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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
N.J. JAMADAR, J.
The Oriental Insurance Company Limited - Appellant
Versus
Karbhari Daga Gaikwad and Another - Respondents
First Appeal No. 522 of 2017 with Civil Application No. 1153 of 2017
Decided On : 16-11-2021
Accident claim - Grant of compensation - Non renewal of insurance policy - Liability of insurance company - Principle of Pay and Recover - TVS motor-cycle by the respondent No. 5/original opponent No. 1 and insured with the appellant/original opponent No. 2, gave a violent dash to the motor-cycle of the deceased. Eventually, the deceased succumbed to his injuries - Deceased was 27 years old. He was a bachelor.
Finding of the Court : Since the registration particulars were recorded on the basis of cover note issued by the insurer, if the said policy of issue of one time insurance was not implemented and/or kept in abeyance, it was for the insurer to disclose the said fact to RTO. Secondly, since clause 4, extracted above, prohibited cancelaltion of such long term policy except on cancelaltion of the registration of the vehicle, it was not open to the insurer to contest the liability as there was nothing on record to indicate that the insurer has cancelled the insurance policy issued in favour of the opponent No.1 / insured - impugned order fastening the liability upon the appellant/ insurer is legally unsustainable. In the circumstances of the case, even the recourse to the principle of Pay and Recover would also be not justifiable. Consequently, the appeal deserves to be allowed and the appellant/ insurer deserves to be exonerated from the liability completely - principle of purposive construction cannot be stretched to such an extent as to fasten the liability on a party who is not at all liable to satisfy the award, for the only reason that in the past there was a contract of insurance between the insurer and insured. A case where the insurer has issued an insurance policy for a particular period and subsequently cancelled the insurance policy for default in payment of premium on the part of the insured, stands on a different footing. But for the default on the part of the insured to pay the premium, a contract of insurance would have been valid and operative. However, where post expiry of period of insurance there is a complete non renewal, to fasten the liability on the insurer on the basis of historical fact of the existence of a prior contract of insurance would be in complete derogation of the principles of construction of contract of insurance. The jural relationship between erstwhile insurer and insured gets snapped with the term of insurance coming to an end.
Result: Appeal allowed.
JUDGMENT :
1. This appeal is directed against the judgment and award dated 28th March, 2014 passed by the learned Member, MACT, Nashik in MACP No.288 of 2009 whereby the appellant/insurer was held jointly and severely liable to pay compensation of Rs.6,68,400/- along with interest @ 9% p.a. from the date of the petition to the respondents/claimants for the death of Milind Karbhari Gaikwad (the deceased), in a vehicular accident.
2. The background facts leading to this appeal can be stated in brief as under :
[a] On 4th February, 2009 the deceased, who was the son of respondent Nos. 1 and 2 and the brother of respondent Nos. 3 and 4, was riding a motor-cycle bearing registration number MH-41/M-7593 on his way to Satpur MIDC. When he reached near ITI signal, Satpur, Nashik, a TVS motor-cycle bearing registration number MH-15/BT-4275, owned by the respondent No. 5/original opponent No. 1 and insured with the appellant/original opponent No. 2, gave a violent dash to the motor-cycle of the deceased. Eventually, the deceased succumbed to his injuries. The deceased was 27 years old. He was a bachelor. The respondents/original claimants instituted the petition under section 166 of the Motor Vehicles Act, 1988 (the Act 1988) asserting that the deceased was earning Rs. 5,000/- p.m. and all the respondents were dependent on the deceased. The claimants averred that the offending vehicle was insured with the appellant/insurer.
[b] The respondent No. 5 / original opponent did not appear before the Tribunal despite service of the notice and thus petition proceeded ex-parte against the opponent No. 1/owner. The appellant /opponent No. 2 resisted the claim qua the insured on the principal ground that on the date of the accident the offending vehicle was not insured with the insurer. It was contended that the opponent No. 1 had insured the offending vehicle with the insurer for the period 17th June, 2006 to 16th October, 2007. The policy was, however, not renewed. Thus, the insured was not liable to indemnify the insurer.
3. The learned Member of the Tribunal recorded the evidence of Karbhari Gaikwad (PW.1), the claimant No.1; Ashok Shinde (PW.2), the Manager of Tricom India Limited where the deceased was working as a Data Processor, and Mohan Gondhalekar (DW.1), the Assistant Regional Manager of the insurer. After appraisal of the evidence and the documents tendered for his perusal, the learned Member was persuaded to allow the petition holding inter alia that the accident occurred due to rash and negligent driving of the offending motor-cycle by its driver and at the time of the accident, the said vehicle was insured with the appellant under the scheme of “One Time Insurance” and thus the appellant as well as the insured/ owner of the vehicle were jointly and severely liable to pay compensation to respondent Nos. 1 to 4/ claimants. To arrive at the said conclusion, the learned Member banked upon the entry made in the record maintained by the RTO wherein it was noted that the vehicle was insured under “One Time Insurance Scheme”.
4. Being aggrieved by and dis-satisfied with the aforesaid finding, as regards the liability of the insurer/opponent No. 2, the appellant/insurer has preferred this appeal. The principal ground of appeal is the erroneous finding by the learned Member of the Tribunal that the vehicle was insured with the appellant on the date of the accident.
5. I have heard Mr. Devendra Joshi, learned counsel for the appellant and Mr. Pritesh Bohade, learned counsel for the Respondent Nos. 1 to 4/original claimants at length. With the assistance of the learned counsels for the parties, I have perused the pleadings before the Tribunal, depositions of the witnesses, documents tendered for the perusal before the Tribunal and the material on record.
6. Mr. Joshi, learned counsel for the appellant strenuously urged that the learned Member committed a manifest error in recording a finding that the offending vehicle was insured with the appellant un
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