An insurance policy remains in effect unless properly cancelled before an accident; insurers are liable to indemnify third-party claims unless valid evidence shows policy cancellation.

JUDGMENT :

RADHAKISHAN AGRAWAL, J.

1. These two appeals have been preferred by the appellant–Insurance Company under Section 173 of the Motor Vehicles Act, 1988, calling in question the common award dated 26.04.2016 passed by the First Additional Motor Accident Claims Tribunal, Bastar at Jagdalpur, Chhattisgarh, in Claim Case Nos. 62/2014 and 63/2014, whereby compensation of Rs. 3,59,000/- and Rs. 4,29,000/- respectively, along with interest @ 9% per annum from the date of application till realization, has been awarded in favour of the claimants and the liability has been fastened upon the present appellant/insurance company. Since both appeals arise out of the same accident, involve identical questions of law and fact, and challenge the award only on the point of liability of the insurer, they are being decided by this common judgment.

2. As per the averments made in the claim petitions, on the intervening night of 30.04.2012 at about 12:00 midnight, the deceased persons, namely, Kohrami Jaggu and Kohrami Chaitu, were proceeding with their bullock cart near Village Dilmili Dega Aamapara on N.H.-16 road. At that time, the offending truck bearing Registration No. CG-18 H- 0542 (hereinafter referred to as “the offending vehicle”), coming from Jagdalpur towards Dantewada, was being driven by Non-Applicant No.1, Neharlal Sahu, in a rash and negligent manner, and dashed against the bullock cart from behind. Due to the forceful impact, both Kohrami Jaggu and Kohrami Chaitu sustained fatal injuries and died on the spot, and two bullocks also died at the place of occurrence. At the time of the accident, the offending vehicle was owned by Non- Applicant No.2, Ram Kumar Soni, and was insured with Non-Applicant No.3, the Insurance Company.

3. On account of death of deceased persons, a claim petitions were filed by the respective claimants under Section 166 of the Motor Vehicles Act, 1988 seeking compensation to the tune of Rs.15,25,000/- and Rs.21,50,000/- respectively under various heads. However, the learned Tribunal vide common award dated 26.04.2016, awarded a compensation as mentioned in paragraph 1 of this judgment while making the appellant – insurer liable for payment of compensation. Hence, these appeals.

4. Learned counsel appearing for the appellant–Insurance Company submit that the learned Claims Tribunal has erred in fastening liability upon the appellant–Insurance Company without properly appreciating the evidence available on record. It is further submitted that although an insurance policy was issued in respect of the offending vehicle for the period from 29.04.2012 to 28.04.2013, but the premium was paid through a cheque which was subsequently dishonoured. Consequently, the policy stood cancelled. In this regard, a notice/intimation of cancellation was also sent to the owner of the vehicle by registered post on 07.05.2012. Therefore, the offending vehicle was not covered under a valid insurance policy on the date of the accident. As such, the Insurance Company cannot be held liable to indemnify the claimants or to satisfy the award. In the alternative, it is submitted that if this Court comes to the conclusion that the Insurance Company is liable to pay the compensation, then, in such circumstances, an order of “pay and recover” may be passed.

5. Learned counsel for the Claimants while admitting that no separate appeal has been filed by them for enhancement of compensation, supported the impugned award and submitted that the learned claims Tribunal, after appreciation of the evidence, has rightly awarded the compensation.

6. Heard learned counsel for the parties and perused the material available