[Cites 11, Cited by 0]
Madhya Pradesh High Court
Mangilal vs Fakrudin on 30 January, 2026
NEUTRAL CITATION NO. 2025:MPHC-IND:33681
1 MA-1663-2014
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PAVAN KUMAR DWIVEDI
MISC. APPEAL No. 1663 of 2014
MANGILAL AND OTHERS
Versus
FAKRUDIN AND OTHERS
Appearance:
Shri Shyamlal Patidar, learned counsel for the appellants.
Shri Manoj Jain, learned counsel for the respondent [R-3].
Reserved on : 06.11.2025
Pronounced on : 30.01.2026
ORDER
The respondent Nos.1 and 2 though represented through counsel but
none has appeared on their behalf. On the last date also i.e. 04.09.2025, this
Court adjourned the case for the absence of the counsel by observing that if
on the next date none appears on behalf of respondent Nos.1 and 2, this
Court may hear this case in their absence. As such, this appeal is being heard
in the absence of respondent. No.1 and 2.
2. The appellant has filed this appeal under Section 173 of the Motor
Vehicles Act being aggrieved by the award dated 01.05.2014 passed in claim
case No.88/2013 whereby raising challenge to the quantum of compensation
as well as to the exoneration of the insurance company form liability to pay
the compensation.
3. The short facts of the case are that on 29.04.2010, deceased Geeta Bai
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was going along with her brother as a pillion rider on the motorcycle. When
they reached near the agricultural field of Muneem Ji between Dharaawara-
Delmi, the respondent No.1 came driving the vehicle number HR55-G-6673
in a rash and negligent manner and dashed into the motor cycle on which
Geeta Bai was sitting as a pillion rider because of which she sustained
grievous injuries, she was rushed to government hospital where she was
declared dead.
4. The appellants/claimants filed claim petition under Section 166 of the
Motor Vehicles Act claiming compensation for death of Geeta Bai. The
claims tribunal after considering the evidence concluded that the insured
vehicle was responsible for accident because the driver was driving the same
in a rash and negligent manner and the compensation to the tune of
Rs.4,46,000/- was awarded to the appellants. However, while doing so the
insurance company was exonerated from its liability to pay compensation for
the reason that there was no existence of contract of insurance on the date of
accident for the reason that the cheque through which the premium of policy
was paid got bounced and due intimation to all concerned was sent by the
insurance company well before the date of accident.
5. The learned counsel for the appellants submits that the claims tribunal
erred in resorting to the provisions of Section of 27 of the General Clauses
Act for presuming that the notice of cancellation of insurance policy was
duly served when the witness of the insurance company AW-1 Ira
Bharadwaj in her cross-examination admitted that she has not brought with
herself receipt of service of notice on the owner cancelling the insurance
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policy. He further submits that the D-1 notice contains address at Delhi
whereas the cheque was issued by the person who was residing in Gurgaon
as such the notice should have been issued to the owner at the address at
Gurgaon and not at Delhi. Apart from this, he also submits that even if the
tribunal found that the policy got cancelled due to the dishonor of cheque of
premium then also also instead of complete exoneration a direction for first
pay to the claimant and then recover from the owner should have been given
considering the fact that the claimant being third party is not concerned with
the dispute between the owner and insurer of the vehicle.
6. As regards the quantum of compensation, learned counsel for the
appellant points out that the claimants stated before the claims tribunal that
the deceased was working a labourer and earning Rs.4500/- per month.
However, the claims tribunal has disbelieved the same and considered the
income at Rs.3000/- per month on notional basis which is incorrect. He
submits that even if the minimum wages are seen then this income at
Rs.3000/- is much less as the minimum wages for unskilled labourer at the
relevant time were Rs.3995/-. He also points out that nothing has been
awarded under the head of future prospects. Apart from this, he submits that
the claims tribunal has completely mistook the statement of Mangilal, who
stated that he is 56 years of age not the deceased. The deceased was stated to
be 55 years of age and even in postmortem report her age was shown as 55
years. Thus, tribunal incorrectly took her age within the age bracket of 56-60
years, consequently, the wrong multiplier has been applied. The correct
multiplier by considering the age at 55 years should have been applied.
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7. He further submits that the claimants were husband and three children of
the deceased, however, the claims tribunal has not awarded anything for loss
of consortium. Nothing has been awarded under the head of future prospects
and loss of estate. He, thus, prays for enhancement of compensation.
8. Per contra, learned counsel for the respondent/insurance company
submits that the claims tribunal has duly discharged its burden by issuing
notice Ex.D-1, the notice about cancellation of payment, Ex.D-2 is the
receipt of notice sent through registered AD mode to the owner of the
vehicle on the same address which is mentioned in the insurance policy. He
further points out that Ex.D-3 is the notice to the concerned RTO about the
cancellation of the policy due to dishonor of cheque of payment. Ex.D-4 is
the postal receipt of notice sent to RTO. He further submits that Ex.D-6 is the
notice from the bank about the dishonor of cheque and Ex.D-7 is the
statement of the bank showing the fact of dishonor. He also submits that the
reason of dishonor of cheque is closure of the account, thus, the conduct of
the owner is very clear. In fact, there was no intention to pay premium since
beginning. He further points that the Ex.D-8 and Ex.D-9 are the cover-note
and insurance policy in which same address has been mentioned which is
mentioned on Ex.D-1 and Ex.D-3. Thus, he submits that the presumption of
Section 27 of the General Clauses Act is fully applicable in the present case.
He thus submits that the claims tribunal has correctly exonerated the
insurance company in toto from liability to pay compensation. As regards
enhancement, he submits that as there is complete exoneration of insurance
company, thus, insurance company has no concern with the quantum of
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compensation. However, he submits that the claims tribunal has correctly
disbelieved the assertion of claim of income of Rs.4500/- per month because
there was complete absence of any material to demonstrate the same. He thus
prays for dismissal of the appeal.
9. Heard the learned counsel for the parties and perused the record.
10. So far as the question of liability of insurance company is concerned,
this Court has gone through the record of the claims tribunal as well as
findings as contained in para Nos.12 to 20 and the conclusion drawn by it in
para 22. It is clear from perusal of Ex.D-1 that this intimation was given by
the insurance company to the owner of the vehicle on 10.03.2010 through
registered AD post. On perusal of the notice, it is seen that the address on the
notice and on the insurance policy is one and the same. Similarly, Ex.D-3 is
the notice sent to the concerned RTO having the very same address. This
notice was also sent through registered AD mode and this is not the case of
the claimant that the address has incorrectly been mentioned in the
communications. The Hon'ble Apex court in the case of United India
Insurance Company Ltd. v. Laxmamma and others (Manu SC 0314 of
2004) has considered similar question and after taking into consideration the
provisions of Section 64 VB of the Insurance Act as well as the earlier case
laws has held in para 19 as under:-
"19. In our view, the legal position is this: where the policy of
insurance is issued by an authorised insurer on receipt of cheque
towards the payment of premium and such a cheque is returned
dishonoured, the liability of the authorised insurer to indemnify
the third parties in respect of the liability which that policy
covered subsists and it has to satisfy the award of compensation by
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reason of the provisions of Sections 147(5) and 149(1) of the MV
Act unless the policy of insurance is cancelled by the authorised
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 authorised 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."
11. Recently, in the case of National Insurance Company Ltd. Vs. Sunita
Devi and others, 2025 SCC OnLine SC 1647 the question was again
considered by the Hon'ble Apex Court and after considering the entire case
law in the matter has held in para 6 as under:-
"6. In the totality of the operative facts, this Court is of the view
that 50% amount which is already paid to the claimants need not
be touched. Therefore, it is provided that there shall be no
recovery from the claimants in respect of the said ½ part of
compensation. The appellant - Insurance Company, however,
shall be at liberty to recover the said 50% amount along with
interest deposited by it as above and received by the claimants as
above, from the owner of the offending vehicle in accordance with
law. As far as the balance of 50% amount along with interest is
concerned, which remains, the claimants shall be entitled to
recover the same from the owner of the offending vehicle in
accordance with law."
12. Although, in some of the cases the Hon'ble Apex Court has exercised
its power under Article 142 of the Constitution of India but the same cannot
be treated as a precedent and no such directions can be issued by this Court.
In view of the clear facts of the present case that the cheque for payment of
premium has been dishonored for closure of the account and the cancellation
of the insurance policy was duly sent through registered AD post on the
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correct address, the presumption has correctly been drawn by the claims
tribunal qua Section 27 of the General Clauses Act. As such, no interference
is warranted in the conclusion of the tribunal in this behalf.
13. As regards the question of enhancement, it is seen from the findings
recorded by the claims tribunal in para 26 and 27 that the claim of earning
Rs.4500/- per month was not supported by any evidence at all. As such, the
same has correctly been discarded by the claims tribunal. However, in view
of the fact that the income at Rs.3000/- which has been taken notionally by
the claims tribunal is also not supported by any reference material. The
guidelines of the State Legal Services Authority provides that on the date of
accident i.e. on 29.04.2010, the minimum wages for an unskilled labourer
were Rs.3995/- which is taken as the income of the deceased.
14. Considering that consistently in postmortem report and other evidence
the age of the deceased has been shown either 50 or 55, thus, the same is
hereby held to be 55 years. The conclusion as drawn by the claims tribunal
in para 26 is erroneous. The husband of the deceased has stated in
examination in chief that he is 56 years of age and not Geeta Bai, thus, the
conclusion of the claims tribunal with respect to the age of the deceased
Geeta Bai is modified to the extent that her age is taken at 55 years, as such,
it is held that multiplier of 11 has to be applied.
15. In view of the fact that the deceased has been taken at 55 years of age,
there will be addition of 10% in her income under the head of future
prospects in view of the law as laid down by the Hon'ble Apex Court in the
case of National Insurance Company Ltd. Vs. Pranay Sethi and others, 2017
(16) SCC 680 and in view of the law laid down by the Hon'ble Apex Court
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in the case of Magma General Insurance Co. Ltd. Vs. Nanu Ram alias
Chuhru Ram, AIR OnLine 2018 SC 1249, all four claimants who were
present before the claims tribunal are hereby awarded Rs.40,000/- each for
loss of consortium. An amount of Rs.15000/- each is awarded for funeral
expenses and loss of estate. As such, the total compensation after above
modifications in the income and the additions in the compensation would
come to Rs.5,76,715/-. After deducting already awarded amount of
Rs.2,56,000/-, the appellants are now entitled for Rs.3,30,715/- which shall
be paid to the appellants by the owner and driver of the vehicle severally and
jointly with interest at 6% per annum from the date of the application before
the claims tribunal.
16. The appellants have to pay deficit court fees within a period of four
weeks from today.
17. With the aforesaid, the present appeal stands disposed of.
(PAVAN KUMAR DWIVEDI)
JUDGE
N.R.
