Insurers remain liable for claims despite dishonored premiums unless cancellation notices were properly communicated prior to the accident, reinforcing the obligations established under the Motor Vehicles Act.

JUDGMENT :

1. Through the medium of this common judgment, the afore-titled two appeals are proposed to be decided.

2. Vide MA No. 235/2012, the appellant/insurance company has challenged interim award dated 02.04.2012 passed by the Motor Accident Claims Tribunal, Kishtwar (hereinafter to be referred as the Tribunal), whereby the learned Tribunal has passed the interim award on the basis of "No Fault Liability" under section 140 of the MOTOR VEHICLES ACT , awarded interim compensation of Rs. 25,000/- in favour of the claimant/Respondent No. Vide MA No. 158/2017, the appellant/insurance company has challenged final award dated 28.02.2017 passed by Tribunal whereby Respondent No. 1/claimant has been awarded a sum of Rs. 2,87,500/- as compensation along with interest at the rate of 7.5% per annum in the same case.

3. It appears that on 14.06.2010 while Respondent No. 1/claimant was walking on the road side, on reaching Guriyan Kishtwar, he was hit by a Tipper bearing Registration No. JK13-3949, as a result of which, he suffered grievous injuries. The accident is alleged to have been caused due to rash and negligent driving of the offending vehicle by its driver, Respondent No. 3 herein. Claimant/Respondent No. 1 was a student, aged 13 years at the relevant time and he suffered 40% permanent disability. Accordingly, he filed a claim petition before the Tribunal impleading the owner, driver and insurer of the vehicle as respondents.

4. The claim petition was contested by the respondents by filing their reply to the claim petition. In its reply, appellant/insurance company claimed that the offending vehicle was being driven in violation of the provisions of MOTOR VEHICLES ACT and in contravention of the terms and conditions of policy of insurance, as such, it has no liability to indemnify the insured. It was contended that the driver of the offending vehicle was not holding a valid and effective driving license. It was also pleaded by the appellant/insurance company that there was no contract of insurance between the owner and the insurer as the policy of insurance had been cancelled on 27.07.2009 due to dishonor of cheque of premium. It was claimed that intimation regarding cancellation of policy was properly conveyed to the insured and as such, the appellant insurance company is not liable to indemnify the owner.

5. Respondent Nos. 2 and 3, the owner and driver of the vehicle also filed their objections to the claim petition. While denying the occurrence, it was claimed that the vehicle in question was insured with appellant/insurance company at the time of the accident. Respondent No. 2/owner filed amended objections, in which it was pleaded that the vehicle in question was insured with the insurance company with effect from 19.06.2009 to 18.06.2010. It was further pleaded that amount of premium of Rs. 6200/-was paid by the said respondent to Neeraj Gupta, the agent of the appellant/insurance company on 01.05.2009. It was claimed by Respondent No. 2/owner that the insurance company has never informed him about the bouncing of the cheque and in fact the amount of premium was paid to the agent in cash.

6. On the basis of the pleadings of the parties, the learned Tribunal framed the following issues:

(1) Whether petitioner Sajjad Hussain S/o Mohd. Abbas R/o Balwana Teh. & Distt. Doda, at present Kishtwar, was hit by a Tipper bearing Registration No. JK13-3949 on 14.06.2010 at Guriyan, when he was pedestrian, and was going from Kistwar towards Guriyan, and the said accident was caused due to rash and negli