Dismissed

The Oriental Insurance Co. Ltd. v. Miss v Tejaswini

Karnataka HC5 Jun 2012MFA/823/2008

Case brief

AI extract

What is this about?

This appeal against a tribunal awarding compensation following a motor vehicle accident was dismissed. The High Court held the insurer liable because it failed to prove, via the postal receipt, that intimation of policy cancellation due to a dishonoured cheque was served on the owner before the accident.

What did the court decide?

The appeal was dismissed. The statutory deposit made before the Court was ordered to be transferred to the concerned Tribunal for disbursement.

The Oriental Insurance Co. Ltd. Vs Miss v… — Pension and Retirement Benefits | Karnataka HC (2012)

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

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DATED THIS THE 5TH DAY OF JUNE 2012

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BEFORE

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THE HON’BLE MR JUSTICE K. N. KESHAVANARAYANA

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M.F.A. No.823/2008 (MV)

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BETWEEN:

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The Oriental Insurance Co. Ltd., Bangalore-560 027. Through its Regional Office, Leo Shopping Complex, No.44/45, Residency Road, Bangalore-560 025. Represented by its Manager, Sri.K.Varadarajan

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…..Appellant

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(By Sri.B.C.Seetharama Rao, Advocate)

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AND :

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Miss.V.Tejaswini, D/o late Seetharamaiah, Aged about 26 years.

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Smt.Narayanamma, W/o late Thippaiah, Aged about 81 years. Both are Residing at Petechamanahalli, Kolar.

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Sri.K.A.Ramaiah Reddy, Major, S/o Abbaiah Reddy, No.357, 3rd Cross, Cambridge Layout,

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Ulsoor, Bangalore-560 008. (Owner of Maruthi Car No.KA-03/N-396

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….Respondents

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(By Sri.P.N.Hegde, Advocate for R-1 & R-2; R-3 served)

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This Miscellaneous First Appeal is filed under Section 173 (1) of MV Act, against the judgment and award dated 12.10.2007 passed in MVC No.292/2001 on the file of Civil Judge (Sr.Dn), & CJM, Kolar, awarding a compensation of Rs.2,45,000/-.

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This Appeal coming for admission on this day, the court delivered the following:

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J U D G M E N T

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This appeal by the Insurance Company is directed against the judgment and award dated 12.10.2007 passed by the Civil Judge (Sr.Dn.) and CJM, Kolar, in MVC No.292/2001.

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The appellant-Insurer is aggrieved by the order of the Tribunal fastening the liability to pay compensation determined. Respondents – 1 & 2 filed claim petition before the Tribunal seeking

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compensation for the death of Seetharamaiah, the father of the 1^st claimant and son of the 2^nd claimant.

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The said Seetharamaiah said to have died

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in the motor vehicle accident that occurred at about 9.50 am on 14.01.2001 on Tekal Bye-pass Road, N.H.-4, in Kolar District. Respondent No.3 is the owner of the offending vehicle namely Maruthi Car bearing registration No. KA.03.N.369. The owner of the offending vehicle did not contest the petition, though he appeared through his counsel. The appellant-Insurance Company contested the petition only on the ground that the policy issued covering vehicle in question has been subsequently cancelled

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on account of dishonour of the cheque issued by the owner towards the insurance premium, as such, as on the date of the accident, there was no valid policy in force, therefore, the insurer is not liable to indemnify the insured even in respect of the claim by the 3^rd parties. The parties, in support of their

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respective case, led evidence. The Insurance Company produced the returned cheque and other documents as well as the letter said to have written to the insured intimating him the cancellation of the policy and also the postal acknowledgement for serving the said letter on the insured-owner of the vehicle.

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The Tribunal on assessment of the oral and documentary evidence by the judgment dated 21.11.2005 allowed the petition, quantified the compensation payable at Rs.2,45,000/-. However, the Tribunal did not accept the contention raised by the appellant-Insurance Company regarding cancellation of the policy and the intimation of such cancellation to the owner of the vehicle. Therefore, the Tribunal held that the insurer is liable to indemnify the insured in respect of the claim of the claimants. In this view of the matter, the Tribunal directed the Insurance Company to deposit the entire

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compensation with interest. Aggrieved by the said judgment and award, the appellant preferred appeal before this Court in MFA No.371/2006. The said appeal was disposed of by judgment dated 10.04.2007 remanding the matter to the Tribunal for fresh consideration with regard to the liability of the Insurance Company to indemnify the insured.

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As could be seen from the judgment of this Court, at the hearing, it was contended on behalf of the Insurance Company that they would produce the postal receipt for having dispatched the letter of cancellation to the owner and it was to enable the appellant-Insurance Company to produce the postal receipt and to adduce evidence in that respect, the matter was remanded. After remand, on behalf of the Insurance Company, one Sri. Selvam was examined as RW.2. However, no further documents were produced before the Tribunal. After hearing, the Tribunal by the judgment under appeal held that the

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Insurance Company has failed to prove that it has intimated the owner of the vehicle regarding cancellation of the policy issued on account of dishonour of the cheque issued by him. In this view of the matter, the Tribunal held that the Insurance Company is liable to pay the determined compensation to the claimants. Aggrieved by the said judgment, the Insurance Company is before this Court in this appeal, for the second time.

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I have heard Sri. B.C. Seetharama Rao,

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learned counsel for the appellant and perused the records secured from the Tribunal.

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It is the contention of the learned counsel

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for the appellant that the Tribunal has failed to consider the postal acknowledgement-Ex.R8, which would clearly prove that the letter of cancellation of policy has been served on the owner of the vehicle long prior to the accident, therefore, as on the date of accident, there was no valid policy in force, as such,

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the insurer is not liable to pay compensation. It is also his contention that the owner of the vehicle has not disputed the receipt of the letter as evidenced by the postal acknowledgement-Ex.R8. Therefore, the Tribunal is not justified in rejecting Ex.R8 on the ground that it does not bear the round seal of the Post Office, therefore, he sought for admission of appeal for consideration.

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As noticed supra, Ex.R8, which is said to be the postal acknowledgement to evidence service of letter of cancellation of the policy on the owner of the vehicle had been produced at the first instance itself. The Tribunal while deciding the petition, at the first instance, had an occasion to look into Ex.R8 and had rejected the same as acknowledgement for having served letter of cancellation on the owner of the vehicle. In the appeal filed before this Court on the earlier occasion, the only question urged was the postal receipt for having dispatched the letter of

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cancellation to the owner of the vehicle is in possession of the Insurance Company and it would be produced as evidence in proof of having dispatched the letter of cancellation. It is on the basis of such submission made before this Court, the matter was remitted to the Tribunal for giving an opportunity to the Insurance Company to produce such additional evidence. If Ex.R8 itself was sufficient proof of service of letter of cancellation on the owner of the vehicle, there was no reason for this Court to have remanded the matter to the Tribunal. From the very fact that this Court remanded the matter to the Tribunal to give further opportunity to the Insurance Company to produce postal receipt for having dispatched the letter of cancellation would indicate that this Court did not accept Ex.R8 as proof of service of said letter on the owner of the vehicle. The Tribunal on remand of the matter, has considered the genuineness of Ex.R8 and has come

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to the conclusion that Ex.R8 does not bear the round seal of the Post Office from where the letter was dispatched and acknowledgement was returned.

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Perusal of Ex.R8 indicates that there is

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no round seal of the Post Office on the said acknowledgement. Of course the owner of the vehicle having not participated in the proceedings except appearing through the counsel, it can be presumed that he has not disputed Ex.R8. However, before non-suiting the claim as against the Insurance Company, it is necessary to consider as to whether Ex.R8 is the document which could be accepted as proof of service of letter of cancellation on the owner of the vehicle. The fact that Ex.R8 does not bear round seal of Post Office creates great amount of doubt about its genuineness. In addition to this, though this Court remanded the matter to afford further opportunity to the Insurance Company to produce postal receipt for having dispatched such

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letter, appellant/Insurance Company did not avail the said opportunity and did not produce the postal receipt. On the other hand, RW.2, who was examined after remand, in his evidence has categorically stated that the postal receipt for having dispatched such letter is not in possession of the Company. It is pertinent to note at this stage that, another official of the Insurance Company, who had been examined on the earlier occasion as RW.1, in his evidence had stated that the postal receipt for having dispatched the letter of cancellation is in the company’s possession, but it is not produced. If the statement of RW.1 is accepted, then it is clear that the said receipt is in possession of the Company, but deliberately it has not been produced before the Tribunal though a submission was made before this Court that the said receipt would be produced. So, non-production of the document which is in possession of the Appellant-Insurance Company

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would entails drawing of an adverse inference against the appellant. In this view of the matter, the Tribunal in my opinion, is justified in holding that the appellant-Insurance Company has not proved that the letter of cancellation, cancelling the insurance policy has been served on the owner of the vehicle.

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The Apex Court in a recent decision in the case of UNITED INSURANCE COMPANY LTD. VS. LAXMAMMA [2012 ACJ 1307] has summarised the legal position in this regard in Para-19, which reads as under:-

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“ In our view, the legal position is this: where the policy of insurance is issued by an authorised insurer on receipt of cheque towards payment of premium and such cheque is returned dishonoured, the liability of authorised 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

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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.”

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In the absence of any satisfactory evidence

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in proof of dispatch and service of letter of cancellation on the owner of the vehicle, as ruled in the aforesaid decision, the insurer is liable to pay the compensation payable to the claimants. However, it is open to the Insurance Company to proceed against the owner of the vehicle in accordance with law.

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In view of the above discussion, the appeal is dismissed.

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The statutory deposit made before this Court is

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ordered to be transferred to the concerned Tribunal for the purpose of disbursement.

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SD/JUDGE

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KGR*

The Oriental Insurance Co. Ltd. v. Miss v Tejaswini

Case brief

What is this about?

What did the court decide?

The Oriental Insurance Co. Ltd. v. Miss v Tejaswini

Case brief

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What did the court decide?

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