Insurance companies are not liable to pay compensation for accidents occurring after the cancellation of the vehicle's policy due to dishonoured payments.

JUDGMENT :

N. ANAND VENKATESH, J.

1. The issue that has been raised in both these appeals are common and therefore, both these appeals are taken up together, heard and disposed of through this common order.

2. The Insurance Company has filed these appeals against the award passed by the Motor Accidents Claims Tribunal (III Additional District Judge), Villupuram @ Kallakurichi, in M.C.O.P.Nos.453 of 2018 and 454 of 2018, dated 20.09.2022.

3. The case of the claimants is that the claimant in M.C.O.P.No.453 of 2018, was the rider of the two wheeler and the claimant in M.C.O.P.No.454 of 2018 was the pillion rider in the two wheeler and on 8.7.2018 they were travelling at Salem – Chennai National High Road. On the place of occurrence, the Car belonging to the 1^st respondent was driven in a rash and negligent manner and it dashed on the two wheeler and as a result of which, the rider and the pillion rider fell down. The claimant in M.C.O.P.No.453 of 2018 sustained (1) Laceration over left temporal region and (2) Multiple abrasion over the face, abdomen, toes and hands. The claimant in M.C.O.P.No.454 of 2018, sustained hip, spinal card fracture and injuries all over the body. It is under these circumstances, both the claimants have filed independent claim petitions seeking for payment of compensation.

4. The Tribunal on considering the facts and circumstances of the case and on appreciation of the oral and documentary evidence came to a conclusion that the accident had taken place only due to the rash and negligent driving on the part of the driver of the offending vehicle. Having reached such a conclusion, the Tribunal fixed a total compensation of a sum of Rs.1,09,968/- in M.C.O.P.No.453 of 2018 and in M.C.O.P.No.454 of 2018, a total compensation of a sum of Rs.1,09,968/-. These amounts were directed to be paid with interest at the rate of Rs.7.5.% p.a.

5. The Insurance Company questioning their very liability to pay the compensation fixed by the Tribunal, has filed these appeals before this Court.

6. Heard Mr.D.Bhaskaran, learned counsel for the appellant – Insurance Company and Mr.K.Raj Kumar for M/s.R.Bharath Kumar, learned counsel for the 2^nd respondent. The 1^st respondent has been served with notice and the name has also been printed in the cause list. There is no appearance either in person or through counsel.

7. This Court has carefully considered the submissions made on either side and the materials available on record.

8. The learned counsel for the appellant submitted that the policy was issued on 4.10.2017 for the period from 4.10.2017 to 3.10.2018. Premium was paid by way of cheque and the same got dishonoured on 4.10.2017. The dishonour of cheque was informed on 11.10.2017 both to the owner of the vehicle as well to the RTO. The intimation was received on 7.11.2017. Thus the contractual relationship between the Insurance Company and the insurer came to an end. The accident had taken place on 8.7.2018 and at that point of time, the offending vehicle was not covered by any policy and therefore, the Insurance Company cannot be made liable in this case. It was therefore submitted that the Tribunal went wrong in applying the pay and recovery principle in this case.

9. The learned counsel in order to substantiate his submissions relied upon the following judgments:

(a) Deddappa and others .v. Branch Manager, National Insurance Company , (2008) 2 SCC 595

(b) United India Insurance Company .v. Laxmamma and others , (2012) 5 SCC 234

(C) National Insurance Co. Ltd. vs. D.