Divisional Manager, Reliance General Insurance Company Ltd., Bhubaneswar vs Minakshi Nayak & Others

Biswanath Rath, J

This Appeal involves an award/judgment passed by the 3rd Motor Accident Claims Tribunal, Puri in M.A.C. No.312/ 439 of 2011/2010.

There is a reporting that A.D. from Respondent No.5 has not returned. For no return of the Brief from Respondent No.5, this Court finds, notice on

Respondent No.5-owner is sufficient. Therefore, this matter is taken up for hearing and passing this judgment on the basis of submission made by the

learned counsel for the Appellant-Insurance Company and learned counsel for Respondent Nos.1 to 4-Claimants.

Factual background involving the case is that on 15.11.2010 at about 10 A.M. while the deceased was standing near Village-Alipada on N.H.-

203(B) running in between Puri and Brahmagiri to the left side of the road along with others in order to proceed to Puri, the offending bus bearing

Regn. No.OR02-K-2414 came from Brahmagiri side towards Puri being driven in rash and negligent manner, as a result of which the front left

bumper of the offending bus dashed against the deceased. Due to the impact on the accident, the deceased fell down and the bus ran over him

causing his death on the spot itself. Body of the victim was taken to the D.H.H., Puri by the local people where the doctor declared him dead.

Involving the incident Puri Sadar P.S.Case No.217 of 2010 was instituted against the Driver of the offending bus. On the premises that the deceased

was healthy, active person and working as a LIC Agent in Puri Branch and getting a monthly commission of Rs.15,000/- and this apart the deceased

was also getting Rs.3000/- per month from Tuition and his total income was Rs.18,000/- per month, the Claimants claimed that out of the aforesaid

income, the deceased was contributing a sum of Rs.12,000/- towards maintenance of the Claimants. Meeting with the untimely death of the deceased

at the age of 40 years, the Claimants being the legal heirs filed the Claim Application bearing MAC No.439/2010 but subsequently on being

transferred, it was registered as MAC No.312/439 of 2011/2010. Based on no appearance in spite of notice, the Owner-Opposite Party No.1 therein

was set ex parte. Opposite Party No.2-Insurance Company filed Written Statement where while denying all the allegations made in the Claim

Objection and calling upon the Claimants to prove the same by documentary evidence, it also denied that the Policy disclosed has nothing to do with

the accident on the premises that on the request for Policy No.2402702340000581, Opposite Party No.1 issued a cheque in favour of the Gramya

Bank on 1.9.2010 for a premium of Rs.17,522/- but it was dishonoured under intimation of insufficient money in the Account. The Insurance Company

also claimed that based on such intimation from the Bank, the Insurance Company issued a letter on 12.10.2010 intimating both Opposite Party No.1-

Owner as well as the R.T.O. itself invalidating the Insurance Policy right from its inception, i.e., on 4.9.2010. It is on the premises that there was no

valid insurance on the date of accident, the Insurance Company disowned the liability.

It is on the pleading, the Tribunal framed the following Issues :-

“I) Is the claim application maintainable ?

II) Whether the death of the deceased occurred in vehicular accident involving he offending vehicle and the said accident occurred due to rash and negligent driving

of its driver ?

III) If the petitioner entitled to get compensation if so, from which O.P. ?

IV) To what other relief ?â€​

Both parties produced documents and led evidence. Based on the materials available on record and the evidence from both sides

answering the Issues in favour of the Claimants and relying on certain decisions indicated therein, ultimately the Tribunal while allowing the Claim

Case on contest against Opposite Party No.2 and ex parte against Opposite Party No.1 directed the Insurance Company to pay compensation of

Rs.17,10,782/- to the Claimants with interest @ 7% per annum from the date of filing of the Case, i.e., 24.12.2010 till payment. The Tribunal also

formulated a scheme in the matter of release of the amount involved therein.

Assailing the judgment involving MAC No.312/439 of 2011/2010, Sri S.Satpathy, learned counsel for the Appellant-Insurance Company, taking this

Court to the plea of the Insurance Company in the Tribunal contended that the Insurance Company had a clear case that involving the Insurance

Policy No.2402702340000581, the Owner of the offending bus though got the Policy against a cheque of the Gramya Bank, Brahmagiri Branch

bearing No.250490 dated 1.9.2010 for clearing the premium amount of Rs.17,522/-, the cheque being placed in the Bank concerned was dishonoured

due to insufficient balance, which fact was intimated to Opposite Party No.2, the present Appellant, by their letter dated 17.9.2010. Sri Satapathy,

learned counsel for the Appellant submitted that after coming to know about bouncing of the cheque placed against the Insurance Policy, vide letter

dated 12.10.2010, the Appellant intimated the Owner about cancellation of the Policy from the date of inception, i.e., 4.9.2010. Simultaneously a

correspondence was also made to the R.T.O. for intimation of bus plying with an invalid Insurance Policy. It is at this stage, taking the discussions on

the evidence at the instance of the Insurance Company in reference to Exts.A to F through Opposite Party No.2, Sri Satapathy, learned counsel,

submitted that there has been a clear attempt attending to the call by the Insurance Company to establish the fact that though there was a Policy in

favour of the offending bus but however on the placing of cheque by the O.P.-Owner for realisation of a sum of Rs.17,522/-, it is thus claimed that the

Policy was issued under bona fide impression of realiastion of money and as a matter of confidence between the Policy Holder and the Insurer. The

cheque being placed, fact remain the cheque got dishonoured for having no money in the Account of Opposite Party-Owner but there has been also

evidence establishing that there has been a letter dated 12.10.2010 issued to both the Owner as well as the R.T.O. intimating therein the cancellation

of the Policy from the date of its inception, i.e., 4.9.2010. The letter has also been exhibited. It is on the basis that the cheque placed for purchase of

the Policy has bounced and the decision of the Insurance Company to cancel the Policy from its inception on 4.9.2010 and the incident having taken

place on 15.11.2010, even after two months the cheque got bounced, On the effective date there was in fact no Policy involving the bus. It is at this

stage, Sri Satapathy, learned counsel for the Appellant relied upon a decision of this Court in The B.M., Bajaj Allianz General Insurance Company

Ltd. & another vrs. Khirabati Mahakur & others reported in 2019(I) ILR -CUT-141. Sri Satapathy drawing the attention of this Court to the

discussions therein and in reference of a decision of the Hon’ble Supreme Court contended that the award is not only required to be interfered

with but the liability of compensation should also be shifted to the Owner involved herein.

Sri S.Swain, learned counsel for Respondent Nos.1 to 4-Claimants, however though did not dispute the fact of dishonour of the cheque taking out

validity of the Insurance Policy from the date of inception, further did not dispute the existence of a letter for intimation to the Owner regarding

invalidation of the Policy from its inception but however referring to the evidence led by the Insurance Company contended that for their own

submission, the Insurance Company failed in producing any document in establishing the service of copy of the letter dated 12.10.2010 either on the

Owner or the Registering Authority. Sri Swain contended that Insurance Company failed in establishing its claim. It is in this view of the matter, Sri

Swain, learned counsel for the Claimants in order to avoid further loss of time to the bereaved family contended that the Insurance Company should

be directed to pay the compensation and it may have a chance of recovery right.

Sri Swain, learned counsel, referring to the Cross Appeal involved herein contended that there has been wrong calculation in the matter of earning of

the deceased. The amount deducted towards Income Tax payment should not have been taken out from the income of the deceased and there is also

wrong application of multiplier and there should have been application of fifteen multiplier to the case at hand.

As indicated herein above, there is no participation of the Owner besides this Court from the lower court proceeding also finds, the Owner also did

not contest the case in the Tribunal.

Considering the rival contentions of the parties, this Court here finds, there is no dispute with regard to the accident taking place involving the

deceased, the sole bread-earner of the Claimants. There is also no dispute that the bus bearing Regn. No.OR02-K-2414 involves the accident.There is

also no dispute that on the basis of Policy No.2402702340000581, a Claim Objection was filed for realisation of appropriate claim on account of

untimely death of the deceased. From the submissions and discussions above, this Court finds, there cannot be any dispute that the cheque submitted

to purchase the Policy involved has been bounced with intimation of having no sufficient money in the Account of the Account Holder, the Owner.

For at least filing of a document by the Insurance Company, the letter dated 12.10.2010, this Court finds, there was a bona fide creation of Policy by

the Insurance Company under impression of the Owner having money in the Account. For bouncing of the cheque, for having no money in the

Account of the Owner for the opinion of this Court, it is a case where the Owner being aware of having no fund in the Account not only created a

false impression with the Insurer in order to purchase a Policy but also cheated the Insurance company and also was running a Bus having no Policy

favouring such running. The Policy though created but was under a bona fide impression of realisation of money. Once there is no realisation of

amount with the input that the Account against which the cheque was placed remain dry, this Court observes, the purchase of the Policy itself was

with bad intention. This Court finds, the cheque submitted by the Owner bounced on 17.9.2010 with intimation to the Owner stated to have been made

on 12.10.2010 and incident involving the accident took place on 15.11.2010. Therefore, here there are almost two months gap from the date of

bouncing of the cheque and the accident. Under no circumstance, it can be believed that the Owner having a Bank Account after providing a cheque

for realisation of the amount to have a Policy to run a bus remained silent in the matter of operation of such account for such long period and could not

be able to know that the cheque has been bounced and the Policy rolled back. Further for a bus being driven on the basis of such non-existing policy

the owner even did not attempt to regularize the policy before 15.11.2010. It is in the premises, this Court finds, the observation of the Tribunal on the

aspect of liability becomes wrong.

It is at this stage, this Court taking into account 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.), finds the Hon’ble Apex Court in paragraph-19 observed as follows:-

“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 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.

Decision referred to hereinabove has clear application to the case of the appellant and thus making the impugned award so far fixation of liability on

the Insurance Company becomes bad in law.

Besides above, this Court also finds Appellants case also gets support of a judgment of this Court in between the B.M., Bajaj Allianz General

Insurance Company Ltd. And another vs. Khirabati Mahakur & others, reported in 2019 (I) ILR â€" CUT-141.

It is at this stage, since this Appeal is filed by the Insurance Company only challenging the liability aspect, this Court find no case involving the

Insurance Company, interferes in the impugned award to the extent of liability only and in the process while holding that the fixation of liability by the

lower Court on the appellants-Insurance Company as bad, directs the owner for making over the compensation amount and also to comply other terms

and conditions in the impugned award.

This Court here considering the claim of the claimants on the calculation aspect as well as Income Tax deduction, entering into the discussion on

the income and for the ultimate entitlement held by the Tribunal, this Court is not inclined to entertain any further claim.

Accordingly, the MACA stands allowed. Consequently, the Cross Appeal stands rejected. No cost.