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2025 Supreme(Online)(Kar) 22733
KARNATAKA HIGH COURT
HANCHATE SANJEEVKUMAR, J
DIVISIONAL MANAGER, RELIANCE GENERAL INSURANCE COMPANY LIMITED – Appellant
Versus
1. S. RAMESH S/O SANNA MARANNA – Respondent
MISCELLANEOUS FIRST APPEAL NO.100916 OF 2017 (MV-I)
For the Appellants/Petitioners: SRI G.N. RAICHUR
For the Respondents: SRI GURUKUMAR V.A.
Insurer cannot escape liability without proving communication of policy cancellation to the vehicle owner; quantum of compensation modified based on assessed injuries.
Headnote:(A) Motor Vehicles Act, 1988 - Section 173(1) - Insurance policy cancelation due to dishonoured cheque - Insurer's liability - Insurer claimed non-liability citing dishonoured cheque and policy cancellation but failed to prove communication to the vehicle owner regarding the dishonoured cheque and policy cancellation. Thus, liability remains. (Paras 3, 5, 13)
(B) Quantum of compensation - Tribunal awarded Rs.4,61,740/- for injuries sustained by the claimant - Held, modification to Rs.3,43,840/- is appropriate based on injuries and future earnings potential considering statute-backed notional income—awarded interest at 6% p.a. (Paras 12, 13, 14)
Facts of the case:
The claimant sustained serious injuries resulting from an accident on 15.04.2014 while working as a driver. The Tribunal initially awarded compensation which the appellant insurance company contested, leading to a reassessment of the awarded amount.
Findings of Court:
The appeal was allowed in part with the original compensation being modified to a lower amount due to the reassessment of various heads of compensation.
Issues: The main determination was whether the insurer could deny liability without proving notification of the policy's cancellation—liability was affirmed.
Ratio Decidendi: The court emphasized that the insurer bears the burden of proof regarding communication of non-renewal or policy cancellation to the vehicle owner, failing which, they remain liable for compensation.
Result: The appeal is allowed in part.
| Table of Content |
|---|
| 1. insurance company contested liability based on policy issues. (Para 1 , 2) |
| 2. court discusses evidential burden on insurer for communication. (Para 4 , 5) |
| 3. details of injuries and initial compensation awarded. (Para 6 , 7 , 8 , 9) |
| 4. modification of compensation awarded after reevaluation of damages. (Para 10 , 11 , 12 , 13) |
ORAL JUDGMENT
(PER: THE HON'BLE MR. JUSTICE HANCHATE SANJEEVKUMAR) This appeal is filed by the insurance company challenging the judgment and award dated 01.10.2016, passed by the Motor Accident Claims Tribunal-II, Ballari, in MVC No.1067/2014, questioning its liability to pay compensation on the ground that the cheque for payment of premium was dishonoured and it was communicated to the owner of the offending vehicle and the insurance policy was cancelled. Therefore, the appellant is not liable to pay compensation and also to reduce compensation.
2. Heard the arguments and perused the trial Court records and the material placed before the Court.
3. In this case, the date of accident is 15.04.2014.
Ex.R.2 is the cheque issued on 08.07.2013 paying premium towards purchase of insurance policy. The cheque was dishonoured on 10.07.2013 and Ex.R.3 is the bank endorsement. The appellant company has issued legal notice and dispatched on 16.07.2013 and Ex.R.6 is the cancellation of insurance policy. But the insurance company has not produced any evidence to show that the intimation of dishonour of cheque was communicated to the owner of the vehicle. Further, there is no evidence that cancellation of policy was communicated to the owner of the offending vehicle. Therefore, on perusing the records no proof is found produced by the appellant insurance company that the fact of dishonour of cheque was communicated to the owner of the vehicle and also the fact of cancellation of insurance policy was communicated to the owner of the vehicle. Therefore, in the absence of this, it is to be held that the insurance policy was in existence.
4. Ex.R.4 is the dispatch list which only proves the fact that notice has been sent but there is no proof that the notice was reached to the owner of the vehicle. Mere dispatch of notice is not sufficient, but at the same time the insurance company shall also prove the fact that the notice is reached and received by the owner of the vehicle.
5. The issue is squarely covered by the judgment of this Court in MFA No.24732/2011 dated 21.02.2025 in the case of Sri P.Yadava Rao S/o.Mallaiah vs. Sri Ramaiah S/o.Sriramulu and others . Therefore, in the absence of proof of dishonour of cheque was communicated and cancellation of policy was communicated, then, the insurance company is held liable to pay compensation.
REGARDING QUANTUM OF COMPENSATION:
6. In the present case, from the medical evidence on record it is proved that the claimant had suffered the following injury.
”Fracture of mandible shaft right femur and ORIF with plate screw for the mandible at symphysis Menti.”
7. The Tribunal after considering the facts and circumstances and evidence on record, has awarded total compensation of Rs.4,61,740/- along with interest at the rate of 7% per annum from the date of petition till the date of realization, under the following heads:
Sl. No.
Heads.
Amount in (Rs.)
1.
Towards pain and sufferings.
60,000/-
2.
Towards loss of amenities
10,000/-
3.
Loss of income during laid-up period
20,000/-
4.
Medical expenses
42,740/-
5.
Loss of future income
2,04,000/-
6.
Future medical expenses
25,000/-
7.
Loss of future prospects
1,00,000/-
Total:
4,61,740/-
8. Further, upon considering the nature of injuries sustained, compensation awarded by Tribunal is on higher side. Therefore, the same is required to be reduced by modifying the judgment and award.
9. Considering the injuries sustained, a compensation of Rs.25,000/- towards pain and suffering, Rs.30,000/- towards loss of amenities are awarded. The compensation awarded towards medical expenses and hospital charges of Rs.42,740
