Madras High Court

National Insurance Company Ltd vs G.Madhu on 22 August, 2023

                                                                   C.M.A.Nos.1330 & 1257 of 2022
                                                                       and C.M.P.No.9609 of 2022

                              IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                               DATED: 22.08.2023

                                                    CORAM :

                                  THE HONOURABLE MR. JUSTICE SUNDER MOHAN

                                          C.M.A.Nos.1330 & 1257 of 2022
                                            and C.M.P.No.9609 of 2022

                     C.M.A.No.1330 of 2022

                     National Insurance Company Ltd.,
                     Division IV, 1st Floor,
                     No.C-17 to 19, Minerva Complex,
                     S.D.Road,
                     Secunderabad,
                     Andhra Pradesh – 500 003.                              ... Appellant
                                                 Versus

                     1.G.Madhu

                     2.S.Sivasankara                                      ... Respondents

C.M.A.No.1257 of 2022

G.Madhu ... Appellant Versus

1.S.Sivasankara

2.National Insurance Company Ltd., Division IV, 1st Floor, No.C-17 to 19, Minerva Complex, S.D.Road, Secunderabad, Andhra Pradesh – 500 003. ... Respondents https://www.mhc.tn.gov.in/judis

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

COMMON PRAYER : Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, against the judgment and decree dated 27.09.2021 passed in M.A.C.T.O.P.No.431 of 2018, by the Motor Accident Claims Tribunal, Special Sub Court, Krishnagiri.

                                  In C.M.A.No.1330 of 2022
                                  For Appellant                  : Ms.N.B.Sureka

                                  For R1                         : Mr.P.Mani
                                  For R2                         : No Appearance

                                  In C.M.A.No.1257 of 2022

                                  For Appellant                  : Mr.P.Mani

                                  For R1                         : No Appearance
                                  For R2                         : Ms.N.B.Sureka


                                                     COMMON JUDGMENT

C.M.A.No.1330 of 2022 has been filed by the appellant/Insurance

Company challenging the liability as well as quantum of compensation

awarded by the Tribunal in M.C.O.P.No.431 of 2018, dated 27.09.2021.

C.M.A.No.1257 of 2022 has been filed by the appellant/claimant

challenging the compensation awarded by the Tribunal in

M.C.O.P.No.431 of 2018, dated 27.09.2021.

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

2.For the sake of convenience, parties are referred as per their rank

in the claim petition.

3.The claim petition was filed stating that on 11.08.2015, at 7.00

p.m., the claimant was riding his motorcycle bearing Reg.No.TN-70-A-

8528 at Guest Line Circle Service Road, Athipalli; that when the

claimant tried to take U turn slowly, a car bearing Reg No.KA-51-A-

3622, driven by the driver in a rash and negligent manner, dashed against

him; that due to the said accident, the claimant sustained multiple

grievous injuries; that thus, the claimant was entitled for compensation.

4.The 1st respondent/owner of the offending vehicle remained ex-

parte before the Tribunal.

5.The 2nd respondent/Insurance Company filed a counter denying

all the averments made in the claim petition and stated that the claimant

took sudden turn and contributed to the accident; that at the time of

accident, the offending vehicle viz., the car was not insured with the 2nd

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

respondent; that hence, the 2nd respondent is not liable to pay any

compensation to the claimant; that in any case, the compensation claimed

was excessive and prayed for dismissal of the claim petition.

6.Before the Tribunal, the claimant examined himself as P.W.1 and

marked Ex.P.1 to Ex.P.12 on his side. On behalf of the 2nd respondent,

two witnesses were examined and Ex.R1 and Ex.W1 to Ex.W6 were

marked. The disability certificate of the claimant was marked as Ex.C1.

7.The Tribunal after considering the oral and documentary

evidence had held that the accident occurred due to rash and negligent

driving by the driver of the car belonging to the 1st respondent and being

the insurer of the 1st respondent, directed the 2nd respondent to pay a sum

of Rs.4,30,903/-, as compensation to the claimant.

8.Aggrieved over the award passed by the Tribunal, the claimant

filed C.M.A.No.1257 of 2022, seeking for enhancement of compensation

and the 2nd respondent has filed C.M.A.No.1330 of 2022, challenging the

liability as well as quantum of compensation awarded by the Tribunal.

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

9.The learned counsel for the 2nd respondent submitted that the

cheque issued by the insured for payment of policy was dis-honoured

and hence, the policy was cancelled and the same was also intimated to

the insured; that the Tribunal had erroneously held that due intimation

about cancellation of policy was not given to the insured and directed the

2nd respondent to pay the compensation; that the learned counsel further

submitted that the compensation awarded by the Tribunal was excessive

and prayed for allowing the appeal.

10.The learned counsel for the claimant per contra submitted that

the Tribunal found that the 2nd respondent had not intimated about the

cancellation of policy or dis-honour of cheque immediately; that hence,

the Tribunal was right in holding that the 2nd respondent was liable to pay

compensation. The learned counsel further submitted that the

compensation awarded by the Tribunal is meagre and hence, he prayed

for enhancement of compensation.

11.Though notice was sent to the 1st respondent – owner of the

vehicle, it could not be served. Hence, this Court permitted the learned

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

counsel for the 2nd respondent/appellant in C.M.A.No.1330 of 2022 to

serve a copy of the notice through paper publication. The learned counsel

took substituted service through paper publication and filed affidavit of

service enclosing paper publication showing the date of the hearing as

22.08.2023. Though the name of the 1st respondent is printed in the cause

list, none appeared on behalf of him.

12.The questions involved in the instant appeal are as follows:

a) Whether the Tribunal was right in holding that the 2nd

respondent is liable to pay compensation?

b) Whether the Tribunal awarded just and reasonable

compensation?

13.As regards the first question, it is seen that though the cheque

said to have issued by the insured was dis-honoured, the intimation was

given two years after the accident i.e on 25.04.2017. The said intimation

was marked as Ex.W1. It is settled position of law, where the insurer

have not intimated about the dis-honour of cheque or cancellation of

policy to the insured, the Insurance Company is liable to indemnify third

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

party claim. Admittedly, since the intimation was not given before the

accident, the 2nd respondent is liable to pay compensation. The Hon'ble

Supreme Court in the case of United India Insurance Co.Ltd vs.

Laxmamma and Others reported in CDJ 2012 SC 280, has held as

follows:

“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 Sections 147(5) and 149(1) of the M.V.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

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof.

20.Having regard to the above legal position, insofar as facts of the present case are concerned, the owner of the bus obtained policy of insurance from the insurer for the period April 16,2004 to April 15, 2005 for which premium was paid through cheque on April 14, 2004. The accident occurred on May 11, 2004. It was only thereafter that the insurer cancelled the insurance policy by communication dated May 13, 2004 on the ground of dishonour of cheque which was received by the owner of the vehcile on May 21, 2004. The cancellation of policy having been done by the insurer after the accident, the insurer became liable to satisfy award of compensation passed in favour of the claimants.”

14.The above observation is squarely applicable to the facts of the

present case. Further in the said case, the Hon'ble Supreme Court gave

liberty to the insurer to prosecute and recover the amount paid to the

claimant from the insured. Hence, the 2nd respondent is entitled to take

steps to recover the compensation amount determined by this Court from

the 1st respondent, owner of the vehicle. https://www.mhc.tn.gov.in/judis

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

15.As regards second question - quantum of compensation, learned

counsel for the claimant submitted that the Tribunal ought to have

adopted multiplier method as the claimant in his deposition has clearly

stated that he suffered functional disability. This Court is of the view that

the claimant's version that he had suffered functional disability is not

corroborated by the medical evidence. The Medical Board assessed the

disability of the claimant as 30% partial permanent disability. The

disability certificate issued by the hospital shows that the claimant had

suffered pain in the pelvic region, difficulty in passing urine and unable

to sit cross legged. From the above observations, one cannot infer

functional disability. In the absence of any proof to hold that the claimant

suffered functional disability, the multiplier method cannot be adopted.

Therefore, there is no infirmity in the award of the Tribunal in fixing

compensation on the basis of percentage method.

16.Further, considering the year of accident, this Court is of the

view that the notional income can be fixed at Rs.10,000/- and

considering the nature of injuries, loss of income during treatment period

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

C.M.A.Nos.1330 & 1257 of 2022 and C.M.P.No.9609 of 2022

can be assessed for two months and the same is enhanced to Rs.20,000/-.

Similarly, the award under the head pain and suffering and loss of social

amenities can be enhanced to Rs.50,000/- each. The amount awarded by

the Tribunal under other heads is just and reasonable and the same are

confirmed. Thus, the compensation awarded by the Tribunal is modified

as follows:

                         S.       Description          Amount          Amount          Award
                         No                           awarded by     awarded by     confirmed or
                                                       Tribunal       this Court    enhanced or
                                                         (Rs)            (Rs)         granted
                         1.       Disability              1,20,000       1,20,000    Confirmed
                         2.       Medical Expenses        2,35,403       2,35,403    Confirmed
                         3.       Transportation            8,000          8,000     Confirmed
                                  Expenses
                         4.       Extra Nourishment        12,000         12,000     Confirmed
                                  and Attender
                                  Charges
                         5.       Pain and                 24,000         50,000      Enhanced
                                  Sufferings
                         6.       Social Amenities         24,000         50,000      Enhanced
                         7.       Loss of Income            7,500         20,000      Enhanced
                                  during treatment
                                  period
                                  Total                   4,30,903       4,95,403   Enhanced by
                                                                                    Rs.64,500/-




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

                                                                     C.M.A.Nos.1330 & 1257 of 2022
                                                                         and C.M.P.No.9609 of 2022

17.With the above modification, these Civil Miscellaneous

Appeals are partly allowed and the compensation awarded by the

Tribunal at Rs.4,30,903/- is hereby enhanced to Rs.4,95,403/- together

with interest at 7.5% per annum (excluding the default period, if any)

from the date of petition till the date of deposit. The 2nd

respondent/Insurance Company is directed to deposit the award amount

now determined by this Court along with interest and costs, less the

amount already deposited, if any, within a period of four (4) weeks from

the date of a receipt of copy of this Judgment, at the first instance and

recover the same from the 1st respondent. On such deposit, the claimant is

permitted to withdraw the entire award amount along with interest and

costs, less the amount already withdrawn, if any. The claimant is directed