United India Insurance Co. Ltd. Vs Gouranga Devnath and 2 Ors.

Linked Case : MC/1811/2014 UNITED INDIA INSURANCE CO. LTD. HAVING ITS REGISTERED OFFICE AT 24 WHITES ROAD CHENNAI 600014 REPRESENTED BY ITS REGIONAL OFFICE G.S ROAD GUWAHATI-5 VERSUS GOURANGA DEVNATH and 2 ORS. S/O LATE ISHWAR H. DEVNATH R/O VILL. JAMUHANDAL P.S. HOJAI DIST. NAGAON ASSAM.

¶17

2:MD. AMIR HUSSAIN S/O LATE NAWAB HUSSAIN R/O VILL. BHUYAN PATTY P.O. and P.S. HOJAI DIST. NAGAON ASSAM.

¶18

3:MD. ABUL ALI S/O LATE ARBAN ALI R/O VILL. JAMUHANDAL P.S. HOJAI DIST. NAGAON ASSAM. -----------Advocate for : MS.L SHARMA Advocate for : appearing for GOURANGA DEVNATH and 2 ORS.

¶19

BEFORE

¶20

HONOURABLE MRS. JUSTICE MARLI VANKUNG

¶21

ORDER

¶22

Date : 11-03-2025

¶23

Heard Mr. H. Buragohain, learned counsel for the appellant. None appeared for the respondents.

¶24

Page No.# 3/10

¶25

2. It is seen that this Court in its Order dated 25.06.2024 held that notice is deemed to be complete upon the respondents, by noting that the affidavit filed on 11.11.2019 along with the copies of the “Asomai Pratidin” and The Assam Tribune” dated 12.10.2019 contained the notice issued in connection with the present appeal through newspaper publication. It was also seen that the appeal was admitted long back on 19.06.2014 and this Court in its Order dated 25.06.2024 had also dispensed with the requirement of taking further steps by registered post with A/D. The matter has been kept pending awaiting for the respondents to be duly represented, and it is seen that the respondents remain unrepresented till date.

¶26

3. In view of the above, this Court finds it fit to proceed with the hearing of the matter in the absence of the respondents.

¶27

4. Brief facts of the case is that on 15.03.2014, the claimants while returning from Doboka market on foot at Mikir Ati vehicle bearing registration No. AS 01X 2787 driven in a rash manner hit him from behind causing injuries to his person. Immediately after the accident, he was taken to HAMM hospital thereafter to GMCH, Guwahati. The incident was registered as Doboka PS Case No. 31/12 and the claimant arrayed the owner, driver and the Insurance Company as Opposite Party Nos. 1, 2 & 3 respectively. Opposite Party Nos. 1 & 2 did not appear before the Tribunal and hence, the case proceeded ex-parte against them. The Opposite Party No. 3/Insurance Company filed the WS denying the averments made in the claim petition by stating that the incident occurred on 15.03.2012 but the Insurance Policy No. 131002/31/10/02/00001951 issued by the Opposite Party No. 3/Insurance Company was valid from 04.03.2011 to midnight on 03.03.2012 and thus, on the day of the incident, the Opposite Party No. 1/owner of the vehicle had no valid Insurance Policy.

¶28

Page No.# 4/10

¶29

5. The following issues were framed by the learned Tribunal:-

¶30

(1) Whether the claimant sustained injuries when the vehicle bearing registration No. AS 01 X 2787 (Altro) hit him from behind?

¶31

(2) Whether the accident occurred due to the fault on the part of the driver of the offending vehicle?

¶32

(3) Whether the claimant is entitled for compensation from the owner or insurer of the offending vehicle and to what extent?

¶33

The claimant adduced his evidence as PW 1 and exhibited his medical documents and Form No. 54.

¶34

6. The learned Trial Court, after hearing the counsel for the claimant and Opposite Party No. 3/Insurance Company held that the accident was proved and found the claimant entitled for compensation of Rs. 80,108/- by finding that the claimant incurred an expenditure of Rs. 30,108/- for his medical treatment, Rs. 25,000/- was fixed for his future medical treatment and Rs. 25,000/- was fixed for none pecuniary damages. The Opposite Party No. 3/Insurance Company was directed to pay the compensation with an interest @6% p.a. within a period of 3 (three) months from the date of filing the case.

¶35

7. The learned Trial Court, after further held that though by the date of the incident, the insured policy was beyond the period mentioned in the said Insurance Policy No.131002/31/10/02/00001951, however, since the claimant is the third party, therefore, insurer cannot be absolved from paying compensation to the claimant only because of the fact that the incident occurred beyond the period from which the Insurance Policy was issued. The learned Tribunal relied upon the judgment of the Division Bench of Allahabad High Court

¶36

Page No.# 5/10

¶37

in a case of National Insurance Co. Ltd. Vs. Jitendra Kumar & Ors., reported in AIR 2009 (ALL) 790 by observing that there is no proof that notice was issued by the insurer to the R.T.I or police to seize the offending vehicle Insurance Policy of which expired on 03.03.2024 and the accident occurred on 15.03.2012. Thus, the Insurer, Opposite Party No. 3 cannot be absolved from paying the compensation to the claimant.

¶38

8. Mr. H. Buragohain, learned counsel for the appellant submits that the impugned Judgment dated 03.04.2014 passed by the learned Motor Accident Claims Tribunal, Hojai, Sankardev Nagar in MAC Case No. 180(N)/12 is liable to be set aside, since the documents on record show that the Insurance Policy No. 131002/31/10/02/00001951 between the owner of the vehicle and the Insurance Company was valid from 04.03.2011 to midnight on 03.03.2012. Thus, when the incident occurred on 15.03.2012, the Insurance Company is not liable to pay the awarded amount and submits that it was not disputed before the Tribunal that the Insurance Policy was no longer valid. The learned counsel also submits that on the expiry of the Insurance Policy, it is not the duty of the Insurance Company to inform the owner of the vehicle regarding the expiry of the validity of the Insurance Police, since the insurer could prefer to have the vehicle insured with another Insurance Company and not necessarily with the same Insurance Company. He submits that the judgment of the Division Bench in National Insurance Co. Ltd. Vs. Jitendra Kumar & Ors., reported in AIR 2009 (ALL) 790 is not applicable in the case, since the cited case deals with the insurance policy which was cancelled by the Insurance Company wherein it was held that being a third party insurance company should inform all concerned.

¶39

9. Having considered the submissions made by the learned counsel for the appellant and on perusal of the impugned judgment of the learned Tribunal dated 25.06.2024, it is seen

¶40

Page No.# 6/10

¶41

that the learned Tribunal had held that the insurer cannot be absolved from paying compensation to the claimant only because of the fact that the incident occurred beyond the period for which the Insurance Policy was issued by relying on the judgment of the Division Bench of Allahabad High Court in a case of National Insurance Co. Ltd. Vs. Jitendra Kumar & Ors., reported in AIR 2009 (ALL) 790 wherein it was held that being a third party insurance company, the Insurance Company should inform all concerned inclusive of the Regional Transport Authority and the appropriate police authority dealing with traffic simultaneously with the information of cancellation of the insurance coverage to the owner/insured. It was observed that (quote) - “As per the scheme of the Act such assurance is to be given not only to the insured but also to the third parties who sustained injury or succumbed death due to road accident and their legal representatives. They are not aware about the import period and extent of the contract between the insurer and the insured. They are also not aware about any default. They presuppose that when a vehicle runs in the public place, it has all valid documents to run. One of such valid documents is contract of insurance between the insurer and insured to cover the third party risk. In that way knowledge or information for not having valid insurance coverage by the insurance company to the Regional Transport Authority and appropriate police authority deals with traffic is mandatory in nature. Insurers can not be allowed to wait and watch like usual commercial enterprises and take defence of not having insurance coverage only after the accident when the claim will arise. As soon as an insurer enters into a contract with insured under the Act, it becomes statutorily liable to the third parties. On the other hand, the Act itself is a beneficial piece of legislation for the third parties. Therefore, whenever we sit in this jurisdiction, we should not be forgetful about predominant effect of such Act. Interest of the affected persons will be considered at first.

¶42

Page No.# 7/10

¶43

Equity follows law by applying the maxim of Acquitas sequitur legem but sometimes law follows equity by the maxim of Lex aliquando sequitur aequitatem particularly when equity emerges into the law relevant for the purpose. Therefore, it is essential for the insurer to take a defence before the tribunal that it had not only cancelled the insurance coverage and informed the insured but also simultaneously intimated all concerned to prevent the vehicle from plying on the road otherwise it can not avoid the liability to pay compensation to the third parties specially in the form of stop gap arrangement and recover from the owner i.e. insured. When the insurance coverage under the Act is compulsory, it has two fold duties i.e. prevention and compensation. When they have discharged their duty of prevention in absence of coverage by notice to the appropriate authorities, their liability can be extinguished and the authorities will be strictly liable to ensure seizure of such vehicle from the public place for not having insurance coverage. Notice to them means notice to public. In absence of the same an insurance company cannot be discharged from their liability to make payment of compensation to a third party even as a stop gap arrangement.”

¶44

10. This Court, while being in full agreement with the observations made by the court in the above cited case, finds that the above cited case may not applicable in the instant case wherein the facts are found to be different. It is seen that in the cited case the insurer had cancelled the insurance coverage and failed to inform the insurer and also failed to simultaneously intimated all concerned to prevent the vehicle plying on the road otherwise. However, in the present case, at the time of the accident which occurred on 15.03.2024, there was no valid Insurance Policy, because the Insurance Policy and the documents on record show that the Insurance Policy No. 131002/31/10/02/00001951 between the owner of the vehicle and the Insurance Company was valid from 04.03.2011 to midnight on

¶45

Page No.# 8/10

¶46

03.03.2012. There is no evidence that shows that steps were taken to renew the policy by the owner of the accident vehicle. Therefore, this court finds it fit to interfere with the judgment and order of the learned Tribunal on finding that there was no insurance coverage at the time of the accident.

¶47

11. This court finds it fit to refer to the findings of the Apex court in Oriental Insurance Co. Ltd. v. Sunita Rathi, reported in (1998) 1 SCC 365 wherein it was held that (quote):-

¶48

“2. The motor accident occurred on 10-12-1991 at 2.20 p.m. It was only thereafter the same day at 2.55 p.m. that the insurance policy and the cover note were obtained by the insured, owner of the motor vehicle involved in the accident. There is express mention in the cover note that the effective date and time of commencement of the insurance for the purpose of the Act was 10-12-1991 at 2.55 p.m. The applicability of the decision in Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] has to be considered on these facts. In our opinion the decision in Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] is distinguishable and has no application to the facts of this case. The facts of that decision show that the time of issuance of the policy was not mentioned therein and the question, therefore, was of presumption when the date alone was mentioned and not the time at which the insurance was to become effective on that date. In such a situation, it was held in Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] that in the absence of any specific time being mentioned, the logical inference to draw was that the insurance became effective from the previous midnight and, therefore, for an accident which took place on the date of the policy, the insurer became liable. There is no such difficulty in the present case in view of the clear finding based on undisputed facts that the accident occurred at 2.20 p.m. and the cover note was obtained

¶49

Page No.# 9/10

¶50

only thereafter at 2.55 p.m. in which it was expressly mentioned that the effective date and time of commencement of the insurance for the purpose of the Act was 10-12-1991 at 2.55 p.m. The reliance on Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] by the Tribunal and the High Court was, therefore, misplaced. We find that in a similar situation, the same view which we have taken, was also the view in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi [(1997) 1 SCC 66 : (1996) 8 Scale 695] wherein Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] was distinguished on the same basis.

¶51

It follows that the insurer cannot be held liable on the basis of the above policy in the present case and, therefore, the liability has to be of the owner of the vehicle. However, we find that the High Court, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the High Court on this point.”

¶52

12. This court finds that the above decision of the Apex Court is aptly applicable in the present case, since it is an undisputed fact that there was no insurance policy on the date of the accident and thus, the Insurance Company cannot be held liable. The awarded amount of Rs. 80,108/- is also not disputed.

¶53

13. In view of the above, the impugned award of the learned Tribunal stands modified to the extent that the owner of the offending vehicle being registration No. AS 01X 2787 is not

¶54

Page No.# 10/10

¶55

absolved from his liability and the right of the claimant to claim the awarded amount survives.

¶56

14. Accordingly, the impugned judgment and order stands interfered with to the extent that the claimant is entitled for compensation of Rs. 80,108/- with an interest at the rate of 6% P.A from the date of filing the case and the claimant is at the liberty to take necessary steps as per law for recovery of the awarded amount from the owner of the accident vehicle.

¶57

15. MAC App. No. 157/2014 is thus disposed of with the above observations.

¶58

JUDGE

¶59

Comparing Assistant

United India Insurance Co. Ltd. v. Gouranga Devnath and 2 Ors.

Case brief

What is this about?

What did the court decide?

United India Insurance Co. Ltd. v. Gouranga Devnath and 2 Ors.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Procedural history

Parties & counsel

Coram

Case details

Similar cases

New India Assurance Company Ltd. Vs Ashanta Saikia and 2 Ors.

Dr. Tulumoni Devi Vs Dr. Nirada Devi and 3 Ors.

Hanif Uddin Vs Suranjana Senapati , Acs

Oriental Insurance Company Ltd. Vs Musstt Minara Begum Laskar and 2 Ors.

United India Insurance Co. Ltd. Vs Gouranga Devnath and 2 Ors.

Rofiqul Islam Sheikh Vs Suranjana Senapati, Acs