ANARKALI AND ORS. Vs. NARESH KUMAR AND ORS.

JUDGEMENT

(1.) The appeal by the claimants is both as regards the quantum as well as liability. The claimants were the widow and 3 minor children besides the mother and sister of the deceased. The Tribunal assessed a compensation of Rs. 9,27,500/- and directed the amount to be paid against respondents 1 and 2 being the driver and owner only. The Insurance Company was exonerated on the ground that on the date when the accident took place on 06.01.2007, the insurance policy, that had been already issued, had been cancelled for non-payment of premium and the owner had also been informed about the same cancelling the policy. The appeal challenges the exoneration of the Insurance Company as in contravention of Section 149(1) and the appellants also want an assessment to quantum to be reappraised in the light of the judgment of the Supreme Court in Sarla Verma Versus Delhi Transport Corporation and another, 2009 6 SCC 121 as reappraised in Reshma Kumari and others Versus Madan Mohan and another, 2013 9 SCC 65.

(2.) The case which was brought by the Insurance Company at the time of trial was that the cheque issued in the name of the Insurance Company on 07.12.2006 towards premium for the policy had bounced for want of sufficient funds by the drawee banker on 12.12.2006 and the Insurance Company had issued a notice on 14.12.2006 about the fact of dishonour and the cancellation of policy on that ground. At the trial, the insurer therefore filed the copy of the cheque which had been returned as dishonoured (R2) with the advice by the drawee banker that the cheque had been dishonoured (R3). R4 was proof of collection charges obtained by the insured's banker for the dishonoured cheque, R5 was copy of the letter and R6 was the registration receipt. Since the owner denied having received any such notice, it was elicited in the cross- examination that he was staying only at the address where notice had been issued. Considering the fact that the registration receipt was also filed, the Tribunal accepted the contention that the policy had been cancelled and the owner had been informed through notice dated 14.12.2006 itself about the fact of cancellation of policy. The accident was admittedly subsequent to the said date, namely, on 06.01.2007 and the insurer was, therefore, contending for exoneration of liability, as held in several judgments of the Supreme Court.

(3.) The issue of the effect of cheque bouncing and the insurer issuing a notice cancelling the policy has been the subject of consideration in National Insurance Company Limited Versus Sobina Lakai, 2007 7 SCC 786; Deddappa Versus National Insurance Company Limited, 2008 2 SCC 595 and National Insurance Company Limited Versus Abhaysing Pratapsing Waghela and others, 2008 9 SCC 133, all holding that if the cancellation of policy had been prior to the date of accident, the Insurance Company would not be liable and if there should be a cancellation subsequent to the accident, the Insurance Company was still be liable to answer the claim but the insurer is entitled to recover from the insured for violation of terms of policy. This point was reaffirmed in a recent judgment of the Supreme Court in United India Insurance Company Limited Versus Laxmamma, 2012 5 SCC 234where on particular facts, the court found that the cancellation of policy had taken place subsequently to the accident and, therefore, the Insurance Company was made liable but it was given the right of recovery.