fc. IN THE HON'BLE HIGH COURT OF CHHATTISGARH AT BILASPUR rCHHATTISGARH) M.A. fONo. v^ Of 200 APP1ELLANT :-Branch Manager,United India NON-APPLICANT N0.3 Insurance Company Limited, Bhurkunda, District Hazaribagh (Bihar). VERSUS RESPONDENTS ^T ^ff^ s :-1. AwadhKumar, son ofShivprasad Choubey, aged about 4Q years, resident ofVillage Bilaro, Police Station Patna, Tahsil Baikunthpur, District Korea (Chhattisgarh), CLAIMANI 2. Dwarikanath Sharma (D.N. Sharma) son of Dhyan Chandra Shamia, aged about 48 years, resident of Patel Nagar, Bhurkunda, District Hazaribagh (Bihar), present resident of Pandavpara Colliery, Police Station Patan, Tahsil Baikunthpur, District Korea (Chhattigarh), 3. Umashanker, son ofPrabhunarayan Sahu, aged about 40 years, Occupation Driver, resident of Bus Stand, Patna, Tahsil Baikunthpur< District Korea (Chhattisgarh). NON-APPLICANT N0.1 AND 2 "s. •<-. APPEAL UNDER SECTION 173 OF MOTOR VEH1CLES ACT. HIGH COURT OF CHHATTISGARH AT BILASPUR Sinale Bench: Hon'ble Shri Justice Prashant Kumar Mishra Miscellaneous Appeal No.732 of 2001 Branch Manager, United India Insurance Co. Ltd. versus Dwarikanath Sharma and others Miscellaneous Appeal (C.) No.1361 of 2008 Branch Manager, United India Insurance Company Limited versus Awadh Kumar and others ORDER Postfor 17-8-2010 Sd/- P.K. Mishra Judge 16-8-2010- ^^^^^&^^e biii5-;!";:'i-'.:y!; lh ' :"" '^:s^ HIGH COURT OF CHHATTISGARH AT BILASPUR Single Bench: Hon'ble Shri Justice Prashant Kumar Mishra Miscellaneous Appeal No.732 of 2051 Appellant Respondents versus Branch Manager, United India Insurance Co. Ltd. Dwarikanath Sharma and others Present: Shri H.B.Agrawal, Senior Advocate with Smt. Iturani Mukherjee, counsel for the appellant. Shri D.N.Prajapati, counsel for respondents No.3 and 4. None for other respondents. Miscellaneous Appeal under Section 1 73 of the Motor Vehicles Act, 1988 Miscellaneous Appeal (C.) No.1361 of 2008 Appellant versus Respondents Branch Manager, United tndia Insurance Company Limited Awadh Kumar and others Present: Shri H.B.Agrawal, Senior Advocate with Smt. Iturani Mukherjee, counsel for the appellant. None for the respondents. Miscellaneous Appeal under Section 173 ofthe Motor Vehicles Act ORDER (Passed on fT-^August, 2010) By this common order, Miscellaneous Appeal No.732/2001 and ^ Miscellaneous Appeal (C.) No.1361/2008 are disposed of. Both the .g^<=s'/SWS7St~-S "Si'SSsS^SSSiP. IB, '<-? • f,: appeals are arising out of an accident involving Dumper Truck bearing No.MP26B 5828, which met with an accident on 10-8-1998. 2. Miscellaneous Appeal No.732/2001 is arising out of Claim Case No.8/99 preferred by claimants Lakhan and Sadharan decided on 27- 9-2001, whereas Miscellaneous Appeal (C.) No.1361/2008 is arising out of award dated 13-7-2007 passed in Ctaim Case No. 100/2006 preferred by claimant Awadh Kumar. In Miscellaneous Appeal No.732/2001, an award of Rs.50,000/- has been passed in favour of claimants, whereas in Miscellaneous Appeal (C.) No.1361/2008 award of Rs.24,000/- has been passed in favour of the claimant. 3. The only question raised and argued by learned Senior Advocate for the appellanVinsurance company is that since the cheque issued by the insured at the time of insuring the vehicle was dishonoured and the cover note has been cancelled, the appellant/insurance company is not liable to indemnify the award and the Claims Tribunal has committed a serious error of law by fastening the liability on the insurance company. 4. Learned counsel appearing for respondents No.3 and 4 in Miscellaneous Appeal No.732/2001 has submitted that a cover note was issued by the insurance company, which was cancelted after the accident, therefore, the insurance company would be liable. 5. In paragraph 16 of the award in Miscellaneous Appeal No.732/2001, it has been observed that the vehicle was insured for a period from 20-7-1998 to 1-9-1999 and a cover note was issued. ~^m» 6. The cheque was accepted by the insurance company on 20-7- 1998, which was dishonoured and fhereafter the cover note was cancelled on 20-8-1998, however, in the meantime, the accident took placeon 10-8-1998. 7. The certificate of insurance issued by the appellant/insurance company is on record in which it is stated that the effective date of commencement of insurance for the purpose of the Motor Vehicles Act, 1988 is from 8 A.M. on 20-7-1998 till the midnight of 19-7-1999. Another document dated 3-9-1998 is on record, which is a communication issued by the appellant/insurance company 19 owner of the vehicle/insured informing him that the cheque issued by him as against payment of premium having been dishonoured by the Bank the insurance cover and other relevant documents are treated as cancelled. From these facts, it would be clear that the information regarding cancellation of the insurance cover was issued on 3-9-1998, whereas the accident had taken place on 10-8-1998. 8. In the matter of National Insurance Company Limited' Abhaysing Pratapsing Waghela and others, (2008) 9 SCC 133, the Hon'ble Supreme Court has held in paragraphs 17 and 18 ofthereport thus: "17. Indisputably, the first respondent is a third party in relation to the contract of insurance which had been entered into by and between the appellant and the owner of the vehicle in question. We have noticed hereinbefore that a document was produced before the Tribunal. Even according to the appellant, although it was only a Motor Input Advice-cum-Receipt, it contained Cover Note •<» •/ No.279106. We, therefore, have to suppose that a cover note had, in fact, been issued. If a cover note had been issued which in terms of elause (b) of sub-section (1) of Section 145 of the Act would come within the purview of definition of certificate of insurance; it would also come within the purview of the definition of insurance policy. If a cover note is issued, it remains valid till it is eancelled. Indisputably, the insurance policy was cancelled only after the accident took place. A finding of fact, therefore, has been arrived at that prior to the deposit of the premium of insurance in cash by the owner of the vehicle, the cover note was not cancelled. 18. It is in the aforementioned situation, we are of the opinion, that the judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be bornein mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third- party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third-party risk must, therefore, be viewed differently vis-a- vis a contract of insurance qua contract." im? .rt^, ^'s-' 9. Learned Senior Advocate for the appellant/insurance company has relied on the judgment ofthe Hon'ble Supreme Court in Deddappa and others vs. Branch Manager, National Insurance Co. Ltd., (2008) 2 SCC 595 to argue that since the cheque was dishonoured and there was no payment, no contract existed between the insurer and the insured and thus the insurance company would not be liable. In National Insurance Company Limitedvs. Abhaysing Pratapsing Waghela and others (supra), the Hon'ble Supreme Court has referred the case of Deddappa and others vs. Branch Manager, National Insurance Co. Ltd. (supra) in paragraph 22 relied by learned Senior Advocate for the appellant/insurance company and yet the Hon'ble Supreme Court has held that as long as the certificate of insurance, i.e., the cover note is not cancelled, the insurance company would be liable to indemnify the award vis-a-vis a third party. In the present case also, the claimants in both the claim cases are third party, therefore, the law laid down by the Hon'ble Supreme Court in National Insurance Company Limited vs. Abhaysing Pratapsing Waghela and others (supra) woutd be squarely applicable and appellant/insurance company shall be liable to indemnify the award. 10. No other point has been argued by learned counsel for the appellanVinsurance company. 11. In the result, Miscellaneous Appeal No.732/2001 and Miscellaneous Appeal (C.) No.1361/2008 fail and are hereby dismissed. There shall be no order as to costs. Sd/- P.K. Mishra Judge T^-f7~ 'r