The liability of the insurer under the insurance policy and the requirement to prove cancellation of the policy and intimation to the owner of the vehicle prior to the accident.

JUDGMENT

Navin Chawla, J. (Oral)

1. This appeal has been filed challenging the Award dated 11.07.2017 (hereinafter referred to as the `Impugned Award') passed by the learned Motor Accident Claims Tribunal, Shahdara, Karkardooma Courts, Delhi (hereinafter referred to as the `Tribunal') in MAC Petition No. 178/2014, whereby inter alia the learned Tribunal has rejected the submission of the appellant that it is not liable to pay compensation under the Impugned Award as the cheque issued by the respondent no.7 (since deceased) for obtaining the insurance policy for the Offending Vehicle had been returned unpaid by its banker with the remark of there being `insufficient funds' in his bank account, and prior to the date of the accident, the appellant had issued an intimation letter dated 04.04.2014, informing the respondent no.7 of the cancellation of the insurance policy.

2. The learned counsel for the appellant submits that in the present case, the cheque dated 25.03.2014 issued by the respondent no.7 towards the insurance premium had been returned back unpaid with the remark "funds insufficient" vide Memo dated 31.03.2014. The appellant, by a communication dated 04.04.2014, informed the respondent no.7 of the return of the cheque and of the cancellation of the insurance policy. He submits that the said document was exhibited as Ex.R3W1/3. He submits that the accident occurred thereafter on 20.05.2014 and, therefore, in terms of the judgment of the Supreme Court in United India Insurance Company Limited v. Laxmamma And Others, (2012) 5 SCC 234, the appellant was not liable to pay the compensation under the insurance policy.

3. On the other hand, the learned counsel for the Legal Heirs of the respondent no.7 submits that the learned Tribunal has, in the Impugned Award, found that the appellant has been unable to prove the service of the intimation of the cancellation of the insurance policy on the respondent no.7. In absence of intimation of such cancellation, the appellant remained liable under the insurance policy, as has been held by the Supreme Court not only in Deddappa v. National Insurance Co. Ltd., (2008) 2 SCC 595, but also in an earlier decision of the Supreme Court in New India Assurance Co. Ltd. v. Rula And Others, (2000) 3 SCC 195.

4. I have considered the submissions made by the learned counsels for the parties.

5. On the issue of liability of the appellant to pay the compensation under the Impugned Award, the learned Tribunal has held that the service of the letter dated 04.04.2013 (Ex.R3W1/3), cancelling the insurance policy, claimed to have been addressed by the appellant to the respondent no.7, could not be proved by the appellant, as the witness of the appellant could not produce the postal receipt thereof nor could state the manner in which the said notice was served on the respondent no.7. The finding of the learned Tribunal is reproduced hereinunder:

"26. In the instant case, the letter Ex.R31/2 dated 04.04.2014 is placed by the insurance company. There is nothing on record that this letter was dispatched to deceased Chhuni Lal either by speed post or by any other means. Postal receipts are not placed on record. The placing of letter itself does not mean that notice regarding dishonored of cheque or cancellation of insurance policy was given to the Chhuni Lai. There is nothing on record that letter duly addressed was dispatched to Chhuni Lal by any means.

27. There is nothing on record that intimation regarding cancellation of insurance policy was given to concerned licencing authority. The insurance company has failed to prove that notice of cancellation of insurance policy was duly given to the deceased Chhuni Lai and to the licencing authority. The insurance company itself is responsible for this predicament. The insurance company has issued the insurance policy on the receipt towards premium in contravention provision of the Section 64 (VB) Insurance Act. The public interest must prevail over the interes