Telangana High Court
Bajaj Allianz General Insurance Co Ltd vs Maloth Chilakamma And Anr on 12 January, 2024
THE HON'BLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO M.A.C.M.A.No.377 OF 2013 JUDGMENT:
This M.A.C.M.A. is filed under Section 173 of the
Motor Vehicles Act, 1988 by the appellant/2nd respondent-
Insurance Company aggrieved by the order and decree dated
29.12.2011 passed in M.A.T.O.P.No.138 of 2009 by the
Chairman, Motor Accidents Claims Tribunal-cum-II Additional
District Judge (F.T.C.I.), Khammam (for short, "the Tribunal").
2. For convenience, the parties will be hereinafter
referred to as they are arrayed before the Tribunal.
3. Brief facts of the case are that the petitioner filed a
claim petition claiming compensation of Rs.4,00,000/- on
account of injuries sustained by her in a motor vehicle
accident that occurred on 14.06.2008.
3(1) It is stated that on 14.06.2008, the petitioner went
to Khammam in order to purchase the cotton sheets along
with one Nanya and Sharathchandram. After completion of
work, she returned to her village by boarding an auto bearing
No.AP-20X-4505, on the way when the auto reached near
Bypass road of Naidupeta outskirts, the driver of Mahendra 2
Savari 2WD 10 bearing No.AP-36X-1670 of 1st respondent
insured with 2nd respondent, which was coming from
Mahubabad towards Khammam, drove his vehicle in a rash
and negligent manner with high speed, dashed against the
auto, and as a result of which, the inmates of the auto
sustained injuries in which the petitioner also received
bleeding injuries to her right leg, right hand and other injuries.
On a complaint, the P.S. Khammam Rural, registered a case in
Cr.No.135 of 2008 for the offence under Section 337 IPC. The
claim petitioner is a agricultural coolie and used to earn Rs.
3000/- per month. Due to the accident she is unable to do her
work and thereby she lost earnings. Hence, the claim petition.
4. Respondent No.1 remained ex parte before the
Tribunal. Respondent No.2/Insurance Company filed a written
statement by denying the allegations made in the petition.
They submitted that initially cover note bearing
No.BZ0800290026 was issued in respect of the above said
vehicle by receiving cheque for Rs.11,900/-. But, the said
cheque was returned with an endorsement that "funds
insufficient". Thus, in the present case since no premium was
received from the 1st respondent, no liability can be
undertaken and contract becomes void in between 1st 3
respondent and this respondent. They further submitted that
the driver-cum-owner of the Savari vehicle, was not holding
the effective driving license and that the accident occurred due
to the negligence of the driver of the auto as the driver of the
auto drove the same with excessive passengers in
uncontrollable manner and without driving license and
without observing traffic rules, as such, this respondent is not
liable to pay compensation. Accordingly, prayed to dismiss the
petition.
5. On behalf of the petitioner, PWs.1 and 2 were
examined and got marked Exs.A1 to A9, and Ex.C1. On behalf
of respondent No.2, RWs.1 and 2 were examined and got
marked Exs.B1 to B3.
6. On appreciating the material available on record,
the Tribunal partly allowed the petition by awarding
compensation of Rs.2,00,000/-. The Tribunal directed the 1st
respondent to pay the compensation to the petitioner, and it
also directed the 2nd respondent/Insurance Company to
deposit the above said compensation amount with interest @
7.5% p.a. from the date of filing of the petition till date of
realization within two months from the date of its order at first
instance and then recover the same from the 1st respondent- 4
owner of the crime vehicle. Aggrieved by the same, the
present appeal is filed by the appellant/2nd respondent-
Insurance Company.
7. Learned counsel appearing for the appellant/2nd
respondent-Insurance Company inter-alia contended that the
learned judge grossly erred in holding the appellant-Insurance
Company is also liable to pay compensation of Rs.2,00,000/-
with interest @7.5% p.a. He further contended that the
learned judge ought to have seen that the owner of the crime
vehicle-the respondent No.2 herein failed to pay the premium
promised and, therefore, the appellant Company need not
perform its part of promise as an agreement made without
consideration, is void and the appellant Company is not liable
to pay the compensation. He further contended that the
learned judge ought to have seen that since the cheque given
towards premium was dishonoured, and no policy was issued
by the appellant Company and therefore it is not liable to
indemnify the respondent No.2 herein for payment of
compensation to the first respondent herein.
7(1) Learned counsel appearing for the
appellant/Insurance Company further contended that the
learned judge did not consider the fact that no policy was 5
issued in pursuance of the said cover note, thus no liability
can be attributed basing on the cover note. He relied upon the
following judgments:
i) In the case of United India Insurance Company Ltd., Vs. A. Narayana Reddy and others 1
ii) In the case of New India Insurance Company Ltd., Tirupati Vs. G. Sampoorna and others 2
Accordingly, prayed to allow the appeal.
9. Per contra, learned counsel appearing for
respondent No.1 contended that the order under challenge
suffers no infirmity and, as such, no interference of this Court
is required. Thus, prayed to dismiss the appeal.
10. Heard both sides. Perused the record.
11. As seen from the impugned order, the Tribunal
observed that as per the evidence of PW.1, she boarded the
auto to return to her village, on the way when the auto reached
near bypass road of Naidupeta outskirts, the driver of the
crime vehicle drove it in a rash and negligent manner with
high speed and dashed against their auto. As a result of
which, herself and other inmates of the auto sustained
grievous and simple injuries. In support of her case, she filed
1 2007(3) ALT 568 2 2010(5) ALT 105 6
Ex.A1-certified copy of FIR, Ex.A2-certified copy of charge-
sheet, Ex.A3-certified copy of Medical Certificate, issued by the
Government Hospital, Khammam, shows that PW.1 sustained
two grievous injuries i.e. fracture of right Ulna lower half, (2)
fracture of right femur lower 2/3rd and one simple injury on
chest and took treatment as inpatient from 14.06.2008 to
02.07.2008. Later, she was shifted to Tarun Orthopaedic
Hospital, Khammam, for better treatment.
12. The Tribunal further observed that the 2nd
respondent/Insurance Company did not dispute veracity of
Ex.A1 to A3 and also did not dispute factum of accident,
involvement of crime vehicle. The only contention of the 2nd
respondent/Insurance Company is that there was no
negligence on the part of the driver of the crime vehicle. The
driver of the crime vehicle is proper person to deny the
evidence of PW.1 who is injured/eyewitness or to explain as to
how the accident occurred. As per Ex.A2-charge-sheet, the 1st
respondent, who is the owner of the vehicle, drove the crime
vehicle at the time of accident. But, he did not choose to
contest the case by denying rash and negligence on his part in
driving the crime vehicle. Further, the 2nd
respondent/Insurance Company did not choose to take any 7
steps to examine the 1st respondent. Further, RW.1 who is the
Assistant Manager in the 2nd respondent Insurance Company
did not deny rash and negligent driving of the 1st respondent.
The evidence of PW.1 is duly corroborating with Ex.A1 to A3
and the Tribunal rightly came to the conclusion that the
accident occurred only due to rash and negligent driving of the
crime vehicle by the 1st respondent and awarded the amount
as stated supra.
13. As regards the liability, the Tribunal observed that
it is the contention of the respondent No.2/Insurance
Company that their Company initially issued cover note in
respect of the crime vehicle by receiving cheque for
Rs.11,500/- from the 1st respondent and the same was
mentioned in the cover note also, and any risk undertakes
subject to receipt of premium only. The cheque issued by the
1st respondent was returned with an endorsement that "funds
insufficient." In support of its contention, the 2nd
respondent/Insurance Company examined its Assistant
Manager as RW.1 and got marked Ex.B1-certified copy of the
cover note, Ex.B2-certified copy of the returned cheque issued
by the 1st respondent and Ex.B3-certified copy of the cheque
returned memo issued by Andhra Bank and further, the 2nd 8
respondent examined Deputy Manager, Andhra Bank,
Khammam, as RW.2 and he deposed that Ex.B3-cheque return
memo was issued by their bank due to insufficient funds in the
account of the 1st respondent.
14. The Tribunal further observed that as per Section
147(4) of the Motor Vehicles Act, it is statutory duty of the
Insurance Company to intimate to the registering authority of
the offending vehicle about the cancellation of the insurance
cover note/policy within a period of one week. In the present
case, it is not the case of the 2nd respondent/Insurance
Company that they have issued notice to the registering
authority of the offending vehicle by intimating the cancellation
of the cover note. Further, the 2nd respondent/Insurance
Company did not get mention either in its counter or RW.1,
who is the Assistant Manager of the 2nd respondent did not
state in his chief-examination whether the 2nd
respondent/Insurance Company got issued any notice to the
1st respondent intimating the dishonour of the cheque issued
by him towards premium. But, RW.1 stated in the cross-
examination that they intimated about the dishonour of the
cheque to the 1st respondent/owner of the crime vehicle
through letter. But, the 2nd respondent/Insurance Company 9
did not file copy of the letter, postal receipt, postal
acknowledgement to show that the 2nd respondent/Insurance
Company intimated about the dishonour of the cheque and
cancellation of the cover note to the 1st respondent/owner of
the crime vehicle.
15. Learned counsel appearing for the
appellant/Insurance Company has relied upon United India
Insurance Company Ltd., (1st supra) wherein at para No.5
and 6, it is stated as under:
5. On 10-1-1997 the insurer addressed a letter to the insured as follows:
Notwithstanding anything contained therein to the contrary it is hereby declared and agreed that the insurance under this policy stands cancelled as from inceptions i.e. 6-1-1997. Since the cheque paid by the insured towards payment of premium returned from our Bankers duly dishonoured, and in consequence whereof premium amounting to Rs. 5,783/- is hereby written off.
6. The original registration receipt dated 14-1-1997 issued by the postal authorities was marked in one case and the Xerox copies in the rest of the cases.
The insured i.e. the owner of the vehicle remained ex parte in all these cases. In view of the evidence of R.W. 1 and the registration receipt filed into the Court and marked, it must be held that the cancellation order was received by the insured, the owner of the vehicle. In fact, the served postal acknowledgement was filed into the Court and was got marked. But it does not contain the date of receipt of the notice by the insured, owner of the vehicle. The accident covered by all these cases occurred on 21-1-1997 i.e., exactly one week after the cancellation letter was sent to the insured by registered post.
10
In the present case, it is not the case of the 2nd
respondent/Insurance Company that they have issued notice
to the registering authority of the offending vehicle by
intimating the cancellation of the cover note. Though RW.1
stated in the cross-examination that they intimated about the
dishonour of the cheque to the 1st respondent/owner of the
crime vehicle through letter. But, the 2nd
respondent/Insurance Company did not file copy of the letter,
postal receipt, postal acknowledgement to show that the 2nd
respondent/Insurance Company intimated about the
dishonour of the cheque and cancellation of the cover note to
the 1st respondent/owner of the crime vehicle. As such, the
said judgment is not applicable to present set of facts.
16. Learned counsel appearing for the
appellant/Insurance Company has relied upon New India
Insurance Company Ltd., (2nd supra) wherein at para No.17,
18, 19 and 20, it is stated as under:
Further more in Oriental Insurance Co., Ltd., vs. Brij Mohan and others[5] S.B. Sinha, J., who spoke for the three Judge Bench in Swaran Singh (1 supra), while holding that the insurance company had no liability, however, invoked the power vested in the Supreme Court under Article 142 read with Article 136 of the Constitution of India to direct the insurance company to pay the compensation amount first and then realize the same from 11
the owner of the Tractor. It may be apt to reproduce the relevant paragraphs in this connection:
"However, respondent No. 1 is a poor labourer. He had suffered grievous injuries. He had become disabled to a great extent. The amount of compensation awarded in his favour appears to be on a lower side. In the aforementioned situation, although we reject the other contentions of Ms. Indu Malhotra,we are inclined to exercise our extraordinary jurisdiction under Article 142 of the Constitution of India so as to direct that the award may be satisfied by the appellant but it would be entitled to realize the same from the owner of the tractor and the trolley wherefor it would not be necessary for it to initiate any separate proceedings for recovery of the amount as provided for under the Motor Vehicles Act. It is well settled that in a situation of this nature this Court in exercise of its jurisdiction under Article 142 of the Constitution of India read with Article 136 thereof can issue suit directions for doing complete justice to the parties."
Had the judgment in Swaran Singh (1 supra) laid down in absolute terms on the liability of the insurance company, there was no necessity for the Court to invoke Article 142. A Division Bench comprising two Judges of the Supreme Court in National Insurance Co., Ltd., vs. Parvathneni and another[6] by an order dated 10.08.2009 doubted the correctness of the directions issued in various judgments to the insurance company to pay the amount even though they are not held liable. The Supreme Court observed thus:
"We have some reservations about the correctness of the aforesaid decisions of this Court. If the insurance company has no liability to pay at all, then, in our opinion, it can not be compelled by order of the Court in exercise of its jurisdiction under Article 142 of the Constitution of India to pay the compensation amount and later on recover it from the owner of the vehicle. In our view, Article 142 of the Constitution of India does not cover such type of cases. When a person has no liability to pay at all how can it be compelled to pay? It may take years for the insurance company to recover the amount from the owner of the vehicle, and it is also possible that for some reason the recovery may not be possible at all."
12
The Supreme Court framed the following issues for consideration of Larger Bench:
"1) If an insurance company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle.
2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?"
On the strength of the discussion undertaken above, it is not possible for this Court to treat the judgment in Swaran Singh (1 supra) as containing mandatory directions to the Tribunals and Courts to invariably direct the insurance companies to pay the amounts at the first instance and recover the same from the owners of the offending vehicles even though they are held not liable. Pending resolution of the issues by the Larger Bench of the Supreme Court, it would be reasonable to understand the judgment in Swaran Singh (1 supra) as leaving discretion to the Tribunals and Courts to give appropriate directions depending upon the facts and circumstances of each case.
17. The Tribunal has rightly relied upon the decision
reported in Oriental Insurance Company Ltd. Vs. Mahamad
Vasim and others 3. In the said decision also, the cheque
issued by the insured in favour of the Insurance Company
towards premium was dishonoured due to insufficient funds
thereby their Insurance Company cancelled the cover note due
to non-payment of premium and intimation was given to the
insured by letter very much prior to the date of the accident
but no intimation was sent to the registering authority. The
3 2008 ACJ 2242 13
Tribunal directed the Insurance Company to satisfy the award
in favour of the third party and recover the amount from the
owner/insured. Then, the Insurance Company preferred an
appeal seeking complete exoneration of liability in view of the
cancellation of the policy, then it was held that the Insurance
Company cannot be completely exonerated from the liability
when it has failed to intimate all concerned about the
cancellation of the policy and thereby appeal is dismissed.
18. In light of the principle laid down in the above
judgments and basically, Motor Vehicle Act is a beneficial
legislation, this Court is of the considered view that the
Tribunal after recording reasons in its order, rightly granted
the compensation in favour of the petitioner and rightly
directed the Insurance Company to pay the compensation at
the first instance and recover the same from the 1st
respondent/owner of the crime vehicle, which needs no
interference from this Court. As such, the M.A.C.M.A. is liable
to be dismissed.
21. Accordingly, the M.A.C.M.A. is dismissed by
confirming the Order dated 29.12.2011 in M.A.T.O.P.No.138 of
2009 passed by the Tribunal. There shall be no order as to
costs.
14
Miscellaneous petitions, if any pending, shall stand
closed.
_____________________________________ NAMAVARAPU RAJESHWAR RAO, J
12th day of January, 2024 BDR