Orissa High Court
Divisional Manager vs Sena Bisoi & Others on 9 January, 2025
Author: Biraja Prasanna Satapathy
Bench: Biraja Prasanna Satapathy
IN THE HIGH COURT OF ORISSA AT CUTTACK
MACA NO.187 OF 2018
Divisional Manager, Oriental .... Appellant
Insurance Co. Ltd. Mr.S. Satapathy, Adv.
-versus-
Sena Bisoi & Others ..... Respondents
Mr. P.K. Behera, Adv.
CORAM:
MR. JUSTICE BIRAJA PRASANNA SATAPATHY
ORDER
09.01.2025
Order No.8
Misc. Case NO.317 of 2018
1. This matter was taken up through Hybrid Mode.
2. Taking into account the nature of order to be passed in the
appeal, this court is of the view that in spite of non-service of notice
on Respondent No.4, the matter can be taken up.
3. Heard learned counsel for the parties.
4. Considering the grounds taken, the delay in filing the appeal
is condoned.
5. The Misc. Case stands disposed of.
(Biraja Prasanna Satapathy)
Judge
MACA NO.187 OF 2018
An application under Section 173 OF Motor Vehicles Act, 1988
Divisional Manager, Oriental .... Appellant
Insurance Co. Ltd.
-versus-
Sena Bisoi & Others .... Respondents
For Appellant : M/s. S. Satapathy, Adv.
For Respondent : M/s. P.K. Behera, Adv.
PRESENT:
THE HONBLE JUSTICE BIRAJA PRASANNA SATAPATHY
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Date of Hearing : 09.01.2025 & Date of Judgment: 09.01.2025
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-
Biraja Prasanna Satapathy, J.
1. Heard Mr. S. Satapathy, learned counsel appearing for the
Appellant-Company and Mr. P.K. Behera, learned counsel
appearing for the Claimants-Respondents.
2. This appeal has been filed by the Appellant-Company
challenging the judgment dt.09.11.2017 so passed by the District
Judge-cum-Member, 1st MACT, Kalahandi at Bhawanipatna in
MAC No.92 of 2015. Vide the said judgment, while allowing the
claim filed by the Claimants-Respondents, the Tribunal allowed
compensation to the tune of Rs.7,18,000/- along with interest @7%
per annum payable from the date of filing of the claim application
till its realization. While allowing such compensation, right of
recovery was also allowed against the Owner-Respondent No.4.
3. Learned counsel appearing for the Appellant-Company
vehemently contended that since the offending vehicle was not
having any valid policy at the time of accident, no liability could
have been saddled on the Appellant-Company. It is contended that
even though a policy was taken by the Owner-Respondent No.4 in
respect of the offending vehicle, but because of the dishonor of the
cheque, the said fact was intimated not only to the Owner-
respondent No.4 but also to the concerned R.T.O on 06.06.2007
and those documents were exhibited vide Ext.A/2 to Ext.E/2.
3.1. It is contended that since factum of dishonour of the cheque
with cancellation of the policy was duly intimated not only to the
Owner-Respondent No.4 but also to the concerned R.T.O on
06.06.2007 which is not disputed, it is to be held that the offending
vehicle was not having valid policy at the time of accident which
took place on 05.03.2008.
3.2. In support of the aforesaid submission, Reliance was placed
to a decision of the Hon'ble Apex Court in the case of United India
Insurance Company Limited vrs. Laxamamma and
Others, reported in 2012 (3) T.A.C.(S.C). Hon'ble Apex Court
in paragraph-19 of the decision has held as follows:
xxx xxx xxx
"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
Section 147(5) and 149(1) of the M.V. Act unless the policy
of insurance is cancelled by the authorized insurer ad
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 initiation 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.
Xxx xxx xxx
3.3. It is accordingly contended that since by the time the accident
took place on 05.03.2008, the policy was already cancelled on
06.06.2007 with due intimation to the Owner-Respondent No.4 as
well as the RTO concerned , no liability could have been fixed on
the appellant-company. Even though the matter was discussed by
the Tribunal, but without proper appreciation of the case law
governing the field, the appellant was unnecessary saddled with the
liability with right of recovery given as against the Owner-
Respondent No.4. It is further contended that since the vehicle in
question was not having any policy on the date of accident, it is the
Owner -Respondent No.4 who is liable to pay the compensation.
4. Mr. P.K. Behera, learned counsel appearing for the claimants-
respondents though supported the impugned judgment but failed
to satisfy this Court with regard to the stand taken in the appeal
regarding cancellation of the policy on 06.06.2007 with due
intimation to the owner-Respondent NO.4 as well as to the
concerned R.T.O.
5. Having heard learned counsel for the parties and placing
reliance as cited supra, it is the view of this Court that since as on
the date of accident which took place on 05.03.2008, the policy in
question was already cancelled because of dishonor of the cheque
on 06.06.2007 with due intimation to the Owner-Respondent NO.4
as well as to the concerned R.T.O, it is the view of this Court that
no liability could have been fixed on the appellant-company.
Therefore, this Court is inclined to quash the impugned judgment
so passed by the learned trial Court in MAC No. 92 of 2015. While
quashing the same, this Court remits the matter to the Tribunal to
decide the claim afresh in accordance with law in which this Court
expresses no opinion.
5.1. Appellant-Company be permitted to take refund of the
statutory deposit along with accrued interest, if any, on proper
identification.
The M.A.C.A accordingly stands disposed of.
(Biraja Prasanna Satapathy)
Judge
Orissa High Court, Cuttack
Dated the 9th January, 2025/sangita
Reason: authentication of order
Location: high court of orissa, cuttack
Date: 20-Jan-2025 18:39:24
