Reliance General Insurance Co. Ltd. v Mary Thomas W/o K.L. Thomas; Sathikumari.V; Justin Raj.K S/o Karunakaran.R

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE A.M.BABU** **THURSDAY, THE 12TH DAY OF JULY 2018 / 21ST ASHADHA, 1940** **MACA.No. 1054 of 2014** **AGAINST THE AWARD IN OPMV 167/2008 OF THE MOTOR ACCIDENTS CLAIMS TRIBUNAL,PUNALUR DATED 21-02-2014** ## **APPELLANT(S)** **RELIANCE GENERAL INSURANCE CO. LTD.** **TRIVANDRUM, REPRESENTED BY ITS DEPUTY MANAGER, REGIONAL OFFICE,ERNAKULAM** **BY ADVS.SRI.GEORGE CHERIAN (SR.) SMT.K.S.SANTHI SMT.LATHA SUSAN CHERIAN** ## **RESPONDENT(S):** **1. MARY THOMAS W/O.K.L.THOMAS, KIZHAKKEVEETTIL,PANAVELY PO,VETTIKKAVALA VILLAGE, KOTTARAKKARA TALUK, KOLLAM** ## **2. SATHIKUMARI.V** **1/261,KEEZHEVARUVILAKATH VEEDU, NEMOM, THIRUVANANTHAPURAM** **3. JUSTIN RAJ.K S/O.KARUNAKARAN.R, PARAYANVILA VEEDU, ANTHIYOOR, BALARAMAPURAM** **R1 BY ADV. SRI.SYAM J SAM** ## **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 13.6.2018, THE COURT ON 12.7.2018 DELIVERED THE FOLLOWING:** ## **A.M. BABU,J.** ## **= = = = = = = = = = = = = = = = = MACA No.1054 of 2014** **- - - - - - -- - - - - - - - - - - - - -** _Dated 12[th] July, 2018_ ## **JUDGMENT** The motor accidents claims tribunal passed an award and directed the appellant to honour it. The appeal is filed claiming exoneration from any liability. The parties are referred to as they are shown in the memorandum of appeal. 2. It was on 4.1.2008 the accident. The vehicle which caused the accident was driven by the third respondent and owned by the second respondent. The vehicle hit the building of the first respondent and caused damage to it. The tribunal assessed the damage at Rs 61,582/- and directed the appellant to pay it with interest and costs. The appellant contended that the policy issued by it was cancelled and that the cancellation of the policy was duly intimated to the second respondent. 3. Heard the learned counsel for the appellant and the learned counsel for the first respondent. 4. The tribunal found that the accident occurred owing 2 MACA No.1054 of 2014 to the rash and negligent driving of the vehicle by the third respondent. The said finding was not assailed either in the memorandum of appeal or at the hearing of the appeal. 5. A few documents and dates are important. On receipt of Ext B1 cheque dated 1.6.2007 the appellant issued Ext B4 policy covering the period from 1.6.2007 to 31.5.2008. The accident occurred during the said period on 4.1.2008. The memorandum of dishonour of cheque appended to Ext B1 cheque would show that the cheque was dishonoured on 6.6.2007. The appellant contended that the policy was cancelled since the cheque was dishonoured. It was also contended that the cancellation of the policy was intimated to the second respondent by sending a letter on 17.10.2007. Ext B3 is contended to be the copy of the letter allegedly sent to the second respondent. The appellant produced Ext B2 postal receipt to prove the sending of the original of Ext B3 to the second respondent by registered post. The tribunal rejected the contentions of the appellant 3 MACA No.1054 of 2014 and directed it to shoulder the liability. 6. Ext B1 cheque was drawn in favour of the appellant. It met dishonour on the ground of insufficiency of funds as shown in the memorandum of dishonour appended to it. The signatory to the cheque was not the second respondent, but one Vijayakumar. This was one reason why the tribunal rejected the contention of the appellant. The rejection of the contention of the appellant by the tribunal on the said ground is not supportable. No law insists on that the cheque issued towards premium should be the cheque of the insured himself drawn on his bank. The premium can be paid by a cheque issued by any person drawn in favour of the insurer. The finding of the tribunal referred to above was wrong. 7. I may next refer to two decisions of the apex court. The decisions are (i) **Deddappa vs Branch Manager, National Insurance Company Ltd (AIR 2008 SC 767)** and (ii) **United India Insurance Company Ltd vs** 4 MACA No.1054 of 2014 **Laxmamma (AIR 2012 SC 2817)** . Both the decisions came in a situation where the cheque issued towards premium was dishonoured before the accident occurred. In **Deddappa** (supra) it was held that the insurer had no liability since the policy was cancelled and the cancellation of the policy was intimated to the insured before the occurrence of the accident. The Supreme Court holds in the other decision **(AIR 2012 SC 2817)** that the policy subsists till it is cancelled and its cancellation is intimated to the owner of the vehicle. The law is thus settled that the insurer who issued a policy on receipt of a cheque towards premium shall be liable under the policy despite the dishonour of the cheque until the policy was cancelled and the cancellation was duly intimated to the insured. The appellant should therefore prove by cogent evidence that it cancelled Ext B4 policy and that its cancellation was intimated to the second respondent before the date of accident. 5 MACA No.1054 of 2014 8. According to the appellant, it cancelled the policy and the cancellation was intimated to the second respondent by sending a letter on 17.10.2007. Ext B3 is stated to be the copy of the said intimation. The same is dated 17.10.2007. It recites that the policy was cancelled since its inception and that the appellant was not on risk under the cancelled policy. Ext B2 was produced to prove the sending of the original of Ext B3 by registered post. Ext B2 is the postal receipt. The name of the second respondent is Sathikumari.V, but the name shown in Ext B2 receipt is Sasi Kumari. The appellant examined RW1, but he did not explain why the communication meant to be issued to Sathikumari was issued to Sasi Kumari. The presumption under Sec.27 of the General Clauses Act is available only in the case of a postal article issued in correct address. No evidence was produced to show that the original of Ext B3 was issued to the second respondent in her correct address. As already stated, even the name shown in Ext B2 receipt 6 MACA No.1054 of 2014 was different. The definite case of the appellant was that the intimation was issued on 17.10.2007. But the date shown in Ext B2 receipt is 29.10.2007. It is impossible to accept that Ext B2 receipt evidences the sending of the original of Ext B3 to the second respondent. Ext B3 indicates that its original was send by registered post with acknowledgment due. The postal acknowledgment would have been good evidence to prove the sending of Ext B3 to the correct person in the correct address and also the receipt of it by that person. But the appellant did not choose to produce the postal acknowledgment. The appellant failed to prove that the alleged cancellation of Ext B4 policy was intimated to the second respondent before the accident. Therefore the appellant cannot claim exoneration from liability. 9. A ground is taken in the memorandum of appeal that the compensation awarded by the tribunal was excessive. But it is not pointed out as to where did the 7 MACA No.1054 of 2014 tribunal go wrong in assessing the quantum of compensation. I do not see any reason to hold that the tribunal awarded compensation in excess. 10. But the appeal is not without merits. The tribunal directed the appellant to deposit Rs 61,582/- with interest at the rate of 7.5% per annum from the date of petition to the date of deposit of the compensation within two months from the date of receipt of a copy of the award. The appellant was directed to pay interest at the rate of 9% per annum from the date of award till realisation of the compensation in the event of its failure to make the deposit within the aforesaid two months' time. Thereby the tribunal virtually charged penal interest on the appellant. The tribunal was not justified in charging such penal interest. The appeal shall be allowed setting aside the direction to pay penal interest. 11. The appeal is allowed to the limited extent of setting aside the charging of penal interest on the appellant. It is made clear that the appellant shall be liable to interest 8 MACA No.1054 of 2014 only at the rate of 7.5% per annum from the date of petition to the date of deposit of the amount before the tribunal. The parties are directed to bear their respective costs in the appeal. sd/- **A.M. BABU Judge** sks/5.7.2018