Bajaj Allianz General Insurance Co. Ltd. vs Aparna Dey & Ors.

Subhasis Dasgupta, J

This appeal emerges out of judgment and order dated 9.1.2017 passed by Motor Accident Claims Tribunal, Additional District and Sessions Judge, 1st Court, Barasat, North 24-Parganas granting award to the tune of Rs.7,51,202 together with interest of 6% per annum from the date of filing of claim application till realisation.

It is brought to our attention by the learned advocate for the appellant/insurance company that a short point, based on law being involved in this case, the appeal could be disposed of without resorting to extensive hearing and in the interest of securing expeditious disposal of this appeal.

Learned advocate for the respondents supporting the candid submission of appellant urged for disposal of this appeal without taking any assistance from lower Court records.

Upon perusal of the records as well as the informal paper book furnished, we are of the considered view that the points urged to be decided, which are required to be addressed by us, may be conveniently decided making little departure from the provisions contained in the Appellate Side Rules on the simple ground that point requiring decision basically involved question of law.

Accordingly the appeal is taken up for hearing by consent of the parties.

The challenge raised by the appellant solitary concentrated to one and only point that whether the appellant/insurance company could be exonerated from its liability to indemnify the claimants, when the appellants/insurance company revoked and or cancelled the insurance policy of the offending vehicle on 15.11.18, for a cheque covering the premium of the insurance polity having been dishonoured by the bank for want of sufficient fund.

According to respondents the contract of insurance policy was very much subsisting on the date of accident, as the revocation and or cancellation of insurance policy was not done in accordance with law with due intimation to the insured.

The Tribunal elaborately dealt with the factual circumstances of the road traffic accident involved in this case leading to the death of the deceased. But some of the crucial facts may be adhered to for the decision of this appeal, which in our view are of highest significance.

That on 8.2.2009 at about 21:05 hours the offending vehicle bearing No. WB-25B/1118 dashed victim Biswanath Dey due to its rash and negligent driving, when victim was proceeding along the left side of Jessor Road from his resident towards Ashokenagar. The victim sustained serious injuries of his person and died on the spot. The deceased victim had an earning of Rs.8,500/- per month from his business, and the claimants are the heirs/dependent family members. For the loss, they suffered, the claimants initiated the claim case for compensation of Rs. 8,00,000/-.

The appellant/insurance company contested the claimant case as OP-2 by filing written statement, wherein plea was taken that the insurance policy in respect of offending vehicle was invalid for the appellant/insurance company having revoked and/or cancelled the insurance policy of the offending vehicle after the cheque, issued by the registered owner for the offending vehicle, was dishonoured by the bank for insufficient fund.

Admittedly, the insurance policy of the offending vehicle was revoked and or cancelled by the appellant/insurance company on 15.11.2008. Further admitted position is that one Nepal Biswas/insured paid the premium of insurance by issuing a cheque bearing No. 865812 dated 5.11.2008 for a sum of Rs.10,334/-. The appellant/insurance company got the said cheque presented through its banker for clearing purpose, when by issuing a notice of bank dated 15.11.2008, it was given to understand to appellant/insurance company that the cheque had been dishonoured for "insufficient fund".

Adverting to Exhibit-'F', said to be issued by appellant/insurance company in favour of the registered owner of the offending vehicle, it was contended with all emphasis that the contract of insurance policy was rendered void ab initio for the cheque issued by the insured/Nepal Biswas having been dishonoured by the bank for insufficient fund and such document, itself one was sufficient enough to exonerate the insurance company from indemnifying the respondents/claimants.

In reply to the contention raised by appellant, it was brought to our attention by the respondents that the Exhibit-'F' neither bears any official seal nor any signature, memo number or reference number etc. so as to make the required communication to the registered owner of the offending vehicle in cancellation of his policy of insurance.

The appellant/insurance company did not issue a separate demand notice under Section 138 of the N.I. Act against the registered owner of the offending vehicle after the cheque was dishonoured by the bank for insufficiency of fund, and similarly never ventured to lodge any criminal case against the registered owner of the offending vehicle.

The insurance policy for the offending vehicle was issued on 13th November, 2009 as testified by DW-3/Arkadeep Sarkar, a legal executive appointed by the appellant/insurance company. Dw-3 during cross-examination testified that no document was there validating due communication of notice in cancellation of the contract of insurance policy upon Nepal Chandra Biswas, the registered owner of the offending vehicle, and he had duly received the same. This evidence without any ambiguity made it clear that though the contract of insurance policy of the offending vehicle was cancelled unilaterally by the appellant/insurance company, but there left nothing to establish that such intimation in cancellation of the insurance policy was communicated and further the registered owner duly received the same.

The solitary point raised in this appeal and ultimately precipitated to a question whether there was valid communication to registered owner of the offending vehicle after his policy of insurance was cancelled by the appellant/insurance company, for the cheque issued from his end having been dishonoured ultimately by the bank on the ground of insufficiency of fund so as to exonerate the appellant from indemnifying claimants. The same point now involved in this appeal was raised before the Apex Court, and the Apex Court addressed the issue by delivering decision in the case of United India Insurance Co. Ltd. V. Laxamamma and Ors. Reported in 2012 (3) T.A.C. 8 (S.C). It would be profitable her to quote the relevant paragraph of such decision as hereunder:

"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 Sections 147(5) and 149(1) of the M.V. 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.

The ratio laid down there is that the liability to indemnify the third party by insurance company, covered under the insurance policy ceases only when the authorised insurer duly intimates cancellation of his policy of insurance in the event of cheque, issued by registered owner of the offending vehicle towards the premium, gets dishonoured by the bank for whatever may be the reasons stipulated in notice issued by the bank in its return memo. Therefore, due communication of cancellation of insurance policy for whatever reason is a sine qua non prior to making cancellation of insurance policy and so as to advance claim exonerating liability of the insurance company to indemnify the claimants. As has already discussed that there left nothing in the evidence to reveal in manifestation of due communication from the end of insurance company after the cancellation of insurance policy, so the appellant/insurance company would not find any escape from its liability to indemnify the claimants. Since the Exhibit-'F' is not supported by any document with regard to due communication/intimation of such cancellation followed by its ultimate reach to the insured, the contract of insurance policy of the offending vehicle should not be rendered in operative so as to absolve the liability of appellant/insurance company to indemnify the respondents/claimants.

Before parting with the case record, another point urged by the appellant feebly incidental to the principle point, already addressed by us hereinabove which may be set at rest by the following observation, is that offending vehicle had no valid licence as on the date of the accident the driver of the offending vehicle was admittedly driving the commercial vehicle in spite of owning a driving licence for non-0transport vehicle making breach of the condition of the insurance policy, which according to appellant is itself strong enough to repudiate the claim for indemnification. Admittedly the driver of the offending vehicle was favoured with a licence authorising him to drive light motor vehicle (non-transport). In terms of Section 2(21) of the M.V. Act defining light motor vehicle, the gross weight of the vehicle, not above than 7500 kgs will be a determinative factor for categorising a light motor vehicle involving two categorise thereunder one for light goods vehicle, and another for light passenger vehicle. Significantly light motor vehicle embraces both transport vehicle/goods carriage vehicle and passengers vehicle also. The Tribunal after consideration of the RC book, insurance policy of the offending vehicle reached to a finding that the gross vehicle weight of the offending vehicle was 5600 kg i.e. much below the 7500 kg.

The ratio of the judgment delivered in the case of National Insurance Company Limited us. Swaran Singh and others, reported in (2004) 3 SCC 197 has succinctly settled that even in cases where the insurance company was able to put good defence under Section 149(2) of the M.V Act, it was upon the insurance company to first pay the claimants of the victim and thereafter recover it from the owner of the offending vehicle unless such breach or breaches are so fundamental in nature having effect of contribution to the case of the accident.

In the instant appeal there left nothing to reveal that for disqualification of driver possessing driving licence to ply light motor vehicle, and further for a transport vehicle having driven by a driver with faulty driving licence, the accident was occurred for its active contribution, and it was so fundamental and patent in nature that it would operate as a good defence to repudiate the claim for award. More so driving of a transport vehicle in spite of holding a driving licence to drive light motor vehicle (non transport) would not make itself so fundamental and patent in nature causing deliberately contribution to the cause of the accident. The appellant/insurer in the given circumstances of the case is not remediless and the manner of resorting to remedy was specifically laid down in the case of Swaran Singh and Ors. (supra) clarifying that to establish the proposition 'Pay and Recover', the money found due to the insurer could be recoverable on a certificate being issued by the Tribunal to the collector in the same process as required under Section 174 of the Act, as arrears of land revenue. The ratio of the decision leading to a proposition 'pay and recovery' was further re-enforced by the Apex Court in a recent decision reported in (2018) 9 SCC 650 in the case of Shamanna and Another vs. Divisional Manager, Oriental Insurance Company Limited.

The appeal fails being devoid of any merits.

With the disposal of appeal, connected application stands also disposed of.

The appellant/insurance company is directed to deposit the entire awarded sum together with interest at the rate decided by the Tribunal from the date of filing of the claim application till the entire sum is liquidated within four (4) weeks from the date of this order to the Registrar General, if not already deposited in the mean time before Registrar General, besides the statutory deposit of Rs.25,000/-. Liberty is given to respondents to approach the Registrar General for release of such amount, and in the event if any such request is made, learned Registrar General shall cause order releasing the awarded sum forthwith upon establishing identity of the claimants including their bank accounts, if any.

Shortfall, if therebe any either or compensation component, or interest component, may be permitted to be disbursed by appellant directly to the bank account of claimants, held for the purpose. After liquadation of entire awarded sum with interest may be permitted to be returned on a formal appraoch being made to Registrar General to that effect.

Urgent certified copy of this order if applied for, be made available to the parties upon compliance with requisite formalities.

I agree.