Delhi High Court
Bajaj Allianz Gen Insurance Co Ltd vs Meena & Ors on 20 February, 2015
Author: Jayant Nath
$~A-7 & 8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment pronounced on: 20.02.2015
+ MAC.APP. 22/2011 and CM Nos.245/2011 (stay) & 8749/2011 (for
release of amount)
BAJAJ ALLIANZ GEN INSURANCE CO LTD ..... Appellant
Through Mr.Rajat Brar, Advocate.
versus
MEENA & ORS ..... Respondents
Through Mr.R.K.Yashwant Singh, Advocate for
R-1 to 5.
Mr.Pawan Kumar Singh, Advocate for
R-7.
+ MAC.APP. 23/2011 and CM No.255/2011 (stay)
BAJAJ ALLIANZ GEN INSURANCE CO LTD ..... Appellant
Through Mr.Rajat Brar, Advocate.
versus
ANGOORI DEVI & ORS ..... Respondents
Through Mr.S.K.Singh, Advocate for R-1 to 5.
Mr.Pawan Kumar Singh, Advocate for
R-7.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J.
1. The present two appeals are filed seeking to impugn the common
award dated 15.11.2010.
2. The brief facts are that on 03.04.2007 the deceased Kanahiya Lal
(driver) and Sh.Giriraj (helper-cum-cleaner) were going on a truck to Madras
via Bhopal from Delhi. In district Rajgarh, their truck was hit by another
truck which came from the opposite side in a rash and negligent manner.
MAC.APP.22/2011 & 23/2011 Page 1
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Sh.Kanahiya Lal and Sh.Giriraj suffered serious injuries and succumbed to
the same.
3. The issue centres around the liability of the appellant. Learned counsel
appearing for the appellant submits that the offending truck was not insured
under a cover of the Insurance Policy. It is urged that the cheque issued by
respondent No.7, the owner of the offending vehicle towards premium for the
policy, was returned unpaid with the observation that the payment has been
stopped. The appellants claim that they have intimated respondent No.7 about
the dishonour of the cheque and cancellation of the insurance policy vide
letter dated 08.03.2007. Hence it is urged that there was no subsisting
insurance policy between the appellants and respondent No.7.
4. Learned counsel appearing for respondent No.7 however denies the
contentions of the appellant. He submits that the cheque no doubt was
dishonoured but no intimation of dishonour was sent. He further states that
the premium has been paid in cash and the entry in the cash book of
respondent No.7 is also available. Learned counsel relies upon the judgments
of the Supreme Court in the case of United India Insurance Company Ltd.
vs. Laxmamma & Ors., (2012) 5 SCC 234 and Oriental Insurance Co. Ltd.
vs. Inderjit Kaur & Ors., 1998 ACJ 123.
5. A perusal of the award shows that the Tribunal noted the submission of
the appellant and relying upon the judgment of the Supreme Court in the case
of Oriental Insurance Co. Ltd. vs. Inderjit Kaur & Ors.(supra) held that
third party liability will not come to an end once the insurance policy is
issued by the insurance company.
MAC.APP.22/2011 & 23/2011 Page 2
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6. A perusal of the evidence of R3W1 Ms.Sunanda Nimisha from the
appellant company shows that she has in her evidence stated that the vehicle
in question was insured under the Policy No.OG-07-1104-1807-00010618. It
is stated that the requisite insurance premium was made by cheque dated
11.01.2007 for Rs.2,34,328/- and was issued on the belief that the cheque
would be honoured. However, when the cheque was presented to the banker
it was returned unpaid on the ground „payment stopped‟. Thereafter on
08.03.2007 an intimation was sent to respondent No.7 cancelling the
insurance policy. The courier receipt has been filed as mark „A‟.
7. In cross-examination she states that the premium of the offending
vehicle was Rs.6,310/-. She further clarifies that many vehicles were being
insured. Cheque of Rs.2,34,328/- was for getting 16 insurance policies of
different vehicles which were obtained over the period 28.02.2007 to
27.2.2008. She admits that the courier receipt does not bear year or the
address of respondent No.7.
8. In my opinion, there is no adequate proof to show that respondent No.7
was duly informed about the dishonour of cheque. The intimation of
dishonour Ex.R3W1/4 is dated 08.03.2007. The courier receipt gives no date.
It also does not give complete address of the addressee. No proof of receipt
of the communication is placed on record.
9. The Supreme Court in the case of United India Insurance Company
Ltd. vs. Laxmamma & Ors.(supra) after noticing the judgment of the
Supreme Court in the case of Oriental Insurance Co. Ltd. vs. Inderjit Kaur
& Ors.(supra) in para 26 held as follows:-
MAC.APP.22/2011 & 23/2011 Page 3
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"26. In our view, the legal position is this: where the policy of
insurance is issued by an authorized insurer on receipt of cheque
towards payment of premium and such cheque is returned
dishonoured, the liability of the authorized insurer to indemnify
the third parties in respect of the liability which that policy
covered subsists and it has to satisfy award of compensation by
reason of the provisions of Sections 147(5) and 149(1) of the
M.V. Act unless the policy of insurance is cancelled by the
authorized insurer and intimation of such cancellation has
reached the insured before the accident. In other words, where
the policy of insurance is issued by an authorized insurer to
cover a vehicle on receipt of the cheque paid towards premium
and the cheque gets dishonored and before the accident of the
vehicle occurs, such insurance company cancels the policy of
insurance and sends intimation thereof to the owner,
the insurance company‟s liability to indemnify the third parties
which that policy covered ceases and the insurance company is
not liable to satisfy awards of compensation in respect thereof."
10. In the absence of any cogent proof of service of notice of intimation of
dishonour of cheque to respondent No.7 and in view of the legal position it
cannot be said that the insurance policy or third party liability came to an
end.
11. Even otherwise, the above conclusion is supported by the confused
manner in which the evidence has been led by the appellant. R3W1 in her
affidavit clearly states that the cheque is for Rs.2,34,328/- dated 11.01.2007.
The premium for the vehicle in question is Rs.6,310/-. How the cheque is co-
related to the premium of Rs.6,310/- is not explained in the affidavit by way
of evidence. In the cross-examination, it is said that there are 16 insurance
policies for which the cheque was given. However, the intimation letter
regarding dishonour of cheque dated 08.03.2007 does not mention any such
MAC.APP.22/2011 & 23/2011 Page 4
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thing and simply cancels the policy in question i.e. OG-07-1104-1807-
00010618. Further the cheque is dated 11.01.2007. The return memo is dated
01.03.2007. There is no explanation why the appellants took nearly two
months to send the cheque for clearing. Further, the insurance policy which is
issued does not mention any cheque number on the policy. It only indicates
a premium of Rs.6,310/- payable. There is no basis to co-relate the insurance
policy with the cheque of Rs.2,34,328/- that is returned dishonoured. Hence,
even otherwise the evidence led by the appellant is not coherent and cannot
be relied upon
12. There is no merit in the present appeal and the same is dismissed.
13. The statutory amount, if any, be refunded.
14. All interim orders stand vacated.
15. All pending applications stand disposed of.
JAYANT NATH, J
FEBRUARY 20, 2015/rb
MAC.APP.22/2011 & 23/2011 Page 5
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