Delhi High Court
Oriental Insurance Co Ltd vs Kiran Sharma & Ors on 16 March, 2016
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 16th March, 2016
+ MAC.APP. 872/2010
ORIENTAL INSURANCE CO LTD ..... Appellant
Through: Mr. Amit Gaur & Mr. Pradeep Gaur,
Advs.
versus
KIRAN SHARMA & ORS ..... Respondents
Through: Mr. Rajeshwar Kumar Gupta with
Mr. Sachin Garg, Advs. for R-1.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J (ORAL):
1. Kiran Sharma (first respondent) suffered injuries in a motor vehicular
accident that occurred on 12.12.2005 involving truck bearing registration
no.HR-38K-7325 (the offending vehicle). She brought a claim petition
under Sections 166 & 140 of the Motor Vehicles Act, 1988 (the MV Act)
before the motor accident claims tribunal (the tribunal) on 01.03.2006, it
being registered as suit no.78/2010 (2006), seeking compensation, inter-alia,
pleading that the accident had occurred due to rash/negligent driving of the
offending vehicle by the third respondent herein (Yunus) and that she had
consequently suffered permanent disability. She impleaded Inderjit Singh
(second respondent), he being registered owner of the offending vehicle and
Oriental Insurance Co. Ltd. (the appellant) since it was the insurer in its
respect against third party risk for the period in question. It may be
mentioned here itself that inspite of notice being served, neither the driver
(third respondent herein) nor the owner (second respondent herein) appeared
to contest and, thus, were set exparte by the tribunal.
2. The tribunal held inquiry and on its basis upheld the claim of the first
respondent (the claimant) about the accident having occurred due to
rash/negligent driving of the truck and as also about the injuries and their
effect. It awarded compensation in the sum of `1,36,008/- with interest in
favour of the claimant. The insurer (the appellant) while contesting the
proceedings before the tribunal had raised the issue that there was no valid
or effective insurance policy in existence in as much as the cheque whereby
the premium had been tendered had been dishonoured by the bank and that
due intimation in this regard had been given to the insured (the owner). The
insurance company led evidence before the tribunal by examining Navneet
Goyal (R2W1), Senior Assistant, to prove the relevant facts and documents.
It appears that the documents submitted through the said witness did not
pertain to the insurance policy in question. In this view, the tribunal rejected
the plea and directed the insurance company to satisfy the award.
3. The insurance company, by appeal at hand, pleaded that there was no
contractual liability undertaken by it in respect of the offending vehicle in as
much as no premium had been received as the cheque which had been
tendered for payment of the premium had returned unpaid. It was submitted
that the liability of the insurance company would arise only on the receipt of
the premium amount in terms of the provisions contained in Section 64 of
the VB of the Insurance Act. It also submitted that proper evidence could
not be adduced during the inquiry before the tribunal due to inadvertent
error of the official witness. The insurance company prayed for opportunity
to lead additional evidence to prove the necessary facts.
4. By order dated 20.12.2010, notice on the appeal was issued to the
respondent and the execution of the impugned award was stayed subject to
the insurance company depositing the entire awarded amount with up-to-
date interest with the Registrar General within the period specified and upon
such deposit being made it to be kept in FDR initially for a period of one
year with automatic renewal.
5. The name of the respondent (the driver) was struck off from the array
of the parties by order dated 11.07.2012, in as much as no relief is claimed
against him. The second respondent (the owner) could not be served by
ordinary mode. The service of the notice on him was effected by substituted
mode. Inspite of the said service, he would not appear even in the
proceedings arising out of the appeal at hand.
6. On 05.03.2014, the request of the claimant (first respondent) was
considered and the learned single judge in seisin of the case was pleased to
allow the deposited amount with accrued interest to be released to him in
terms of the award passed by the tribunal subject to he furnishing a personal
bond, observing, inter-alia, that in case the insurance company succeeds in
the instant appeal, it would get recovery rights against the driver and owner
of the offending vehicle.
7. On the request of the insurance company (appellant), it was allowed
by order dated 11.07.2012 to lead additional evidence. Pursuant to the said
liberty granted, the insurance company examined Brij Mohan (AW1), senior
divisional manager, on the strength of his affidavit sworn on 22.09.2014 and
authorization (vide Ex.AW1/A). He proved that the owner of the offending
vehicle (second respondent) had tendered the premium in respect of the
insurance policy by cheque no.581049 (Ex.AW1/1) which when presented at
the bank was returned dishonoured vide cheque returning memos
(Ex.AW1/2 & Ex.AW1/3).
8. There is no contest whatsoever by the owner/insured or the driver.
While there can be no doubt about the fact that the insurance company
cannot claim to be absolved against the third party claim under the insurance
policy, its remedies against the insured are still available because it did not
receive any premium and, thus, there is no valid contract, there being no
consideration in terms of Section 64 VB of the Insurance Act [Oriental
Insurance Co. v. Inderjit Kaur 1998 ACJ 123; New India Assurance
Company Ltd. v. Rula 2000 ACJ 630 and New India Insurance Co. Ltd. v.
Shamsed 2001 ACJ 585].
9. In above view, the appeal of the insurance company is allowed. It is
granted rights to recover the amount paid to the claimant in this case from
Inderjit Singh, the owner (the insured) of the offending vehicle. For such
purposes, it is at liberty to take out appropriate proceedings before the
tribunal.
10. The statutory amount, if made, shall be refunded.
R.K. GAUBA
(JUDGE)
MARCH 16, 2016/ssc
