Delhi High Court
National Insurance Co. Ltd. vs Poonam And Ors. on 1 April, 2014
Author: Suresh Kait
$~R55
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 1st April, 2014
+ MAC.A.322/2007
NATIONAL INSURANCE CO. LTD. ..... Appellant
Represented by: Mr. L.K. Tyagi, Adv.
Versus
POONAM AND ORS. ..... Respondents
Represented by: NEMO.
CORAM:
HON'BLE MR. JUSTICE SURESH KAIT
SURESH KAIT, J. (Oral)
1. The present appeal has been preferred against the impugned award
dated 03.02.2007, whereby Ld. Tribunal awarded compensation for an
amount of Rs.1,84,500/- with interest @ 6% per annum from the date of
filing of the Claim Petition till realization of the amount.
2. Vide the present appeal, appellant is seeking complete exoneration
from any liability as the cheque issued by the owner of the offending vehicle
got dishonoured and thereafter the insurance policy was cancelled.
3. The issue raised in the instant appeal has been dealt by this court in
the case bearing MAC.App. No. 495/2010, Usha Aggarwal v. Pramod kr.
Gupta and ors., decided on 27.11.2013 wherein it is held as under:
15. Admittedly, the cheque was issued by the respondent
No.2 Raju Gupta, i.e., the owner of the offending vehicle on
15.03.2001 for issuance of cover note. Accordingly, the
respondent No. 3 issued cover note in favour of the respondent
No. 2. Thereafter, on the cheque being dishonoured, the
respondent No. 3 Insurance Company sent notice dated
28.03.2013 by cancelling the said cover note.
16. The question before this Court for consideration is
whether the cover note once issued and thereafter on the
cheque being dishonoured, the said cover note continued in
force as the third party risk is concerned.
17. The similar issue came before the High Court of Kerela
in the case of Sivankutty and others (Supra) wherein the
Court held that the liability of the Insurance Company in
damages for third party risks continues for the entire period
covered by the policy in spite of the cheque issued towards
payment of premium was dishonoured and consequently policy
was cancelled by the Insurance Company. The remedy of the
Insurance Company lies against the "insured" to have the
amount paid by them by way of compensation for third party
risks to be got reimbursed.
18. Moreover, in the case of Inderjit Kaur and others
(Supra) the Apex Court held that despite the bar created by
Section 64VB of the Insurance Act, the appellant, an authorized
insurer, issued a policy of insurance to cover the bus without
receiving the premium. By reason of the provisions of
Section 147(5) and 149(1) of the Motor Vehicles Act, the
appellant became liable to indemnify third parties in respect of
the liability which that policy covered and to satisfy awards of
compensation in respect thereof notwithstanding its entitlement
to avoid or cancel the policy for the reason that the cheque
issued in payment of the premium thereon had not been
honoured.
19. In view of the above, the respondent No. 3 Insurance
Company cannot be absolved of its obligation to third parties
under the policy because it did not receive the premium. It has
remedies in this behalf lay against the insured. It was the
Insurance Company itself who was responsible for its
predicament. It had issued the policy of insurance upon receipt
of a cheque towards the premium in contravention of the
provisions of Section 64 VB of the Insurance Act. A policy of
insurance being a public interest concept prevails over the
interests of the Insurance Company.
20. The Ld. Tribunal has wrongly exonerated Respondent
No.3 Insurance Company from the liability and directed
respondents no. 1 and 2 to pay the compensation. Ld. Tribunal
has not considered the settled law regarding the statutory
liability of the insurance company which is also envisaged as
per the provisions of Motor Vehicles Act, 1988.
4. Admittedly recovery rights are granted in favour of the appellant.
5. Keeping in view the decision taken by this court in the case mentioned
above, I do not find any merit in the instant appeal.
6. Same is accordingly dismissed.
7. The statutory amount be released in favour of the appellant and the
balance compensation amount be released in favour of the respondents /
claimants on taking steps by them.
SURESH KAIT, J
APRIL 01, 2014
jg
