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.

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 1^st respondent insured with the 2^nd 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 1^st respondent remained exparte before the Tribunal and the claim was contested by the 2^nd respondent-insurance company by denying manner of accident as described in the claim petition. The 2^nd respondent- insurance company also raised a point that cheque issued by the 1^st respondent for payment of premium was dishonoured and hence, there was no privity of contract between the 2^nd respondent and the 1^st respondent. Therefore, the 2^nd respondent-insurance company sought for exoneration.

4. Before the Tribunal, the appellant/claimant was examined as PW.1 and on his behalf, 7 documents were marked as Exs.P1 to P7. On behalf of the 2^nd respondent/Insurance Company, it's Official was examined as RW.1 and 5 documents were marked as Exs.R1 to R5. The Disability Certificate issued by the Medical Board to the claimant was marked as Ex.C1.

5. The Tribunal on appreciation of evidence available on record, came to the conclusion that the accident had occurred only due to negligence of the driver of the car belongs to the 1^st respondent insured with the 2^nd respondent. The Tribunal also concluded that the cheque issued by the 1^st respondent for payment of premium to the 2^nd respondent/Insurance Company got dishonoured and hence, exonerated the 2^nd respondent/Insurance Company and passed award against the 1^st respondent by directing him to pay a sum of Rs.3,54,400/- as compensation to the claimant. Aggrieved by the same, the claimant has come by way of this appeal.

6. The learned counsel appearing for the appellant/claimant would submit that the accident had occurred on 06.09.2015 and cheque issued to the 2^nd respondent by the 1^st respondent was also dishonoured only on 06.09.2015. In the absence of any evidence on record to show that the policy was cancelled by the 2^nd respondent and the same was intimated to the 1^st respondent prior to the accident, the Tribunal ought not have exonerated the Insurance Company. In support of the said contention, the learned counsel relied on the judgment of the Apex Court in United India Insurance Co. Ltd. vs. Laxmamma and others reported in 2012 ACJ 1307 The learned counsel further submitted that the amount awarded by the Tribunal under the heads paid and sufferings and loss of amenities are very much on lower side.

7. The learned counsel appearing for the 2^nd respondent/Insurance Company would submit that since the cheque issued by the 1^st respondent for payment of premium got dishonoured, the Tribunal was justified in exonerating the Insurance Company as there was no privity of contract between the 1^st respondent and 2^nd respondent. The learned counsel further submitted that having applied multiplier method and awarded compensation, the Tribunal ought not have awarded any amount under the head loss of income separately.

8. It is seen from Exs.R1 to R5, it is clear that the 1^st respondent issued a cheque for payment of premium on 31.08.2015 and policy of insurance was issued in favour of the 1^st respondent on 04.09.2015. The effective date of policy is from 06.09.2015 to 05.09.2016. A perusal of Ex.R1 makes it clear that 2^nd respondent received a communication from it's banker on 06.09.2018 that the cheque issued by the 1^st respondent for payment of premium was dishonoured due to insufficient funds. However, the 2^nd re