Justice B.P. Routray in a case where the insurance company failed to show that the RTO was intimated about the cancellation of the insurance policy of the offending vehicle, noted that when issuance of the insurance policy remains undisputed, but only the validity of cancellation is disputed, the interest of third-party should not be allowed to suffer.
And accordingly held that the Insurance company cannot be absolved of its liability in the current case.
Brief Facts:
The present appeal has been filed by the insurer that is Oriental Insurance Co. Ltd., against the judgment dated 28th September 2020 wherein a compensation of Rs. 8,60,400/- had been granted to the claimants on account death of the deceased in the motor vehicular accident dated 15.06.2014.
The deceased was walking on the extreme left side of the road and the offending vehicle which was coming at a high speed dashed him. According to the appellant-insurer, the policy in respect of the offending vehicle had been cancelled since 04.04.2015, because a previous cheque towards the premium was dishonored due to insufficient funds and hence the insurer is not liable to indemnify the owner.
Observations of the Court:
The Court noted that the service of intimation of cancellation on the owner as well as the RTO is objected to by the claimants. The appellants have shown that the owner of the car was informed about it, but there is nothing on record in respect of the service of intimation on the RTO.
The court then referred to different Supreme Court judgments, including United India Insurance Company Limited vs. Laxmamma and others, (2012) 5 SCC 234 and Rashmita Mohanty and others vs. Santosh Kumar Padhi and another, 2016 (I) OLR 989.
The court further noted that a motor vehicle is prohibited from plying on a public roads without a valid Insurance Policy with the object that third party is ensured compensation for damages he suffered due to negligence in the use of the motor vehicle by the driver irrespective of his or the owner’s financial condition. Therefore, the court concluded that when issuance of the policy remains undisputed, but only the validity of cancellation is disputed, the interest of third-party should not be allowed to suffer. In the current case, it was noted that the insurer-appellant has failed to satisfy the condition of intimation to the registering authority regarding the cancellation of the policy and therefore, the insurance company cannot be absolved of its liability to indemnify the owner.
The decision of the Court:
The court did not interfere with the quantum of compensation as computed by the tribunal and disposed of the appeal while directing the Insurance Company to deposit the entire compensation amount.
Case Title: The Divisional Manager, Oriental Insurance Company Ltd. V. Dukhabandhu Dehuri (since dead) through LR s and others
Coram: Justice B.P. Routray
Case No.: MACA No. 128 of 2021
Advocate for the Petitioner: Mr. S. Satapthy, Advocate
Advocate for the Respondent:Mr. P.K. Mishra, Advocate Fore Respondents nos. 1(a), 1(b) & 2
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