well as RTO in writing. So it is not liable to pay any compensation to the claimants. In support of his contentions, the learned counsel has placed reliance on the decisions in National Insurance Co. Ltd. v. Seema Malhotra and Deddappa v. Branch Manager, National Insurance Co. Ltd.
The learned counsel for the claimants and the learned counsel for owner of vehicle has contended that as per the evidence, Manager of SBI, the banker of owner, an amount of Rs.44,216/- was available in the account of the owner by 07.03.2014. According to them, though the cheque was issued on 28.02.2014, the appellant did not present the said cheque by the said date and, therefore, respondent No.6, owner of the crime vehicle cannot be blamed for the said delay on the part of the Insurer. In support of the contention, the learned counsel for owner has relied upon a decision of the Supreme Court in United India Insurance Company Limited v. Laxmamma.
Decision of the Tribunal:
The Tribunal after considering the evidences and relying upon the principle laid down by the Supreme Court in United India Insurance Co. Ltd., v. Sunil Kumar has observed that since Section 163A of Motor Vehicle Act is based on the concept of 'no fault liability' and is enacted as a measure of social security, the Tribunal is of the view that the said issue would not at all arise for consideration. Thus, as stated supra, in an application under Section 163A of M.V. Act, claimants need not prove the negligence of the driver of the offending vehicle. The Tribunal held that the Insurer and the owner are liable to pay the compensation.
The Tribunal in its order has awarded the compensation of Rs.5,50,000/- with proportionate costs and interest at 7.5% against the claimants jointly and severally as against the claim of Rs.10,00,000/- made by claimants for the death of Mohd. Nawaz.
Appellant approach to High Court:
M/s. Liberty General Insurance Limited, being aggrieved by the order passed by the Motor Accidents Claims Tribunal - cum - Principal District Judge, Karimnagar, filed the appeal challenging the liability as well as quantum of compensation before the Telangana HC.
The learned counsel for the appellant has contended that the Tribunal failed to appreciate the contention of the Insurer that it is not liable to pay compensation to the claimants, because the cheque issued by owner of the crime vehicle was dishonoured for the reason "Insufficient Funds" and, therefore, as on the date of accident, the policy/cover note issued in favour of the crime vehicle is not in existence.
The learned counsel appearing on behalf of the claimants has contended that the Tribunal has rightly considered the entire evidence, both oral and documentary and gave a finding that there is fault on the part of the Insurer also.
Analysis:
The single judge bench of Justice K. Lakshman has held that in the present case, the Insurer has not received the premium and, therefore, the Insurer shall not assume any risk. As such, the Insurer is not liable to pay compensation to the claimants - legal heirs of the deceased.
The court further observed that as per the provisions of the Negotiable Instrument Act, cheque, a negotiable instrument is valid for three months. Therefore, it is for the Insurer to present the said cheque within the period of three months. It is the duty of owner to keep sufficient funds in his account till the said period expires or till the cheque is honoured. In this case without verifying that the cheque was cleared by the insurer, owner of the crime vehicle, withdrew the amount or did not keep the required funds in his account so as to honour the cheque. Thus, there is negligence on the part of the owner in which event he cannot blame the Insurer. The contention of the claimants and the owner that there was delay on the part of the Insurer in depositing the cheque and as such, the Insurer is liable to pay compensation cannot be accepted.
Judgment:
The High Court while allowing the appeal has modified the award and decree passed by the Tribunal by reducing the compensation from Rs.5,50,000 to Rs.4,62,834/- with same interest of 7.5% per annum. The HC also set aside the order of Tribunal that the Insurer is directed to deposit the compensation at the first place and recover the same from the owner of the vehicle and has held that the appellant is not liable to pay compensation to the claimants. The HC directed the owner of the crime vehicle to deposit the said compensation amount with interest and proportionate costs within one month from the date of receipt of a copy of this judgment. After deposit, the claimants are entitled their shares in accordance with the ratio fixed by the Tribunal in the award and decree.
Case Details:
Before: High Court of Telangana
Bench: Hon'ble Justice K.Lakshman
Case Title: M/S Liberty General Insurance vs. Md. Haseena
Date of Decision: 06.07.2020
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