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2015 Supreme(Online)(KER) 17756
HIGH COURT OF KERALA
P.R.RAMACHANDRA MENON, ANIL K. NARENDRAN, JJ
ROYAL SUNDARAM ALLIANCE INSURANCE COMPANY LIMITED – Appellant
Versus
SACHIN R.NAIR – Respondent
MACA 2587 2015
SRI.MATHEWS JACOB (SR.), SRI.P.JACOB MATHEW
An insurance policy remains valid until properly canceled and communicated, irrespective of payment issues occurring post-accident.
Headnote:
Insurance - Appeal - Insurance Act - Section 64-VB - The court ruled that liability exists as the policy cancellation occurred after the accident, emphasizing that the insurer must inform the insured for cancellation to affect coverage.
Fact of the Case:
An insurance company appealed against an award granted by a Tribunal for injuries sustained by a claimant in an accident, arguing that the insurance policy was canceled due to a dishonored cheque.
Finding of the Court:
The court found that the insurance policy was still in effect at the time of the accident since cancellation was communicated only after the incident. Hence, the insurer remained liable.
Issues: Whether the insurance company is liable for compensation despite claiming the policy was canceled after the accident due to non-payment of premium.
Ratio Decidendi: The court established that an insurance policy remains valid until officially canceled and communicated to the insured, reaffirming the importance of timely notification regarding cancellations.
Final Decision: The appeal by the insurance company was dismissed, affirming the Tribunal's award.
J U D G M E N T
P.R. Ramachandra Menon, J.
This appeal has been filed by the Insurance Company being aggrieved of the award dated 28.04.2015 in O.P.(MV)No.737 of 2010 on the file of the M.A.C.T., Vatakara, granting a total compensation of Rs.1058000/- with interest at the rate of 9% per annum in respect of the injuries sustained by the first respondent.
2. The main contention is that the cheque issued by the insured , i.e. the second respondent was dishonoured for want of funds and in the said circumstance, the policy was cancelled, which was communicated to the insured by registered post, also forwarding a copy to the authorities of the Motor Vehicles Department and hence there cannot be any liability to the insurer.
3. The sequence of events narrated in the appeal shows that the claimant, while proceeding along the road, was knocked down by a tipper lorry bearing No.KL.10/AC-7980, owned and driven by the second respondent . This led to the claim petition, wherein a contention was taken by the insurer that no liability could be fastened on the shoulders of the Insurance Company for cancellation of the policy as aforesaid. The evidence adduced before the Tribunal consists of deposition of the claimant as P.W.1, documents produced as Exts.A1 to A11 from the part of the claimant, Exts.B1 to B5 from the part of the respondents and Ext.C1 disability certificate issued by the Medical College Hospital, Kozhikode, marked as Court exhibit. After evaluation of the facts and circumstances, the Tribunal arrived at a finding that the accident was solely because of negligence on the part of the owner-cum-driver, i.e. the second respondent and liability was fixed accordingly. After considering the pleadings and materials on record, amounts were awarded under different heads granting total compensation of Rs.1057523/-, which was directed to be satisfied with interest at the rate of 9% per annum. However, in view of cancellation of the policy, the Tribunal, placing reliance on the verdict passed by this Court in 2013(4)KLT SN 121 ( Wilson vs. Vasantha Kumar ), granted right of recovery to the insurer from the owner of the vehicle. This is sought to be challenged in this appeal filed by the insurer contending that in the absence of any liability to pay, the question of pay and recovery does not arise.
4. Heard Mr. Mathews Jacob, the learned Senior Counsel on behalf of the appellant in detail.
5. The main grounds raised by the appellant as discernible from Grounds 'C' and 'E' are that, cancellation of policy was intimated to the insured by registered post and that a letter was sent to the RTO in this regard. Reliance is sought to be placed on Section 64 -VB of the Insurance Act as well, to the effect that the risk would commence only from payment of premium and not otherwise.
6. Coming to the factual position, the accident occurred was on 05.05.2010 and the policy, for want of premium was cancelled on dishonour of cheque and the same was communicated to the insured only subsequently as per Annexure -A letter dated 28.05.2010 (produced along with I.A.No.3749 of 2015), which by itself shows that cancellation of policy was effected much after the accident and that policy was in existence on the date of the accident. It is also relevant to note that copy of Annexure- A communication has been marked to the 'Transport Commissioner' and not to the RTO as contended by the appellant in Ground 'C', which by itself is not sufficient to accept the contention that the position was duly intimated to the authorities of the Motor Vehicles Department as well, in so far as there is no case for the appellant that it was served to the competent authority/concerned authority, who granted registration under the M.V. Act. There is no case that such communication was sent by registered post to the Transport Commissioner. It is true that there is an entry in Annexure B extract of record issued by the Department of Posts that some communication was sent to the RTO, Kakkanad
