An insurance company cannot absolve itself from liability if it fails to prove effective communication of policy cancellation to the insured.

(PER: THE HON'BLE MR. JUSTICE C M JOSHI)

Being aggrieved by the judgment and award in MVC No.1324/2015 dated 13.6.2019 by learned Additional Senior Civil Judge and MACT, Pandavapura, the Insurance Company, who was respondent No.2 in the said petition has approached this court in appeal questioning the liability fastened upon it.

2. The factual matrix that is relevant for the purpose of this appeal are that, the petitioner while was walking near railway station at Pandavapura, on 12.06.2015 at about 9.10 a.m., met with an accident when the car bearing No. TN.34.S.9509 dashed against him. He was shifted to the hospital for the grievous injuries sustained by him and had to suffer the injuries. Alleging that the accident was due to the rash and negligent driving of the car driver, and that the car was insured with the appellant-insurance company, petitioner filed a claim petition for compensation.

3. On service of notice, the owner did not appear before the Tribunal and as such, he was placed exparte. The respondent No.2, Insurance company appeared before the tribunal and contended that the owner of the vehicle had issued a cheque bearing No.95280 dated 27.6.2014 drawn on Axis Bank Limited, Thiruchangode, for an amount of Rs.21,664/- towards the payment of the premium of the insurance and that the said cheque was returned for insufficient funds by the said bank. It was contended that immediately, the Insurance Company had informed the owner about the cancellation of the policy by RPAD notice dated 01.07.2014 and also informed the concerned RTO where the vehicle was registered.

Therefore, alleging that the owner of the vehicle was very well aware of the cancellation of the policy and as such, there being no such contract subsisting between the Insurance Company and the owner as on date of the accident dated 12.6.2015, the Insurance Company sought exonerating it from any liability.

4. The Tribunal, framed appropriate issues, including the issue regarding the cancellation of the insurance policy and recorded the testimony of two witnesses as PWs.1 and 2 and Exs.P1 to P51 were marked. The official of the respondent No.2 was examined as RW1 and Exs.R1 to R4 were marked.

5. After hearing the arguments, the Tribunal held that soon after the cheque was returned for insufficient funds, there is no sufficient evidence to show that the appellant-Insurance Company had communicated the cancellation of the policy to the insured as well as the statutory authorities under the Motor Vehicles Act. Therefore, it fastened the liability to pay the compensation upon the appellant-Insurance Company by determining such compensation to be Rs.3,03,200/-.

6. Being aggrieved by the same, the Insurance Company is before this court in appeal.

7. The arguments by learned counsel Sri Ravishankar S. Samptrathi, for the appellant and the learned counsel for respondent No.1/petitioner were heard. Respondent No.2, was served with the notice, but did not appear.

8. Learned counsel for the appellant contended that when there is positive evidence by the official of the Insurance Company and the copy of the notice issued to the insured intimating cancellation of the policy and the returned cheque were placed on record at Exs.R2 to R4, the Tribunal erred in holding that the appellant-Insurance Company is liable to pay the compensation. He contends that the finding of the Tribunal is contrary to Section 27 of the General Clauses Act, and therefore, is not sustainable in law.

9. Per contra, learned counsel for respondent No.1 has defended the impugned judgment of the Tribunal. 10. The testimony of RW1 and Exs. R 2 to 4 are of importance to address the contentions raised by the appellant. Ex.R2 is the copy of the notice by the appellan