In the absence of a valid insurance policy on the date of the accident, the insurance company is not liable to pay compensation.

JUDGMENT

(Prayer: Civil Miscellaneous Appeal has been filed under Section 173 of the Motor Vehicles Act, 1988, against the judgment and decree dated 06.03.2012 passed in M.C.O.P.No. 903 of 2008 on the file of the Motor Accident Claims Tribunal/Principal Subordinate Judge, Tindivnam.)

1. Challenge is made to the Judgment and decree dated 06.03.2012 passed in M.C.O.P.No. 903 of 2008 on the file of the Motor Accident Claims Tribunal, Tindivanam/Principal Subordinate Judge, Tindivanam by the insurance company.

2. The claim petition was filed under Section 166(1) of the Motor Vehicles Act, claiming compensation of Rs. 3,50,000/- for the injuries sustained by the first respondent.

3. The Tribunal after evaluating the evidence has passed an award for a sum of Rs. 1,51,000/- with the interest at a rate of 7.5% per annum from the date of filing of petition payable by the second respondent on behalf of the first respondent at the first instance with a liberty to recover from the first respondent at a later point of time.

4. The learned Counsel, Mr.R.Sivakumar appearing for the appellant would vehemently contend that there was no valid insurance policy on the date of accident in respect of first respondent's vehicle. Therefore, the insurance company is not liable to compensate the petitioner. He would further contend that only the owner is liable to pay compensation. Therefore, the order to pay by the insurance company and to recover at the later point of time from the first respondent is not correct.

5. To substantiate his arguments, the learned counsel for the appellant referred the following judgments of this Court :-

(i) in the case of IFFCO-TOKIO General Insurance Co.Ltd., Vs Shahanas reported in 2021 (2) TN MAC 28 (DB) was referred to in order to contend that the cheque issued by the owner of the lorry for the insurance premium amount was dishonored by her banker. Therefore, the insurance policy was cancelled by the insurance company. On the date of alleged accident, there was no insured/insurer relation between the owner of the lorry and the insurance company. Thus, there was no contract of insurance in subsistence between the insurance company and the owner of the lorry. Therefore the insurance company is not liable to pay compensation amount. This Court has held that as on the date of accident when there was no insured / insurer relationship, the question of giving direction to pay the compensation amount and to recover the same from the owner does not arise.

(ii) The judgment rendered in HDFC ERGO General Insurance Company Limited Vs. Rani and others, 2022 (1) TN MAC 644 was referred to in order to contend that when there is no policy existed on the date of accident, insurer is not liable to pay the compensation and only the owner of the offending vehicle is liable to pay the compensation and the Tribunal erred in directing the insurer to pay and recover.

6. Despite the receipt of summons, the respondents neither appeared nor represented through their counsel.

7. When similar issue came up before the Hon'ble Supreme Court in New India Assurance Co. Ltd. Vs. Tara Devi, 2016(2) TN MAC 520 (SC), wherein the Apex Court has set aside the order passed by the Tribunal and held that the insurance company is not liable to pay the compensation. The relevant portion of the said decision has been culled out as follows:

“6. Learned Counsel appearing for the Appellant/Insurance Company submits that on the date of the alleged incident, the Vehicle in question did not have the valid Insurance Policy. To buttress his argument, the learned Counsel brings to our notice the date of the Policy lapsed, the date of intimation of dishonour of the Cheque and the Cancellation Letter written to the insured/Owner. But this aspect of the matter has not been taken note of either by the Tribunal or the High Court while passing the impugned Judgment(s) and Order(s).

7. We have carefully perused the documents furnish