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IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.Sounthar, J
B.Nithyanandham – Appellant
Versus
R.Rajguru – Respondent
JUDGMENT :
The appeal is filed by the injured/claimant questioning the award of compensation passed by the Motor Accident Claims Tribunal, IV Small Causes Court, Chennai in M.C.O.P.No.8770 of 2015, dated 27.01.2022.
2. It is the case of the appellant/claimant that on 06.09.2015 when he was standing in the left hand side of Seni Amman Koil Street near Karumari Amman Nagar Junction in front of Tea Shop, a Car belonging to the 1st respondent insured with the 2nd respondent came in a rash and negligent manner and hit the claimant. As a result of the accident, the claimant sustained grievous injuries. Hence, a claim petition was filed seeking compensation of Rs.9,00,000/- against the respondents.
3. The 1st respondent remained exparte before the Tribunal and the claim was contested by the 2nd respondent-insurance company by denying manner of accident as described in the claim petition. The 2nd respondent- insurance company also raised a point that cheque issued by the 1st respondent for payment of premium was dishonoured and hence, there was no privity of contract between the 2nd respondent and the 1st respondent. Therefore, the 2nd respondent-insurance company sought for exoneration.
4. Be
Insurer remains liable for compensation unless the policy is cancelled and the insured is notified prior to the accident, despite a dishonoured cheque for premium.
Insurance companies remain liable for compensation despite policy cancellations due to non-payment, requiring proof of such cancellations when contested.
An insurance company cannot absolve itself from liability for a motor vehicle accident unless it proves the insured's failure to pay premium through substantial evidence, regardless of policy issues ....
The court held that minor cheque dishonour does not absolve the Insurance Company of liability, and compensation must be adjusted for inflation and economic conditions.
The insurance company is liable to indemnify the owner in respect of the statutory liability unless the policy is cancelled and intimated to the insured before the accident.
An insurance company is not liable for compensation if the policy was cancelled prior to the accident due to non-payment of premium.
Insurance companies are not liable to pay compensation for accidents occurring after the cancellation of the vehicle's policy due to dishonoured payments.
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