NEW INDIA ASSURANCE CO LTD Vs. SHOBHA SHARMA

JUDGEMENT

(1.) THIS order shall also govern the disposal of M.A. Nos. 1823/08 and 1824/08 as in all the appeals, the award under challenge is dated 27 -3 -2008 passed by I MACT, Ujjain whereby the claim petition filed by the claimants were allowed and compensation was awarded. In all the appeals the accident is one and same and parties are also one and same except the claimants.

(2.) SHORT facts of the case are that claim petitions were filed before the learned Tribunal alleging that claimants filed the claim petition alleging that on 4 -6 -2003, Shankarlal @ Hemant Kumar was driving the motorbike along with two pillion riders, namely Santoshbai and his niece Payal aged 3 years, at that time, bus bearing registration No. DLIP -A -0213, which was being driven by respondent No. 4 rashly and negligently, owned by respondent No. 5 and insured with the appellant, dashed the motorbike of Shankarlal, with the result Shankarlal and his sister Santoshbai and niece Payal passed away. It was alleged that claim petition be allowed and adequate compensation be awarded. The claim petition was contested by respondent No. 5 on the ground that there was no negligence on the part of respondent No. 5. It was also alleged that if it is found that accident occurred because of negligence on the part of respondent No. 5, then since offending vehicle was insured, therefore, appellant is liable for compensation. The claim petition was also contested by the appellant on the ground that since premium was paid by cheque which was dishonoured much before the accident and policy was cancelled, therefore, appellant/ Insurance Co. is not liable for compensation. It was prayed that claim petition be dismissed. After framing of issues and recording of evidence learned Tribunal allowed the claim petition and awarded the compensation as under : -_ <FRM>JUDGEMENT_122_MPLJ4_20133.htm</FRM>

(3.) COUNSEL for the appellant submits that impugned award whereby appellant/Insurance Co. has been held liable for compensation is illegal. It is submitted that offending vehicle was insured on the instance of respondent No. 6 for the period from 25 -4 -2003 to 24 -4 -2004. The premium was sent for collection to the concerned bank from where it was dishonoured on 7 -5 -2003 and immediately thereafter by registered letter the policy was cancelled. On 12 -5 - 2003, intimation was given to the concerned by registered post. Since accident occurred on 4 -6 -2003 and policy was cancelled on 12 -5 -2003 much before the accident, therefore, learned Tribunal was not justified in holding the appellant liable for payment of compensation. For this contention reliance is placed on a decision in the matter of Dadappa vs. Branch Manager, National Insurance Co. Ltd., 2008 ACJ 581, wherein cheque issued towards premium was dishonoured and the Insurance Co. cancelled the policy, information was also given to the RTO, after taking into consideration the provisions of section 64 -VB of the Insurance Act, the Hon'ble Apex Court held that contract is based on reciprocal promise, reciprocal promises by the parties are conditions precedent for a valid contract. It was further held that Insurance Co. was not liable. It is submitted that appeal be allowed and impugned award whereby appellant/Insurance Co. has been held liable be set aside and that part of the order whereby Insurance Co. has been held liable be set aside.