Partly allowed

Divisional Manager,New India Assurance Co.Ltd. v. Nisamani Rath

Orissa HC8 Apr 2024MACA/43/2018

Case brief

AI extract

What is this about?

Insurance company appealed the MACT award on liability and quantum in a motor accident claim. The court held claimants were not prejudiced by policy-cancellation intimation issues, confirmed pay-and-recover against the vehicle owner, reduced non-pecuniary damages to Rs.70,000, set interest at 6%, removed penal interest, and modified the award to Rs.41,70,920.

What did the court decide?

Award modified; insurer to deposit Rs.41,70,920 with 6% interest from 05.11.2008 within eight weeks; no penal interest; recovery right against respondent No.4 confirmed.

Divisional Manager,New India Assurance Co.Ltd. Vs Nisamani Rath — Insurance | Orissa HC (2024)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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MACA No.43 of 2018

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The Divisional Manger, New India …. Appellant Assurance Company Limited, Berhampur

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Mr. G.P. Dutta, Advocate

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-Versus-

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Smt. Nisamani Rath & Others

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…. Respondents

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Mr. K.N. Tripathy, Advocate CORAM:

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MR. JUSTICE R.K. PATTANAIK ORDER

08.04.2024

Order No.

Heard Mr. Dutta, learned counsel for the appellant Insurance Company and Mr. Tripathy, learned counsel for claimants respondent Nos.1 to 3.

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None appears for respondent No.4 at the time of call.

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Instant appeal is filed by the appellant Insurance Company challenging the liability and quantum of compensation directed in MAC Case No.40 of 2014 by the learned 2^nd MACT, (Southern Division), Berhampur, Ganjam on the grounds stated therein.

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Mr. Dutta, learned counsel for the appellant Insurance Company would submit that learned Tribunal fell in to error in concluding that the intimation was not received by respondent No.4 despite evidence on record. It is further submitted that the amount of compensation is required to be reduced since on the head of non-pecuniary damages, a sum of Rs.2,55,000/- is allowed

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Page 1 of 4

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which should have been Rs.70,000/- instead. Furthermore, Mr. Dutta submits that the rate of interest should have been 6% in place of 7% and there is no reason behind imposing panel interest @ 9%.

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On the other hand, Mr. Tripathy, learned counsel for claimants respondent Nos.1 to 3 submits that there has been no intimation regarding cancellation of insurance policy to respondent No.4 as it has been held by learned Tribunal, which is based on evidence received. In reply and response to the above, Mr. Dutta refers to postal receipt and a copy of the Dispatch Register to claim that such intimation was issued to respondent No.4 regarding the cancellation of the policy. To counter the same, Mr. Tripathy, learned counsel for the claimants respondent Nos.1 to 3 submits that such Dispatch Register was not produced and proved before learned Tribunal. It is contended that there has been no plea and any documentary evidence in support of any such intimation duly served on respondent No.4, namely, owner of the offending vehicle. Mr. Dutta, learned counsel for the appellant Insurance Company submits that in any case, it is not likely to affect the claimants respondent Nos.1 to 3, all the more when, respondent No.4 was ex-parte and when Ext. H i.e. letter of intimation of the owner was not challenged. It is claimed that if any such intimation is issued in correct address of the owner of the offending vehicle, it is to be presumed that the same was delivered to him.

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There has been a finding by learned Tribunal regarding absence of any such evidence like postal receipt or acknowledgment regarding proof of service of letter of intimation regarding cancellation of insurance on respondent No.4 but in course of hearing today, a copy of the Dispatch Register is produced along

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Page 2 of 4

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with the original postal receipt. The Court is of the considered view that any such intimation is not likely to prejudice the claimants respondent Nos.1 to 3. The Court however finds that the appellant Insurance Company is to cover the risk but realize the compensation amount from respondent No.4 for the reason that the intimation was not sent to RTO which stands admitted by OPW No.1, the fact which has been taken cognizance of by learned Tribunal. In any case, absence of any such intimation duly sent to the RTO, the appellant Insurance Company has to pay the compensation to the claimants respondent Nos.1 to 3 and to recovery the same from respondent No.4, which has been directed by learned Tribunal as well.

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With respect to the compensation amount, it is not in dispute that on the head of non-pecuniary damages, an amount of Rs.2,55,000/- is allowed, which is not in accordance with law. An amount of Rs.70,000/- is permissible on such head and to that extent, the compensation amount is to be reduced. Furthermore, interest @ 6% should have been allowed on the compensation by learned Tribunal. The Court does not find any reason either to impose panel interest as it has been directed by learned Tribunal. With the above discussions and recalculation, the compensation amount is arrived at Rs.41,70,920/- which the payable along with interest @ 6% per annum to the claimants respondent Nos.1 to 3 and the same is considered to be fair and reasonable.

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Accordingly, it is ordered.

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In the result, the appeal stands allowed in part. Consequently, the impugned award in MAC Case No.40 of 2014

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Page 3 of 4

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dated 16^th October, 2017 by learned 2^nd MACT, (Southern Division), Berhampur, Ganjam is hereby modified to the extent as aforesaid with a direction to the appellant Insurance Company to deposit an amount of Rs.41,70,920/- as the compensation payable along with interest @ 6% per annum from the date of claim application filed i.e. 5^th November, 2008 within eight weeks from today which shall thereafter be disbursed in favour of claimants respondent Nos.1 to 3. The Court directs that there shall be no panel interest. Furthermore, the Court confirms the recovery right allowed by the learned Tribunal in favour of the appellant Insurance Company. It is lastly ordered that the entire awarded amount along with interest up-to-date including the statutory deposit along accrued interest thereon deposited by the appellant Insurance Company by the Court’s order dated 20^th May, 2022 shall be refunded to be redeposited before learned Tribunal for its disbursement, an exercise which be undertaken and accomplished within the above stipulated period.

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Urgent certified copy of this order be issued as per rules.

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(R.K. Pattanaik) Judge

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Tudu

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Signature Not Verified

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Digitally Signed Signed by: THAKURDAS TUDU Designation: Sr. Stenographer Reason: Authentication Location: OHC,CTC Date: 10-Apr-2024 10:35:28

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Divisional Manager,New India Assurance Co.Ltd. v. Nisamani Rath

Case brief

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Divisional Manager,New India Assurance Co.Ltd. v. Nisamani Rath

Case brief

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