^'...-.^ HSGH COURT OF CHHATTISGARH AT BILASPUR SB: Hon'bSe Shri Justice R. L. Jhanwar, M. A.fONo. 469 of 2006 \ 1 ^ APPELLANT RESPONDENTS United india Insurance Company Limited. / Versus Lachhuram Baghei and others. ORDER For Pronouncement of Order .03.2011 Sd/- R.L. Jhanwar Judge ^. HIGH COURT OF CHHATTISGARH AT BILASPUR SB: Hon'bSe Shri Justice R. L. Jhanwar, rVI.A.fC)No.46Sof20Q6 APPELLANT NON-APPLICANT No.2 RESPONDENTS 3. United india insurance Company Limited, Personal and Rura! Insurance Micro Branch, Khatwani Gali Makai Chowk, Dhamtari, Distt. Dhamtari (C.G.) Versus Lachhuram Baghei, S/o Sunher Singh, aged about 38 years, R/o Viliage Bhaisasur, P.s. Antagarh, Distt. Kanker (C.G.) Non-aDplicant No.1 VehicSe owner Smt. Sharmiia Dhanelia, Wd/o Trilokchand Dhaneiia, aged about 26 years. Ku. Bhoomika, D/o Late Triiokchand Dhanelia, aged about 4 years. 4. Nikhii Kumar S/o Late Trilokchand Dhanefia, aged about 2 years. 5. Hariprasad Dhaneiia, S/o Badai Singh Dhanelia, aged about 48 years. 6. Smt. Shyambati, W/o Hariprasad Dhaneiia, aged about 44 years. A!! R/o Viilage - Bhaisasur, P.S. Antagarh, Distt. Kanker) SI.No.2 & 3 Minor through natura! guardian applicant No.1 Smt. Sharmiia DhaneSia, Wd/o Trilokchand DhaneJia). Ctajmants APPEAL UNDER SECTION 173 OF THE IVIOTOR VEHSCLES ACT. 1988 Appearance: Shri S.S. Agrawal, counsel forthe appeiiant. None for respondent No.1 Shri S.C.Verma, counsel for respondents No.2 to 6. ORDER (Passedon D.03.2011) This is insurer's appeat directing against the order dated 13/09/2006 passed by 1 Motor Accidents Claims Tribuna! En claim case No.04/2005 whereby the learned Claims Tribunai awarded a sum of .;^. .^ nS^.. S ^m^'^^ i^ ^ Rs.2,31,000/- in favour of the respondents No.2 to 6 / daimants and against appeilant / insurer, 2. Aggrieved therewith, the appellant/insurer preferred this appeai. 3. At the outset, Shri S.S.Agrav^al, counsel for the appellant/insurer, submitted that he wouid not argue on the question of quantum butwould confine his argument on the question of canceilation of po!icy of insurance due to non-payment of premium. Counsei for the appeilant laid much stress that Ex.D.2 was cover note and the same was issued by the appeEJanVinsurer to the owner of newiy Hero Honda Motor Cycle but due to non-payment of premium, the poiicy of insurance was cancelied and the information as to canceilation policy of insurance due to non-payment of premium was sent to the insured through Ex.D.1, which is a notice, and the insured had a!so signed the same, and therefore, the appeiiant/insurance company is not iiable to pay any compensation awarded by the Tribunal. Lastty, he urged that the appeai may be aliowed. 4. Qn the other hand, Shri S.C.Verma, counse! for the ciaimants/respondents No.2 to S wouid argue in support ofthe impugned order. 5. i have heard iearned counse! for the parties at length and perused the record ofthe C!aims Tribunai including impugned order. 6. Admittediy, respondent No.1 had purchased one Hero Honda Motor cycie from M/s. Sancheti Auto, Bhanupratappur. The appeilanVinsurer did not dispute that cover note was Issued to the insured by it or by its empioyee. The evidence on record has clearty shown that the said cover note was issued on 1 1.02.2004 and the same was exhibited as Ex.D.2. The evidence on record has also cleariy shown that the said motor cycle was got insured by its owner. Admittediy, on 16.02.2004 while driving the said motor cycle one Triiokchand Dhanelia met with accident and he died on spot. 7. in order to appreciate the argument ofthe counsel for the appeilant that due to^non-payment of premium, the policy of insurance was already ^l:x^. 9 '"-•-'^m^ ^«11111,»^- canceiied and the information asdo cancellation policy of insurance due to non-payment of premium was sent to the insured through Ex.D.1 , which is a notice, i shall first deal with evidence of Lacchuram N.A.W.1, owner of the newiy Hero Honda Motor Cycle. it is clear from his evidence that he purchased the said motor cycie through M/s. Sancheti Auto, Bhanuprappur and got the same insured with the appeliant/insurer through M/s Sancheti Auto by paying premium. However, he denied that he had received one letter regarding cancellation of insurance policy sent by the appellanVlnsurer. N.A.W.2 Kazi Zamieer Ahmed, a witness of appeliant/insurer, has in his evidence deposed that due to non-payment of premium for the new motor cycie, cover note was cancelled. He has also deposed that information thereof was sent to the owner through a letter dated 11.02.2004 by U.P.C. He has aiso stated that Ex.D.1 also bore the signature of owner showing that he has received the same after signing it. Ex.D.1 and Ex.D.2 are on record. Ex.D.1 is a Setter issued to M/s Sancheti Auto addressed to the owner and Ex.D.2 is a cover note issued on 11.02.2004 at 16.15 hours. A bare perusa! of Ex.D.2 has ciearly revealed that premium of Rs.875/- was charged in cash. N.A.W.2 Kazi Zameer Ahmed, on the one hand, admitted in his cross-examination that an amount of Rs.875/- was received towards premium but, on the other hand, denied that no such amount was received. Once it has been cieariy shown that an amount of Rs.875/- was charged towards premium, the appe!iant/insurer could not have said that no such amount was received and in fact it has no right to deny this fact in its written version. More over, once the appelianVinsurer has accepted that amount has been paid in cash, then no question of denial wouid arise. If there is any dispute regarding non-receipt of premium, then the insurance company shou!d have enquired the matter from its employee or agent whether any premium was paid and if its agent or employee has received such amount, then the insurer shal! be responsibie to pay compensation. in this case, no doubt, a sum of Rs.875/- was charged towards premium and after that cover note was issued meaning thereby cover note was issued oniy after receipt of Rs.875/- and may be some formalities would remain to issue main policy. 8. Sub-Section (4) of Section 147 of the Motor Vehicies Act (for short lthe Acf) provides that the insurance company after issuance of cover note foliowed by a policy of insurance shail inform the fact to the registering authority within period of seven days of the expiry of the period of the validity. Sub-Section (4) ofSection 147 oftheAct reads as under: "147. Requirements of poiicies and iimits of liability.-- xxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxx (4) Where a cover note issued by»the insurer under the provisions of this Chapter or the rules made thereunder is not foliowed by a policy of insurance within the period prescribed time, the insurershali, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe." in the present case, the appellant/insurer and the owner had entered into agreement through cover note and insurer had atready received a sum of Rs.875/- and oniy after receipt of such payment, the insurer had issued that cover note and thereafter accident took place on 16.02.2004 meaning thereby the appeliant had sufficient opportunity to inform the fact that the said motor cycle was got insured through IVI/s Sancheti Auto by it with the concerned Office of Regiona! Transport Authority. However, the appellanVinsurer did not do so. Sub-Section (5) of Section 147 of the further provides that an insurer issuing a policy of insurance under this section shal! be liabie to indemnify. Sub-Section (5) of Section 147 of the Act reads as under: "(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shal! be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons". The object of sub-section (5) that once the insurer, being an authorized insurer, issued a policy of insurance or cover note to cover the vehicle even without receiving any premium therefor, it became liabie to indemnify the person or classes of persons in respect of any liability whlch the policy purports to cover in the case of that person or those ciasses of persons. Sub-clause (b) of sub-section (1) of Section 147 of the Act also clearly shows that "a policy of insurance must be a policy which is issued by a person who is an authorized insurer; or insures the person or classes of persons speclfied in the policy to the extent specified in sub-section (2) (i) against any Siability which may be incurred by him in respect of fhe death of or bodiiy injury to any person, inciuding owner of the goods or his authorized representative carried in the vehicle or damage to any property of a third party caused by a or arising out of the use ofthe vehicle in a pubiic piace; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use ofthe vehicle in a public piace:" 9. Now, so far as the receipt of Ex.D,1 and signature of owner on it is concerned, the appeflanVinsurer did not produce any of its representatives or any agent, who is said to have issued the cover note Ex.D.2 after receiving premium of Rs.875/- aithough the said agent or representative was the best person to adduce evidence in that regard. . More over, the insurance company did not examine any hand written expert to prove the signature of the owner so that the Tribuna! couid verify the factum of signature. Thus, it is clear that the insurer has utteriy faiied to prove that jetter canceling the insurance policy has been received by the insured. it was incumbent upon the insurer to prove its case but it has not been abie to prove its case. The findings recorded by the Tribuna! are purely based on iegal, clinching and reliable evidence sustainable under law. 10. For the foregoing reasons, l find no infirmity in the impugned order and thus caiied for no interference. 11. Consequently, the appeal being devoid of merit is liable to be and is hereby dismissed. No order as to costs. Sd/- R.L. Jhanwar Judge