K. George Thomas and Anvar C.M. v Joshy S/O Sebastian and Divisional Manager, Royal Sundaram Alliance Insurance Co. Ltd.

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MRS. JUSTICE MARY JOSEPH`** ``` THURSDAY, THE 15[TH] DAY OF FEBRUARY 2024 / 26TH MAGHA, 1945 ``` ``` MACA NO. 217 OF 2021 ``` ``` AGAINST THE AWARD DATED 10.07.2020 IN O.P(M.V) NO.1175 OF 2016 OF ``` ``` MOTOR ACCIDENT CLAIMS TRIBUNAL, KOTTAYAM ``` ## **`APPELLANTS/RESPONDENTS:`** - **`1 K.GEORGE THOMAS, S/O.THOMAS VARGHESE, H.NO.02/562, MANAPARAMBIL HOUSE, THYMARUVUMKARA WEST, OTHERA P.O., THIRUVALLA-689101.`** - **`2 ANVAR C.M., SAFA MAHALH NO.601226, ST.FRANCIS ROAD, KATHRUKADAVU, KALOOR, COCHIN-682017.`** ## **`BY ADV SRI.A.K.HARIDAS`** ## **`RESPONDENTS/PETITIONER & RESPONDENT NO.3:`** - **`1 JOSHY S/O.SEBASTIAN, PALLIPARAMBIL HOUSE, MAMMODU P.O., MADAPPALLY-688006.`** - **`2 DIVISIONAL MANAGER, ROYAL SUNDARAM ALLIANCE INSURANCE CO. LTD., SUNDARAM TOWERS, 46, WHITE ROAD, ROYAL PETTAH, CHENNAI-600014.`** ``` BY ADV. R2 BYSMT.A.SREEKALA ``` ``` THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR HEARING ON 15.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` M.A.C.A.No.217 of 2021 ``` ``` 2 ``` ## **JUDGMENT** ## **Dated this the 15[th] day of February, 2024** The appeal on hand is originated from an award passed by Motor Accident Claims Tribunal, Kottayam (for short ‘the Tribunal’) on 10.07.2020 in O.P.(M.V) No.1175/2016. The appellants before this Court are respondents 1 and 2 who are the driver and the registered owner of the offending vehicle, which is a private car bearing Registration No.KL-7BG-7671. 2. For the sake of convenience, the parties to this appeal will hereinafter be referred to as petitioners and respondents 1 to 3 in accordance with their status in the Original Petition. 3. The facts of the case relevant for disposal of this appeal are summarised hereinbelow: ``` M.A.C.A.No.217 of 2021 ``` ``` 3 ``` On 24.12.2013 at about 5.30 p.m., while the petitioner was riding a motorcycle bearing Registration No.KL-33/E 4570, a car bearing Registration No.KL-7BG7671 hit against the motorcycle at a place called Kailathupady and thereby he sustained serious injuries. He availed treatment for that. It was alleged that the motor accident in question was occurred due to the rash and negligent driving of the car by the 1[st] respondent. The 2[nd] respondent arrayed in the Original Petition was none other than the owner and the 3[rd] respondent, the insurer of the offending vehicle. A sum of `9,00,000/was claimed as compensation. 4. Respondents were served with notice. 1[st] and 2[nd] respondents entered appearance and filed written statement raising contentions that the compensation claimed is excessive and that the criminal case pertaining to the motor accident was registered by ``` M.A.C.A.No.217 of 2021 ``` ``` 4 ``` influencing the police. Admittedly, the offending vehicle was having a valid policy and the 1[st] respondent was holding a valid driving licence. 3[rd] respondent had also filed written statement denying insurance coverage for the offending vehicle as on date of the motor accident. It was contended that though a policy was originally issued for the vehicle, but the period of coverage was not extended after its expiry, in view of the cancellation of the policy on account of bouncing of the cheque given for payment of premium. According to them, a cheque dated 20.11.2013 was given for `9,842/- but it was dishonoured and thereby the policy stands void _ab initio._ Therefore, the 3[rd] respondent is contended as not liable to indemnify the 2[nd] respondent. It is further contended that the petitioner at the relevant time was not wearing a helmet. Amount claimed as compensation is also disputed for its exorbitance. ``` M.A.C.A.No.217 of 2021 ``` ``` 5 ``` 5. The Tribunal passed an award for a sum `12,29,120/- and directed the 1[st] and 2[nd] respondents to pay the same with interest at the rate of 8% per annum from 01.09.2016 till the date of realisation. Aggrieved by the fixation of liability upon the 1[st] and 2[nd] respondents and challenging the same, the appeal on hand is filed. 6. 3[rd] respondent has taken a contention in the written statement filed that the premium proposed to be paid by a cheque was dishonoured for the reason, insufficiency of funds. 3[rd] respondent has also produced copies of the driving licence and the policy and those are marked in evidence respectively as Exts.B1 and B2. They have also produced copies of the registered notice nil dated, motor insurance endorsement, cheque for `9,842/- and cheque return memo and marked those in evidence as Exts.B3 to B6. ``` M.A.C.A.No.217 of 2021 ``` ``` 6 ``` 7. Relying on **Manoharan v. Shaji** (2020 (2) KLT 464) the Tribunal held that the factum of cancellation of policy is not required to be intimated to the Registering Authority and the insurer. It held further that even in the absence of a communication to the registering authority and the insurer, the policy can be taken to have been cancelled. The factual situation in **Manoharan** supra being different from that in the case on hand, the dictum laid therein cannot be applied in the case on hand. Therefore, the Tribunal undoubtedly has committed an error by holding so on the basis of **Manoharan** supra. 8. A Full Bench of this Court has held in **Prasanna v. Kabeer** [2018(4) KLT 722(FB)] as follows: “The burden is not on the insurer to establish conclusively that the intimation of cancellation of insurance coverage was in fact served on the insured or the registering authority-The burden is on the ``` M.A.C.A.No.217 of 2021 ``` ``` 7 ``` addressee to rebut the presumption by conclusive evidence that he did not really receive the letter and it is not a case of deliberate avoidance.” It is clear from the above dictum that when a cheque given for payment of premium has been dishonoured for want of funds in the account of the insured to honour it, communication regarding that factum needs to be issued to the insured or the Registering Authority. Only when the insurer succeeds in establishing that the communication as above has been issued by it to the insured or the Registering Authority, it can take the benefit of cancellation of policy and exoneration from liability to indemnify the insured. It is for the insured or the Registering Authority to establish that the communication issued has not been served on them. When the communication was established as not served on the insured or the Registering Authority, the insurance company cannot ``` M.A.C.A.No.217 of 2021 ``` ``` 8 ``` escape from its liability to indemnify the insured on the ground that the policy is cancelled. 9. In the case on hand, Ext.B3 was produced by the insurer with a view to establish that communication regarding cancellation of policy has been issued to the insured. Ext.B3 is nothing but photocopy of a notice claimed to be issued by the insurer to the insured, by Registered Post. Going by Ext.B3, it is found that it does not bear the date. Moreover, the postal receipt and acknowledgment card to evidence issuance of notice to the insured or the Registering Authority were also not produced. Therefore, the insurer is not entitled to avail the benefit of cancellation of policy and exoneration from liability to indemnify the insured. The Tribunal on a misreading of **Manoharan** supra has held that the burden is not cast upon the insurer to communicate about the cancellation of coverage to the insured or the ``` M.A.C.A.No.217 of 2021 ``` ``` 9 ``` Registering Authority. The Tribunal undoubtedly is erred in holding so. 10. Appeal succeeds for the reason and is allowed. The impugned award to the extent it exonerated the 3[rd] respondent from liability to indemnify the insured is set aside. The 3[rd] respondent insurer is fixed with liability to indemnify the insured for the compensation arrived at as payable in favour of the petitioner. Sd/- **MARY JOSEPH JUDGE** NAB