High Court of KeralaSingle Judge2013-06-18Appeal allowed; findings of Tribunal set aside;...

National Insurance Company Ltd. v. Akbar K.V., A.T. Mohammed Koya and Musthafo

Case / Petition Number:MACA No.1326 of 2010

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Thomas P. Joseph
Judgment Date: 2013-06-18
Court Decision / Holding: The appeal is allowed. The Tribunal’s finding that the appellant is liable to indemnify the 2nd respondent is set aside. Since the policy was cancelled well before the date of the accident and the cancellation was duly intimated to the 2nd respondent and the RTO, the appellant is not liable to indemnify the 2nd respondent. All other findings of the Tribunal and the award are set aside, and O.P.(MV) No.1359 of 2005 is remitted to the Tribunal for fresh decision. The 2nd respondent is permitted to implead the New India Assurance Company Limited as a party; if such an application is made, the Tribunal shall decide merits. The Tribunal is directed to dispose of the petition in accordance with the law. Respondents 1 to 3 shall appear before the Tribunal on 10.07.2013. All other pending interlocutory applications are dismissed.
Final Disposition: Appeal allowed; findings of Tribunal set aside; matter remitted to Tribunal for fresh decision; insurer not liable; New India Assurance Company may be impleaded if sought; directions for appearance and dismissal of other interlocutory applications.

Parties to the Case

Appellants / Petitioners

National Insurance Company Ltd.

Respondents

Akbar K.V.
A.T.Mohammed Koya
Musthafo

Legal Representation & Advocates

Counsels for Petitioners

• Sri Lal George

Counsels for Respondents

• Sri G. Prabhakaran
• Smt. R. Padmakumari

Case Synopsis & Summary

This MACA arises from an award dated 05.10.2009 by the Motor Accidents Claims Tribunal, Kozhikode, which awarded the first respondent compensation for injuries suffered in a motor vehicle accident on 02.12.2003. The offending vehicle was a bus insured by the appellant insurer, which is the 3rd respondent in the appeal. The Tribunal held the accident occurred due to the negligence of the driver (the 3rd respondent) and directed the appellant to indemnify the 1st respondent for Rs. 17,950 along with interest and costs. The appellant challenged the liability on the ground that the premium cheque for the policy was dishonoured on 05.07.2003, prompting cancellation of the policy prior to the accident; it contends that cancellation was communicated to the 2nd respondent and to the Regional Transport Authority, Irinjalakuda. Relying on United India Insurance Co. Ltd. v. Laxmamma (2012) 5 SCC 234, the appellant argues the insurer cannot be held liable where cancellation pre-dates the accident. The Tribunal, however, treated the policy as valid on the date of the accident and found liability. The appellant produced Exts.B2–B5 and Annexures A1–A3 as additional evidence, sought to establish cancellation, and the High Court allowed the appeal, set aside the Tribunal’s liability finding, and held cancellation prior to the accident with proper intimation absolves the insurer. The matter was remitted for fresh decision, with permission to implead New India Assurance Co. Ltd., if sought, and directions issued for appearance at the Tribunal.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that the policy was cancelled before the accident due to the dishonour of the premium cheque, and thus the insurer cannot be held liable. Relying on United India Insurance Co. Ltd. v. Laxmamma (2012) 5 SCC 234, it argues that cancellation prior to the accident exempted the insurer from liability. It produced Exts.B2–B5 and Annexures A1–A3 as additional evidence (via I.A. No.1872 of 2010) to prove cancellation and also urged that the Tribunal’s finding of liability should be reversed. The appellant also sought to implead New India Assurance Company Ltd. as an additional party to resist the claim and requested remittance for a fresh decision by the Tribunal.

Contentions of Respondents

The respondents supported the Tribunal’s finding of liability, contending that the policy remained in force at the date of the accident or that proper cancellation was not communicated to the relevant authorities, thus keeping the insurer liable. They argued that the Tribunal’s factual findings deserved preservation and opposed the appellant’s attempt to add New India Assurance Co. Ltd. as a party at this stage. They relied on the Tribunal’s record and argued for maintaining the award, or at least a remand only if the insurer’s liability could be affirmed under the insurance contract terms.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
United India Insurance Co. Ltd. v. Laxmamma	[2012] 5 SCC 234	Positive	Cited to support the proposition that cancellation of the policy prior to the accident exempts the insurer from liability.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE THOMAS P.JOSEPH** **TUESDAY, THE 18TH DAY OF JUNE 2013/28TH JYAISHTA 1935** **MACA.NO. 1326 OF 2010 ( )** **----------------------------------OPMV NO.1359 OF 2005 OF THE PRINCIPAL MOTOR ACCIDENTS CLAIMS TRIBUNAL, KOZHIKODE** ## **APPELLANT(S)/3RD RESPONDENT:** **---------------------------------------------------** **NATIONAL INSURANCE COMPANY LTD., DIVISIONAL OFFICER, 2ND FLOOR, NOOR COMPLEX MAVOOR ROAD, KOZHIKODE, REPRESENTED BY ITS MANAGER, REGIONAL OFFICE, OMANA BUILDINGS PADMA JN., M.G.ROAD, ERNAKULAM.** **BY ADV. SRI.LAL GEORGE** ## **RESPONDENT(S)/PETITIONER AND RES.1 & 2:** **------------------------------------------------------------------** **1. AKBAR K.V., AGED 25 YEARS, S/O. MOIDEEN KOYA (LATE), KAMBIVALAPPIL HOUSE, VENGALAM P.O. ELATHUR, KOZHIKODE DISTRICT.** ## **2. A.T.MOHAMMED KOYA, S/O. HYDER,** ## **HAJASSAN HOUSE, ELATHOOR, KOZHIKODE.** ## **3. MUSTHAFA, S/O. MOIDEEN,** **ARANTHOP HOUSE, FRANCIS ROAD, KALLAI KOZHIKODE.** **R2 BY ADV. SRI.G.PRABHAKARAN R2 BY ADV. SMT.R.PADMAKUMARI** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 18-06-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **MACA.NO. 1326 OF 2010** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS:** **EXHIBIT B6 TRUE PHOTOSTAT COPY OF LETTER DATED 7.7.2003 ADDRESSED TO THE REGIONAL TRANSPORT AUTHORITY, IRINJALAKUDA.** **EXHIBIT B7 TRUE PHOTOSTAT COPY OF THE ACKNOWLEDGMENT CARD DATED 14.7.2003 SIGNED BY THE REGIONAL TRANSPORT AUTHORITY.** **EXHIBIT B8 TRUE PHOTOSTAT COPY OF THE DESPATCH REGISTER MAINTAINED BY THE APPELLANT.** ## **RESPONDENT(S)' EXHIBITS:** **NIL** ## **TRUE COPY** **P.S. TO JUDGE** ## **THOMAS P.JOSEPH, J.** **==================================== M.A.C.A. No.1326 of 2010 ==================================== Dated this the 18[th] day of June, 2013** ## **J U D G M E N T** Respondents 1 and 2 are served through paper publication but there is no response. 2. This appeal arises from the award dated 05.10.2009 of the Motor Accidents Claims Tribunal, Kozhikode (for short, “the Tribunal”). The 1[st] respondent who claimed to have sustained injuries in a motor accident on 02.12.2003 claimed compensation from respondents 2 and 3, owner and driver of the offending vehicle. The appellant was impleaded as the 3[rd] respondent in the proceeding on the allegation that it has insured the offending vehicle. The Tribunal found that the accident occurred due to the negligence of the 3[rd] respondent, driver of the offending bus which hit the motor cycle which the 1[st] respondent was riding. The Tribunal assessed compensation payable to the 1[st] respondent as Rs.17,950/- with interest and proportionate costs. 3. The appellant contended that since the cheque for the premium stood dishonoured, it cancelled the policy of insurance in favour of the 2[nd] respondent and intimation of cancellation was **M.A.C.A No.1326 of 2010** -: 2 :- given to the 2[nd] respondent and the RTO, Irinjalakuda. The Tribunal found that the policy of insurance was valid as on the date of the accident, no intimation was given to the appropriate authority to prevent plying of the vehicle without a valid policy and hence the appellant is liable. The appellant was directed to deposit the amount awarded in the Tribunal. Appellant is aggrieved and has preferred this appeal. 4. Learned counsel for the appellant has invited my attention to Exts.B2 to B5 and Annexueres A1, A2 and A3 produced in the appeal along with I.A. No.1872 of 2010 with a request to receive those documents as additional evidence. It is contended that since the policy of insurance was cancelled even prior to the accident, the appellant could not be held liable. Reliance is placed on the decision in **United India Insurance** **Co. Ltd. v. Laxmamma** ([2012] 5 SCC 234). There it is held that where the policy was cancelled prior to the accident, the insurer cannot be held liable unlike cases where cancellation of the policy was after the accident. 5. Exhibit B5 is the memo dated 05.07.2003 issued from the drawee bank dishonouring cheque for premium tendered by the 2[nd] respondent. Exhibit B5 shows that the cheque for the **M.A.C.A No.1326 of 2010** ## -: 3 :- premium was dishonoured on 05.07.2003. Exhibit B2 is the copy of letter dated 03.07.2003 addressed by the appellant to the 2[nd] respondent intimating him about dishonour of the cheque cancelling the policy. Exhibit B3 shows that original of Ext.B2, letter was served on the 2[nd] respondent by 14.07.2003. The accident occurred on 02.12.2003. 6. The Tribunal has taken the view that Ext.B4, Policy would show that it was valid from 03.07.2003 from 02.07.2004. The Tribunal has observed that there is no evidence to show that cancellation of the policy was intimated to the competent authority to prevent plying of the vehicle without a valid policy. 7. The appellant has produced Annexures A1 to A3. In view of the dispute involved in the case and since the relevant documents are already produced in the Tribunal, I am inclined to allow I.A. No.1872 of 2010. Hence I.A. No.1872 of 2010 is allowed. Annexures A1 to A3 are marked as Exts.B6 to B8. 8. Exhibit B6 is the copy of letter dated 07.07.2003 from the appellant to the Regional Transport Officer, Irinjalakuda intimating cancellation of policy of the offending vehicle belonging to the 2[nd] respondent. Exhibit B8 is the copy of the despatch register which shows that Ext.B6, letter was sent to **M.A.C.A No.1326 of 2010** -: 4 :- the RTO. Exhibit B7 shows service of the letter on the RTO on 14.07.2003. Thus it is clear that competent authority was also informed well prior to the accident on 02.12.2003 about cancellation of the policy. In that view of the matter and in the light of the decision referred supra, the appellant is not liable to indemnify the 2[nd] respondent. Finding of the Tribunal that the appellant is liable to indemnify the 1[st] respondent is to be set aside. 9. The learned counsel for the 2[nd] respondent has produced certain documents along with counter affidavit to I.A. No.1428 of 2013. Those documents, according to the learned counsel for the 2[nd] respondent would show that financier of the vehicle had taken a policy of insurance with the New India Assurance Company. The learned counsel requested that the said Company may be impleaded as additional respondent in the proceeding. 10. That procedure has to be taken in the Tribunal. For, if impleaded, that Company is entitled to resist the claim petition on appropriate grounds as are available to it. In the light of the above I am inclined to give opportunity to the 2[nd] respondent to implead necessary party. In view of that, all the findings entered **M.A.C.A No.1326 of 2010** -: 5 :- by the Tribunal and the ultimate award are liable to be set aside. Resultantly the appeal is allowed as under: (i) Finding of the Tribunal that the appellant is liable to indemnify the 2[nd] respondent is set aside. (ii) It is found that since the policy was cancelled much prior to the date of accident and necessary intimation of the same was given to the 2[nd] respondent and the Regional Transport Authority, the appellant is not liable to indemnify the 2[nd] respondent. (iii) Other findings of the Tribunal and consequent award are set aside and O.P(MV) No.1359 of 2005 is remitted to the Tribunal for fresh decision. (iv) It is open to the 2[nd] respondent to implead the New India Assurance Company Limited as a party to the proceeding. (v) If any such application is made, the Tribunal shall pass appropriate orders on the application on merit. (vi) The Tribunal is directed to dispose of the claim petition as provided under the law. (vii) Respondents 1 to 3 shall appear before the Tribunal on 10.07.2013. If any of the parties does not appear, the Tribunal shall issue notice to such of respondent. ## **M.A.C.A No.1326 of 2010** -: 6 :- (viii) Registry shall forward the documents produced along with additional counter affidavit of the 2[nd] respondent also to the Tribunal. All other pending Interlocutory Applications will stand dismissed. ## **THOMAS P. JOSEPH, JUDGE.** vsv