The Branch Manager vs Manohar
2021 Latest Caselaw 23178 Mad

                                                                                CMA.No.2652 of 2021
                                                                            and CMP.No.15165 of 2021

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS
                                                DATED: 26.11.2021
                                                     CORAM:
                                  THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
                                                CMA.No.2652 of 2021
                                                       and
                                                CMP.No.15165 of 2021

                     The Branch Manager,
                     The New India Assurance Co. Ltd.,
                     No.347, J.N.Street,
                     (opposite to Muthu Gold House),
                     Puducherry – 1.                                                 ...Appellant

                                                           Vs.

                     1.Manohar

                     2.Babu                                                        ..Respondents

                     Prayer: Civil Miscellaneous Appeal is filed under Section 173 of the Motor
                     Vehicles Act, 1988, against the award dated 11.02.2021 made in
                     MCOP.No.735 of 2018 on the file of the Motor Accident Claims Tribunal,
                     (Additional Sub-Court), Puducherry.


                                         For Appellant       : Mr.S.Dhakshinamoorthy
                                         For Respondents : Notice served




                     1/9


https://www.mhc.tn.gov.in/judis
                                                                                    CMA.No.2652 of 2021
                                                                                and CMP.No.15165 of 2021

                                                     JUDGMENT

The challenge in this appeal is to the award of the Motor Accident

Claims Tribunal made in MCOP.No.735 of 2018 on the file of the Motor

Accident Claims Tribunal (Additional Sub-Court), Puducherry.

2.The claimant sought for compensation of a sum of

Rs.10,00,000/- for the injuries suffered by him in the Motor Accident that

occurred on 12.07.2018. According to the claimant, he was passenger in the

bus bearing Registration No.PY-01-CE-7799. When it stopped at the bus

stop and he was about to alight from the bus, the driver moved the bus in a

rash and negligent manner. Due to the sudden movement, the petitioner fell

down and the rear wheel of the bus ran over his leg. As a result of the

accident, he had suffered several injuries in his right leg, left hand and a

head injury also. Contending that the negligence on the part of the driver of

the bus is the cause of the accident, the claimant sought for compensation.

The Appellant was impleaded as an Insurer of the bus that was responsible

for the accident.

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

3.The claim was resisted by the Appellant / Insurance Company,

contending that there was no valid contract of Insurance, since the cheque

issued by the 1st respondent / owner of the bus covering the premium

payable under the policy was dishonoured and therefore, in terms of Section

64-VB of the Insurance Act, the Insurance Company cannot be held liable.

The 1st respondent, who is the owner of the vehicle remained exparte. The

Tribunal assessed the compensation payable at Rs.3,36,000/-.

4.On the question of liability of the Insurance Company, the

Tribunal found that the cheque was in fact, dishonoured. The Tribunal

however, concluded that the Insurance Company would be liable, since it

has not proved that the intimation of the cancellation of the policy was

given to the owner and the road transport Office before the accident. The

Tribunal also faulted the Insurance Company for not producing the

acknowledgments for the receipt of the letters dated 19.07.2018 addressed

to the owner and the road transport Officer regarding cancellation of the

policy. On the above conclusion, the Tribunal held that the Insurance

Company is liable to indemnify the owner and therofore, it is liable to pay

the award amount.

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

5.Heard Mr.S.Dhakshinamoorthy, learned counsel appearing for

the Appellant. The respondents though served, are not appearing either in

person or through counsel, duly instructed.

6.Mr.S.Dhakshinamoorthy, learned counsel appearing for the

Appellant / Insurance Company would contend that he has no grievance

with the award of the Tribunal on the quantum and its conclusion that the

Insurance Company would be liable to compensate the victim, who is a 3 rd

party to the contract of Insurance. The learned counsel would however,

contend that the Tribunal must have held that on the dishonour of the

cheque, the Insurance Company would not be liable to indemnify the owner

and therefore, it would have the right to recover the compensation from the

owner. The sum and substance of the arguments of the learned counsel is

that the Insurance Company must have been given the liberty to recover the

money paid from the owner of the vehicle. I have considered the

submission of the learned counsel.

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

7.The policy in this case was issued on 07.07.2018. The cheque

was issued on 06.07.2018. The cheque was returned on 12.07.2018, on

which date, the accident also occured. On 19.07.2018, the Insurance

Company vide Exs.R3 and R4 informed the owner and the Road Transport

Officer about the dishonour of the cheque and the cancellation of the policy.

The Tribunal has held that the Insurance Company would be liable to

compensate the victim, since the cancellation happened after the accident.

The Tribunal also found that the cheque was returned on 12.07.2018, the

date on which, the accident occurred. Therefore, there could not have been

a repudiation of the policy prior to the accident.

8.No doubt, the law on this aspect is settled to the effect that

repudiation of the policy after the accident would not discharge the liability

of the Insurance Company towards a 3rd party namely, the claimant.

Therefore, the Tribunal was right in concluding that the Insurance Company

is liable to compensate the claimant for the loss. At the same time, the

Tribunal must have taken care to order pay and recovery, in as much as, the

owner, who had not paid the premium cannot seek indemnification from the

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

Insurance Company. The contract of Insurance is based on good faith and it

is a contract of indemnity. Unless the premium is paid, the liability to

indemnify would not arise. Therefore, the Tribunal was wrong in

concluding that the Insurance Company would be liable to indemnify the

owner. Liability to pay a 3rd party claimant is different from the liability to

indemnify the owner. The liability to pay a 3rd party claimant can be there,

at the same time, the liability to indemnify to owner need not be

contractually available.

9.Hence, this appeal is partly allowed, the award of the Tribunal is

modified. The Insurance Company will be entitled to recover the

compensation paid from the owner of the bus, in question by levying

execution as is done in the other cases where pay and recovery is ordered by

Tribunal. No costs. Consequently, connected miscllaneous petition is

closed.

26.11.2021

kkn

Index:No

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

Internet:Yes Speaking

To:-

1.The Motor Accident Claims Tribunal, (Additional Sub-Court, Puducherry.

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

R.SUBRAMANIAN, J.

KKN

CMA.No.2652 of 2021 and CMP.No.15165 of 2021

https://www.mhc.tn.gov.in/judis CMA.No.2652 of 2021 and CMP.No.15165 of 2021

26.11.2021

https://www.mhc.tn.gov.in/judis