IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN TUESDAY, THE 16TH MARCH 2010 / 25TH PHALGUNA 1931 MACA.No. 205 of 2007() ---------------------- OPMV.695/1998 of MOTOR ACCIDENT CLAIMS TRIBUNAL, PALAKKAD .................... APPELLANT(S): /3RD RESPONDENT AND THE 5TH RESPONDENT ----------------------------------------------------------------------- 1. THE NEW INDIA ASSURANCE COMPANY LTD., SHYAM ENCLAVE, CALCUTTA REPRESENTED BY ITS MANAGER. 2. THE NEW INDIA ASSURANCE COMPANY LTD., KRISHNA NAGAR, NEW DELHI, REPRESENTED BY ITS DEPUTY MANAGER. BY ADV. SRI.KKM.SHERIF SRI.P.A.MOHAMMED ASHROF SRI.A.A.ZIYAD RAHMAN RESPONDENT(S): CLAIMANT AND RESPONDENTS 1,2,4 AND 6 ----------------------------------------------------------------------- 1. K.KRISHNAKUMAR, S/O.KRISHNANKUTTY, FIELD ENGINEER, RESIDING AT RESMI, HOUSE NO.17/301, MANAPPULLIKKAVU, EAST YAKKARA, PALAKKAD. * 2. CHANDRA BABU, S/O.MAHASINGH, C-118, THANG NAGAR, GAZIYABAD, UTTARPRADESH. (DELETED) 3. M/S.KAMRUPR ROADWAYS (P) LTD., A3-SHYAM INDORE GAINI BORDER, THARACHAND, DARTHA STREET, VAMUNA NAGAR, CALCUTTA. 4. UNITED INDIA, INSURANCE COMPANY, DIVISIONAL OFFICE, SURYA COMPLEX, T.B.ROAD, PALAKKAD. 5. THE UNITED INDIA INSURANCE COMPANY, BRANCH OFFICE, VBRA BOUME ROAD, CALCUTTA-700 001. * R2 IS DELETED FROM THE PARTY ARRAY AS PER ORDER DTD.13.8.2007 AT THE RISK OF THE APPELLANT ON I.A.NO.1722/2007. ADV. SRI.A.R.GANGADAS FOR R1 SRI.P.MURALEEDHARAN FOR R4 & 5 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 16/03/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = M.A.C.A. NO. 205 OF 2007 = = = = = = = = = = = = = = = Dated this the 16th day of March, 2010. J U D G M E N T This is an appeal preferred against the award of the Motor Accidents Claims Tribunal, Palakkad in O.P.(MV) 695/98. Now I find the necessary parties to the proceedings are only the claimant and respondents 1, 2 and 5. The vehicle owned by the claimant bearing Reg.No.KEZ 3165 sustained damages when the vehicle HR 37/3701 driven by the first respondent dashed against it resulting in serious damages to the vehicle. 2. The Claims Tribunal after consideration of the entire materials awarded damages of Rs.23,191/- with 6% interest and directed R5, the insurance company to pay the amount. Now the question that is posed before this Court is regarding the liability of the insurance company when the cheque issued towards premium of the policy is dishonoured and that the policy is cancelled prior to the accident after due intimation to the owner. The matter is now squarely covered by the decision of the Hon'ble Supreme Court of India in M.A.C.A. 205 OF 2007 -:2:- Deddappa v. National Insurance Co. Ltd. (2008 (1) KLT 296). The Hon'ble Supreme Court held that when cheque issued towards premium is dishonoured and policy cancelled and the insured and R.T.O. are informed of cancellation of policy, then it was held that the insurance company is not liable to pay the amount. So the conditions precedent for exonerating the insurance company totally from the liability will arise only if the insured as well as the transport authority is informed about the cancellation of the policy prior to the accident. 3. In this case it is submitted that the policy is cancelled prior to the accident and the insured has been informed about the cancellation of the policy. As there is no intimation given to the transport authority with respect to the cancellation of the policy prior to the accident then by virtue of the decision referred to above the insurance company would not be entitled to get total exoneration of the liability and it will be liable to pay the amount to the third party. Or in other words, the claimant herein is entitled to get the amount from the 5th respondent, New India Assurance Company Ltd. M.A.C.A. 205 OF 2007 -:3:- 4. The very important question is that what will be the right of the insurance company to get reimbursement from the owner. Issuance of an insurance policy is a contract which has to be supported by bonafides. A person representing himself to be a bonafide person issues a cheque in favour of the company towards premium and when it gets dishonoured it should not be placed in par with a third party who has nothing to do with the issuance of the policy. Therefore if it is proved that the cheque is dishonoured and the owner has been intimated and the accident had taken place subsequent to the cancellation of the policy necessarily the right of reimbursement to the insurance company from the owner will arise. So for that purpose the insurance company has to establish the facts mentioned in the previous paragraphs. Therefore I dispose of the appeal holding that the 5th respondent, insurance company in the claim petition is bound to pay the amount to the claimant and I give an opportunity to the insurance company to put forward the contention regarding the reimbursement of the amount from the owner on account of the dishonour of the cheque and cancellation of the policy prior to the accident. For the said M.A.C.A. 205 OF 2007 -:4:- purpose the parties are permitted to produce documentary as well as oral evidence in support of their respective contentions and the question of reimbursement be considered in accordance with law. Since the owner has not chosen to appear anywhere and as it affects his rights the insurance company is directed to take out necessary steps to serve or publish so that the matter can be disposed of with notice to him. Parties are directed to appear before the Tribunal on 23.4.2010. 5. I also make it clear that the insurance company can now deposit the amount due to the claimant within a period of sixty days from the date of receipt of a copy of the judgment. The United India Insurance Company being not a necessary party to the proceedings now need not be troubled again in the further proceedings. M.N. KRISHNAN, JUDGE. ul/-