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P. SAM KOSHY, N. TUKARAMJI
New India Assurance Co. Ltd. – Appellant
Versus
Amrutham Rajasree – Respondent
JUDGMENT: (per Hon’ble Sri Justice N. Tukaramji)
We have heard Mr. Kota Subba Rao, learned counsel for the appellant/respondent No.2 and Mr. Chandra Sekhar Reddy Gopi Reddy, learned counsel for the claim petitioners.
2. This appeal has been filed by the respondent No.2/insurance company assailing the liability fastened in the decree and order dated 09.11.2015 in O.P.No.224 of 2009 on the file of the Chairman, Motor Accidents Claims Tribunal-cum-I Additional District Judge, Nalgonda.
3. The prime contest of the appellant/respondent No.2/insurer (hereinafter ‘the insurer’) is that as the cheque issued by the insured/respondent No.6 (hereinafter ‘the insured’) towards premium was dishonoured for want of sufficient funds and the same was intimated to the insured much prior to the accident, the policy stood cancelled, as such, fastening the liability to indemnify the owner is untenable. Further the cover note of the insurance policy is clearly specifying that the policy would be subject to realization of premium amount, thus the dishonour of the cheque automatically rescinds the insurance contract ab initio. Furthermore, as per the Section 64-VB of the Insurance Act, 1938 specifies that th
Insurer must communicate policy cancellation before an accident; failure to do so results in liability for compensation.
Dishonour of a premium cheque can lead to the effective cancellation of an insurance policy, relieving the insurance company from liability to pay compensation for any subsequent accidents.
The liability of the insurer under the insurance policy and the requirement to prove cancellation of the policy and intimation to the owner of the vehicle prior to the accident.
The main legal point established in the judgment is the liability of the insurance company to indemnify the insured in cases of motor vehicle accidents, emphasizing the importance of timely intimatio....
Insurance companies must prove policy cancellation and notification to the insured before an accident to avoid liability for compensation.
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 ....
Insurance companies remain liable for compensation despite policy cancellations due to non-payment, requiring proof of such cancellations when contested.
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