Orissa High Court

Divisional Manager vs Hemanta Bag & Ors (In Maca No.1297/2017) on 1 August, 2024

Author: B.P. Routray

Bench: B.P. Routray

Signature Not Verified
Digitally Signed
Signed by: SANGRAM DAS
Reason: Authentication
Location: High Court of Orissa, Cuttack
Date: 02-Aug-2024 16:57:01




                                 IN THE HIGH COURT OF ORISSA AT CUTTACK
                                   MACA No.1297 of 2017 &MACA No.632 of 2017

                           (From the judgment dated 29th August 2017 & 30th March 2017
                           of learned 3rd MACT, Balasore passed in MAC Nos.1753 of
                           2014 and 1695 of 2014)

                             MACA No.1297 of 2017 & 632 of 2017
                             Divisional Manager,
                             Oriental Insurance Co.Ltd.                     (in MACA No.1297/2017)
                             Divisional Manager,
                             Oriental Insurance Co.Ltd.                     (in MACA No.632/2017)
                                                                                ....       Appellant
                                                                -versus-
                             Hemanta Bag & Ors                              (In MACA No.1297/2017)
                             Sarbeswar Sahu & Ors.                          (In MACA No.632/2017)
                                                                                ....     Respondents
                           Advocate(s) appeared in this case:-

                                          For Appellant         : Mr.G.P.Dutta, Advocate (in MACA
                                                                  No.1297 of 2017 & MACA No.632
                                                                  of 2017)

                                          For Respondents       : Mr.    B.Singh,   Advocate  for
                                                                  Respondents (in MACA No.1297 of
                                                                  2017 & MACA No.632 of 2017)
                                            CORAM: JUSTICE B.P. ROUTRAY
                                                           JUDGMENT

1st August 2024 B.P. Routray, J.

1. The matters are taken up through hybrid mode.

Location: High Court of Orissa, Cuttack

2. Heard Mr.G.P.Dutta, learned counsel for the insurer-

Appellant and Mr. B.Singh, learned counsel for the claimant-

Respondents.

3. Both the awards being related to the same accident causing

death of two persons are heard together and disposed of by this

common judgment.

4. MACA No.1297 of 2017 has been filed challenging the

impugned award dated 29th August 2017 of learned 3rd MACT,

Balasore passed in MAC No.1753 of 2014 and MACA No.632 of

2017 has been filed challenging the impugned award dated 30th

March 2017 of learned 3rd MACT, Balasore passed in MAC

No.1695 of 2014.

5. The learned Tribunal has directed for payment of

compensation of Rs.6,00,000/- and Rs.7,35,000/- along with

interest @7.5% per annum in MAC No.1753 of 2014 & MAC

No.1695 of 2014 on account of death of the deceased persons

namely Sudhamani Bag and Krushna Kanhya Sahu respectively in

the motor vehicle accident dated 1st September 2014.

Location: High Court of Orissa, Cuttack

6. The entire contention of challenge advanced by Mr.Dutta on

behalf of the Insurer is that, the policy was not valid on the date of

accident and it was cancelled much prior to that with due

intimation to the authority and the owner.

7. The accident took place on 1st September 2014 involving

offending vehicle bearing registration No.OR-01-L-0391 (Bus).

The Insurance policy was applied for on 6th September 2013 by

submission of cheque towards premium and accordingly the policy

certificate was issued on 6th September 2013 valid till 5th

September 2014. The cheque submitted towards premium at the

time of taking the policy was subsequently dishonoured and the

intimation was sent by the bank on 4th October 2013 under Ext.E.

Then immediately the Insurer cancelled the policy and intimated

the same to the Registering Authority i.e. RTO, Balasore vide

letter dated 11th October 2013 (Ext.G) and the owner also.

8. This cancellation of policy of insurance granted on 6th

September 2013 in respect of the offending vehicle has been

intimated vide letter dated 11th October 2013 under Ext.G through

registered post to the RTO and the Insured owner on 28th October

Location: High Court of Orissa, Cuttack

2013. The receipts of the registered post letters have been filed

under Ext.H.

9. Mr.Singh submits that the acknowledgement receipts

produced by the Insurer do not establish the proof of service of

cancellation of policy and therefore, the liability of the Insurer still

remains to indemnify the compensation.

10. The issuance of letter by registered post to the addressee

carries certain presumption of delivery of the same. It is

acknowledged in Order 5 Rule 19 of the Civil Procedure Code.

Similarly, Section 27 of the General Clauses Act prescribes that

the if the addressee is properly made and the letter is sent by

registered post, then delivery of the same is presumably effected

unless the contrary is proved. Reading Section 27 along with

Section 114(f) of the Indian Evidence Act draws the presumption

of delivery of the letter sent in registered post to the addressee

without proof to the contrary.

11. In M/s. Indo Automobiles vs. M/s. Jai Durga Enterprises &

Ors., 2008 AIR SCW 7436, the Hon'ble Supreme Court has

observed that, it is well-settled that once notice has been sent by

Location: High Court of Orissa, Cuttack

registered post with acknowledgment due in a correct address, it

must be presumed that the service has been made effective. In M/s.

Ajeet Seeds Ltd vs.K.Gopala Krishnaiah, AIR 2014 SC 3057, the

Supreme Court has held as follows;-

"10. It is thus clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business."

12. From the analysis of law as stated above, it can be well

presumed that the letter of cancellation of policy dated 11th

October 2013 (Ext.G) has been duly served on the Registering

Authority as well as the insured owner in due course. In the case

of United India Insurance Company Limited vs. Laxmamma and

others, (2012) 5 SCC 234, it is held by the Supreme Court that:-

Location: High Court of Orissa, Cuttack

"26. In our view, the legal position is this: where the policy of insurance is issued by an authorized insurer on receipt of cheque towards the payment of premium and such a cheque is returned dishonoured, the liability of the authorized 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 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 which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof."

In the case at hand , the Insurer has produced the copy of the

cancellation letter and the registered post receipts under Ext.G & H

to substantiate their contention about cancellation of policy and

intimation of the same to the Registering Authority as well as the

owner in support of their evidence stated by O.P.W.1.

Accordingly, the Insurer is discharged of its liability from

indemnification pursuant to the insurance policy upon its

cancellation and due intimation sent to the registering authority

and the insured. Therefore, the direction of the Tribunal to the

Location: High Court of Orissa, Cuttack

Insurer to indemnify the award amount cannot sustain. The Insurer

is discharged of its liability. However, it is open for the Claimants