Chanada Bhagwan Jagtap And Ors vs Kadam Shankar Jagtap And Ors
2022 Latest Caselaw 10333 Bom

                                                             FA2358-2018.odt
            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      BENCH AT AURANGABAD

                        FIRST APPEAL NO. 2358 OF 2018
                       (WORMEN'S COMPENSATION ACT)

 1. Smt. Chanda w/o Bhagwan Jagtap
    Age 30 years, Occu: Labour
    R/o Panchashil Nagar, Vaijapur,
    District Aurangabad

 2. Ku. Prashant s/o Bhagwa Jagtap,                      ... Appellants
    Age 9 years, Occu: Education

 3. Ku. Pritee d/o Bhagwan Gajtap,
    Age 7 years, Occu: Education

 4. Ku. Prem s/o Bhagwan Jagtap
    Age 5 years, Occu: Education, No. 2 to 4 are
    under Natural Guardian of Appellant No.1-
    Smt. Chanda w/o Bhagwan Jagtap

 5. Mandabai Jagtap
    Age 64 years,
    R/o Post Borsar Tq. Vaijapur Dist. Aurangabad

     VERSUS

 1. Deleted.
 2. Kishor Bhagwan Tejli,
    Age Major, Occu: Business, R/o R.H.No.3031,
    Chowk,Mandai,W.No.41/1 Nasik

 3. Divisional Manager,                                  ... Respondents.
    Bajaj Aillianz General Insurance Co.,
    Adalat Road, Aurangabad.

Mr. S. V. Kulkarni, Advocate for the appellants
Mr. S. G. Chapalgaonkar, Advocate for respondent No.3.

                   CORAM              : S. G. DIGE, J.
                   RESERVED ON        : 12.08.2022
                   PRONOUNCED ON      : 07.10.2022
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                                                                   FA2358-2018.odt
JUDGMENT:

1. Challenge in this appeal is to cancellation of insurance policy

due to dishonour of cheque which was paid as premium of policy.

2. It is the contention of the learned counsel for the appellants

that the appellants/original claimants had filed a claim petition under

the Employees Compensation Act for compensation against the vehicle

owner and Insurance company. The Commissioner for WCA and Judge,

Labour Court (II), Aurangabad has partly allowed the claim petition.

The claim against the respondent-Insurance company is dismissed on

the ground that there was no valid and effective insurance policy of the

offending vehicle on the date of accident. The premium was paid

through cheque but it was dishonoured. Dishonour of cheque can't be

a ground to cancel the insurance policy. Hence, requested to allow the

appeal.

3. The learned counsel for the appellants submits that no

intimation was given to the RTO along-with postal acknowledgment,

about cancellation of Insurance policy. Therefore, the insurance policy

is not duly cancelled. Risk of the vehicle is covered under the policy, as

the insurance policy is not cancelled as per law. Even if the policy is

cancelled, the insurance company is liable to pay compensation and

may recover the compensation from the vehicle owner. The learned

counsel for the appellants relied on (1) Eknath Shantaram Kunkolienkar

& another Vs. Anthony Fernandes & Anr. [ 2011 Goa L.R. 754 (Bom)]

FA2358-2018.odt and the Oriental Insurance Company Ltd. Vs. Gitabai wd/o Bhaskar

Brahmane & ors. [ 2013 A.C. 437 (Bom.)].

4. It is the contention of learned counsel for the respondent

No.3- Insurance Company that the Insurance company had cancelled

the policy long before the date of accident. The cheque, by which the

premium was paid in respect of the policy was dishonoured. The

Insurance company cancelled the policy on 23rd August, 2014. The

accident took place on 13th May, 2015. The insurance company had

informed about the cancellation of policy to the owner of vehicle i.e.

respondent No.2 and R.T.O. Hence, the order passed by the Tribunal is

legal and valid. The learned counsel for the respondent Insurance

company relied on Deddappa & Ors. Vs. Branch Manager, National

Insurance Co. Ltd., 2008 (1) All MR 968.

5. I have heard both learned counsel. Perused the judgment

and order passed by the Tribunal.

6. The Tribunal has dismissed the claim petition against the

Insurance company on the ground that the cheque by which the

premium was paid was dishonoured, hence the insurance policy was

cancelled. The said fact was communicated to the owner of the vehicle

(Respondent No.2)and the RTO. The respondent Insurance company, to

prove cancellation of the policy, has examined their officer Chinmay

Joshi at Exh. C-30. He has stated that against Policy No.0415-2003-

1803-00000868, the Company received a Cheque of Abhyudaya Bank

FA2358-2018.odt of Rs.25,276/- as a premium from respondent No.2 to insure Vehicle

Reg. No.MH-04-CP-7187 ( offending vehicle). The said cheque was

submitted for encashment but it was returned back from the Bank with

remark 'fund insufficient'. The Insurance company had sent letter to

Kishor Bhagwan Tejli-owner on 23rd August, 2014 stating that the

cheque issued by him has been dishonoured and the policy stands

cancelled, void ab initio from the beginning of the coverage period. It

is further stated by this witness that the said letter is received by

respondent No.2 owner on 3rd September, 2014. There is one condition

in the policy certificate which states that " if premium is paid through

cheque, the policy is void ab initio in case of dishonor of cheque".

Thereafter, the insurance company had also sent letter dated 23rd

August, 20014 to the Regional Transport Authority intimating them

that the contract of insurance vide Insurance Policy No.0415-2003-

1803-00000868 between the Insurance company and respondent No.2

is void ab initio in view of cheque dishonour.

7. Nothing elicited in the cross examination of this witness.

The dishonoured cheque is at Exh.C-17. Postal acknowledgment

receipts are at Exh. 21 and 22. From the evidence of this witness it

reveals that the policy is cancelled on 23rd August, 2014 whereas the

accident is occurred on 13th May, 2015. Almost after 10 months of the

intimation given to the respondent No.2-owner of the vehicle about

cancellation of policy, the accident is occurred. Hence, it cannot be said

FA2358-2018.odt that the offending vehicle was insured with the insurance company at

the time of accident.

8. The Hon'ble Apex Court, in the case of Deddappa & Ors.

(supra), has held that if the contract of insurance has been cancelled

and all concerned have been intimated thereabout, Insurance company

would not be liable to satisfy the claim. The facts of the said case are

squarely applicable to the present case.

9. In view of the above, I pass following order:

ORDER

The first appeal is dismissed. No order as to costs.

(S. G. DIGE, J. ) JPChavan