Orissa High Court

The H.D.F.C. Ergo General vs Sumati Mallik And Others on 20 March, 2023

       IN THE HIGH COURT OF ORISSA AT CUTTACK

        MACA No.1030 of 2017 and MACA No.948 of 2017

(From the judgment dated 16th August, 2017 of the 3rd M.A.C.T.,
Bhubaneswar in M.A.C.Case No.300/156 of 2013)

                                ---------
In MACA No.1030 of 2017
The H.D.F.C. ERGO General
Insurance Company Limited
represented through its Manager,
Legal.                                   ....                Appellant
                                      -versus-
Sumati Mallik and others                    ....         Respondents

Advocate(s) appeared in this case:-

          For Appellant        : Mr.A.A.Khan, Advocate

          For Respondents      : Mr. P.K. Mishra, Advocate
                                 (For Respondent Nos.1-3)
                                 AND
In MACA No.948 of 2017
Sumati Mallik and others                 ....                Appellants
                                      -versus-
Basanta Kumar Rout and another              ....         Respondents

Advocate(s) appeared in this case:-

          For Appellants       : Mr.P.K.Mishra, Advocate

          For Respondents      : Mr.A.A.Khan, Advocate
                                 (For Respondent No.2)




MACA Nos.1030 & 948 of 2017                              Page 1 of 8
              CORAM: JUSTICE B.P. ROUTRAY
                            JUDGMENT

20th March, 2023

B.P. Routray, J.

1. Both the appeals are directed against same judgment dated 16th

August, 2017 of 3rd M.A.C.T., Bhubaneswar in M.A.C. Case No.

300/156 of 2013, wherein compensation to the tune of Rs.12,73,820/-

along with interest @7% per annum from the date of filing of the

application i.e., 19th August 2013 has been granted on account of death

of the deceased in the motor vehicular accident dated 6th July 2013.

2. MACA No.1030 of 2017 has been filed by the Insurance

Company challenging the impugned award mainly questioning the

liability on its part to indemnify the compensation amount. As per the

Insurance Company, the policy issued in favour of the offending

vehicle was already cancelled prior to the accident for dishonor of the

Cheque and thus, it should be absolved of the liability.

3. In MACA No.948 of 2017, which has been filed by the

claimants, they have prayed for withdrawal of the claim application.

Here, it needs to be mentioned that there are two sets of claimants, who

are two wives and their respective children. The present claimants

namely, Sumati Mallik and her children are stated to be the second

wife of the deceased. The first wife namely, Basanti Mallik along with

her children has filed MAC No.258 of 2013 before 4th MACT,

Balasore, which is pending till date (as per the submission). Learned

counsels for the present claimants submitted that presently both the

wives and their respective children have settled their inter se disputes

and they have also settled their respective share amount with specified

proportion on the claim amount and further, the claim application

No.258 of 2013 will be withdrawn by other set of claimants.

4. Now coming to examine the challenge advanced by the

Insurer, it is seen that the offending vehicle is a Tipper bearing

Registration No.OD-02-G-0238 and the accident took place when the

deceased was going in his bicycle. The accident took place on 6th July,

2013 at 7.00 AM. Issuance of Policy No.2315 2005 1218 5100 000

dated 31st May, 2013 under Ext. 'A' in favour of the offending vehicle

remains undisputed. As per the contention of insurer, the Cheque

issued by the owner amounting to Rs.58,543/- towards premium of the

policy was dishonoured on 5th June, 2013 and immediately thereafter

an intimation was sent to the owner (Insured) on 11th June, 2013 under

Ext.'D'.

5. But, as seen from the record, no such document regarding

service of intimation of cancellation either on the owner or on the

Registering Authority has been produced by the Insurer. O.P.W.1 is the

Assistant Manager of the Company. He has not stated anything

regarding mode of service of such intimation. The Supreme Court in

the case of United India Insurance Co. Ltd. vrs. Laxmamma, (2012) 5

SCC 234 have held as follows:

"26. 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 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."

6. Further, this Court in the case of Rashmita Mohanty and

4 others vrs. Santosh Kumar Padhi and another, 2016(I) OLR-989,

this Court have further observed that, in absence of an intimation to the

concerned Registering Authority regarding cancellation of the

insurance policy issued in respect of the offending vehicle, as required

under Section 147(4) of the M.V. Act, the insurer is liable to pay the

awarded compensation amount to the claimants, with the right to

recover the same from the owner of the vehicle.

7. In the case at hand, the letter of cancellation has though

been produced under Ext. 'D', but nothing has been brought on record

satisfying service of the same on the insured. Intimation to the owner

and Registering Authority means service of intimation at the end of the

recipient. Mere production of the letter of cancellation or entry in the

official register of the sender is not enough to prove receipt of the letter

by the addressee. O.P.W.1 did not say anything regarding mode of

service of the letter of cancellation. The service of letter of cancellation

either on the owner or on the Registering Authority is not proved on

record by the Appellant. So in absence of proof of service of the letter

of cancellation, it cannot be concluded that the fact of cancellation of

the policy has been duly intimated to the owner and the Registering

Authority. In such scenario, when issuance of policy is not denied, the

onus is on the insurer to prove satisfactory service of letter of

cancellation of policy on the insured. In absence of proof of

satisfactory service of intimation of cancellation, the insurer cannot be

absolved of its liability to indemnify the owner in terms of the policy.

As such, the Appellant-Insurance Company is liable to pay

compensation amount and the direction of the Tribunal regarding the

same along with right of recovery granted in favour of the Insurer is

confirmed.

8. With regard to quantum of compensation, the Tribunal has

assessed the same as follows:-

     Sl.No. HEAD                                   CALCULATION
     (i)    Monthly income                     =   Rs.6,000/-
     (ii)   1/5th of (i) deducted towards      =   Rs.6,000/-
            personal       and       living        Rs.1,200/-        =
            expenses.                              Rs.4,800/-
     (iii)  30% of (ii) added towards          =   Rs.4,800/-
            future prospect of the                 Rs.1,440/-
            deceased                               Rs.6,240/-
     (iv)   Compensation               after   =   Rs.6,240/- x 12 x 14
            multiplier of 14 is applied            =Rs.10,48,320/-
     (v)    Loss of consortium                 =   Rs.1,00,000/-

     (vi)     Loss of care and guidance of =       Rs.1,00,000/-
              minor children, loss of love
              and affection and loss of
              estate
     (vii)    Funeral expenses             =       Rs.25,000/-

     (viii)   Litigation expenses              =   Rs.500/-




             Total compensation awarded =      Rs.12,73,820/-
                                              (Rupees twelve lakhs
                                              seventy-three
                                              thousand        eight
                                              hundred twenty) only.

9. It is seen from above that some extra amount has been

granted towards loss of consortium and loss of care, love and affection.

But keeping in view the extent of future prospectus added, this Court

confirms the quantification without interfering with the same.

10. As prayed on behalf of the claimants, MACA No.948 of

2017 is dismissed as withdrawn. MACA No.1030 of 2017 is also

dismissed in view of the discussions made above.

11. The entire compensation amount as directed by the

Tribunal including the interest shall be deposited before the Tribuanl

within a period of two months from today. After deposit of the

compensation amount, the Tribunal shall disburse the same in favour

of both sets of claimants as per its direction contained in the impugned