Appellants vs Unknown
2023 Latest Caselaw 2245 Ori

        IN THE HIGH COURT OF ORISSA AT CUTTACK
                        MACA No.503, 27, 568 of 2018

(From the judgments of learned 6th MACT, Karanjia dated 7th
September, 2017 passed in MAC No.153 of 2012 and dated 9th March,
2018 passed in MAC No.152 of 2012)


 The Divisional Manager, New India
 Assurance Co. Ltd.                (in MACA No.503 & 568/2018)
 Dasaratha Soren and Another             (in MACA No.27 of 2018)
                                                              Appellants

                                   -versus-

 Dasaratha Soren and Others              (in MACA No.503 of 2018)
 Sinigo Marndi and Others                (in MACA No.568 of 2018)
 Dildar Hussain and Another              (in MACA No.27 of 2018)
                                              ....           Respondents

Advocate(s) appeared in this case:-

            For Appellant        : Mr. Somnath Roy, Advocate in
                                   MACA No.503 & 568 of 2018
                                   Mr. B.B. Singh, Advocate in MACA
                                   No.27 of 2018

            For Respondents      : Mr. B. K. Mohanty, counsel for
                                   Respondent No.3 and
                                   Mr. B.B. Singh, counsel for
                                   Respondents 1 & 2 in MACA No.503
                                   & 568 of 2018
                                   Mr. Somanath Roy, counsel for
                                   Respondent No.2 in MACA No.27 of
                                   2018


MACA No.503, 27, 568 of 2018                              Page 1 of 10
                CORAM: JUSTICE B.P. ROUTRAY
                                JUDGMENT

20th March, 2023 B.P. Routray, J.

1. All the three appeals, which are concerning death of two persons

in the same accident, are taken up together and disposed of by this

common order.

2. MACA No.503 of 2018 is arising out of MAC No.153 of 2012

concerning death of a minor girl, namely Sonali Soren, wherein the

tribunal has directed for payment of a sum of Rs.3,34,000/- as

compensation. The claimants have preferred MACA No.27 of 2018

against the same award praying for enhancement of the compensation

amount.

3. In MACA No.568 of 2018, the award of the tribunal passed in

MAC No. 152 of 2012 granting compensation of Rs.6,30,000/-

concerning death of the deceased, namely Narendranath Marandi has

been challenged.

4. The common case of the claimants in all the cases are to the

effect that, on 3rd March 2012, the minor girl Sonali, reading in Class-

VII, went as a pillion rider in the motor cycle driven by her uncle,

Narendranath Marandi from Jashipur to their village on NH-49. The

offending vehicle, i.e. Bolero bearing registration number OR-02-AK-

7718 coming from opposite direction with high speed being driven in

rash and negligent manner dashed the motor cycle. Narendranath died

on the spot and Sonali died at the hospital. Jashipur P.S. Case No.28

dated 3rd March, 2012 was registered in respect of the accident and the

investigation ended with submission of charge-sheet against accused

driver of the offending vehicle alleging offences under Section

279/337/338/304-A of I.P.C.

5. The finding of the tribunal with regard to involvement of the

offending vehicle and negligence of its driver in causing the accident is

not disputed by the insurer - Appellant. The entire dispute raised by

the insurance company in MACA No.503 and 568 of 2018 is with

regard to validity of the insurance policy and its liability to indemnify

the compensation amount. According to the owner, the offending

vehicle was having coverage of insurance vide policy No. 5508023

1110100004252 for the period 16th September 2011 to 15th September

2012 and therefore, the insurance company is liable to indemnify him

in respect of payment of compensation amount. On the other hand as

per the insurer, the aforesaid policy issued in respect of the offending

vehicle was cancelled from the date of its inception much prior to the

accident due to dishonor of the cheque given by the owner of the

vehicle and therefore, the insurer should not be saddled with any

liability for the contract of insurance was no more in subsistence on the

date of accident.

6. The tribunal upon adjudication of the controversy have come to

the conclusion that though cancellation of policy has been made, but

the required intimation thereof was not sent to the owner (insured) and

the RTO and therefore, the insurer cannot be absolved of its liability

under the policy. The Tribunal then directed for payment of

compensation amount by the insurance company.

7. Such finding of the tribunal with direction to pay the

compensation amount by the insurance company is the subject matter

of challenge in MACA No.503 and 568 of 2018. As per Mr. Roy,

learned counsel for the insurer the intimation of cancellation of the

policy was sent to the owner as well as the RTO by Registered Post

and the tribunal has failed to appreciate the same.

8. On the backdrop of such controversy with regard to cancellation

of insurance policy and intimation thereof to the insured as well as the

RTO, the relevant documents are found under Ext.C/2, D/2, E/2, F/2,

G/2 & H/2. Further, the insurer also examined its officer as O.P.W.1 to

depose about cancellation of the policy.

9. The owner (insured) also examined himself as O.P.W.1. Said

O.P.W.1 in his evidence has stated that the policy of insurance was

validly issued on 16th September, 2011 and he did not receive any

intimation of cancellation of the same. As per the evidence of O.P.W.2

- the Branch Manager of New India Assurance Co. Ltd., Cheque No.

576571 dated 15th September 2011 for Rs.7530/- given by the owner

was dishonoured as per intimation of the Bank dated 20th January 2012.

Thereafter the policy of insurance issued in favour of the offending

vehicle was cancelled. The intimation of such cancellation was

intimated by Registered Post with A/d on 27th January 2012 to the

owner which was received by him on 2nd February 2012 and similarly

the RTO, Bhubaneswar received the same on 3rd February, 2012.

10. Before delving into the dispute, it is mentioned here that

issuance of policy No.55080231110100004252 on 16th September

2011 by the insurer, i.e. New India Assurance Co. Ltd. is not disputed.

So, the onus on proof of cancellation of said policy and the intimation

thereof to all concerned is on the insurer. The Supreme Court in the

case of United India Insurance Company Limited vs. Laxmamma

and others, (2012) 5 SCC 234 have set the law at rest on the point of

cancellation of policy due to dishonour of cheque. With discussion to

earlier decisions rendered in the cases of Oriental Insurance Co. Ltd.

vs. Inderjit Kaur, (1998) 1 SCC 371, New India Assurance Co. Ltd.

vs. Rula, (2000) 3 SCC 195 and National Insurance Co. Ltd. vs.

Seema Malhotra, (2001) 3 SCC 151, the Supreme Court have stated

the legal position 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."

11. This Court in the case of Rashmita Mohanty and others vs.

Santosh Kumar Padhi and another, 2016 (I) OLR 989 has observed

as follows:

"Accordingly, no material had been produced by the Insurance Company before the learned Tribunal to show that such intimation regarding cancellation of policy had been given to the concerned Registering Authority. Therefore, 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."

12. As stated earlier Ext.C/2 is the copy of the cancelled policy,

Ext.E/2 is the postal receipt sent to Sk. D. Hussain (the owner) and

Ext.F/2 is the postal acknowledgment signed by one Ajit Kumar Patra,

the recipient. Neither the insurer nor O.P.W.2 say anything about the

relationship of Ajit Kumar Patra with Sk. D. Hussain nor did they say

in what capacity the Registered letter was received by him. Therefore,

the tribunal has rightly held that proof of service of the intimation by

Registered Post is not established on record and this court confirms the

same. Similarly, the postal acknowledgement under Ext.H/2 does not

disclose anything regarding receipt of intimation of cancellation by the

office of the RTO, Bhubaneswar nor does it bear any official seal.

O.P.W.2 also has admitted in his evidence regarding the same. Thus on

analysis of evidence regarding service of intimation of cancellation of

the policy, this court comes to conclusion that the same has not been

established on record and the insurer has failed to discharge the onus

on his part. So as per the settled law discussed above this court agrees

with the finding and direction of learned Tribunal for payment of

compensation by the Insurance Company. It is reiterated here that for

the failure on the part of the Insurance Company to prove valid service

of intimation of cancellation of the policy, it cannot be absolved of its

liability in respect of third party as per the contract of insurance.

However, since the fact of dishonour of the Cheque in respect of

payment of premium by the owner has been established on record by

production of the original Cheque under Ext.A/2, liberty is granted in

favour of the insurer to recover the compensation amount from the

owner (insured).

13. So far as MACA No.27 of 2018 is concerned which has been

filed by the claimants for enhancement of the compensation amount in

respect of death of the minor girl, considering the grounds urged on

behalf of the claimants, particularly addition of future prospects to the

notional income as held by the Hon'ble Supreme Court in the case of

Kirti and Another v. Oriental Insurance Co. Ltd., (2021) 2 SCC 166, I

am inclined to enhance the same to Rs.5,00,000/-. It is clarified here

that keeping in view the age of the deceased as 14 years, future

prospect to the extent of 40% is liable to be added against 25% granted

by the tribunal and further, the claimants are entitled to loss of parental

consortium as well as adequate amount towards general damages.

14. No merit is seen to interfere with the compensation amount

quantified by the tribunal in respect of death of Narendranath Marandi

as the tribunal by adopting all settled procedure has derived the same.

15. In the result all the appeals are disposed of with direction to the

insurer, i.e. New India Assurance Co. Ltd. to deposit compensation

amount of Rs.5,00,000/- (five lakhs) for death of Sonali Soren (in

MAC No.153 of 2012) and Rs.6,30,000/- (six lakhs thirty thousand) for

death of Narendranath Marndi (in MAC No.152 of 2012) before the

tribunal along with interest @ 6% per annum from the date of filing of

respective claim applications, within a period of two months from

today, which shall be disbursed in favour of the respective claimants on

such terms and proportion to be decided by the tribunal.

16. The statutory deposits made by the insurer - Appellant before

this court in MACA No.503 of 2018 and 568 of 2018 along with

accrued interest thereof be refunded on proper application and on

production of proof of deposit of the awarded amount before the

tribunal.

(B.P. Routray) Judge M.K. Panda, Sr. Steno