The Oriental Insurance Co. Ltd. v. Raveendran M.V. and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR.JUSTICE PIUS C.KURIAKOSE & THE HON'BLE MR. JUSTICE A.V.RAMAKRISHNA PILLAI** **FRIDAY, THE 3RD DAY OF FEBRUARY 2012/14TH MAGHA, 1933** ## **MACA.No. 1416 of 2010 ( )** **-------------------------------OPMV.680/2007 of MOTOR ACCIDENTS CLAIMS TRIBUNAL, PALA ...................** ## **APPELLANT(S)/3RD RESPONDENT:** ## **-----------------------------------------** **THE ORIENTAL INSURANCE CO.LTD., KANJIRAPPALLY, REPRESNTED BY ITS, ASSISTANT MANAGER REGIONAL OFFICE, ERNAKULAM NORTH, KOCHI-18.** ## **BY ADV. SRI.GEORGE CHERIAN (THIRUVALLA)** ## **RESPONDENT(S)/CLAIMANTS:** **------------------------** **1. RAVEENDRAN M.V. MOOZHAYIL HOUSE,PAYYANITHOTTAM, POONJAR, THEKKEKARA P.O., PIN-686582.** **2. SOBHANA, MOOZHAYIL HOUSE, PAYYANITHOTTAM POONJAR, THEKKEKARA P.O. PIN-686582.** **3. SUJESH MR.MOOZHAYIL HOUSE, PAYYANITHOTTAM, POONJAR, THEKKEKARA P.O.-686582.** **4. SUJA M.R.MOOZHAYIL HOUSE, PAYYANITHOTAM, POONJAR, THEKKEKARA P.O.,PIN - 686582.** **5. A.N.CHANDRASEKHARAN, S/O.NARAYANAN,AROLIL HOUSE, CHENNADU P.O., POONJAR, PIN-686581.** **6. SHIJUMON APREM, S/O. APREM,KOODAPUZHA HOUSE, PAZHAYIDOM KARA, ERUMELY VILLAGE, PIN-686509.** - **R1-4 BY ADVS. SRI.SHAJI THOMAS PORKKATTIL SRI.T.V.VINU** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 03-02-2012, ALONG WITH MACA. 1419/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **svs** ## **C.R.** ## **THOTTATHIL B. RADHAKRISHNAN** ## **&** ## **BABU MATHEW P. JOSEPH, JJ.** **==============================** **M.A.C.A.Nos. 1416 & 1419 of 2010** **============================== Dated this the 26[th] day of November, 2014** ## **JUDGMENT** ## **Thottathil B. Radhakrishnan, J.** These appeals arise from a common award passed in two claim petitions filed under the Motor Vehicles Act, 1988, for short, the 'Act', following a road traffic accident involving a two wheeler and a stage carriage. The rider and the pillion rider of the two wheeler died. Their legal representatives are awarded compensation. The Tribunal held the driver of the stage carriage negligent and directed MACA 1416 &1419/2010 2 the appellant insurance company to satisfy the award and then recover the amount from the owner of the stage carriage. 2. We have heard the learned senior counsel for the appellant and the learned counsel for the respondents in these appeals. The only issue in these appeals is as to whether the Tribunal was justified in directing the appellant insurance company to satisfy the award by treating it as the insurer, though it was given the right to recover from the owner after such payment. 3. The requisite facts for deciding these appeals are that on 26.10.2006, a policy cover note was issued by the appellant company in favour of the owner of the stage carriage towards third party risks. The cheque issued by the owner for the purpose of that policy was dishonoured on presentation. Intimation of such dishonour was received by the appellant from its banker on 13.12.2006. On 15.12.2006, the insurer cancelled the insurance cover and MACA 1416 &1419/2010 3 issued a communication to the owner intimating the dishonour of the cheque jand the cancellation of the insurance cover. Ext.B13 postal acknowledgment shows the delivery of a postal article in the address shown as that of the owner on 19.12.2006. The accident was on 28.12.2006 at 9.15 a.m. It is on record that the owner of the stage carriage obtained yet another insurance policy at about 4 p.m., to wit, 15.53 hours on the date of the accident, i.e., after the occurrence. The Manager of the appellant withstood cross examination and answered the challenge whether he could produce the postal acknowledgment. That is how the aforenoted Ext.B13 came on record. When confronted with Ext.B13, the owner of the stage carriage, who testified as RW3, deposed that the signature on Ext.B13 is not his. He, however, said that he knew about the dishonour of the cheque from his banker more than one week before the accident. MACA 1416 &1419/2010 4 4. The Tribunal noted the judgment of the Honourable Supreme Court of India in **Samundradevi v. Narendra Kaur [AIR 2008 SC 3205]** and proceeded to dilate on certain legal issues. It said that having regard to the nature of the contract of insurance in the backdrop of Section 147 of the Act, the privity doctrine notwithstanding, the insurance cover would continue to run insofar as it is in favour of the third parties. We would further proceed to say that in the case of cancellation of such an insurance policy, intimation should be given to all concerned, thereby meaning the Regional Transport Officer, Police Officer etc. Intimation regarding the cancellation of the policy was given to the Regional Transport Officer going by the case of the appellant through its witness. The fact of the matter remains that it is in evidence that the owner of the vehicle knew that the cheque was dishonoured. That dishonour, within his knowledge, was at least a week before the vehicle met with the accident. He is shown to have taken yet MACA 1416 &1419/2010 5 another policy after the accident. As regards the denial of the owner that the signature in Ext. B13 is not his, assimilating the entire materials, this appellate court is satisfied that such denial has no face value to stand. He had filed interlocutory application seeking an order setting aside the _ex parte_ proceedings against him. That interlocutory application is supported by an affidavit. Proof of facts by way of affidavit is permissible in such proceedings. That affidavit is sworn to before an Advocate. That carries his signature. We have compared that signature with the signature appearing on Ext.B13. Though we see that the witness was not contradicted with the signature on the affidavit filed in support of I.A.No.1265 of 2009, we are satisfied that even on an examination with the naked eye, there is abundant familiarity and similarity that there is no reason for us to come to any conclusion to uphold the denial of the signature on Ext.B13 by the owner of the stage carriage. MACA 1416 &1419/2010 6 5. The aforesaid being the factual position, we revert to the legal issue involved on the proved facts. Sections 147 and 149 of the Act, have their play only on the basis of a concluded contract of insurance. That is a contract based on reciprocal promises. The normal regular rules governing general contract would first apply in relation to the formation of such a contract of insurance. As noted by the Honourable Supreme Court of India in **Deddappa v. National Insurance Co.Ltd. [2008(1)KLT 296(SC)]** , cited by the learned senior counsel for the appellant, the reciprocal promises by the parties, are condition precedent for a valid contract and the distinction between the statutory liability of the Insurance Company vis-a-vis a third party in the context of Sections 147 and 149 of the Act and its liability in other cases, would not be relevant when the contract is invalid. The liability under Section 147 of the Act to the third party and the operation of Section 149 _qua_ Section 147 of the Act would become relevant as regards MACA 1416 &1419/2010 7 liabilities only when there is a contract of insurance and such liability would have to be met only if the contract is valid. If the contract of insurance has been cancelled and such cancellation has been duly intimated as required, the Insurance Company would not be liable to satisfy the claim. Though there was some argument on the concept of the phraseology “all concerned”, in the said precedent, we are of the view that the person who would have to be intimated would be the person who had applied for insurance cover and may be the R.T.A. That having been done, we cannot accept the view of the learned Tribunal that intimation should have been given also to the police. The logical reasoning behind this approach is that, as in the case in hand, if we are to say that the insurer will have to intimate the police authorities, we can easily conceive that it is impossible, since a stage carriage would be plying through different areas under the jurisdiction of different police authorities. The purpose is to intimate the person eligible to MACA 1416 &1419/2010 8 be covered under the insurance policy in the event of the existence of a valid contract of insurance and a subsequent third party liability arising in terms of Sections 147 and 149 of the Act. We see nothing more. 6. On the proved facts and the circumstances of the case in hand, we cannot but apply the precedent in **Deddappa** ( _supra_ ) and allow these appeals. 7. The learned counsel for the claimants made a fervent plea that the direction given by the learned Tribunal to the insurer to pay and then recover is in consonance with justice, equity and good conscience and therefore, it does not deserve to be disturbed. He referred to the directions in **Deddappa** ( _supra_ ) for support. In that case, it is obvious that the Apex Court exercised its plenary powers referable to Article 142 of the Constitution of India. That cannot be done here. In the result, these appeals are allowed setting aside the directions to the appellant to pay and recover under the MACA 1416 &1419/2010 9 impugned common award. It is however directed that if any amount has already been released to the claimants in terms of the earlier orders, the appellant will not proceed to recover such amounts from the claimants, but would be entitled to recover such amount from the owner of the stage carriage with interest as ordered by the Tribunal in the impugned common award. No costs. Sd/- **THOTTATHIL B. RADHAKRISHNAN JUDGE** Sd/- **BABU MATHEW P. JOSEPH JUDGE** ks. True copy P.S. (Hr.Gr.)To Judge MACA 1416 &1419/2010 10