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2022 Supreme(Kar) 453
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
H.P. SANDESH, J.
Srikanta M.R., S/o. Late M.G. Ramaiah - Appellant
Versus
Geetha, W/o. K.P. Rudrappa & Ors. - Respondents
M.F.A. No. 7043 of 2014 (MV-I)
Decided On : 02-12-2022
For the Appellant : Sri K.V. Shyamaprasada.
For the Respondent: Sri O. Mahesh.
Point of Law : Statutory liability of insurer to indemnify third parties which policy covered subsists and insurer has to satisfy award of compensation unless policy of insurance was cancelled by insurer and intimation of such cancellation had reached insured before the accident. [Para 21]
Headnote:
Insurance Act - Section 64VB - Company – Vehicle - Compensation - Cheque dishonoured - Challenged - Claimant was driving autorickshaw, at that time, driver of offending vehicle i.e., lorry suddenly stopped the same in middle of road without giving any signal carelessly, due to which, claimant touched his auto to lorry as a result, claimant had sustained injuries and immediately he was shifted to Mallige Medical Center and then, he was shifted to NIMHAS hospital and thereafter, he was shifted to Shekar hospital wherein he has taken treatment as an inpatient for a period of 9 days and again he was referred to NIMHAS hospital and he took treatment at Victoria hospital - Claimant in order to substantiate his contention, examined himself as PW1 and got marked documents at Ex.P1 to P15 and examined another witness as PW2 - On other hand, respondents have examined one witness as RW1 and got marked documents at Ex.R1 to R7 - Main contention of Insurance Company is that cheque which was issued for policy was dishonoured, Insurance Company is not liable to pay compensation - Whether Tribunal has committed an error in not awarding just and reasonable compensation as contended by claimant? Whether Tribunal has committed an error in fastening liability on insured instead of insurer and whether it requires interference of this Court?
Finding of Court : Apex Court also discussed with regard to Section 64VB of Insurance Act and judgment of Balkar Ram and Laxmamma and also earlier judgments which have been referred, it is very clear that Court has to take note of public interest in respect of third parties are concerned and ordered to pay compensation - In case on hand also claimant is a third party who was driver of auto and offending vehicle was suddenly stopped as a result, he went and dashed against said lorry and sustained injuries and when claimant is a third party, as observed by Apex Court in judgment of Inderjit Kaur held that even if he was entitled to avoid policy for not having received premium, held, nonetheless liable for third party risk as public interest served by an insurance policy must prevail over insurer interest and hence, Court do not find any force in contention of counsel for Insurance Company that Insurance Company is not liable to pay compensation - In subsequent judgment of Seema Malotra’ case, Apex Court held that insurer is under no obligation to perform his part of contract, except in relation to his statutory liabilities in respect of third parties - In case on hand also Court have already pointed out that no document is placed for having given intimation and same was acknowledged by insured and unless same is reached insured Insurance Company cannot avoid liability and Court have already pointed out that Tribunal has not discussed anything about reaching of notice to insured - Under circumstances, contention of Insurance Company cannot be accepted and Tribunal has committed an error in fastening liability on insured instead of insurer - Claimant has made out case to fasten liability on Insurance Company - Court answer point No.2 accordingly.
Result : Appeal is allowed in part.
JUDGMENT :
This appeal is filed by the claimant challenging the judgment and award dated 25.08.2014 passed in M.V.C.No.7585/2012 on the file of the III Additional Senior Civil Judge and MACT, Bengaluru (‘the Tribunal’ for short).
2. Heard the learned counsel appearing for the appellant and the learned counsel appearing for respondent No2.
3. The factual matrix of the case of the claimant before the Tribunal is that on 06.10.2012 at about 1.00 a.m., the claimant was driving the autorickshaw, at that time, the driver of the offending vehicle i.e., the lorry suddenly stopped the same in the middle of the road without giving any signal carelessly, due to which, the claimant touched his auto to the lorry as a result, the claimant had sustained injuries and immediately he was shifted to Mallige Medical Center and then, he was shifted to NIMHAS hospital and thereafter, he was shifted to Shekar hospital wherein he has taken treatment as an inpatient for a period of 9 days and again he was referred to NIMHAS hospital and thereafter, he took treatment at Victoria hospital. The claimant in order to substantiate his contention, examined himself as PW1 and got marked the documents at Ex.P1 to P15 and examined another witness as PW2. On the other hand, the respondents have examined one witness as RW1 and got marked the documents at Ex.R1 to R7. The main contention of the Insurance Company is that the cheque which was issued for policy was dishonoured hence, the Insurance Company is not liable to pay the compensation. The Tribunal after considering both the oral and documentary evidence available on record fastened the liability on the owner and granted the compensation of Rs.1,57,200/- with 8% interest.
4. Being aggrieved by the judgment and award of the Tribunal, the present appeal is filed by the claimant contending that the Tribunal has erred in holding that the second respondent herein has issued proper notice to the first respondent and also to the RTO in respect of dishonour of cheque received by it towards the premium. The learned counsel vehemently contend that the Tribunal has committed an error in relying upon the documents at Ex.R2 to R7 and held that the notice, in question, was deemed to be served on the first respondent and the concerned RTO but the postal acknowledgment for having served the notice is not produced. The Tribunal also committed an error in not awarding just and reasonable compensation and the compensation awarded in all the heads are very meager when the claimant had suffered the fracture of maxilla, diffuse axonal injury and fright frontal sulcus sub arrchnoid haemorrhage and he was shifted to several hospitals for the treatment and he has taken the treatment as inpatient for 12 days and the Tribunal has not awarded compensation on the head of ‘future medical expenses’ hence, it requires interference of this Court.
5. Per contra, the learned counsel appearing for the Insurance Company would vehemently contend that the Tribunal has rightly fastened the liability on the insured and exonerated the liability of the Insurance Company since, the cheque which was issued was dishonoured. The counsel also filed a memo along with the copy of Insurance Regulatory and Development Authority notification dated 16.10.2002 and brought to notice of this Court that the regulations 3 as well as 4 are with regard to the manner of premium payments as well as commencement of risk and the counsel would vehemently contend that the attachment of risk to an insurer will be in consonance with the terms of Section 64VB of the Act and except in the cases where the premium has been paid in cash, in all other cases the insurer shall be on risk only after the receipt of the premium by the insurer. Provided that in the case of a policy of general insurance that where the remittance made y the proposer or the policyholder is not reaslised by the insurer, the policy shall be treated as void ab-initio. Hence, the Insurance Company is not liable to pa
