Karnataka High Court
The Divisional Manager vs Sri. Durgappa S/O. Yallappa Madar on 16 June, 2022
Bench: P.Krishna Bhat
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MFA No. 24863 of 2010
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 16TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR JUSTICE P.KRISHNA BHAT
MFA NO. 24863 OF 2010 (MV-I)
BETWEEN:
THE DIVISIONAL MANAGER,
ORIENTAL INSURANCE COMPANY LTD.DIVISIONAL
OFFICE, ENKAY COMPLEX,KESHWAPUR, HUBLI
THROUGHREGIONAL MANAGER, ORIENTAL INSURANCE
COMPANY LTD., REGIONAL OFFICE,SUMANGALA
COMPLEX, LAMINGTON ROAD, HUBLI
...APPELLANT
(BY SRI. S K KAYAKAMATH, ADVOCATE)
AND:
1. SRI. DURGAPPA S/O. YALLAPPA MADAR,
AGE: 25 YEARS, OCC: COOLIE, R/O BANKAPUR, TQ:
SHIGGAON,NOW AT DEVAGIRI, HAVERI
2. SRI.SURINDER SINGH JAGGI,
AGE: MAJOR, OCC: BUSINESS,R/O 4/A, NILES
CHAMBERS SECTOR19-C, PLOT NO.18, VASHI, NAVI
Digitally signed
by JAGADISH T R MUMBAI,MAHARASHTRA STATE
Location: HIGH
COURT OF
KARNATAKA, ...RESPONDENTS
DHARWAD
Date: 2022.06.22 (BY SRI.M.H. PATIL, ADV. FOR R1) (R2-SERVED)
15:01:49 +0530
THIS MFA FILED U/SEC. 173(1) OF THE MOTOR VEHICLE
ACT 1988, AGAINST THE JUDGMENT AND AWARD DTD:09-09-
2010 PASSED IN MVC NO.145/2009 (OLD MVC.NO.251/2007) ON
THE FILE OF THE DISTRICT JUDGE(FAST TRACK) AND MEMBER,
MACT, HAVERI, AWARDING THE COMPENSATION OF RS.47,000/-
WITH INTEREST AT THE RATE OF 6% P.A. FROM THE DATE OF
PETITION TILL REALISATION.
THIS APPEAL COMING ON FOR FINAL HEARING, THIS
DAY, COURT DELIVERED THE FOLLOWING:
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MFA No. 24863 of 2010
JUDGMENT
This appeal is at the instance of the Insurance
Company calling in question the correctness of judgment and
award dated 9.9.2010 in MVC No.145/2009 (Old MVC
No.251/2007) passed by the learned Fast Track Court and
Addl. MACT, Haveri (for short, 'Tribunal') awarding
compensation of Rs.47,000/- with interest thereon at 6% per
annum from the date of petition till date of payment.
2. In view of nature of grounds urged by the
Insurance Company, reference to the facts of the case is
wholly unnecessary and in any case the same has been dealt
with in great detail in the impugned judgment.
3. The only ground urged by the learned counsel for
the Insurance Company in support of his appeal to impugn
the judgment and award in question is that premium amount
paid by way of cheque by the insured was unrealized on
account of the same being dishonoured by Banker and
therefore, the learned Tribunal was in error in fastening the
liability on the part of Insurance Company as the appellant
had cancelled the Policy of Insurance. In support of said
MFA No. 24863 of 2010
contention, learned counsel placed reliance on a decision of
Hon'ble Apex Court in National Insurance Co. Ltd. Vs.
Seema Malhotra & Others, AIR 2001 SC 1197
(paragraphs 17 to 19). Therefore, he submitted that the
appeal is required to be allowed and Insurance Company is
entitled to be disclaimed from its liability to pay
compensation.
4. Learned counsel appearing for respondent
No.1/claimant, per contra, submits that the appellant has
totally failed to produce any material to show that the
alleged notice of cancellation of policy issued by the
appellant had reached the insured before the date of
accident and therefore, in view of decision of Hon'ble Apex
Court in United India Insurance Co. Ltd. Vs. Laxmamma
& Others, AIR 2012 SC 2817, insurance company is liable
to pay compensation and there is no error in the judgment
and award of the learned Tribunal.
5. I have carefully considered the submissions
made on both sides and I have perused the records and also
two decisions cited before me by respective counsel.
MFA No. 24863 of 2010
6. Records show that the Insurance Company has
produced Ex.R2 which is a notice of dishonour of cheque and
it reads as follows:
THE ORIENTAL INSURANCE CO. LTD.
(Subsidiary of General Insurance Corpn. Of India)
Regd. Office: Oriental House Asaf ali Road, N.Delhi-110002..
Place: M.CD.09,10, Homi Modi St., Fort
Mumbai-23, Tel.No.204 3321, Email
[email protected]
Pin Code :
Fax/Tel: 2043321/6196
Dated: 28-Feb-06
Dept. : Motor Registered
To:
MR. SURINDERSINHG JAGGI
A-4, NILESH CHAMBERS SEC 19-C
VASHI NEW BOMBAY.
DEAR SIR/SIRS/MADAM,
Re: Dishonoured Cheque No.91177 dt. 23.02.2006 for Rs.17436
drawn on ICICI Banking Corpn. Ltd. towards premium against
Cover/Note no.0 dt. Endt.No.o and Policy No.5372 Vehicle No.MH-43-
E-4471 Make TATA.
Please note that the above cheque has been dishonoured with the remarks INSUFFICIENT
FUND.
It is therefore, understood and declared that the above policy stands cancelled abinitio due to
non-receipt of consideration and our Co. is not on risk nor any claim will be entertained.
Further, cover shall again commence from the time of receipt of fresh remittance of Rs.17436
including bank charges of Rs.100 in cash or bank draft, favouring The Oriental Insurance Co.
Ltd. You are requested to surrender the original policy/covernote/receipt for our records. You
are further requested to bring the vehicle along for inspection to enable us to grant the cover.
Thanking you,
Your faithfully,
Sd/-
(Divisional/Branch Manager)
MFA No. 24863 of 2010
7. However, admittedly, the appellant-insurer has
not produced any document to show that the said notice had
reached the insured and if it had reached, whether it was
prior to the date of accident. The Hon'ble Apex Court in
Laxmamma & Others1 (supra) has observed at paragraph
19 of the judgment as under:
"19. 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
authorized insurer to indemnify 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 Section 147(5) and 149(1) of the MV 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 dishonoured 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."
(underlined by me)
8. The above decision was rendered by Hon'ble Apex
Court after considering the decision in Seema Malhotra2
AIR 2012 SC 2817
AIR 2001 SC 1197
MFA No. 24863 of 2010
(supra). As already noticed, the appellant has wholly failed
to produce any material to show that before date of accident
Ex.R2-Notice of cancellation of policy had reached the
insured, namely the insured was intimated that the policy
was cancelled even before date of the accident. In that view
of the matter, there is no merit in the appeal and same is
liable to be dismissed and accordingly, it is dismissed. The
amount in deposit be transmitted to the learned Tribunal
along with original records.
Sd/-
JUDGE
JTR
