NATIONAL INSURANCE CO. LTD. Vs. NISHI BALA ROY

JUDGEMENT

(1.) Heard Mr. S.S. Sharma, learned Senior Counsel assisted by Ms. L. Sharma, learned Counsel for the appellant and Mr. A.R. Agarwal, learned Counsel for the respondent. One Madan Roy is the deceased. The deceased died while riding a bicycle. The bicycle of the deceased was hit by a bus and he died in a motor vehicle accident. The occurrence of the accident, the negligence of the driver of the offending vehicle, is not in dispute. The coverage of insurance is in dispute.

(2.) The appellant insurer issued a covering note as against the issuance of cheque against the policy. The cheque bounced for want of insufficient fund. The insurer wrote a letter to the insured intimating cancellation of policy for want of payment of premium. It is said that accident occurred after the cancellation of policy, therefore, insurer is not liable to pay compensation. The material date is 12th December, 2001 when the accident occurred. The cover note is issued on 28th September, 2001. The Bank challan disclosed that the information of dishonour of cheque for want of payment was issued on 1st November, 2001. The insurer has produced the postal receipt to show that a registered letter was sent to the insured vide Ext. E(2). A copy of the covering letter is Ext. E. The Bank intimations are at Exts. D and Dl. The respondent claimant, per contra, contends that there has been no valid communication of the cancellation of policy. Mere posting of registered letter does not mean that it was received by the insured. The insurer has not issued registered letter with acknowledgement. If done so the acknowledgement has been a valid proof of receipt. The insurer has not communicated the postal authorities nor communicated about the issuance of said letter to the insurer. In the absence of the clinching material, it is argued there is no valid cancellation of the policy on the date of accident, therefore, the insurer is liable to pay the compensation as per law.

(3.) It is further submitted that the cancellation of policy was not intimated to the concerned RTO as required under Sections 147(4), 147(5) and 149(1) of the M.V. Act and Rules.