1. This Court on 29-3-2010 in M.A.C.M.A.M.P.No.1264/2010 directed the expedite hearing to be taken up and further directed the registry to list the matter after two weeks for final hearing. Thus the matter is appearing under the ‘Final Hearing’ caption today.
2. Heard Smt.Mammu Vani, the learned Counsel representing the appellant and Sri Mohd.Mumtaz Pasha, the learned Counsel representing the 1st respondent.
3. The New India Assurance Company Limited representing by its Regional Manager filed the present M.A.C.M.A. aggrieved by the order dt. 4-12-2007 made in OP.NO.71/2005 on the file of the Chairman, Motor Vehicles Accident Claims Tribunal-cum-V Additional District and Sessions Judge, Fast Track Court, Ranga Reddy District. The said Tribunal in the light of the respective stands taken by the parties, having recorded the evidence of P.Ws.1, 2 and R.W.1 as well, having marked Ex.A.1 to Ex.A.10 and Ex.B.1 to Ex.B.8, came to the conclusion that the O.P. to be partly allowed with proportionate costs for Rs.94,000/- with subsequent interest at 7.5% per annum from the date of petition till the date of deposit and with certain further directions.
4. Smt.Mammu Vani, the learned Counsel representing the appellant had taken this Court through the respective pleadings of the parties, the evidence available on record and the findings recorded by the Tribunal as well and would maintain that the Tribunal had not appreciated the oral and documentary evidence available on record and the evidence available on record in proper perspective and hence the M.A.C.M.A. to be allowed. The learned Counsel also would maintain that the Tribunal ought to have seen that the cheque issued by the husband of the owner of the vehicle as payment of premium for the policy had been dishonoured and the appellant company had immediately intimated the fact to the owner of the vehicle and hence the Insurance Company cannot be fastened with any liability whatsoever. The learned Counsel also would maintain that the Tribunal ought to have seen that as per the terms of the policy, the policy would stand cancelled ab initio and hence the policy to be deemed to have been cancelled from 13-6-2005 which was the date of the issue of the policy and in such circumstances, the policy cannot be said to be in force as on the date of accident i.e., 22-6-2005. The learned Counsel also made certain further submissions relating to the quantum of Cooperation which had been awarded and would maintain that definitely the same would be on higher side and the said quantum at least to be modified.
5. Per contra, Sri Mohd.Mumtaz Pasha, the learned Counsel representing the 1st respondent, had taken this Court through the findings which had been recorded by the Tribunal in particular at para 10 while answering Additional Issue and also placed strong reliance on several decisions and would maintain that in the light of the settled position of law, the findings recorded by the Tribunal being in accordance with law, the said findings are to be confirmed and the M.A.C.M.A. to be dismissed. The learned Counsel also submit that as far as the third party is concerned, such third party is not concerned with this problem, at the best if the Insurance Company is having any problem in this regard as against the owner, it is between the owner of the vehicle and the Insurance Company to settle the same and appropriate directions may be given in this regard if this Court feels such direction to be given in the interest of justice.
6. Heard the Counsel. Perused the oral and documentary evidence available on record and also the findings recorded by the Tribunal. Hereinafter the parties would be referred to as shown in O.P.No.712/2005 aforesaid.
7. The claimant/petitioner filed the said O.P., under Section 166 of the Motor Vehicles Act (in short, hereinafter would be referred to as ‘the Act’ for the purpose of convenience). It is the case of the petitioner that the petitioner has been working as labourer and earning Rs.4,000/- per month and he was aged about 32 years at the time of accident and on 22-6-2005 while he was traveling from Uppal to Ghatkesar in Seven Seater Auto bearing No.AP 23 T 8542 at 11.40 a.m., one lorry bearing No.AP 24 V 945 coming from opposite direction and dashed the Auto, due to which the petitioner received fracture of right hand and multiple injuries and grievous injuries and admitted in Gandhi Hospital, Secunderabad and police also registered a case in Cr.No.111/2005 against the driver of the lorry and respondent No.1 is the owner of the said lorry and respondent No.2 is the Insurer of the said vehicle and therefore, the Cooperation of Rs.1,50,000/- be awarded.
8. Respondent No.1 filed counter affidavit denying the allegations made in the O.P.
9. The 2nd respondent filed counter denying the accident and further it was denied that the driver of the auto possessed valid driving licence and further it was denied that the petitioner received injuries in the said accident. It was also further denied that the crime vehicle was insured with the 2nd respondent. Further it was denied that the driver of the lorry possessed valid and effective driving license and hence it was prayed that the O.P. to be dismissed.
10. On the strength of these pleadings, the following issues had been settled:-
1) Whether the accident took place on 22-6-2005 at about 11.40 a.m., at Rohit Rice Mill, Narapally, Ghatkesar Mandal, Ranga Reddy District on account of the rash and negligent driving of the driver of the lorry bearing No. AP 24 V 945 while dashed the auto seven seater bearing No. AP 13 T 8542?
2) Whether the petitioner is entitled to claim compensation, and if so for how much amount from which respondent?
3) To what relief?
11. During the pendency of the O.P., R.2 filed additional counter stating that R.1 obtained insurance policy for crime vehicle with effect from 13-6-2005 to 12-6-2006 subject to realization of cheque issued by her husband, which was bounced as funds insufficient and R.2 immediately addressed a letter dt.23-6-2005 and in view of the cancellation of the policy, the Insurance Company is not liable to pay the Cooperation and hence prayed for dismissal of the O.P. and in the light of the additional counter, the following Additional Issue had been settled:-
“Whether the policy issued by respondent No.2 for crime vehicle stood cancelled by dishonour of the cheque dt.10-6-2005?”
12. The petitioner examined himself as P.W.1 and Dr.Ravinder Kumar was examined as P.W.2 and Ex.A.1 to Ex.A.10 had been marked. R.W.1 was examined on behalf of R.2 and Ex.B.1 to Ex.B.8 had been marked. The Tribunal at para 8 recorded certain reasons while answering Issue No.1 and came to the conclusion that there was rash and negligent driving on the part of the lorry driver, due to which the accident occurred. While answering Issue No.2 at para 9 further reasons had been recorded and on appreciation of evidence came to the conclusion that the compensation amount payable to the claimant-petitioner would come to Rs.94,000/-. While answering Additional Issue, at para 10, the Tribunal relied on several decision and ultimately came to the conclusion that in the light of the ratio laid down in the said decisions, it cannot be said that the claimant/petitioner is not entitled to the relief and accordingly partly allowed the O.P., granting Rs.94,000/- with proportionate costs and with subsequent interest at 7.5% per annum from the date of petition till the date of deposit. Aggrieved by the same, the present M.A.C.M.A. had been preferred by the New India Assurance Company Limited – respondent No.2 in O.P.No.712/2005 aforesaid.
13. In the light of the submissions made by the Counsel on record, the following points arise for consideration in this M.A.C.M.A.:-
1) Whether the findings recorded by the Tribunal while answering Issue No.1 to be disturbed or to be confirmed in the facts and circumstances of the case?
2) Whether the findings recorded by the Tribunal while answering Issue No.2 to be confirmed or to be modified or to be set aside in the facts and circumstances of the case?
3) Whether the findings recorded by the Tribunal on the Additional Issue at para 10 to be disturbed or to be confirmed in the facts and circumstances of the case?
4) If so, to what relief, the parties would be entitled to?
14. Points No.1 to 3:- For the purpose of convenience these points are being discussed together. The case of the petitioner as P.W.1 is that on 22-6-2005 he was proceeding from Uppal to Ghatkesar in Auto bearing No. AP 23 T 8542 and near Rohit Rice Mill, one lorry bearing No. AP 24 V 945 came at a high speed on a wrong route and dashed the auto, due to which the driver of the auto died and the claimant – petitioner received injuries including fractures. Ex.A.1 is the certified copy of F.I.R. along with original complaint; Ex.A.2 is the certified copy of charge sheet; Ex.A.3 is the certified copy of scene of offence panchanama; Ex.A.4 is the certified copy of MLC and injury certificate; Ex.A.5 is the original medial bills and prescriptions; Ex.A.6 is the x-ray films, Ex.A.7 is the Xerox copy of driving license of driver; Ex.A.8 is the Xerox copy of registration certificate of lorry; Ex.A.9 is the Xerox copy of Insurance Policy of lorry; and Ex.A.10 is the Xerox copy of permit of lorry. This witness no doubt was cross-examined but however no serious contradictions as such had been elicited. P.W.2 is the Doctor who treated P.W.1 who had supported the version of P.W.1. Thus in the light of the clear evidence of P.Ws.1 and 2 and also Ex.A.1 to Ex.A.10, findings had been recorded at para 8 while answering Issue No.1 and the same was answered in favour of the claimant-petitioner that there was rash and negligent driving on the part of the lorry driver who caused the accident. Hence, the said findings are hereby confirmed. The Tribunal further appreciated the evidence of P.W.1 and P.W.2 and also had taken into consideration the X-Ray films – Ex.A.6 and also Ex.A.5 and Ex.A.4 and further relying upon the evidence of P.W.2 came to the conclusion that it would be reasonable to award Rs.50,000/- for the fracture of both bones of the right leg and Rs.25,000/- for the fracture of right hand and further awarded Rs.10,000/- towards pain and suffering and further observed that the petitioner-claimant could not attend the work for at least two months and it would be quite reasonable to take his wages as Rs.2,000/- per month and two months wages to be worked out as Rs.4,000/- and for medicines and extra-nourishment food etc., further amount of Rs.5,000/- had been awarded. Thus, the total compensation was fixed at Rs.94,000/- and accordingly Issue No.2 was answered. In view of the reasons recorded at para 9 since the Tribunal had arrived at the correct conclusion awarding the said compensation, the said findings are hereby confirmed.
15. The principal question which had been argued in elaboration, on the strength of the evidence of R.W.1 and also Ex.B.1 to Ex.B.8, is that whether by virtue of the subsequent cancellation of the insurance policy , whether the Insurance Company is liable to pay the compensation and whether the Insurance Company can be fastened with such liability at all in the facts and circumstances of the case? Ex.B.1 is the Authorization letter dt.11-10-2007; Ex.B.2 is the certified copy of charges collection summary sheet; Ex.B.3 is the certified copy of cheque dt.10-6-2005; Ex.B.4 is the certified copy of memo issued by the Bank dt.22-7-2005; Ex.B.5 is the certified copy of memo issued by Andhra Bank dt.16-6-2005; Ex.B.6 is the certified copy of letter dt.23-6-2005; Ex.B.7 is the certified copy of postal receipt; and Ex.B.8 is the certified copy of office copy of insurance policy. Several of the facts are not serious controversy. The evidence of R.W.1 would go to show that insurance policy which was issued in favour of respondent No.1 was cancelled because of the dishonour of the cheque issued on 10-6-2005 by the husband of the owner of the vehicle. Ex.B.2 is the certified copy of charges collection summary sheet, Ex.B.4 is the certified copy of the cheque return memo, Ex.B.5, Ex.B.6, Ex.B.7 and Ex.B.8 also had been referred to above. The policy was issued on 13-6-2005 to 12-6-2005 and it was cancelled vide letter dt.23-6-2005 whereas the accident took place on 22-6-2005. The Tribunal in fact had relied on the undernoted decisions:-
NATIONAL INSURANCE CO.LTD. v. SEEMA MALHOTRA AND OTHERS (2001 ACJ 638); UNITED INDIA INSURANCE CO.LTD. v. NARAYANA REDDY AND OTHERS (2007 (1) An.W.R. 307 (A.P.)); NEW INDIA ASSURANCE CO.LTD. v. ANJANABAI AND OTHERS (2007 ACJ 610); NATIONAL ISNURANCE CO.LTD., v. RULA AND OTHERS (2000 ACJ 630); UNITED INDIA INSURANCE CO.LTD v. TUNIKI @ MUDAM LACHAVVA @ LAXMI AND ANOTHER (2007 (2) ALD 65).
and came to the conclusion that the subsequent cancellation of policy for non-payment of premium would not affect the right of third party which accrued in favour of third party and accordingly came to the conclusion that on that ground it cannot be said that the appellant herein – 2nd respondent in the O.P. is not liable to pay the compensation.
16. In NATIONAL INSURANCE CO.LTD. v. ABHAYSING PRATAPSING WAGHELA AND OTHERS (2008 ACJ 2697) at paras 16 and 17 it was observed as hereunder:-
“Indisputably, the respondent No.1 is a third party in relation to the contract of insurance which had been entered into by and between the appellant and the owner of the vehicle in question. We have noticed hereinbefore that a document was produced before the Tribunal. Even according to the appellant, although it was only a Motor Input Advice-cum-Receipt, it contained the cover note No.279106. We, therefore, have to suppose that a cover note had, in fact, been issued. If a cover note had been issued which in terms of clause (b) of Section 145 of the Act would come within the purview of definition of certificate of insurance; it also would come within the purview of the of definition of an insurance policy. If a cover note is issued, it remains valid till it is cancelled. Indisputably, the insurance policy was cancelled only after the accident took place. A finding of fact, therefore, has been arrived at that prior to the deposit of the premium of insurance in cash by the owner of the vehicle, the cover note was not cancelled.
It is in the aforementioned situation, we are of the opinion, that Judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed differently vis-à-vis a contract of insurance qua contract.
In NATIONAL INSURANCE CO.LTD. v. LAXMI NARAIN DHUT (2007 ACJ 721 (SC)) it was observed as hereunder:-
“As noted above, there is no contractual relation between the third party and the insurer. Because of the statutory intervention in terms of Section 149, the same becomes operative in essence and Section 149 provides complete insulation.
In the background of the statutory provision, one thing is crystal clear, i.e., the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake licence has to be considered differently in respect of third party and in respect of own damage claims.”
In ORIENTAL INSURANCE CO.LTD. v. MEENA VARIYAL (2007 ACJ 1284 (SC)) it was observed as hereunder:-
“The object of the insistence on insurance under Chapter XI of the Act thus seems to be a compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen’s Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods.”
In ORIENTAL INSURANCE CO.LTD. v. SUDHAKARAN K.V., (2008 ACJ 2045 (SC)) it was observed as hereunder:-
“The provisions of the Act and, in particular, Section 147 of the Act were enacted for the purpose of enforcing the principles of social justice. It, however, must be kept confined to a third party risk. A contract of insurance which is not statutory in nature should be construed like any other contract.”
Reliance also was placed on DADDAPPA v. BRANCH MANAGER, NATIONAL INSURANCE CO.LTD. (2008 ACJ 581 (SC)) and ORIENTAL INSURANCE CO.LTD. v. INDERJIT KAUR (1998 ACJ 123 (SC)). The Division bench of this Court after referring to the under-noted decisions DADDAPPA’s case (supra); M.NAGESWARA RAO v. NEW INDIA ASSURANCE CO.LTD., VISAKHAPATNAM (2003 (3) ALD 379 (DB)); MANAGER, UNITED INDIA INSURANCE CO.LTD. v. ABBISETTI VENKATARAO (2008 (1) ALD 84); NATIONAL INSURANCE CO.LTD. v. NARESH KUMAR (2008 ACJ 869); NATIONAL INSURANCE CO.LTD. v. SEEMA MALHOTRA (2001 ACJ 638); NEW INDIA ASSURANCE CO.LTD. v. RAM DAYAL AND OTHERS (1990 (2) SCC 680); NEW INDIA ASSURANCE CO.LTD. v. RULA (supra); NEW INDIA ASSURANCE CO.LTD v. SHASED AND OTHERS (2001 ACJ 585); ORIENTAL INSURANCE CO.LTD v. INDERJIT KAUR (AIR 1998 S.C., 588) and UNITED INDIA INSURANCE CO.LTD. v. SYED MOHAMMED (1991 ALT 650) in NATIONAL INSURANCE CO.LTD., DIVISIONAL OFFICE, ELURU v. SK.AHMEDUNNISA AND OTHERS (2008 (5) ALD 575 (DB)) observed at paras 18 and 19 as hereunder:-
“In the instant case, the accident in question occurred on 12-4-1999. The cheque was issued on 16-11-1998 towards renewal of the policy issued by the Insurance Company and the same was returned on 23-11-1998. R.W.1 who was examined on behalf of the appellant-Insurance Company deposed that they have not affixed the postal receipt in the register and marked only Ex.B.5 in proof of sending the notice of cancellation of policy to the second respondent – owner of the vehicle. Ex.B.4 is the office copy of the letter claimed to have been issued by the appellant company. Ex.B.5 is the Xerox copy of the relevant entry extract at page No.25 of the dispatch book of the appellant company to the effect that they have issued the letter. However, the appellant-Insurance Company did not produce any receipt stating that the letter was sent under registered post with acknowledgment due, to the effect that policy was not renewed as the cheque was bounced. No postal acknowledgment was marked by the appellant Insurance Company. Except a bald contention that they informed the insured on 3-12-1998, however, no material has been placed by the Insurance Company to prove that after bouncing of the cheque, the policy was cancelled and intimation was received by the owner of the vehicle to that effect. It is seen from the record that the 1st respondent – owner of the vehicle was not examined he remained ex parte. When the Insurance Company failed to prove that notices were served on the insured informing that it cancelled the policy, the appellant – Insurance Company cannot avoid liability as it failed to give opportunity to the insured of the vehicle to remit the premium for the cheque dishonoure.d In these circumstances, we are of the opinion that subsequent cancellation of insurance policy on the ground that the cheque through which premium was paid was dishonoured would not effect the rights of the third party. In the circumstances, the decisions relied on by the learned Counsel for the appellant – Insurance Company do not apply to the facts of the present case.
Considering the facts and circumstances of the case, and following principles laid down by the Apex Court in Inderjit Kaur’s case (supra) and Rula’s case (supra), we are of the considered view that the Tribunal was justified in making the appellant – Insurance Company liable to indemnify the loss of the owner of the vehicle. Therefore, the contention of the learned Counsel Sri Kota Subba Rao that as on the date of accident the policy was cancelled and insured is not liable to pay the compensation does not merit any consideration.”
17. In the light of the legal position referred to supra, this Court is thoroughly satisfied that the Tribunal after recording reasons at para 10 answered the Additional Issue in favour of the claimant-petitioner and the said findings recorded by the Tribunal also cannot be found fault but however it is made clear that the appellant herein – the New India Assurance Company Limited is entitled to recover the same from the owner of the vehicle if the Insurance Company is so advised. Except giving this liberty, no further findings can be made in favour of the appellant – Insurance Company since all other findings are being confirmed by this Court. Subject to the aforesaid liberty, the findings are hereby confirmed.
18. Point No.4:- In the result, the M.A.C.M.A. being devoid of merit, the same shall stand dismissed. No order as to costs.