Bombay High Court
The New India Assurance Co. Ltd. vs Mrs. Vinuta Kanakdas Shetty And Ors. on 22 September, 2025
2025:BHC-AS:39760 1-FA-213-2015.DOC
Ajit
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.213 OF 2015
The New India Assurance Co. Ltd. ...Appellant
Versus
Mrs. Vinuta Kanakdas Shetty and Ors. ...Respondents
WITH
CROSS OBJECTION (ST) NO. 14096 OF 2015
Mr. Shrikant M. Dange, for the Appellant.
Mr. Ketan A. Dhavle, for the Respondent Nos. 1 to 3.
Ms. Shilpa Kapil a/w Mr. Chidanand Kapil a/w Ms. Aishwarya
Mall, for Respondent No.4.
CORAM Dr. Neela Gokhale, J.
RESERVED ON: 18th September 2025
PRONOUNCED ON: 22nd September 2025
JUDGMENT:
-
1. The Appellant assails order dated 31st July 2014 passed
by the Motor Accident Claims Tribunal, Pune ('MACT') in
MACP No. 702 of 2012. By way of the impugned judgment,
the Tribunal held the Appellant liable to pay compensation of
Rs.58 Lakhs to the Respondent Nos. 1 to 3 with interest at the
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rate of 9% per annum from the date of the petition till it is
realised. The Tribunal also directed that 50% of the
compensation to be given to the Respondent No.1 and 25%
each to the Respondent Nos. 2 and 3.
2. The facts in brief are as follows:
i) On 3rd May 2012, one Kanakdas Shetty was traveling by
car with his family members. A truck driver dashed his car.
Kanakdas succumbed to his injuries and his family members
sustained grievous injuries. He died on 22nd May 2012, during
treatment.
ii) The Respondent No.4 herein is the owner of the
offending truck and the truck was insured with the Appellant
company. The Respondent Nos. 1 to 3 are the widow, son and
daughter respectively of deceased Kanakdas. Kanakdas was
aged 58 years at the time of death. He was a
director/employee in many firms and was earning Rs.1 Lakh
per month.
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iii) The matter proceeded ex-parte against the Respondent
No.4-owner of the truck before the Tribunal, as he was not
present nor did he file his written statement.
iv) The Respondent No.4 had issued a cheque of
Rs.39,633/- towards the premium of the policy with the
Appellant-insurance company. The cheque was dishonored
and the Appellant informed the said Respondent about the
dishonor on the date of the accident. However, the said
information was provided after the occurrence of the accident.
The insurance company repudiated the policy for non
payment of premium. However, the Respondent No.4 claimed
that since the information was provided to him post the
accident, he was still entitled to the benefits of the policy.
v) The claimants namely the Respondent Nos. 1 to 3
herein, filed their claim before the Tribunal. The Respondent
No.4-truck owner did not file his written statement. Thus, the
Tribunal framed issues and proceeded to hear the matter, ex-
parte against the Respondent No.4.
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vi) After adducing the evidence, the Tribunal delivered the
judgment and order impugned herein.
3. Feeling aggrieved by the said judgment and order, the
Appellant-insurance company filed the present appeal and the
Respondent No.2 filed his cross objections. The claimants i.e.
Respondent Nos. 1 to 3 also seek enhanced compensation.
4. Mr. Shrikant M. Dange, learned Counsel appears for the
Appellant, Mr. Ketan A. Dhavle, learned Counsel appears for
Respondent Nos. 1 to 3 and Ms. Shilpa Kapil, learned Counsel
appears for the Respondent No.4.
5. The Appellant urged that since the cheque issued by the
Respondent No.4 was dishonored, the policy stood lapsed.
Hence, he was not entitled to claim the benefits of the said
policy. Mr. Dange submitted that the Respondent No.4
approached the Appellant's office and requested to renew the
policy without disclosing the fact of the accident. According to
Mr. Dange, the Respondent No.4 was intimated regarding the
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dishonor of the cheque immediately and on the same date the
accident occurred. The Respondent No. 4 was thus, aware of
the factum of the dishonor of his cheque.
6. On merits, Mr. Dange submitted that at the time of
death of Mr. Kanakdas, his son was not dependent on him and
he was earning his livelihood. Hence, the Tribunal erred in
awarding 25% of the compensation to him. Mr. Dange further
submitted that there is no provision in law that even though
the policy is lapsed and the insurance company is exonerated,
the company must pay first and recover the amount from the
owner of the policy. He also objected to the rate of interest
awarded, the same to be excessive. He thus, submitted that
the judgment and order impugned herein is erroneous and
contrary to the evidence on record. He prays that the appeal
be allowed. However, without prejudice, he submits that if the
Court is inclined to uphold the liability of the Appellant, in
that case, he resists the cross objections of Respondent No.4.
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7. Per contra, Ms. Kapil relying upon her cross objections,
submitted that there is no question of recovering the amount
directed to be paid to the claimants from the truck owner,
since the insurance company failed to communicate dishonor
of the cheque towards premium to him within time and more
particularly before the accident. She submits that on the date
of the accident, the policy still subsisted and it is the insurance
company which is liable to make good the loss. Ms. Kapil
further submitted that the truck driver was driving the truck
in negligent and rash manner and contributed to the
occurrence of the accident. She further submitted that the
negligence is not independently proved by the claimant. She
also submits that the eyewitnesses are not examined and the
spot panchanama prepared by the police is not admitted nor
has any evidentiary value. She thus, concludes by saying that
the compensation amount granted is quite excessive and
untenable.
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8. Mr. Dhavle sought an enhanced amount of
compensation towards loss of love and affection; funeral
expenses, loss of estate, and loss of spousal/parental company.
Mr. Dange conceded to the request of Mr. Dhavle in so far as
the enhanced amount is concerned. He however, refutes the
cross objections filed by the Respondent No.4. At this stage,
the objection of Respondent No.4-truck owner is limited to the
direction permitting the insurance company from recovering
the compensation paid by the company from the truck owner.
9. Heard all the Counsel and perused the record with their
assistance. I have also gone carefully in the
citations/precedents cited by the Counsel.
10. Admittedly, the information about dishonor of the
cheque was intimated to the policy holder/truck owner post
the accident. The accident took place in the morning and the
intimation was made in the afternoon. There is nothing on
record to indicate that the bank of the insured informed him
about the dishonor prior to the accident. No witness from the
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bank either of the insurance company or that of the truck
owner was called to depose regarding the time when the bank
intimated the truck owner regarding the dishonored cheque.
11. In the matter of Oriental Insurance Company Ltd. Vs.
Yogendra Bhalchandra Patil and Anr.1, this Court held that
even if a cheque towards the premium is dishonored and the
insurance company cancels the policy, the insurance company
cannot avoid its liability unless the insurer is put to notice
regarding cancellation of the policy by the insurance company.
12. In another decision in the matter of Oriental Insurance
Company Vs. Gitabai and Anr.2, the aforesaid position of law is
reiterated by this Court. In United India Insurance Company
Ltd. Vs. Laxmamma and Ors.3, the Supreme Court held that
the statutory liability of insurer to indemnify third parties
which policy covered subsists and the insurer has to satisfy the
award of compensation unless the policy of insurance was
1 2007 ACJ 2051
2 2014 ACJ 1423
3 2012 SCC OnLine SC 350
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canceled by the insurer and intimation of such cancellation
had reached the insured before the accident.
13. In view of the settled position of law and in the absence
of any evidence led by the insurance company to indicate that
the information regarding dishonor of cheque and lapse of
policy was intimated to the insured truck owner, there is no
infirmity in the judgment and order of the Tribunal in this
regard. The liability of the Appellant to pay the compensation
to the claimants i.e. the Respondent Nos. 1 to 3 herein is
upheld.
14. As far as the cross objections of the truck owner on the
aspect as to whether the said amount can be recovered by the
Appellant from him is concerned, the Supreme Court, in
Oriental Insurance Company Ltd. Vs. Nanjappan and Ors. 4,
held that the amount of compensation paid by the insurance
company to the claimants can be recovered from the insured.
For that purpose, the insurer shall not be required to file a
4 (2004) 13 SCC 224
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suit. It may initiate a proceeding before the executing court
concerned, as if the dispute between the insurer and the
owner was the subject-matter of determination before the
Tribunal and the issue is decided against the owner and in
favour of the insurer. Hence, the finding of the Tribunal that
the Appellant is entitled to recover the amount of
compensation paid by it to the claimants, from the
Respondent No.4, is also upheld. The cross objections of the
Respondent No.4 in this regard is rejected.
15. Ms. Kapil has tried to contest the quantum of
compensation awarded to the claimants. However, the
Respondent No.4 remained absent before the Tribunal. He
had not led any evidence neither had he cross examined the
claimants. At this stage, Ms. Kapil prays that the matter be
remanded to the Tribunal for fresh trial. The appeal was
admitted on 11th March 2015. Till date, prior to the
admission, no such request was made. In these circumstances,
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I am not inclined to agree to the prayer of remand made by
Ms. Kapil, at this stage when the matter is heard finally.
16. Mr. Dhavle for the claimants/Respondent Nos. 1 to 3
sought enhancement of the compensation granted by the
Tribunal to the extent of Rs.2,70,329/- towards loss of love
and affection, funeral expenses and loss of spousal/parental
love. It appears from the impugned judgment and order that
the Tribunal has already granted compensation towards loss
of estate and consortium as well as towards funeral expenses,
traveling expenses and special diet. In these circumstances,
the prayer for enhanced compensation is rejected.
17. In so far as the merits of the matter in terms of quantum
of compensation is concerned, Mr. Dange, on instructions,
states that he is not pressing the said issue. Hence, I have not
gone into the merits of the case in so far as determination of
quantum of compensation is concerned.
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18. In view of the aforesaid discussion, there is no infirmity
in the impugned judgment and order. The appeal is dismissed
in the aforesaid terms. The statutory amount and other
amounts, if any, deposited by the Appellant in this Court be
transferred to the Tribunal concerned. The claimants are
permitted to withdraw the amounts from the Tribunal along
with accrued interest thereon. The Appellant shall pay the
deficit court fees, if any, as per Rules.
19. The appeal and the cross objection are disposed of as
dismissed.
(Dr. Neela Gokhale, J)
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