Motor accident appeal seeking enhancement of award and shifting liability from the vehicle owner to the insurer after policy cancellation on cheque dishonour was not intimated to the RTO. The court enhanced compensation to Rs.8,41,400 with reduced interest and gave the insurer right of recovery against the owner.
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IN THE HIGH COURT OF ORISSA AT CUTTACK
MACA No.102 OF 2018
From the Judgment/Order dated 02.11.2017 passed by the learned 2nd MACT, Northern Division, Sambalpur in MAC Case No.189 of 2011.
Tapaswini Besan & Ors. :::: Appellants
-:: VERSUS ::-
Nabin Ku. Adwani & Anr. :::: Respondents For Appellants :::: Mr. P.K. Mishra, Advocate (Claimants) For Respondent :::: Mr. P.K. Mahali, Advocate (Respondent No. 2)
………
PRESENT :
THE HON’BLE MR. JUSTICE BIRAJA PRASANNA SATAPATHY
---------------------------------------------------------------------------------Date of Hearing- 12.12.2024 :: Date of Judgment- 12.12.2024 ---------------------------------------------------------------------------------- B.P. Satapathy, J. This matter is taken up through Hybrid Arrangement (Virtual/Physical) Mode.
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4.1. However, placing reliance on the decision of the Hon’ble Apex Court in the case of United India Insurance Co. Ltd. Vs. Laxmamma , (2012) 5 SCC 234, learned counsel for the Appellants contended that in view of the said decision, since factum of cancellation of the policy was never intimated to the concerned RTO, Respondent No. 2-Company is liable to pay the compensation with right of recovery as against Owner-Respondent No. 1. Hon’ble Apex Court in Para 26 of the aforesaid Judgment has held as follows:-
"26. In our view, the legal position is this: where the policy of insurance is issued by an authorised insurer on receipt of cheque towards the payment of premium and such a cheque is returned dishonoured, the liability of the authorised insurer to indemnify the third parties in respect of the liability which that policy covered subsists and it has to satisfy the award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the MV Act unless the policy of insurance is cancelled by the authorised 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 authorised insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonoured and
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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."
4.2. It is also contended that the Tribunal while assessing the compensation at Rs.5,66,000/- with interest @ 7.5% per annum did not award any compensation towards future prospect as well as general damages.
4.3. It is contended that if the Tribunal would have awarded compensation towards future prospect and general damages, the total compensation amount would have been calculated at Rs.8,41,400/-. It is accordingly contended that not only the award so passed by the Tribunal is required to be enhanced to Rs.8,41,400/but also the liability should be saddled on Respondent No. 2, with right of recovery as against Respondent No. 1 in view of the decision of the Hon’ble Apex Court as cited (supra).
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with right of recovery as against Owner-Respondent, this Court may interfere with regard to the rate of interest so allowed.
7.1. This Court accordingly while holding so, directs the AppellantCompany to deposit compensation amount of Rs.8,41,400/- along with interest @ 6% per annum payable from the date of filing of the claim application till its realization within a period of eight (8) weeks from the date of receipt of this order. On such deposit of the amount, the Tribunal shall disburse the same in favour of the Claimant-Appellant in terms of the Judgment passed on 02.11.2017.
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7.2. However, it is observed that if the amount as directed will not be deposited by the Respondent-Company within the aforesaid time period of eight (8) weeks, the compensation amount of Rs.8,41,400/- shall carry interest @ 7% per annum payable for the period starting from the expiry of the period of eight (8) weeks till its payment.
7.3. It is further observed that if any application is filed by the Respondent-Company to recover the amount from the OwnerRespondent, the Tribunal shall do well to dispose of the application in accordance with law and by giving due opportunity of hearing to the Owner-Respondent.
(BIRAJA PRASANNA SATAPATHY) Judge
Orissa High Court, Cuttack The 12th December, 2024/Sneha
Signature Not Verified
Digitally Signed Signed by: SNEHANJALI PARIDA Designation: Sr. Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 19-Dec-2024 12:31:10
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2 issues framed by the court
Whether the insurer is liable to pay compensation when the policy was cancelled due to dishonour of premium cheque without intimation of cancellation reaching the RTO.
Whether the compensation should be enhanced for future prospects and general damages.
Colour shows how this judgement treated each authority
United India Insurance Co. Ltd. Vs. LaxmammaRelied on¶7
(2012) 5 SCC 234 · Who else cites this
Tapaswini Besan & Ors.
Nabin Ku. Adwani & Anr.
Biraja Prasanna Satapathy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
