Icici Lombard motor Insurance Co.Ltd. Vs Jayakrushna Sahoo

2. Since in spite of due publication of the notice in the newspaper, nobody has entered appearance on behalf Respondent No.3, notice against Respondent No.3 is treated as sufficient. Notice against Respondent No.2 has already been held sufficient vide order dtd.13.03.2024. However in spite of appearance, no one is there on behalf of Respondent No.2.

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3. Heard learned counsel appearing for the Parties.

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4. Considering the grounds taken in the I.A, the delay in filing of the appeal is condoned.

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5. Accordingly, the I.A stands disposed of.

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(Biraja Prasanna Satapathy)

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Judge

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// 2 //

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MACA No.235 of 2018

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----------------------------------------------------------------------------Date of Hearing: 07.12.2024 and Date of Judgment:07.12.2024 -----------------------------------------------------------------------------

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Biraja Prasanna Satapathy, J .

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1. Heard learned counsel appearing for the Appellant and claimant-Respondent No.1. In spite of appearance, no counsel is there on behalf of Respondent No.2. Similarly, in spite of due service of notice by way of paper publication, no one has entered appearance for Respondent No.3.

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2. This appeal has been filed by the AppellantCompany challenging Judgment dtd.28.11.2017 so passed by the learned 1^st MACT, Dhenkanal in M.A.C Case No. 73 of 2010. Vide the said Judgment the Tribunal assessed the compensation at Rs.7,72,800/along with interest @ 7% per annum payable from the date of filing of the claim application till its realization.

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3. It is contended that the Tribunal while awarding the compensation did not take into consideration the fact that the policy issued in favour of the offending vehicle was not a policy in the eye of law as the cheque submitted by the owner of the offending vehicle was dishonored by the Bank for insufficient fund. Not only that the cancellation

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of the policy was also intimated to the owner of the offending vehicle.

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3.1. It is contended that since the policy issued in favour of the offending vehicle was cancelled due to dishonor of the cheque, it is to be held that there was no policy on the date of accident. But the said fact was not taken into consideration by the Tribunal in its proper perspective.

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3.2 . It is also contended that the Tribunal without any material wrongly held the monthly income of the injured at Rs.3,800/- per month relying on a pay slip issued for the month of November, 2008 when the accident took place on 18.07.2009.

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3.3 . It is also contended that the Tribunal awarded compensation on the higher side towards treatment of the injured.

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4. Making all the submissions, learned counsel for the appellant contended that the impugned judgment needs interference of this Court and the appellant-company is not at all liable to pay the compensation as directed.

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5. Mr. P.K. Mishra, learned counsel appearing for the claimants-respondents on the other hand placed reliance on the decision rendered by this Court in MACA No.128/2021 disposed of on 20.03.2023. It is contended that this Court placing reliance on the decision of the

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Apex Court in the case of United India Insurance Company Limited vs. Laxmamma & Others , reported in (2012) 5 SCC 234, held that since admittedly the policy was issued in favour of the offending vehicle and subsequently it was cancelled due to dishonor of the cheque so provided by the owner of the offending vehicle while taking the policy, the Tribunal has rightly held the appellant liable to pay the compensation. But in view of the aforesaid decision right of recovery could have been allowed by the Tribunal in favour of the appellantcompany. Hon’ble Apex Court in Para-26 of the judgment has held as follows:-

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“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 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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6. However, in course of hearing, learned counsel

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appearing for the Claimant-Respondent contended that Claimant/Respondent No.1 will have no grievance if this Court will award compensation to the tune of Rs.7,20,000/- along with interest @ 6 % payable from the date of application till its realization.

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7. Learned counsel appearing for the appellant to the aforesaid proposition so laid by the learned counsel for the claimants-Respondents leave it to the discretion of this Court.

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8. Having heard learned counsel appearing for the Parties and considering the submissions made and placing reliance on the decision in the case of Laxmamma as cited (supra), so followed by this Court, this Court is of the view that even though the policy taken by the owner of the offending vehicle was cancelled due to dishonor of the cheque, but since the said fact was never brought to the notice of the concerned Regional Transport Officer, no illegality or irregularity can be found with regard to the liability fixed on the appellant-company. Since no document has been produced and exhibited showing that the factum of cancellation of the policy was ever communicated to the concerned RTO, the appellantcompany is liable to pay the compensation, however with right of recovery as against the owner of the offending vehicle-Respondent No.3.

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8.1 . However, considering the submissions made by the learned counsel appearing for the Claimant-Respondent No.1, this Court while interfering with the impugned award, held the claimant-respondent No.1 entitled to get compensation amount of Rs.7,20,000/- along with interest @ 6% per annum payable per annum payable from the date of filing of the claim application till its realization. This Court directs the appellant to deposit the compensation amount along with interest as indicated, before the Tribunal 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-Respondent No.1 in terms of the judgment dtd.28.11.2017.

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8.2 . However, it is observed that if the compensation amount as directed will not be deposited by the Appellant-Company within the aforesaid time period of eight (8) weeks, the compensation amount of Rs.7,20,000/- shall carry interest @ 7% per annum payable for the period starting from the expiry of the period of eight (8) weeks till its payment.

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8.3. It is also observed that in the event any such application is moved for recovery of the amount from the Owner-Respondent No.3, the Tribunal shall deal with the same in accordance with law and by giving due opportunity of hearing to the Owner-Respondent.

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8.4 . It is further observed that only after deposit of the entire amount as directed, Appellant-Company shall be permitted to take refund of the statutory deposit along with accrued interest, if any, from the Registry on proper identification.

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9 . Accordingly, the MACA stands disposed of.

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(Biraja Prasanna Satapathy) Judge

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Orissa High Court, Cuttack Dated the 5^th of December, 2024/Subrat

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Signature Not Verified

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Digitally Signed Signed by: SUBRAT KUMAR BARIK Reason: Authentication Location: HIGH COURT OF ORISSA, CU TTACK Date: 13-Dec-2024 11:26:33

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Icici Lombard motor Insurance Co.Ltd. v. Jayakrushna Sahoo

Case brief

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Icici Lombard motor Insurance Co.Ltd. v. Jayakrushna Sahoo

Case brief

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What the court decided

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