Delhi High Court
New India Assurance Co. Ltd. vs Hukam Singh & Ors. on 21 March, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 21st March, 2012
+ MAC.APP. 310/2009
NEW INDIA ASSURANCE CO. LTD. ..... Appellant
Through: Ms. Neerja Sachdeva, Advocate
versus
HUKAM SINGH & ORS. ..... Respondents
Through: Mr. Gaurav Kumar Singh, Adv. for
R-3.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appellant New India Assurance Company Limited
impugns the judgment dated 05.02.2009 passed by the Motor
Accident Claims Tribunal (the Claims Tribunal) on the ground
that instead of granting recovery rights, the Appellant was
entitled to be exonerated as the Appellant proved on record that
the cheque issued by the third Respondent was dishonoured on
presentation and all the concerned were duly informed.
2. It is urged that the case is covered by the report of the Supreme
Court in Deddappa & Ors. v. Branch Manager, National
Insurance Company Limited, (2008) 2 SCC 595.
3. Para 13 of the impugned judgment is extracted hereunder:-
"As regards the liability of the Insurance Company, two
witnesses examined in evidence of the Insurance
Company. R3W1/Simeul Suman Xess has deposed that
R2/Pankaj Kumar, the insured had given a cheque
no.269924 dated 31.8.01 for a sum of ` 24,804/- drawn
on Vyash Cooperative New Bank Ltd. and said cheque
was dishonoured when presented for encashment for
insufficient funds in the accounts of R2/Pankaj Kumar.
The witness has also proved registered letter, Ex.R3W1/2
dated 6.9.01, issued to R2/Pankaj Kumar and similar,
letter sent to regional Transport Authority on 5.9.01,
copy of which Ex.R3W1/6 has also been proved by the
witness. R3W2/Pankaj Gupta, an Assistant working with
New India Assurance Co. Ltd. had proved Ex.R3W2/1
endorsement cancelling the policy no.
232101/31/01/0100003351. The dishonoured cheque has
also been placed on record. In sum, the insurance
policy, which was taken by R2 from R3/Insurance
Company in respect of bus no.DL-1PB-1922 was
cancelled since the cheque issued by R2 as premium for
the policy was dishonoured and intimation to that effect
was sent by insurance Company to R2 as well as
Transport Authority by registered post in September
2001, much before the date of the accident. On behalf of
Insurance Company, reliance has been placed on a case
decided by the Hon'ble Supreme Court reported as
D3eddappa and others vs. National Insurance Co. Ltd.,
(2008) 2 Supreme Court Cases 595 and the facts in the
case being relied are identical to the fats of the present
case. In the circumstances, it is held that there was no
valid insurance policy for the offending vehicle as on the
date of the accident and R3/Insurance Company is not
liable to pay the compensation to the petitioner.
However, as directed by the Hon'ble Supreme Court in
the case being relied on behalf of R3/Insurance
Company, award shall be first satisfied by the Insurance
Company and then, Insurance Company shall be entitled
to recover the amount from R2, the owner of the
offending vehicle."
4. It is urged by the learned counsel for the third Respondent that
the third Respondent paid the amount of premium in cash when
he received information about the dishonour of the cheque and
the contract of Insurance was revived. No such plea was taken
by the third Respondent as he was proceeded ex-parte. No
Appeal has been filed by the third Respondent against the order
passed by the Claims Tribunal granting recovery rights against
the third Respondent.
5. In para 24 of the report in Deddappa & Ors. (supra), it was held
as under:-
"24. We are not oblivious of the distinction between the
statutory liability of the Insurance Company vis-a-vis a
third party in the context of Sections 147 and 149 of the
Act and its liabilities in other cases. But the same
liabilities arising under a contract of insurance would
have to be met if the contract is valid. If the contract of
insurance has been cancelled and all concerned have
been intimated thereabout, we are of the opinion, the
insurance company would not be liable to satisfy the
claim."
6. In Deddappa & Ors. (supra), the Supreme Court exercised its
extraordinary jurisdiction under Article 142 of the Constitution
of India to direct the first Respondent to pay the compensation
to the Appellants (therein) as they belonged to the lower strata
of the society.
7. The Claims Tribunal did not have jurisdiction to direct the
Insurance Company to first pay the awarded compensation and
then recover the same as the contract of insurance had become
void and nonest on account of dishonour of the cheque and due
information to all the concerned including the Insured i.e. the
third Respondent herein was given regarding the same.
8. The First Respondent (the Claimant) shall be entitled to recover
the amount of compensation from the Respondents No.2 and 3
i.e. the driver and the owner of the offending vehicle
respectively.
9. The Appeal is allowed in above terms.
10. No costs.
(G.P. MITTAL)
JUDGE
MARCH 21, 2012
vk
