Delhi High Court
Reliance General Insurance Co. ... vs Dr. Sarjeet Singh Thakur & Ors on 20 April, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 20th April, 2012
+ MAC.APP. 413/2012
RELIANCE GENERAL INSURANCE CO. LTD...... Appellant
Through Mr. Sameer Nandwani, Adv.
versus
DR. SARJEET SINGH THAKUR & ORS. ..... Respondents
Through Nemo.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
CM APPL.7000/2012 (Exemption)
Exemption allowed, subject to all just exceptions.
The application stands disposed of.
MAC.APP. 413/2012 and CM APPL.6999/2012 (stay)
1. The Appellant Reliance General Insurance Company Limited
impugns a judgment dated 06.02.2012 passed by the Motor
Accident Claims Tribunal (the Claims Tribunal) whereby while
awarding a compensation of `2,89,500/- in favour of the First
Respondent, for having suffered injuries in an accident,
directed the Appellant to pay the compensation in the first
instance with a right to recover the same from the Insured.
2. The only ground of challenge raised by the Appellant during the
course of argument is that the cheque for `10,838/- having been
dishonoured for insufficient funds and the Insured being
informed about the same, the Appellant Insurance Company had
no liability at all. On this aspect, the Claims Tribunal held as
under:-
"39. R4W1 has stated that the company is not liable
to pay any compensation as the offending vehicle was not
insured on the date of accident. He stated that the cheque
given by the insured had bounced on 25.04.09 due to
insufficient funds as per the memo of the bank and the
same was intimated to the insured vide letter dated
30.04.09. He proved the cheque return Ex.R4W1/2, the
cheque Ex.R4W1/3 and intimation to the insured
Ex.R4W1/4 about the dishonour of the cheque. He stated
that they mention the mode of payment on the cover note
before issuing the policy but admitted that the cheque
number and date is not mentioned on the cover note
Ex.PW1/78. He stated that the cover note was issued on
12.04.09 and generally they send the cheque to the bank
for encashment within 2-3 days. He stated that on
Ex.R4W1/2, the cheque amount is mentioned as
Rs.10,838/, presentation date as 24.04.09 and return date
as 25.04.09 for the reasons "insufficient funds". He
stated that the policy is issued to the party even without
realisation of the amount against the cheque. He stated
that as per the document Ex.R4W1/1, the policy was
signed at Mumbai on 28.04.09 in view of the cover note
dated 12.04.09 however, the said policy was never sent to
the party. He stated that they do not have any proof as to
whether the party was informed/served about dishonour
of the premium cheque or as to whether the copy was
served on the Regional Transport Authority.
40. Perusal of testimony of R4W1 reveals that the
policy was not sent to the insured although signed in
view of the cover note to the party. The cheque towards
premium was dishonoured on account of "insufficient
funds". Although R4W1 has stated that intimation was
sent to the insured but he could not place any document
to show of its acknowledgment by the insured or
intimation to the Regional Transport Authority as to the
non issuance of policy to the insured on account of
dishonour of the cheque towards premium. However,
respondent no.1 has been able to establish that the
cheque towards premium of the insurance policy was
dishonoured. No evidence has been led by the
owner/insured to disprove this fact."
3. The Claims Tribunal relied on National Insurance Co. Ltd. v.
Vasdev Kakreja & Ors. II (2010) ACC 148 and held that it was
the liability of the Insurance Company to pay the compensation
in the first instance with a right to recover the same from the
Insured. I may say that Vasdev Kakreja (Supra) was not
applicable to the facts of the present case as in the instant case
there was no question of breach of the terms of policy either on
account of driving the offending vehicle without licence or with
a fake licence or with a licence which was not valid for the class
of vehicle involved in the accident.
4. The Appellant's case was that since the cheque issued towards
the premium of the Insurance Policy was dishonoured, the
Appellant had no liability to pay. Admittedly, the Insurance
Company did not send any intimation to the RTO as required
under Section 147 (4) regarding non-issuance of the policy of
Insurance in pursuance of the cover note issued by the
Appellant.
5. In Deddappa & Ors. v. Branch Manager, National Insurance
Company Limited, (2008) (2) SCC 595; the Supreme Court
considered the judgment in Oriental Insurance Company
Limited v. Inderjit Kaur, (1998) 1 SCC 371 & New India
Assurance Company Limited v. Rula, (2000) 3 SCC 195 and
held that if an Insurance policy is cancelled on account of
dishonour of cheque and the Insured as well as the RTO are
informed about the same, the third party would not be entitled
to get the compensation from the Insurance Company as they
are liable only so long as the policy subsisted.
6. This case is squarely covered by the judgment of this Court in
National Insurance Company Limited v. Reshmi & Ors., MAC
APP. 460/2011 decided on 17.01.2012 whereby it was held that
if the Insured is not informed about the dishonour of the cheque,
the Insurance Company cannot be escape its liability to the third
party as well as to the insured. If the insured is informed about
the dishonour of the cheque and an intimation in this regard is
also given to the RTO as provided under Section 147 (4) of the
Motor Vehicles Act (the M.V. Act), the Insurance Company
would not be liable to the third party. At the same time, if the
insured is informed but no intimation is given to the RTO, the
Insurance Company would be liable to the third party with the
right of recovery against the insured.
7. As stated above, the recovery rights have already been granted
to the Appellant.
8. No other point has been raised during the course of arguments.
9. There is no merit in the Appeal; the same is accordingly
dismissed.
10. Pending application also stands disposed of.
(G.P. MITTAL)
JUDGE
APRIL 20, 2012
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