Insurance companies must prove policy cancellation and notification to the insured before an accident to avoid liability for compensation.

ORDER :

1. The present First Appeal, under Section 173 of Motor Vehicles Act, 1988 , is preferred by the appellant – Insurance Company being aggrieved and dissatisfied with the judgment and award dated 26.06.2012 passed by the Motor Accident Claims Tribunal, Bharuch in Motor Accident Claim Petition No.397 of 2007.

2. Heard learned advocates for the respective parties.

3. Relying upon judgment of Division Bench of this Court in the case of Mansingbhai Jagabhai Amaliyar vs. Reliance General Insurance Co. Ltd. [First Appeal No. 466 of 2012], learned advocate Mr.V.C.Thomas for appellant - Insurance Company raised solitary contention that in the present case cheque issued towards premium to purchase policy was returned unpaid. It is submitted that owner was duly informed about cancellation of policy which could be inferred from the facts that subsequent to road accident but within same year, owner has purchased new policy for vehicle. Learned advocate Mr.Thomas referred to impugned judgment to submit that since no premium was paid by the owner covering risk of date of accident, insurance is not liable to pay compensation. Learned advocate Mr.Thomas referred to deposition of Mr.Surendrakumar Sonajibhai Bhagat - PW-1 - Administrative Officer of insurance company (Exh.37) to submit that necessary evidence was lied to establish that policy issued by the insurance company is cancelled and also informed to the owner of vehicle. In this circumstances, learned Tribunal has committed serious error in fasten liability upon appellant to pay compensation.

3.1. Making above submission, it is submitted to allow the appeal.

4. Per contra, learned advocate Mr.Amit Chaudhary for the claimants referred to evidence on record to submit that it is mandatory to inform RTO about cancellation of policy. Policy needed to be cancelled in accordance with terms and conditions. It is submitted that victim of road accident is third party and in order to get exonerated to pay compensation, insurance company has to lead evidence to the effect that policy is cancelled and is informed both to the owner and RTO. In the present case, no evidence is placed on record to prove that owner and RTO are informed about cancellation of policy. He has relied upon judgment of Co-ordinate Bench of this Court in the case of United India Insurance Company Ltd. vs. Ranuben Balubhai Rathod [First Appeal No. 2821 of 2012 and allied matters] dated 06.08.2024 to buttress his contention.

5. What would be noticed that by impugned judgment and award, Rs. 5,35,000/- with interest at the rate of 9% p.a. from the date of petition till realization with cost to the claimant holding opponents jointly and severally to pay compensation for the accident which took place on 08.02.2007 in the outskirts of Bharuch City, whereby, deceased who was walking nearby road, was ramped by the Qualis Car plying at excessive speed. The deceased having received serious injuries died. Noticeably claimants who are legal heirs of deceased are third party. Insurance Company raised defence that cheque given by the owner of the car has been returned unpaid and said policy which is issued does not get effective on the date of accident and it could be inferred that owner is knowing this facts and as such he has purchased new policy on 28.02.2007 (Exh.43). Noticeably upon receipt of cheque issued towards purchasing policy, insurance company ha issued policy, cheque later on got dishonored. Learned advocate Mr.Thomas referred to Exh.42 and press that letter regarding cancellation of policy was issued to Mr.Champaksinh Parmar which amounts to cancellation of policy and conveyed to owner. Perusal of Exh.42 indicates photocopy of the paper, there is no signature of any person made in said letter. It is blank. Learned