Royal Sundaram Alliance Insurance Company Limited v. Hashim and Ibrahim

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE MARY JOSEPH** **THURSDAY, THE 11TH DAY OF FEBRUARY 2021 / 22ND MAGHA,1942** ## **MACA.No.682 of 2016** **AGAINST THE AWARD IN OP(MV)NO.336/2009 of ADDL.MACT, ALAPPUZHA. DATED 25-05-2015** ## **APPELLANT/3RD RESPONDENT:** **ROYAL SUNDARAM ALLIANCE INSURANCE COMPANY LIMITED, CHENNAI, NOW REPRESENTED BY THEIR ZONAL HEAD, SUBRAMANIAM BUILDING, CLUB HOUSE ROAD, ANNASALAI, CHENNAI-600002.** **BY ADVS. SRI.MATHEWS JACOB (SR.) SRI.P.JACOB MATHEW** ## **RESPONDENTS/PETITIONER/RESPONDENTS 1 AND 2:** **1 HASHIM, S/O. ABDHU, KALATHUNGALVELI, VADUTHALA JETTY P.O., AROOKUTTY, CHERTHALA, PIN-688 535.** **2* SHIHABU, S/O. KUNJUMOIDEEN, ALANKARATHUPARAMBIL, MUNICIPAL WARD 10, KODUNGALLUR P.O., THRISSUR-680 664. (DELETED)** **3 IBRAHIM S/O. A.I.MUHAMMED, OOLACKAL HOUSE, PATHAZHAKKAD, THRISSUR, PIN-680 318.** ***RESPONDENT NO.2 IS DELETED FROM THE PARTY ARRAY AS PER ORDER DATED 13.6.2016 IN I.A.NO.1959/2016.** **BY ADVS. SRI.A.T.ANILKUMAR SRI.P.SHANES METHAR SMT. SHYLAJA FOR R1** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 03.02.2021, THE COURT ON 11.02.2021 DELIVERED THE FOLLOWING:** M.A.C.A. No. 682 of 2016 -:2:- ## **MARY JOSEPH, J.** - - - - - - - - - - - - - - - - - - - - - - - - M.A.C.A. No. 682 of 2016 - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 11[th] day of February, 2021 ## **JUDGMENT** This appeal is preferred against an award passed by Motor Accident Claims Tribunal, Alappuzha (for short 'the Tribunal') on 25.05.2010 in O.P.(MV) No.336 of 2009. 2. The Original Petition was filed under Section 166 of the Motor Vehicles Act, 1988 (for short 'the M.V. Act') seeking compensation for the personal injuries sustained by the 1[st] respondent in a motor accident occurred at 10.30 p.m. on 07.08.2008 near Karthiyani Temple, at Aroor. 3. For the sake of clarity the parties to this appeal will hereinafter be referred to as petitioner and respondents 1 to 3 in accordance with their status before the Tribunal. 4. The petitioner was running a motor cycle bearing registration No.KL-07/AD-4981 from North to South. When the vehicle took a U turn, a mini lorry having registration No.KL47/4252, proceeding from the same direction hit on the backside of the motor cycle. The petitioner sustained injuries and was M.A.C.A. No. 682 of 2016 -:3:- treated at Medical Trust Hospital, Kochi. Claiming a sum of Rs.10,00,000/- as compensation from the driver, owner and insurer of the mini lorry, the Original Petition was filed. 5. The 3[rd] respondent had filed written statement denying insurance coverage of the mini lorry at the time of accident. Admittedly a policy was issued for the mini lorry on 11.07.2008. But cheque for Rs.15,223/- drawn on Kodungalloor branch of SBI issued towards payment of premium by the proposed insured, when sent for collection was bounced, for want of funds in the account of the insured. Since the premium was not received by the 3[rd] respondent, the factum was informed to the 1[st] respondent on 05.08.2008. A copy of the intimation was also forwarded to the Regional Transport Officer (for short 'RTO') stating that for want of premium, the policy issued was cancelled from the very inception. The 1[st] respondent failed to give fresh cheque or the premium in cash for issuance of the policy for the vehicle. Therefore, exoneration from liability to indemnify the insured was sought by the 3[rd] respondent. The original petition filed as O.P.(MV) No.336/2009 was allowed and an award was passed in favour of petitioner for a sum of Rs.13,32,335/- with interest at the rate of 9% pr annum from the date of the petition ## M.A.C.A. No. 682 of 2016 -:4:- till the date of realisation and all the respondents were made jointly and severally liable. The 3[rd] respondent was further directed to produce crossed demand draft or cheque for Rs.9,373/- in the name of MACT, Alappuzha towards the court fee payable and a cheque or demand draft for Rs.5,00,000/- in the name of the petitioner, to be released to him. The balance amount with interest and appropriate cost was directed to be deposited in a Nationalised Bank in the name of the petitioner for a period of 5 years with permission to withdraw interest accrued thereon for his livelihood within 30 days. 6. According to Sri.Mathews Jacob, the learned Senior Standing Counsel for 3[rd] respondent, the quantum fixed by the Tribunal as compensation is exorbitant and disproportionate to the sufferings of the petitioner in the motor accident. According to him, Rs.3,00,000/- awarded as costs for fixation of artificial limb is not based on any materials furnished by the petitioner and undoubtedly an exorbitant sum. It is contended by the learned counsel that the cheque issued towards payment of premium was bounced for insufficiency of funds and under Section 64-VB of the Insurance Act, 1938, an insurer is not liable to indemnify the insured, if premium is not paid by the latter. ## M.A.C.A. No. 682 of 2016 -:5:- According to him, in the case on hand, since the premium amount was not received by the 3[rd] respondent, it cannot be made liable to indemnify the 1[st] respondent. According to him, the factum of dishonour of the cheque and intimation given to the 1[st] respondent and the RTO were sought to be proved through some documents produced alongwith the written statement filed by the 3[rd] respondent and marked in evidence as Exts.B1 to B5, the Tribunal failed to consider those in the impugned award. 7. According to the 3[rd] respondent, documents produced and marked in evidence before the Tribunal include the copies of the policy issued in respect of the mini lorry bearing registration No.KL-47/4252, the cheque issued towards payment of premium, the letter issued to the 1[st] respondent, the dishonour memo and the certificate issued from IRDA. According to him, the above documents marked in evidence if considered by the Tribunal in the proper perspective, it ought to have exonerated the 3[rd] respondent from liability to indemnify the 1[st] respondent. According to him, from Ext.B3, it is established that a letter has been sent to the 1[st] respondent and the carbon copy of it was also forwarded to the RTO. Thus it was canvassed by the learned ## M.A.C.A. No. 682 of 2016 -:6:- counsel that all formalities relating to cancellation of policy was evidenced by the documents as complied with and the Tribunal ought to have exonerated the 3[rd] respondent from its liability to indemnify the 1[st] respondent. According to him, the impugned award was passed by the Tribunal in utter ignorance of Exts.B1 to B5 which form part of the record of evidence and without proper application of mind. Therefore, the fixation of absolute liability on the 3[rd] respondent to indemnify the 1[st] respondent is liable to be reversed. 8. The learned counsel has cited **Dedappa v. National Insurance Company Limited** [2008(1) KLT 296 SC] where the Apex Court has held that when the cheque issued towards payment of premium was dishonoured and policy was cancelled and when the insured and the RTO were informed of cancellation of policy, the insurance company would not be liable to satisfy the claim of the insured. According to the learned counsel, when Ext.B4 in the case on hand evidences that a notice has been sent to the 1[st] respondent and its carbon copy to the RTO, it would suffice to absolve the 3[rd] respondent from its liability to indemnify the 1[st] respondent in the matter of payment of compensation awarded in favour of the victim of the motor accident. M.A.C.A. No. 682 of 2016 -:7:- 9. On the contrary, the learned counsel for the petitioner has contended that when a policy was issued to cover the vehicle involved in the accident without receiving premium, the 3[rd] respondent will be liable to indemnify the 1[st] respondent in respect of its liability to third parties covered by the policy and to satisfy the award directing payment of compensation. The learned counsel has relied on **Oriental Insurance Company Ltd. v. Inderjit Kaur and others** [ AIR 1998 SC 588] to rest her contention. 10. The question relevant for consideration in the context is whether the 3[rd] respondent succeeded in establishing that the policy was cancelled by it following the bouncing of the cheque issued by the 1[st] respondent towards payment of premium. The 3[rd] respondent has taken a contention before the Tribunal that a policy was issued for the Mini Lorry bearing reg. No.KL-47/4252 originally, on 11.07.2008. A cheque drawn on SBI, Kodungalloor branch for a sum of Rs.15,223/- was also issued towards payment of premium. The cheque was sent for collection but was bounced due to insufficiency of funds in the account of the 1[st] respondent, wherefrom the cheque was drawn and issued. Since the memo issued by the Bank to inform the factum of M.A.C.A. No. 682 of 2016 -:8:- dishonour of the cheque was received by the 3[rd] respondent, the 1[st] respondent was intimated by the former through letter dated 05.08.2008 that the policy from the very inception was cancelled. It also contains an endorsement to serve carbon copy to the RTO. 11. Though it was contended by the 3[rd] respondent in the written statement that immediately on obtaining the memo stating dishonour of the cheque from the bank, the 1[st] respondent was intimated about the factum and a copy sent to the RTO, and Exhibit B4 is marked in evidence to establish, it was not evidenced as sent accordingly to the respective parties, since the postal receipt is not produced and marked in evidence. Apart from the endorsement in Ext.B4 that “CC RTO”, other materials to evidence that it was actually sent to the RTO and the latter received it, are not produced and marked in evidence. A postal receipt alone could establish that an article infact has been sent by post. If it was sent by registered post with acknowledgment due, the return of the acknowledgment back to the sender would be a satisfactory evidence to establish despatch of the article sent, on the addressee. The 3[rd] respondent has not stated in the written statement the manner in which original of Ext.B4 was sent to the insured and the RTO. In a context where, evidence to ## M.A.C.A. No. 682 of 2016 -:9:- establish communication of the cancellation of policy to the 1[st] respondent and the RTO is lacking, the prayer of the 3[rd] respondent to exonerate it from its liability to indemnify the 1[st] respondent is not allowable. 12. The dictum in **Wilson v. Vasantha Kumar and others** [2013 (3) KHC 764(DB)] relied on by the learned counsel for the 3[rd] respondent will not also help him in canvassing for exoneration from liability. The dictum in **Oriental Insurance Company Ltd** supra relied on by the learned counsel which holds that once the insurer issued a policy to cover a vehicle without receiving premium, he will be liable to indemnify third parties in respect of liability covered by the policy and to satisfy the sum awarded as compensation, can squarely be applied in the case on hand. The Apex Court has also held in the case supra that the provisions of Section 64-VB will not help the insurer to get himself absolved from his liability. 13. The Tribunal has awarded compensation to the petitioner by the impugned award and made respondents 1 to 3 jointly and severally liable to pay the same with interest at the rate of 9% per annum from 31.03.2009, the date of the petition till the date of realisation. The Tribunal has also directed the 3[rd] M.A.C.A. No. 682 of 2016 -:10:- respondent to produce a crossed demand draft or cheque for Rs.9,373/- in the name of MACT, Alappuzha towards court fee and a cheque or demand draft for Rs.5,00,000/- in the name of the petitioner to be released to him and the balance amount with interest and proportionate cost in the name of the petitioner to be deposited in any Nationalised Bank for a period of 5 years with permission to withdraw interest accrued therefrom for his livelihood. 14. In the context of the case where evidence is lacking to establish communication of intimation of cancellation of policy to the 1[st] respondent, the 3[rd] respondent cannot evade from his liability to indemnify the 1[st] respondent. Since premium has not been collected by the 3[rd] respondent, it shall get the compensation amount, after payment to the petitioner, recovered from the 1[st] respondent. 15. A further challenge was also raised by the 3[rd] respondent against award of Rs.3,00,000/- towards fixation of artificial limb for the petitioner, for the reason that, it is exorbitant and does not have any materials to base. It is found on a perusal of the documentary evidence adduced by the petitioner that a material disclosing the approximate expenditure M.A.C.A. No. 682 of 2016 -:11:- to be incurred for fixation of an artificial limb is not produced and marked in evidence by the petitioner. The petitioner has not mounted the box to depose about the medical advice to fix the artificial limb and the expenses required in connection therewith. Since the leg was amputated, fixation of artificial limb is a factum unavoidable for the enjoyment of life of the victim. There must be some materials to establish the approximate cost of fixation. It is found from the award that Rs.3,00,000/- was awarded by the Tribunal for the purpose. 16. By Ext.A10, the 1[st] respondent was established as a driver by profession. But the Tribunal has taken Rs.4,500/- as his monthly income for assessment of compensation. But while computing compensation for loss of dependency, Rs.4,000/- only was considered by the Tribunal. It is found from Exts.A7 and A8 that the petitioner had sustained several severe injuries and was treated as inpatient for about two months. It is not evidenced that any steps for fixation of artificial limb was taken by the petitioner. The accident was occurred in the year 2008 and the impugned award was passed in the year 2015. The appeal was filed in the year 2016. In case of amputation of leg, certainly it will take some time to be accustomed with the limbless condition. M.A.C.A. No. 682 of 2016 -:12:- Undoubtedly the service of a bystander is inevitable at least during the initial period to get over the trauma. The Tribunal has awarded only Rs.5,000/- towards bystander expenses. The severe injury sustained by the petitioner must have necessitated use of a conveyance for transportation to and fro hospital for treatment and for other purposes. But the Tribunal awarded only Rs.3,000/- towards transportation expenses. Certificate issued by the Medical Board assessing the permanent disability of the petitioner as 80% is also marked in evidence as Ext.A9. But the Tribunal has taken only 60% as the disability of the petitioner while computing compensation for disability. The fixation of disability being by the Medical Board, the Tribunal ought to have taken 80% certified by it. The monthly income being fixed as Rs.4,500/-, the Tribunal ought to have computed compensation for disability on its basis. But, the Tribunal assessed the compensation for disability by taking the monthly income as Rs.4,000/-. 17. As disclosed from Exts.A5, A7 and A8 the petitioner had sustained the following injuries in the accident : - “1. bilateral pneumothorax with multiple rib fracture. 2. Comminuted segmental fracture and fracture distal third of fibula 3. Gross cerebral oedema fracture zygoma and fracture orbit wail.” M.A.C.A. No. 682 of 2016 -:13:- 18. His left leg was amputated below knee during the course of treatment. In view of the multiple grave injuries suffered by the petitioner and the treatment availed for that for about two months, the petitioner must have suffered much discomforts and inconveniences. But, the Tribunal failed to compensate the petitioner under that head. This Court is constrained to observe that, the Tribunal has arrived at compensation without application of mind, in a totally negligent and careless manner. In that context, compensation which the petitioner is legitimately entitled to was denied to him, by the Tribunal. 19. Therefore, this Court is reluctant to reduce Rs.3,00,000/- awarded by the Tribunal for fixation of artificial limb, as it, in view of the discussion made hereinbefore, would justifiably compensate the petitioner for the deficient sums stand ordered by the impugned award as compensation under other heads. In the result, the appeal stands allowed in part. The award to the extent it grants compensation of Rs.3,00,000/- towards fixation of artificial leg is confirmed. Award to the extent it fixes M.A.C.A. No. 682 of 2016 -:14:- absolute liability on the 3[rd] respondent to compensate the petitioner is modified by granting the 3[rd] respondent the right to recover the sum after payment to the petitioner, from the 1[st] respondent. The 3[rd] respondent shall deposit the amount awarded as compensation in favour of the petitioner within one month from the date of receipt of a certified copy of the judgment and shall proceed to recover it from the 1[st] respondent. Sd/- **MARY JOSEPH, JUDGE** ttb