United India Insurance Company Ltd. Vs. Meera Gopal Nangare and Ors. - (High Court of Bombay) (06 Dec 2021)
When the policy of insurance was in force on the day the vehicle met with the accident, the Insurance Company is bound to pay the amount of compensation
Present is Insurance Company's appeal, taking exception to the judgment and award, passed by Chairman, Motor Accident Claims Tribunal, in Motor Accident Claim Petition whereunder a sum of Rs. 2,00,000 has been awarded as compensation on account of death in vehicular accident and directed to be paid jointly and severally by the Appellant Insurance Company and the owner of the vehicle involved in the accident. The challenge is mainly on the ground of dishonour of cheque issued by the insured towards payment of premium of the insurance cover.
Learned counsel for the Appellant - Insurance Company would submit that, the premium was paid by cheque. The cheque was dishonoured on its presentation for encashment. The Appellant Insurance Company, therefore, cancelled the contract of insurance. It has, therefore, no liability to pay any compensation. He would further submit that, if the Court holds the Appellant Insurance Company to be liable to pay the compensation to a third party, it be held to be entitled to recover the amount of compensation to be paid by it from the insured.
The policy of insurance covered the period from 13th February, 1999 to 12th February, 2000. The cheque towards the premium was issued on 12th February, 1999. The accident took place on 14th May, 1999 i.e. during the period of insurance cover. The cheque was dishonoured on 17th February, 1999. Intimation regarding the dishonour of cheque and cancellation of the policy of insurance was issued thereafter. On the date the accident took place, the policy of insurance was in force.
Since the policy of insurance was in force on the day the vehicle met with the accident, the Appellant Insurance Company is bound to pay the amount of compensation granted under the impugned award. The fact is, however, that, post accident, the cheque issued towards payment of premium was dishonoured. The Appellant Insurance Company, therefore, cancelled the policy of insurance and gave its intimation to the insured. Necessarily, the Appellant Insurance Company would be entitled to recover the amount of compensation that it will be required to pay under the award. For recovery of the said amount, it cannot be driven to a fresh round of litigation.
The amount of compensation granted under the impugned award and deposited by the Appellant Insurance Company with this Court be paid to the Respondents No. 1 to 5 - claimants with interest accrued thereon, immediately. The amount that has been paid by the Appellant Insurance Company towards satisfaction of the impugned award shall be recoverable by it from the Respondent No. 6 - owner of the offending vehicle, with interest thereon @ 6% p.a. from the date of this order to the date of actual payment to the appellant Insurance Company, in an execution proceeding.
Tags : AWARD COMPENSATION VALIDITY