Telangana High Court
Hdfc Ergo General Insurance Co. Ltd. vs Nadigoti Rajeshwari on 18 March, 2024
THE HON'BLE SRI JUSTICE SAMBASIVARAO NAIDU
M.A.C.M.A.NO.521 OF 2019
JUDGMENT :
Being aggrieved by the Judgment dated 12.10.2018 in M.V.O.P.No.79 of 2017 on the file of Chairman, Motor Accident Claims Tribunal-cum-II Additional District Judge, Mancherial, whereunder the petition filed by the respondents/claimants under Section 166 (1) (c) of M.V.Act for compensation was partly allowed by the Tribunal, granting a sum of Rs.6,58,200/- with interest @ 9% per annum, the 3rd respondent/Insurance Company against which joint liability was fastened with the other respondents, filed this civil miscellaneous appeal under Section 173 of M.V.Act and sought for setting aside the impugned Judgment.
2. The main ground on which this appeal is filed according to the appellant is lack of valid policy to indemnify the owner of the vehicle involved in the accident. According to the grounds on which this appeal is filed, the appellant/Insurance Company has contended that the Tribunal in spite of sufficient evidence to believe that the 2 MACMA.No.521 of 2019 cheque issued by 5th respondent herein i.e., 2nd respondent owner of the vehicle towards premium of the policy was dishonored due to insufficient funds, therefore, as on the date of accident there was no policy/coverage in existence of the vehicle. Therefore, the Tribunal ought not to have fastened the liability against the appellant herein.
3. The appellant has claimed that the owner of the vehicle while seeking policy against his vehicle issued a cheque on 21.02.2014 and on the basis of cheque, a policy was offered. But, the said cheque was returned dishonored on 03.04.2014. A notice was sent to the owner as well as the Regional Transport Officer on 08.04.2014. The accident on the basis of which the above referred M.V.O.P.No.79 of 2017 was occurred on 06.07.2014 i.e., much later to the date of dishonor of the cheque, and notice issued by the appellant. But, the Tribunal did not consider this aspect and passed an award against the driver, owner and insurer of the vehicle.
4. As could be seen from the impugned Judgment, the respondents/claimants have filed the above petition by 3 MACMA.No.521 of 2019 claiming a sum of Rs.27,84,984/- as compensation for the death of one N.Rajesh in a road traffic accident.
5. The respondents being mother and siblings of the said Rajesh (hereinafter be referred as deceased) have claimed that on 06.07.2014 at about 2:30 p.m., while the deceased was at Polytechnic college at CCC club, Naspur, the driver of a car bearing No.AP-01-AF-8910 by driving the car in rash and negligent manner and in high speed, dashed the deceased, due to which he fell down and received severe injuries to the head. He was immediately shifted to Government hospital, Mancherial and from there he was taken to Pratima hospital, Karimnagar. But, the deceased died while undergoing treatment. The respondents have claimed that the deceased was 19 years old. He was working as private electrician and earning Rs.10,000/- per month. Therefore, they filed petition seeking compensation from the driver, owner and insurer of the vehicle.
6. The respondent Nos.1 and 2 i.e., driver and owner of the vehicle have filed common counter, claiming that there is valid insurance policy obtained from the 3rd 4 MACMA.No.521 of 2019 respondent i.e., present appellant. Therefore, they sought for dismissal of the petition.
7. It appears from the record that the respondents have filed the said petition initially against the owner and driver of the vehicle. But, subsequently on the basis of the averments made in the counter filed by respondent Nos.1 and 2, they have added the 3rd respondent i.e., the present appellant.
8. The present appellant has filed a counter stating that the cheque which was issued towards premium for the policy was not realized as the cheque was dishonored due to lack of sufficient funds in the account of the 5th respondent/respondent No.2. Therefore, they have claimed that they need not pay any compensation.
9. The Tribunal has framed the following (4) issues:
1. Whether Nadigoti Rajesh died in the accident that occurred on 06.07.2014 at about 2:30 p.m., Bunglows area, near Polytechnic college, CCC Naspur, Mancherial?
2. Whether the said accident occurred due to rash and negligent driving of car bearing No.AP-1-AF-8910?
3. Whether the petitioner is entitled to claim compensation for the accidental death of Nadigoti 5 MACMA.No.521 of 2019 Rajesh, if so how much? If so, against which of the respondents?
4. To what relief?
10. During enquiry, the respondents/claimants have examined PWs 1 to 3 and marked Exs.A1 to A6. The respondent Nos.4 and 5 i.e., driver and owner of the vehicle have examined RWs 1 to 4. A representative from the present appellant herein was examined as RW5. Ex.B1 to B4 were marked on behalf of the respondents.
11. The Tribunal having appreciated the pleadings and evidence of both parties, having held that the accident occurred due to rash and negligent driving by the 4th respondent herein and having assessed the compensation as Rs.6,58,200/-, passed an award by fixing the liability against the driver, owner and insurer of the vehicle.
12. Heard both parties.
13. Now the following points arose for consideration:
1. Whether the contentions raised by the appellant with regard to dishonor of the cheque due to which, the policy cannot be considered, was not properly appreciated by the Tribunal?6 MACMA.No.521 of 2019
2. Whether the appellant herein cannot be made liable to pay compensation along with other respondents of the main original petition.
14. POINTS:
The learned counsel for the appellant has submitted that as per the conditions of the policy marked as Ex.B2, there was a clear note that in the event of dishonor of a cheque(s), insurance coverage provided under the documents, automatically stands cancelled from inception, irrespective of whether a separate communication is sent or not.
15. Therefore, the counsel has argued that by virtue the endorsement itself, it is very clear that the liability of the insurance company will commence only on a valid policy. But, in the present case, there is evidence to believe that the cheque issued by 5th respondent/respondent No.2 towards premium was dishonored. The same was intimated to the owner, but there was no proper response. Therefore, the insurance company is not liable to pay any compensation as such sought for exonerating the appellant herein from making payment of compensation. 7 MACMA.No.521 of 2019
16. It is a fact that the respondents/claimants have filed O.P.No.79 of 2017 claiming compensation against the driver, owner and insurer of the car bearing No.AP-01-AF 8910. There is no serious dispute about the accident in which Rajesh died. The main ground, on which the appeal is filed, is with regard to liability to pay compensation.
17. The other respondents against whom the liability was fixed with the present appellant did not question the award. As per the material placed before the Court i.e., oral evidence of PW5 and Exs.B1 to B4 goes to show that when the respondent No.5/appellant herein in order to obtain a policy, he has paid an amount of Rs.14,866/- on 21.02.2014 through a cheque bearing No.20665 and as per the return memo which is marked as Ex.B3, it is quite clear that the cheque issued by the 5th respondent was dishonored by the bank due to lack of sufficient funds in the account of the 5th respondent i.e., owner of the vehicle.
18. The appellant has claimed that soon after the dishonor of the cheque, they sent intimation to the owner and Regional Transport Officer vide Ex.B4/intimation. It is true the appellant herein did not file any postal 8 MACMA.No.521 of 2019 acknowledgement to prove the service of the said intimation to the owner of the vehicle.
19. However, as rightly contended by the appellant, the said intimation was sent to the address which is mentioned in the main original petition by virtue of General Clauses Act, it is deemed that the notice which was sent to proper address was served on the owner of the vehicle. Even otherwise when once he has issued a cheque towards payment of premium on 21.02.2014 it was the duty of owner to verify whether the cheque was properly encashed. As per return memo dated 03.04.2014, it is quite clear that the cheque issued by respondent No.5 was dishonored. The appellant has claimed that in view of endorsement on the policy itself, the policy which was issued on the basis of cheque which was subsequently dishonored, shall be treated as void from inception.
20. In a judgment between New India Assurance Co., Ltd., vs Kotana Appanna & Ors 1 the erstwhile High Court of Andhra Pradesh having referred the judgment in 1 197 (3) A.P.L.J. 465 (HC) 9 MACMA.No.521 of 2019 United India Insurance Co. Ltd., vs Ayeb Mohammed 2 made an observation as under:
"In view of Section 64-VB of the Insurance Act and in view of Section 96 2 (c) Motor Vehicle Act (old) which refer to the grounds on which the Insurance Company can defer the claim filed by the claimants."
"Mere issuing of a cheque which could not be honoured for want of funds in the Bank, does not amount to issuing of a cheque as contemplated in the explanation to Section 64VB of the Insurance Act. For the purpose of Section 64-VB of the Insurance Act, a cheque would be a cheque if on presentation it is capable of being encashed immediately and is not returned for insufficiency of funds. The risk can be assumed on the part of the insurer and such risk commences only on payment of premium by the insured in advance by a cheque or in cash which is a condition precedent for assuming the risk."
21. In the case on hand there is ample evidence to believe that the cheque which was issued by 5th respondent towards premium was dishonored. The respondent No.5 did not place any material to believe that he has verified the 2 1991 ACJ 650 (SC) 10 MACMA.No.521 of 2019 records and was satisfied that his cheque was honored by the bank and there was valid payment towards the premium.
22. According to Section 64VB no insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed is made in advance in the prescribed manner.
23. In the judgment of Kotana Appanna & Ors, the erstwhile High Court of Andhra Pradesh while accepting the contention raised by the Insurance Company held that the insurance policy was in effective and will not clock the insurance company that any liability to pay compensation amount to the claimants.
24. Therefore, as rightly contended by the present appellant, though a policy was issued, in view of subsequent developments viz., dishonor of the cheque issued towards the premises, it shall be deemed that there 11 MACMA.No.521 of 2019 was no valid policy covering the risk of the 5th respondent. On the endorsement on the policy it is very clear that the liability of the insurance company will commence only on a valid policy. Therefore, the appeal filed by the appellant/insurance company deserves to be allowed and the appellant can be exonerated in making payment of compensation. However, in view of the findings recorded by the Tribunal the liability of the driver and owner has been established and as they did not file any appeal, questioning the quantum of compensation, the driver and owner of the vehicle are still liable to pay compensation.
25. In the result, the appeal is allowed. The Insurance Company which is shown as respondent No.3 in M.V.O.P.No.79 of 2017 is exonerated from making payment of the compensation.
As a sequel, pending Miscellaneous Applications, if any, shall stand closed.
___________________________________ JUSTICE SAMBASIVARAO NAIDU Date:18.03.2024 PSSK