IN THE HIGH COURT OF DELHI AT NEW DELHI MAC App No.730/2007 Judgment delivered on: January 10, 2008 The Oriental Insurance Co. Ltd. ..... Appellant Through: Mr. Pankaj Seth, Adv. versus Mohd. Waseem & Ors. ..... Respondents Through: Nemo CORAM: HON'BLE MR. JUSTICE KAILASH GAMBHIR 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes KAILASH GAMBHIR, J. Oral: * Counsel for the appellant contends that in case of cancellation of insurance policy there has to be complete exoneration of liability of the MAC. APP. No. 730 of 2007 Pages 1 of 4 insurance company. The contention of counsel for the appellant is that the insurance company has been made responsible to pay the amount and then recover it from the insured although the contract itself was cancelled. Counsel for the appellant has placed reliance on the recent judgment of the Supreme Court reported in 2007 (14) Scale 257, Deddappa & Ors. Vs. The Branch Manager, National Insurance Co. Ltd. I have heard learned counsel for the appellant. At the first blush, I found myself in agreement with the counsel for the appellant but after closely examining the facts of the present case, I do not find that the ratio of the said judgment is applicable in the facts of this case. In this case, the Tribunal has observed in the award that the appellant insurance company did not intimate to the registering authority about the cancellation of the insurance policy. As per Section 147 of the Motor Vehicles Act, it is the statutory duty of the insurance company to intimate to the registering authority of the offending vehicle about the cancellation of the insurance cover note/policy within a period of one week. Reference is made to Para 24 of the impugned award wherein the Tribunal has made the said observations. The same is reproduced as under:- “24. Ld. Counel for the respondent Nos. 1 to 3 has submitted that the cheque was issued by one Mr. Dharmender and not by the respondent no.3 and therefore, it is possible that after taking the payment in MAC. APP. No. 730 of 2007 Pages 2 of 4 cash from respondent no.3, the Officer of the insurance company had put the cheque of some Dharmender and might have retained with him the cash amount. This argument is misplaced in as much as the respondent no.3 never appeared in the court to depose that he had not given the payment vide cheque No. 147651 issued from account of one Dharmender. Not only this even in the insurance policy, a copy of which has been proved by respondent no.2, it is clear that the payment of the premium was received by way of said cheque and not by cash. Ld. Counsel for respondent nos. 1 to 3 has argued that as per the provisions of Section 147 of M.V. Act, it is statutory duty of the insurance company to intimate to the Registering Authority of the offending vehicle, within one week of the cancellation of the insurance cover note/policy, by the insurance company did not do so and therefore, it cannot escape the liability. In my opinion although the insurance company cannot escape the liability towards a third party i.e., the petitioner as it had not intimated the Registering Authority of the offending vehicle about the cancellation of the insurance company but at the same time the right of the insurance company against the insured i.e. Respondent no.3 cannot be denied because insurance cover note/policy was already cancelled by respondent no.4 vide letter dated 5.9.04 despatched on 15.09.04 i.e. much prior to the date of occurrence of accident. Respondent no.2 has admitted in his cross examination that he never got transferred the insurance policy after the purchase of vehicle from respondent no.3. Adverse inference has to be drawn that he never got transferred the insurance cover notice because he was aware that the insurance cover note stands cancelled due to non payment of insurance premium. I accordingly hold that respondent no.1 and 2 who are the driver and the registered owner of the offending vehicle are held jointly and severally liable to pay compensation to the petitioner. The respondent no.4, being the insurer of the offending vehicle is although vicariously held liable to pay compensation to the petitioner but at the same time it can recover the amount of compensation from respondent nos. 2 & 3 who are the owner and insured of the offending vehicle. MAC. APP. No. 730 of 2007 Pages 3 of 4 Accordingly, the issue no.2 is decided in favour of the petitioner and against the respondents. In the judgment of the Apex Court relied upon by counsel for the appellant, it has been clearly stated that the insurance company would not be liable in a case where the contract of insurance has been cancelled and due intimation has been given about the cancellation of the policy to all concerned. Para 26 of the said judgment is reproduced as under:- “26. We are not oblivious of the distinction between the statutory liability of the Insurance Company vis-a-vis a third party in the context of Sections 147 and 149 of the Act and its liabilities in other cases. But the same liabilities arising under a contract of insurance would have to be met if the contract is valid. If the contract of insurance has been cancelled and all concerned have been intimated thereabout, we are of the opinion, the insurance company would not be liable to satisfy the claim.” Since admittedly no such intimation was given by the insurance company to the registering authority about the cancellation of the insurance policy, I do not find that the said judgment is applicable to the facts of the present case. There is no merit in the appeal and the same is hereby dismissed. January 10, 2008 KAILASH GAMBHIR, J ga MAC. APP. No. 730 of 2007 Pages 4 of 4