NEW INDIA ASSURANCE CO. LTD v. MANOJ KUMAR SOLANKI & ORS

1. Whether Reporters of Local papers may YES be allowed to see the Judgment?

2. To be referred to the Reporter or not? YES

3. Whether the judgment should be YES reported in the Digest? JUDGMENT (Oral)

1. The appellant has challenged the award of the learned Tribunal whereby compensation of Rs.56,000/- has been awarded to claimant/respondent No.1.

2. The accident dated 4th February, 1999 resulted in the grievous injuries to respondent No.1. Respondent No.1 suffered compound fracture of left arm. Respondent no.1 filed the claim petition before the Claims Tribunal.

3. The accident was caused by Maruti Esteem Car bearing No.DL-6CE-3533 which was driven by respondent No.2 and 2010:DHC:1651 owned by respondent No.3 at the time of the accident. The learned counsel for the appellant submits that the appellant had insured Maruti Esteem Car bearing No.DL-4CE-6419 for the period 27th June, 1998 to 26th January, 1999. On 8th June, 1998, respondent No.3 approached the appellant to transfer the aforesaid policy to the offending vehicle bearing No.DL- 6CE-3533 for the remaining period to the policy i.e. up to 26th January, 1999. The development officer of the appellant inadvertently issued the cover note bearing No.0413849 for the period 8th June, 1998 to 7th June, 1999, instead of 8th June, 1998 to 26th January, 1999. This mistake was corrected by an endorsement dated 28th July, 1998. The period as per endorsement expired on 26th January, 1999 and vehicle met with an accident on 4th February, 1999. The contention of learned counsel appellant is that the offending vehicle was not insured at the time of the accident and, therefore, the appellant was not liable to pay the award amount.

4. The learned Tribunal held the appellant liable on the ground that the cover note No.0413849 dated 8th June, 1999 was for full year from 8th June, 1999 to 7th June, 1999, therefore, the appellant is liable qua the third party.

5. The learned counsel for the appellant submits that the cover note No.0413849 was not followed by any policy and also no premium was taken for the period after 26th January,

1999.

6. This appeal can be decided on the basis of the principle applicable in the case of dishonoured cheques. In the case of dishonour of cheque towards the premium of the insurance policy, the insurance company is liable qua the third party till the endorsement is issued, notice of endorsement is given to the owner and the intimation is sent to the Road Transport Authority. In the present case, admittedly no intimation has been given to the Road Transport Authority about the endorsement issued by the appellant and, therefore, appellant shall remain liable qua the third party with the right to recover the amount from the owner of the offending vehicle.

7. The learned counsel submits that respondent No.3 has also filed a claim for damage caused to the offending vehicle. It is clarified that the owner shall not be entitled to the own damage claim on the basis of this judgment.

8. The appeal is partially allowed and the impugned award is modified to the extent that after the payment of the award amount to the claimant, the appellant shall be entitled to recover the award amount from respondent No.3.

9. Vide order dated 23rd March, 2010, the statutory amount of Rs.25,000/- was directed to be released to the claimant/respondent No.1. Respondent No.1 has not appeared and has not withdrawn the said amount. Let the statutory amount of Rs.25,000/- be kept in fixed deposit till the respondent No.1 approaches this Court for withdrawal of the said amount. The balance award amount be deposited by the appellant with the Claims Tribunal after notice of deposit under Order 21 Rule 1 of the Code of Civil Procedure to respondent No.1.

10. Copy of this order be given ‘Dasti’ to learned counsel for both the parties under signature of Court Master. J.R. MIDHA, J MARCH 19, 2010 HL