An insurance company remains liable to compensate third parties unless it can prove that the policy was duly cancelled and that notice of cancellation was given before the accident.

JUDGMENT :

N.V. ANJARIA, J.

1. The present is an appeal preferred by the Insurance Company, which is directed against judgment and order dated 02.05.2016 passed in Motor Accident Claims Appeal No. 451 of 2007, by the High Court of Delhi, dismissing the appeal of the appellant herein and confirming the judgment and award dated 20th April, 2007 passed by Motor Accident Claims Tribunal, Delhi in Suit No. 64 of 2006.

2. In an accident occurred on 22nd August 2005 at about 3.30 p.m. one Dheeraj Singh died. He was driving motorcycle bearing No. HR-60 4688 along with a pillion rider. The motorcycle was hit from behind by the speeding truck bearing registration No. HR 46 A 1020 - offending vehicle. The deceased fell down on the road and was ran over by the offending vehicle.

2.1 The Motor Accident Claims Tribunal taking into account the relevant aspects including that the deceased was 36 years old, that he had been serving as Computer Engineer in a private company and found to be earning Rs. 3,364/- per month, taking the multiplier to be 17 awarded total compensation of Rs. 8,23,000/- under different heads.

2.2 The defence of the appellant-Insurance Company before the Tribunal as well as before the High Court was that the policy of insurance issued in relation to the offending vehicle was cancelled by it, about which the owner and the Regional Transport Officer were informed. It was contended that as the policy stood cancelled and it did not subsist on the date of accident, the appellant-insurer could not have been fastened with the liability of payment of compensation.

3. The Tribunal in its judgment recorded the finding that it was the driver who was rash and negligent in driving to be solely responsible for causing the accident. The Tribunal further concluded that the insurance policy stood cancelled on account of non-payment of the premium and resultantly the insurer was not liable. However, the Tribunal directed the appellant-insurance company-original Respondent No. 3 to pay the compensation in the first instance and accorded it the right to recover the amount from Respondent No. 2-Owner. The High Court was of the view that no ground existed to interfere with the judgment and award of the Tribunal, consequently, dismissed the appeal as meritless.

3.1 Focusing on the only aspect to be addressed in this Appeal about the cancellation of the insurance policy and on that count disowning by the appellant of its liability for payment of compensation, the evidence as appreciated and recorded by the Tribunal go to show that the cheque towards the premium which was sought to be paid in respect of the insurance policy (Ex. R3W1/5) had bounced on the ground of insufficiency of funds. This factum was reflected in evidence through memo (R3W1/6). Witness (R3W1) deposed that the company had sent communication by the Company (Ex. R3W1/7) cancelling the insurance policy.

3.2 The insurance policy was on record in form of (Ex. R3W1/5) and also placed on record was the registered receipt thereof (Ex. R3W1/8). It was deposed that the Insurance Company had also intimated the said fact about the cancellation of the policy to the RTO, which communication was also on record. The Tribunal in terms recorded that the testimony of witness appellant-Insurance Company (R3W1) was not controverted and could not be demolished. The High Court also accepted the said position to dismiss the appeal.

4. Emphasising the aforesaid finding on record that the cheque was dishonoured and the intimation was given by the appellant-company, learned Advocate, Mr. Amit Kumar Singh, appearing for the appellant submitted by relying on the decision of this Court in