Case: Deddappa  Vs. Branch Manager, National Ins. Co. Ltd

This appeal is directed against the judgment and order dated 15.6.2005 passed by a learned Single Judge of the High Court of Karnataka in M.F.A No.5751 of 2002, whereby and whereunder an appeal preferred by the respondent herein from the judgment and order dated 12.06.2002 passed by the Motor Accidents Claims Tribunal in M.C.A. No.113 of 2001 was allowedShantamma, daughter of the appellant herein was sleeping in her hut. A tempo bearing No.KA 37 - 2257 which was being rashly and negligently driven by Respondent No.2 herein ran over her. She died on the spot. Household articles of the appellant also were damaged in the said accidentAn application for grant of compensation was filed by the appellants herein under Section 166 of the Motor Vehicles Act, 1988 (for short the Act) in the Court of C.J. (SD) & Motor Accidents Claims Tribunal at Gangavati in the district of Koppal on 12.06.2006The said vehicle was insured with the National Insurance Company. A plea was taken therein by the Insurance Company that although the vehicle in question was insured by the owner for the period 17.10.1997 and 16.10.1998, but the cheque issued therefor having been dishonoured, the policy was cancelled and, thus, it was not liable thereforBy an Award dated 12.06.2002, the learned Motor Vehicles Accidents Claims Tribunal allowed the said claim application directing payment of compensation for a sum of Rs.1,58,000/- with interest @ 12% per annum holding that the Insurer was liable to pay the said awarded amount despite cancellation of the contract of insurance. As noticed hereinbefore the High Court of Karnataka on an appeal preferred by the first respondent herein allowed the same relying on the judgment of the Karnataka High Court in M.F.A. No.6430 of 2001.

Court's reasoning:
We are not oblivious of the distinction between the statutory liability of the Insurance Company vis-à-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 claimA beneficial legislation as is well known should not be construed in such a manner so as to bring within its ambit a benefit which was not contemplated by the legislature to be given to the party. In Regional Director, Employees State Insurance Corporation, Trichur v. Ramanuja Match Industries [AIR 1985 SC 278 ], this Court held:We do not doubt that beneficial legislations should have liberal construction with a view to implementing the legislative intent but where such beneficial legislation has a scheme of its own there is no warrant for the Court to travel beyond the scheme and extend the scope of the statute on the pretext of extending the statutory benefit to those who are not covered by the schemeWe, therefore, agree with the opinion of the High Court