Proper communication of policy cancellation to the owner and the authority concerned is crucial in determining the liability of the insurer in motor accident cases.

JUDGMENT

Birendra Kumar, J. - REPORTaBLE

1. a Truck bearing registration No.RJ-14-2G-2693 met with an accident due to rash and negligent driving of the driver on 23.01.2004. For the accident aforesaid, Mahesh Nagar, Police Station case No.27/2004 was registered. The driver of the Truck namely Mohan Lal Nayak and cleaner of the Truck namely Mr. Ghasi died in the accident. The dependents of the victim of Motor accident filed separate claim cases. Claim case No. 22/2004 was filed by the dependents of Mohan Lal Nayak and Claim case No. 23/2004 was filed by the dependents of Mr. Ghasi.

2. By the impugned award dated 23.03.2011, the learned Motor accident Claims Tribunal, Malpura, Tonk, allowed the claim cases and saddled with liability to pay compensation amount against the appellant-New India assurance Co. Ltd. being insurer of the said Truck. However, liberty was given to the appellant to recover the said amount from the owner of the vehicle. This appeal is against the award made in favour of respondent No.1 to 7, who are dependents of deceased-Ghasi, vide Claim Case No. 23/2004.

3. The appellant has challenged the impugned award only on the ground that since on the date of accident, the Truck was not insured with the appellant, the Tribunal has erred in law and facts in making award enforcible against the appellant also.

4. Undisputed facts of this case for adjudication of aforesaid issue is that on 18.04.2003, a cheque towards payment of premium was presented by Murari Lal Soni, the registered owner of the Truck with the appellant. at that time, the registration Number of the Truck was RND-3792. Subject to realization of the cheque amount, the insurance was renewed for the period of 19.04.2003 to 18.04.2004, covering the date of accident dated 23.01.2004. a copy of the same is Ex.8. The cheque (Ex.a/2) could not be encashed due to insufficiency of the fund. Consequently, on 28.05.2003, the appellant cancelled the policy. The cancellation order is Ex.a4, the relevant portion is being reproduced below:

'Please note that the above mentioned Policy/Collection stands cancelled since inception and we are not on risk in respect of the above Policy & Certificate of Insurance. In case you want to take a fresh insurance please remit us immediately the premium in Cash/DD to enable us to assume the risk from the date of fresh collection subject to your confirmation that there has been no loss so far.'

5. The aforesaid cancellation letter was sent to Mr. Murari Lal Soni, however, in-correct name of the owner was mentioned as Murari Lal Saini. In the circumstance, the postal peon returned the cancellation notice with remarks that no person with such name resides at the address. The envelop concerned is Ex.a/5 on the record. The appellant sent the cancellation notice to the Regional Transport Officer vide Ex.a8 only on 01.12.2009 i.e. after the accident.

6. The learned Tribunal took the aforesaid factual position into notice and came to the conclusion that since cancellation of the policy was not communicated properly to the owner due to incorrect mentioning of the name of the owner or to the authority concerned, before the accident, hence, the appellant cannot be absolved of the responsibility to pay to the victims.

7. another factual development was that on 03.01.2004 i.e. prior to accident, the ownership of the Truck was transferred to respondent No.8-Praveen Kumar Soni. The respondent No.8 got registered and fresh registration number of the Truck was issued as RJ-14-2G-2693. In the claim petition, the registered owner Murari Lal Soni was not a party rather the new purchaser Praveen Kumar Soni was a party.

8. Mr. Praveen Jain, learned counsel for the appellant contends that since the insurance policy specifically stipulated that it would be effective only on receipt of the premium amount and premium amount could not be received, hence, it cannot be treated as contract between the insurer and insured for want of 'consideration' in the form of premium