Punjab-Haryana High Court

Oriental Ins Co. Ltd vs Darshan Kaur And Ors on 21 October, 2024

Author: Sudeepti Sharma

Bench: Sudeepti Sharma

FAO-4883-2005
2005 (O&M)
-1-

IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
FAO
FAO-4883-2005 (O&M)
Date of Decision : 21.10.2024

ORIENTAL INSURANCE CO. LTD. ....APPELLANT

VERSUS

DARSHAN KAUR AND ORS ....RESPONDENTS

CORAM : HON'BLE MRS. JUSTICE SUDEEPTI SHARMA

Present: Mr. R.P. Daria, Advocate for the appellant
appellant-Insurance Company.

Mr.K.K. Garg, Advocate
for the respondents No.1 to 4.

Mr.Ravinder Arora, Advocate with
Mr. Vipul,
Vipul Advocate for respondent No
Nos.7 and 8.
-.-
SUDEEPTI SHARMA,
SHARMA J.

1. The present appeal has been preferred by the Insurance Company

against the award passed by the learned Motor Accident Claims Tribunal,

Chandigarh (for short, 'the Tribunal') on 08.08.2005 under Section 166 of the

Motor Vehicles Act, 1988,
198 whereby, the claimant
claimants were awarded a compensation

of Rs.3,14,200/-- along with interest @ 9%
% per annum
annum.

FACTS NOT IN DISPUTE

2. Brief facts of the case are that on 30.07.2001 01 Bhagwan Singh

alongwith his brother Pal Singh boarded a bus No. HP HP-25-0792 0792 for going to Nogali

(near Dharampur), Dharampur) from Chandigarh. He was sitting near window of the driver

side. When the bus reached near Chow Blind curve Bathol Dharampur, then a

truck bearing No.HP-14-3373 No.HP came from the he side of Dharampur and in the process

of crossing each other, other the driver of both the vehicles failed to maintain a distance

in between and collided with each other. As a result of the impact impact, Bhagwan Singh

FAO-4883-2005 2005 (O&M)

suffered head injuries as the window panes of th thee bus were broken and hit against

his head. Bhagwan Singh died on the spot due to grievous injuries suffered by him.

3. Upon notice of the claim petition, respondents appeared and denied

the factum of compensation.

4. From the pleading of the parties, the Tribunal framed the following

issues:-

"1.

1. Whether Bhagwan Singh died in a road accident which took

place on 30.7.01 at about 6.45 a.m. on national highway no.2

near Chow Blind Curve Bathol, Dharampur on account of rash

& negligent driving of bus N N0. HP-25-0792 0792 and truck No. HP-

HP

14-3373 3373 by their respective drivers i.e. respondents no.1 & 5,

owned by respondents no.4 and 2 respectively? OPP

2. If issue no.1 is proved whether claimants are entitled to any

amount as compensation, if so, to what amount aand nd from

whom? OPP

3. Whether respondent no.1 was not holding a valid driving

licence at the time of accident if so, its effect? OPR OPR-3

4. Relief."

5. After taking into consideration the pleadings and the evidence on

record, the learned Tribunal awarded compensation to the tune of Rs.

Rs.3,14,200/ 3,14,200/-

alongwith interest @ 9% % per annum. Hence the present appeal.

SUBMISSIONS OF THE COUNSELS

6. The learned counsel for appellant--Insurance Company contends that

the date of insurance is 21.09.2000, which was cancelled because of dishonor of

FAO-4883-2005 2005 (O&M)

the cheque on 24.11.2000 and the date of accident is 30.07.2001. He contends that

once there is no insurance and it was cancelled, the learned Tribunal has erred in

making the oriental insurance company liable to pay jointly and severely the

amount of compensation. He relies upon the judgment of the Hon'ble Supreme

Court in Deddapa and others versus The Branch Manager, National Insurance

Co. Ltd., 2008 AIR Supreme Court 767.

7. Per contra, contra, learned for the respondents No.1 to 44-claimant argues that

the award passed by the learned Tribunal is liable to be enhanced.

8. Per contra, learned for the respondent respondents No.7 and 8 argues that the

learned Tribunal vide award dated 08.08.2005 has rightly held that the insurance

company is liable to pay the amount of compensation awarded to the claimants and

the present appeal is liable to be dismissed.

9. I have heard learned counsel for the parties and perused the whole

record of this case.

case

10. A perusal of the award shows that the learned Tribunal after taking

into consideration arguments of both the parties held that insurance company is

also liable to pay the amount of compensation awarded to the claimants. The

relevant extractt of the award is reproduced as under:

under:-

"22

22. The moot point in this particular case is regarding liability of

respondent no.3 namely Oriental Insurance Company. Oriental

Insurance Company insured the truck No. HP HP-14-3373 3373 on 21.9.2k as

per insurance cover. The counsel for the insurance company has

taken a firm stand that the insurance company is not liable because taken

the cheque of premium was dishonoured and the insurance policy was

FAO-4883-2005 2005 (O&M)

cancelled vide letter dt. 24.11.2k (Ex (Ex-R-5)

5) and its intimation was duly

sent to the owner of vehicle Vikram Singh vide regis registered tered cover

receipt of which is Ex. R-7.

R 7. In this context he relied upon an authority

titled as New India Assurance Company Ltd Vs. Raghu and Ors 2003

(1) Accidents Compensation Judicial Reports 282

282.. In this particular

case because of dishonouring of cheque of premium of policy, the

policy was cancelled and accordingly the insurance company was

absolved of its liability to pay the compensation.

23. Every case has got its own distinct facts. The facts of the

present case are quite different from the authorit authorityy relied upon by the

counsel for the insurance company. In the present case though the

policy was cancelled and intimation was sent to the owner of the

vehicle but no intimation was sent to the Registering Authority as

required under the Motor Vehicles Act Act,, 1988. I am of the considered

view that in this particular case section 147 (clause 4) and Section

149 of the Motor Vehicles Act 1988 applies. Section 147 (clause 4)

runs as follows:-

follows:

"Where a cover note issued by the insurer under the

provisions of this Chapter or the rules made thereunder

is not followed by a policy of insurance within the

prescribed time, the insurer shall, within seven days of

the expiry of the period of the validity of the cover note,

notify the fact to the registering authority in whose wh

records the vehicle to which the cover note relates has

FAO-4883-2005 2005 (O&M)

been registered or to such other authority as the State

Government may prescribe."

Similarly Section 149 of the Motor Vehicles Act, 1988 runs as

follows:

follows:-

"(1) If, after a certificate of insurance has been issued

under sub-section section (3) of Section 147 in favour of the

person by whom a policy has been effected, judgment or

award in respect of any such liability as is required to be

covered by a policy under clause (b) of sub sub-section section (1) of

section 147 (being a liability covered by the terms of

policy) (or under the provisions of section 163A) is

obtained against any person insured by the policy, then,

notwithstanding that the insurer may be entitled to avoid

or cancel or may have avoided or cancelled tthe he policy,

the insurer shall, subject to the provisions of this section,

pay to the person entitled to the benefit of decree any

sum not exceeding the sum assured payable thereunder,

as if he were the judgment debtor, in respect of the

liability, together with any amount payable in respect of

costs and any sum payable in respect of interest on that

sum by virtue of any enactment relating to interest on

judgments."

24. To decide this point reliance is further placed on an authority

titled as Oriental Insurance ce Company Ltd Vs. Inderjit Kaur and

FAO-4883-2005 2005 (O&M)

others, AIR, 1988, SC, 588 wherein it has categorically been held that

where insurer has issued the policy to cover bus without receiving

premium, he becomes liable to indemnify the third party in respect of

its liability liability which policy covers and to satisfy awards of

compensation. Provisions of section 64 64-VB VB of the Insurance Act does

not absolve the insurer of its liability. Similarly reliance is further

placed on an authority titled as United India. Insurance Co, Ltd Vs.

Mahendra Singh and others, 2005 (1) Accidents Compensation

Judicial Reports 205 wherein it has been clearly held that merely

because the cheque was dishonoured, the liability of the insurance

company to the claim of third party had not come to an end. However

the insurance company could recover the amount from the insured.

Reliance is further placed on an authority titled as Oriental Insurance

Company Limited Vs. Pinjary Hussainamma, 2002 ACJ, 597 wherein

the insurance policy was cancelled prior to the date of accident but

the cancellation was not communicated to the Registering Authority

as required under Section 147 (4) of the Motor Vehicles Act, 1988. It

was held that the insurance company was not exempted from the

liability to the third party though it could proceed against the owner.

25. In view of the detailed discussion made above it is manifest that

in the present case after the cancellation of the policy by the

insurance company no intimation intimation/communication /communication was sent to the

Registering Authority as as is required under Section 147 (4) of the

Motor Vehicle Act. Moreover in view of section 149 of the Motor

FAO-4883-2005 2005 (O&M)

Vehicles Act 1988 and Section 64 64-VB VB of the Insurance Act, the

liability of the insurance company towards the third party does not

come to an end. Accordingly ordingly it is held that Oriental Insurance

Company respondent no.3 is also liable to pay the compensation to Company-respondent

the claimants along with other respondents. However the insurance

company lateron may sue the original owner to satisfy their claim

against him. The The liability of all the five respondents in this case shall

be joint and several."

11. A perusal of the above reveals that the cheque of premium was

dishonoured and insurance policy was cancelled vide letter dated 24.11.2000

(Ex.P-5)

5) and its intimation intim tion was duly sent to Vikram Singh, the owner of the

vehicle vide registered cover receipt, which is Ex.R Ex.R-7.

7. It is a settled proposition of

law as held by the Hon'ble Supreme Court in Deddapa and others versus The

Branch Manager, National Insurance Co. Lt Ltd (supra) that if the contract of

insurance has been cancelled and all concerned have been intimated thereabout,

insurance company would not be liable to pay the compensation. The relevant

extract of the judgment are reproduced as under:

under:-

"22. A contract is based on reciprocal promise. Reciprocal

promises by the parties are condition precedents for a valid

contract. A contract furthermore must be for consideration.

23. In today's world payment made by cheque is ordinarily

accepted as valid tender. Sectio Sectionn 64VB of the 1938 Act also

provides for such a scheme.

FAO-4883-2005 2005 (O&M)

24. Payment by cheque, however, is subject to its

encashment. In Damadilal & Ors. v. Parashram & Ors.

[(1976) 4 SCC 855],, this Court observed ::-

"On the ground of default, it is not disputed that

the defendants tendered the amount in arrears by

cheque within the prescribed time. The question is

whether this was a lawful tender. It is well-

well

established that a cheque sent in payment of a debt

on the request of the creditor, unless dishonoured,

operates es as valid discharge of the debt and, if the

cheque was sent by post and was met on

presentation, the date of payment is the date when

the cheque was posted..."

25. XXXX XXXXX XXXXX

26. We are not oblivious of the distinction between the

statutory liability ability of the Insurance Company vis vis-a-vis vis a third

party in the context of Sections 147 and 149 of the Act and its

liabilities in other cases. But the same liabilities arising under a

contract of insurance would have to be met if the contract is

valid. If the contract of insurance has been cancelled and all

concerned have been intimated thereabout, we are of the

opinion, the insurance company would not be liable to satisfy

the claim."

FAO-4883-2005 2005 (O&M)

12. On the touchstone of hereinabove discussed findings and judicial

precedent, cedent, the award dated 08.08.2005 passed by learned Tribunal, Chandigarh

stands vitiated by a complete absence of judicial application of mind.

13. In view of the above, the present appeal is partly allowed to the extent

that insurance company shall not be liable to pay the compensation and

respondents No.7 is held liable to pay the compensation.

14. Pending applications, if any, also stand dispose disposed of.





              October 21,, 2024                             ((SUDEEPTI SHARMA)
              A.Kaundal                                           JUDGE
                   Whether speaking/non-speaking

speaking/non speaking : Speaking Whether reportable : Yes/No