Karnataka High Court
V L Munesh vs Asham on 7 December, 2023
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR
MISCELLANEOUS FIRST APPEAL NO.1974/2015 (MV-D)
C/W
MISCELLANEOUS FIRST APPEAL NO.6255/2014 (MV),
MISCELLANEOUS FIRST APPEAL NO.6256/2014 (MV-I),
MISCELLANEOUS FIRST APPEAL NO.1975/2015 (MV-I)
IN MFA NO.1974/2015:
BETWEEN:
1. GOWRAMMA,
W/O LATE RAMANNA,
AGED ABOUT 33 YEARS,
2. JEEVITHA,
D/O LATE RAMANNA,
AGED ABOUT 12 YEARS,
3. PREETHAM,
S/O LATE RAMANNA,
AGED ABOUT 10 YEARS,
4. MANOJ,
S/O LATE RAMANNA,
AGED ABOUT 8 YEARS,
5. THIMMAMMA,
W/O LATE RANGAPPA,
AGED ABOUT 58 YEARS,
APPELLANTS 2 TO 4 ARE MINORS,
REPRESENTED BY THEIR NATURAL
2
GUARDIAN AND MOTHER-FIRST APPELLANT,
ALL ARE RESIDING AT VARAHASANDRA VILLAGE,
TURUVEKERE TALUK,
NOW RESIDING AT BANDEPALYA,
NEAR SIDDAGANGA MUTT,
TUMKUR-572 103.
... APPELLANTS
(BY SRI. SHANTHARAJ .K, ADVOCATE)
AND:
1. ASHAM S/O GADIBABA SAB,
AGE MAJOR,
R/AT 3RD CROSS, GANDHINGAR
TIPTUR-572 201.
2. SRIRAM GENERAL INSURANCE CO. LTD.,
NO.10003-E-8, RIICO INDUSTRIAL AREA,
SITAPURA, JAIPUR, RAJASTHAM,
NOW REPRESENTED
SRIRAM GENERAL INSURANCE CO. LTD.,
BY ITS MANGER, NO.302,
3RD FLOOR, S & S CORNER BUILDING,
FLAT NO.48, HOSPITAL ROAD,
SHIVAJINAGAR,
BENGALURU-560 001.
... RESPONDENTS
(BY SRI. O. MAHESH, ADVOCATE FOR R2, R1 IS SERVED)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT
AGAINST THE JUDGMENT AND AWARD DATED:23.4.2014,
PASSED IN MVC NO.108/2012 ON THE FILE OF THE ADDITIONAL
SENIOR CIVIL JUDGE, MACT-11, TUMKUR, PARTLY ALLOWING
THE CLAIM PETITION FOR COMPENSATION AND SEEKING
ENHANCEMENT OF COMPENSATION.
3
IN MFA NO.6255/2014:
BETWEEN:
THE REGIONAL MANAGER,
SRIRAM GENERAL INSURANCE CO. LTD.,
NO.10003-E-8, RIICO INDUSTRIAL AREA,
SITAPURA, JAIPUR, RAJASTHAM,
NOW REPRESENTED BY
SRIRAM GENERAL INSURANCE CO. LTD.,
NO.302, 3RD FLOOR, S & S CORNER BUILDING,
FLAT NO.48, HOSPITAL ROAD, SHIVAJINAGAR,
BENGALURU-560 001, BY IT'S MANAGER.
... APPELLANT
(BY SRI. O. MAHESH, ADVOCATE)
AND:
1. GOWRAMMA,
W/O LATE RAMANNA,
AGED ABOUT 32 YEARS,
2. JEEVITHA,
D/O LATE RAMANNA,
AGED ABOUT 11 YEARS,
3. PREETHAM,
S/O LATE RAMANNA,
AGED ABOUT 9 YEARS,
4. MANOJ,
S/O LATE RAMANNA,
AGED ABOUT 7 YEARS,
RESPONDENTS 2 TO 4 ARE MINORS,
REPRESENTED BY THEIR NATURAL
GUARDIAN AND MOTHER-FIRST RESPONDENT,
4
5. THIMMAMMA,
W/O LATE RANGAPPA,
AGED ABOUT 57 YEARS,
ALL ARE RESIDING AT
VARAHASANDRA VILLAGE,
TURUVEKERE TALUK-572 227
NOW RESIDING AT BANDEPALYA,
NEAR SIDDAGANGA MUTT, TUMKUR,
NOW RESIDING AT TUMKUR-572 101.
6. ASHAM, MAJOR,
S/O. GADIBABA SAB,
3RD CROSS, GANDHINAGAR,
TIPTUR, TUMKUR DIST.-572 201.
... RESPONDENTS
(BY SRI. K. SHANTHARAJ, ADVOCATE FOR R1 TO R5,
V/O DATED 26.3.2018, NOTICE TO R6 IS HELD SUFFICIENT)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT
AGAINST THE JUDGMENT AND AWARD DATED:23.4.2014,
PASSED IN MVC NO.108/2012 ON THE FILE OF THE ADDITIONAL
SENIOR CIVIL JUDGE, MACT-11, TUMKUR, AWARDING
COMPENSATION OF RS.6,11,000/- WITH INTEREST @ 6% P.A.
FROM THE DATE OF PETITION TILL REALIZATION.
IN MFA NO.6256/2014:
BETWEEN:
THE REGIONAL MANAGER,
SRIRAM GENERAL INSURANCE CO. LTD.,
NO.10003-E-8, RIICO INDUSTRIAL AREA,
SITAPURA, JAIPUR, RAJASTHAM,
NOW REPRESENTED BY
SRIRAM GENERAL INSURANCE CO. LTD.,
NO.302, 3RD FLOOR, S & S CORNER BUILDING,
5
FLAT NO.48, HOSPITAL ROAD, SHIVAJINAGAR,
BENGALURU-560 001, BY IT'S MANAGER.
... APPELLANT
(BY SRI. O. MAHESH, ADVOCATE)
AND:
1. V.L. MUNESH S/O LAKKANNA,
AGED 26 YEARS,
R/O VARAHASANDRA,
MAYASANDRA HOBLI,
TURUVEKERE TALUK,
NOW R/A SREENAGARA,
NEAR HMT GATE, TUMKUR-572 201.
2. ASHAM S/O GADIBABA SAB,
MAJOR,
3RD CROSS, GANDHINAGARA,
TIPTUR, TUMKUR DIST.-572 201.
... RESPONDENTS
(BY SRI. K. SHANTHARAJ, ADVOCATE FOR R1,
R2 IS SERVED)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT
AGAINST THE JUDGMENT AND AWARD DATED:23.4.2014,
PASSED IN MVC NO.109/2012 ON THE FILE OF THE ADDITIONAL
SENIOR CIVIL JUDGE, MACT-11, TUMKUR, AWARDING
COMPENSATION OF RS.2,80,100/- WITH INTEREST @ 6% P.A.
FROM THE DATE OF PETITION TILL REALIZATION.
IN MFA NO.1975/2015:
BETWEEN:
V.L. MUNESH S/O LAKKANNA,
AGED ABOUT 26 YEARS,
RESIDING AT VARAHASANDRA VILLAGE,
MAYASANDRA HOBLI,
TURUVEKERE TALUK,
6
NOW RESIDING AT SRINAGAR,
NEAR H.M.T. GATE,
TUMKUR-572 103
... APPELLANT
(BY SRI. SHANTHARAJ .K, ADVOCATE)
AND:
1. ASHAM S/O GADIBABA SAB,
AGE MAJOR,
R/AT 3RD CROSS, GANDHINGAR
TIPTUR-572 201.
2. SRIRAM GENERAL INSURANCE CO. LTD.,
NO.10003-E-8, RIICO INDUSTRIAL AREA,
SITAPURA, JAIPUR, RAJASTHAM,
NOW REPRESENTED
SRIRAM GENERAL INSURANCE CO. LTD.,
BY ITS MANGER, NO.302,
3RD FLOOR, S & S CORNER BUILDING,
FLAT NO.48, HOSPITAL ROAD,
SHIVAJINAGAR,
BENGALURU-560 001.
... RESPONDENTS
(BY SRI. O. MAHESH, ADVOCATE FOR R2, R1 IS SERVED)
THIS APPEAL IS FILED UNDER SECTION 173(1) OF MV ACT
AGAINST THE JUDGMENT AND AWARD DATED:23.4.2014,
PASSED IN MVC NO.109/2012 ON THE FILE OF THE ADDITIONAL
SENIOR CIVIL JUDGE, MACT-11, TUMKUR, PARTLY ALLOWING
THE CLAIM PETITION FOR COMPENSATION AND SEEKING
ENHANCEMENT OF COMPENSATION.
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 20.11.2023, COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT' THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
7
COMMON JUDGMENT
These appeals are filed by the claimants as well as
respondent No.2, challenging the judgment and award
passed by the Additional Senior Civil Judge and MACT-XI,
Tumkur, in MVC No.108/2012 and MVC No.109/2012, dated
23.04.2014.
2. MFA No.6255/2014 is filed by the Insurance
Company, while MFA No.1974/2015 is filled by the
claimants challenging the judgment and award in MVC
No.108/2012, while MFA No.6256/2014 and MFA
No.1975/2015 are filed by Insurance Company and the
claimant challenging the judgment and award in MVC
No.109/2012. As these appeals are arising out of the same
accident and since common judgment was passed, all these
appeals are heard together and disposed of through this
common judgment.
8
3. For the sake of convenience, the parties herein
are referred as per the ranks occupied by them before the
Tribunal.
4. The brief factual matrix leading to the case are
as under:
On 13.09.2011, the petitioner Munesh, Nagamma and
deceased-Ramanna were proceeding in auto-rickshaw
bearing registration No.KA-44-3228 in order to attend a
function at Tiptur. When they were returning after attending
the function near Dasegowda's house of Balagarahalli
Village, the driver of the lorry bearing registration No.KA03-
A-0131 came in a rash and negligent manner and dashed
against the auto-rickshaw. As a result, Ramanna succumbed
on the spot and other inmates sustained injuries. The legal
heirs of deceased Ramanna filed a claim petition in MVC
No.108/2012 and the other injured Munesh filed a claim
petition in MVC No.109/2012 under Section 166 of the
Motor Vehicle Act, 1988 (for short 'MV Act') claiming
compensation.
9
5. Respondent No.1 did not appear before the
Court, but respondent No.2-Insurance Company filed
objection statement disputing the issuance of policy and
disputing the driving license, negligence act on the part of
the driver of the lorry and alleging negligence on the part of
the driver of the auto. They have also denied the age,
income and occupation of the deceased and claimant
injured and it is specifically asserted that respondent No.1
had made a proposal for issuance of the policy and remitted
a premium amount of Rs.15,780/- by way of cheque on
11.07.2011 and on the basis of the same, policy came to be
issued subject to realisation of the cheque. But when the
said cheque was presented for encashment, it returned with
endorsement that signature of the drawer differs. Then it is
alleged that Insurance Company has cancelled the policy
and the premium amount has not been realized and there is
no contractual liability and the same was intimated to the
owner long before the accident as well as the RTO. Hence,
respondent No.2 has disputed the claim.
10
6. The Tribunal after appreciating the oral and
documentary evidence, has allowed MVC No.108/2012 by
awarding compensation of Rs.6,11,000/-, while MVC
No.109/2012 is partly allowed by awarding compensation of
Rs.2,80,100/- with interest. The liability is fastened on
respondent No.2-insurer.
7. Being aggrieved by this judgment and award, the
claimants filed MFA No.1974/2015 & MFA No.1975/2015
seeking enhancement, while Insurance Company has filed
MFA No.6255/2014 and MFA No.6256/2014 challenging the
liability itself.
8. Heard the arguments advanced by the learned
counsel for appellant/Insurance Company and the learned
counsel for respondents/claimants. Perused the records.
9. The learned counsel for appellant would contend
that the cheque is dated 10.08.2011 and it was presented
on the same day and bounced on the same day. It is
alleged that the accident has occurred on 30.09.2011 and
11
long before the notice was issued on 12.08.2011 cancelling
the policy and intimation was already issued to the owner.
10. He would contend that since policy was
cancelled, no liability can be fastened as there is no contract
and contract is unenforceable and is void abinitio as per
regulation (iv) of the Insurance Company regulations. He
would also contend that owner has not appeared and has
not disputed the cancellation of policy and service of notice
and the evidence of Insurance Company was not at all
challenged. The learned counsel for appellant further
asserts that the vehicle was also planted since complaint
disclose that some lorry hit him and it was night hours and
they were not in a position to ascertain the lorry number
and Investigating Officer is not examined. Hence, he would
also contend that since vehicle was also planted, question of
fastening the liability on Insurance Company does not arise
at all.
11. Per contra, the learned counsel for
appellant/claimants would contend that Ex.R4 is dated
12
14.12.2013 issued by HDFC bank on the ground that
signature of drawer differs, but accident has occurred on
30.09.2011 itself and notice is not served and original
cheque and relevant Bank endorsement of State Bank of
Mysore is not produced. He would contend that regarding
planting of the vehicle absolutely no pleadings and no
evidence and notice ought to have been served and in the
absence of postal acknowledgement and non-production of
the bounced cheque, the liability of the Insurance Company
cannot be exonerated and it is required to pay the
compensation and recover the same from the owner. He
would also contend that in case of death, the deceased was
aged about 35 years and his income was taken as
Rs.4,500/- which is on lower side and there are five
members in the family and deduction to the extent of 1/3rd
is on higher side and future prospects ought to be granted.
As regards injury case, he would contend that disability is to
the extent of 32% as per evidence of PW2 and income was
also taken on lower side and hence, he would seek for
enhancement by allowing the appeals filed by the claimants
13
and by dismissing the appeals filed by the Insurance
Company.
12. After having heard the arguments and perusing
the records, it is evident that there is no serious dispute of
the fact that the deceased-Ramanna and claimant Munesh
were travelling in auto bearing registration No.KA-44-3228
when it met with an accident on 30.09.2011. There is no
series dispute of the accident and further, death of
Ramanna is also undisputed. The Insurance Company has
raised an issue of planting the vehicle, but no such
pleadings are forthcoming and no evidence is also lead in
this regard. When the issue pertaining to payment of policy
is involved, the question of planting the vehicle pertaining
to which the premium was not paid does not arise at all. If
at all the claimants intend to plant the vehicle, they could
have planted the vehicle having clear insurance and in this
instant case, the insurance itself is under dispute in view of
bouncing of cheuqe. Hence, the said ground is not
acceptable.
14
13. First let us consider the quantum of
compensation. In MVC No.108/2012 the deceased-Ramanna
was admittedly succumbed to the injuries. Claimants are
the widow, minor children and mother of the deceased.
Though claimants assert that the deceased was doing milk
vending business and earning Rs.15,000/- per month, they
have not produced any material documents to substantiate
this contention. In the absence of any evidence regarding
the income, the notional income is required to be taken.
Admittedly, accident has occurred in 2011 and this Court is
consistently taking income of Rs.6,500/- in respect of the
accidents that occurred in the year 2011. The Tribunal has
taken the income as Rs.4,500/- which is on lower side.
Apart from that, the Tribunal has deducted 1/3rd towards
personal expenses. But when there are five dependants, the
deduction should be 1/4th. Hence, the Tribunal has also
committed an error in deducting 1/3rd. Apart from that, as
per postmortem report, the deceased was aged about 35
years. Hence, multiplier of '16' is applicable and since he is
15
self-employed below 40 years 40% is required to be added
towards future prospects. If the income is taken as
Rs.6,500/- and if 1/4th is deducted, the income of the
deceased would workout as under: [(6500x1/4=1625)
6500-1625=4,875] to which 40% has to be added
(4875x40/100=1,950) i.e., Rs.6,825/-which he would have
contributed to the family. Hence, monthly dependency
would workout to Rs.6,825/-.
14. As such, the loss of dependency would workout
as 6825 x 12 X 16=Rs.13,10,400/-. Hence, claimant would
be entitled for a total compensation of Rs.13,10,400/-. as
against Rs.5,76,000/- awarded by the Tribunal under the
head of loss of dependency.
15. The claimants are the widow, children and
mother of the deceased. As such, each of them are entitled
for Rs.40,000/- under the head of loss of Consortium and
hence, they are entitled for Rs.2,00,000/- in all. Further,
under the head of loss of estate they are entitled for
Rs.15,000/- and under the head of funeral expenses, they
16
are entitled for Rs.15,000/-. Hence, claimants would be
entitled for a total compensation under various heads as
under:
Sl. Particulars Amount
No.
1 Loss of dependency Rs.13,10,400/-
2 Loss of consortium Rs.2,00,000/-
3 Loss of estate Rs.15,000/-
4 Funeral expenses Rs.15,000/-
Total Rs.15,40,400/-
Award of Tribunal Rs.6,11,000/-
Enhanced Rs.9,29,400/-
compensation
As such, the claimants would be entitled for an total
compensation of Rs.15,40,400/- as against Rs.6,11,000/-
awarded by the Tribunal. Therefore, the claimants are
entitled for an enhanced compensation of Rs.9,29,400/-.
16. As regards the claimant in MVC NO.109/2012, it
is evident that he suffered fracture of right femur. Ex.P16
establishes that he was taken to BGS Global Hospital and he
was admitted as an inpatient from 02.10.2011 to
10.10.2011. The discharge summary records at Ex.P8
17
disclose that he has undergone surgery of ORIF with CCP
and other procedure.
17. PW4-Dr.H.A.Ramegowda is an orthopedic
surgeon at Turvekere. He is not a treated doctor, but his
evidence discloses that he has only examined the petitioner
as an outpatient. The petitioner admittedly suffered right
femur fracture and was inpatient for 8 days. PW4 claims
that he has examined the claimant on 03.10.2013, but the
accident has occurred on 30.11.2011, which means 2 years
after he has examined him just before the evidence. His
evidence discloses that he examined only for assessment of
disability and he assessed disability to the extent of 32%.
His cross-examination reveals that the fracture was well
united and he claims that he do not have knowledge of
avocation of the petitioner. Without having knowledge of
avocation of the petitioner, the question of he giving
disability does not arise at all. Though he asserts that there
is shortening of right leg to the extent of 5cm, but he has
not disclosed how much length of each leg. Though this
18
witness claims that he was regularly treating him, but no
such documents are produced. Further, this witness has
produced Ex.P14 without summoning and Ex.P14, which is
pertaining to clinical notes, it should be in possession of the
claimant. There are no details as to how this witness has
calculated the disability. Hence, the Tribunal has taken
functional disability only to the extent of 5% to the whole
body and it has in detail appreciated all these aspects. The
observation of the Tribunal cannot be said to be erroneous.
Hence, the disability taken by the Tribunal to the extent of
5% is proper. The Tribunal has applied multiplier '18'
considering the age of claimant as 24 years. However,
Tribunal has again taken income as Rs.4,500/- instead of
Rs.6,500/- as observed above. Hence, if the income is taken
at Rs.6,500/- considering the disability at 5%, the loss of
income would workout to (6500 x 12 x 18 x
5/100=Rs.70,200/-) Rs.70,200/-.
18. Hence, claimant would be entitled for
compensation under the head of loss of future earning
19
capacity to Rs.70,200/- as against Rs.48,600/- awarded by
the Tribunal. The Tribunal has awarded Rs.1,70,000/- under
the head of medical expenses, conveyance, food and
nourishment and attendant charges which is a reasonable
one and does not call for any interference. Further, under
the head of loss of amenities and unhappiness Rs.10,000/-
was awarded and towards future medical expense
Rs.8,000/- was awarded and it is on proper appreciation.
These aspects do not call for any interference. Under the
head of loss of income during laid up period for a period of
3 months Rs.13,500/- was awarded, which is on lower side
as it was based on income of Rs.4,500 and when income is
taken as Rs.6,500/- it would be Rs.19,500/-. Under the
head pain and suffering Rs.30,000/- came to be awarded,
which is just and proper. Hence, the claimant would be
entitled for a total compensation under the following various
heads:
Sl. Particulars Amount
No.
1 Pain & Sufferings Rs.30,000/-
2 Medical expenses, conveyance, Rs.1,70,000/-
20
food and nourishment,
attendant charges
3 Loss of income during laid up Rs.19,500/-
period
4 Loss of future income due to Rs.70,200/-
permanent disability
5 Loss of amenities Rs.10,000/-
6 Future medical expenses Rs.8,000/-
Total compensation Rs.3,07,700/-
Hence, the claimant would be entitled for total
compensation of Rs.3,07,700/- as against Rs.2,80,100/-
awarded by the Tribunal.
19. Now let us consider the liability. It is the specific
contention of the Insurance Company that the cheque
issued by respondent No.1 towards payment of premium
was returned as 'signature differs' and hence, policy stands
cancelled. In this regard, the respondent has placed reliance
on evidence of RW1 and Ex.R1 to Ex.R4. Ex.R1 is the
cancelled copy and Ex.R2 is the notice issued to the owner
under registered post dated 12.08.2011 regarding
cancellation of the policy.
21
20. Ex.R2 also discloses that postal receipt is also
enclosed and that clearly disclose that on 12.08.2011 itself
the notice came to be issued to the owner to the address
given in the policy proposal by respondent No.1 cancelling
the policy for dishonour of the cheque. Whether cheque was
dishonored for difference in signature or insufficient of
funds, is irrelevant. But the fact that the cheque was
dishonoured and it is not under serious dispute. Ex.R3 is a
letter issued by respondent No.2-Insurance Company to
RTO also regarding cancellation of the policy on account of
dishonour of the cheque. Ex.R4 is an intimation issued by
HDFC Bank regarding dishonour of the cheque.
21. There is no serious dispute of the fact that
respondent No.1-owner has issued a cheque pertaining to
State Bank of Mysore. The said cheque was bounced as per
the case of the Insurance Company and Ex.R4 is relied. But
Ex.R4 is pertaining to HDFC Bank. The intimation issued by
concerned State Bank of Mysore is not produced. Even the
cheque was also not produced. But it is important to note
22
here that under Ex.R1 Policy was cancelled and a notice was
issued under Ex.R2 and Ex.R3 to respondent No.1 and the
concerned RTO. Respondent No.1 never disputed the receipt
of the notice under Ex.R2. The notice was issued to the
address given in the policy and hence, it is deemed service.
In the absence of dispute of service of notice is raised by
respondent No.1-owner, question of claimants raising this
issue does not arise at all. The owner never appeared and
never asserted that his cheque was honoured and he has
not received intimation pertaining to the Policy. Under such
circumstances, the presumption shall be drawn against
respondent No.1 regarding he receiving the intimation of
dishonour of the cheque. Admittedly, Ex.R2 was issued on
12.08.2011 and accident has occurred on 30.09.2011. The
accident has occurred almost after more than 48 days of
issuance of intimation. The same is also not disputed by the
owner-respondent No.1.
22. Further, when premium itself is not paid, the
question of liability under contract does not arise at all. A
23
contract without consideration is void. Further, under
Section 64 of Insurance Act if the cheque is dishonoured,
then the policy is void abinitio.
23. The learned counsel for respondent/claimants
placed reliance on a decision reported in (2000) 3 SCC 195
[NEW INDIA ASSURANCE CO. LTD., vs. RULA AND
OTHERS] and contended that claimants being third parties,
the Insurance Company cannot escape the liability. It is
observed that when the cheque received towards premium
bounced and consequently, the policy is cancelled and the
rights accrued in favour of the third party, prior to the
cancellation of the policy held would remain unaffected by
cancellation, irrespective of any provision to the contrary
contained in the contract act or insurance act. In the said
case, before cancellation of the policy and issuance of
intimation, the accident has occurred. Hence, the said
observation has been made. But in the instant case, the
accident has occurred on 30.09.2011, but the intimation of
the cancellation of Policy was issued on 12.08.2011 itself
24
long before. Hence, the said principles would not come to
the aid of the respondents/claimants in any way and the
said principles cannot be made applicable to the facts &
circumstances of the case in hand.
24. Further, the learned counsel for respondents/
claimants placed reliance on (2008) 7 SCC 526 [NATIONAL
INSURANCE COMPANY LIMITED vs. YELLAMMA AND
ANOTHER]. But in the said case, the Apex Court has
exercised the powers under Article 142 of Constitution and
that power is not vested with any High Courts. As such, this
Court cannot exercise any power under Article 142 and
exercising of the power under Article 142 by the Hon'ble
Apex Court cannot act as a precedent. As such, the said
principles will not come to the aid of the claimants in any
way.
25. The learned counsel for claimants has placed
reliance on a decision reported in (2012) 5SCC 234
[UNITED INSURANCE COMPANY LIMITED vs LAXMAMMA
AND OTHERS]. He has invited the attention of the Court to
25
observation made in para 26 of the said judgment, wherein
it is observed as under:
"In our view, the legal position is this: where the
policy of insurance is issued by an authorized
insurer on receipt of cheque towards the
payment of premium and such a cheque is
returned dishonoured, the liability of authorised
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 Sections 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 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."
But there itself, the Hon'ble Apex Court has clearly observed
that when Insurance Company cancels policy of the
insurance and sends intimation thereof to the owner, the
Insurance Company is not liable to indemnify the third
parties and Insurance Company is not liable to satisfy the
26
award. In fact this observation would assist Insurance
Company rather than the claimants and admittedly, in the
instant case, intimation of cancellation of policy was issued
long before the accident as per Ex.R2 and the owner never
claimed that he did not receive any such intimation. Hence,
the said principles will not come to the aid of the claimants
in any way.
26. In view of the provisions of Insurance Act and
under contract act, when the premium paid by way of
cheque is not encashed, automatically contract ceases and
as per the insurance act the policy becomes void abinitio.
Apart from that, in the instant case, the intimation was also
delivered by the Insurance Company as per Ex.R2 and
owner never asserted encashment of his cheque or non-
receipt of the intimation. Under such circumstances, the
liability, if any, is required to be on respondent No.1-owner
and not the insurance company.
27. In view of these facts and circumstances, the
appeals filed by the claimants need to be allowed so far as
27
quantum alone is concerned. But the appeals filed by the
Insurance Company need to be allowed pertaining to
liability. Accordingly, I proceed to pass the following:
ORDER
(i) MFA No.6255/2014 and MFA No.6256/2014 are
allowed by exonerating Insurance Company to
pay the compensation.
(ii) MVC No.108/2012 and MVC No.109/2012 are
dismissed as against respondent No.2-Insurer
who is appellant in MFA No.6255/2014 and MFA
No.6256/2014.
(iii) Simultaneously MFA No.1974/2015 and MFA
No.1975/2015 are also allowed in part.
(iv) The claimants in MFA No.1974/2015 arising out
of MVC No.108/2012 are held entitled for total
compensation of Rs.15,40,400/- as against
Rs.6,11,000/- awarded by the Tribunal from
respondent No.1-owner of lorry bearing
registration KA03-A-0131. The enhanced of
compensation shall carry interest at the rate 6%
per annum.
(v) The claimant in MVC No.109/2012 is held
entitled for a total compensation Rs.3,07,700/-
as against Rs.2,80,100/- awarded by the
Tribunal from respondent No.1-Owner of lorry
bearing Registration No.KA03-A-0131. The
enhanced compensation of Rs.27,600/- shall
carry interest at the rate of 6% per annum.
(vi) The deposit and disbursement shall be as per the
terms of the order of the Tribunal and entire
enhance compensation shall be released in
favour of the claimants.
(vii) The amount deposited by the insurance company
shall be refunded to the insurance company.
Sd/-
JUDGE
DS
