New India Assurance Co. Ltd. Vs. Smt. Afroz Bi & Ors  Insc 883 (30 November 2006)
Pasayat & S.H. Kapadia
Out of S.L.P. (C) Nos.14587-88 of 2005) ARIJIT PASAYAT, J.
in these appeals is to the orders passed by the Division Bench of the Madhya
Pradesh High Court, Indore Bench in Miscellaneous Appeal No. 473 of 1997 which
was disposed of on 14.7.2004 and MCC No. 597 of 2004 filed for reviewing the
said order which was rejected by order dated 2.2.2005.
facts in a nutshell are as follows:
Khan (hereinafter referred to as the 'deceased') met with an accident on
17.8.1992. The offending vehicle (No. MP-09-D-3815) was the subject matter of
insurance with National Insurance Company Ltd. Policy of insurance issued by it
covered the period from 5.10.1991 to 4.10.1992.
issued insurance cover in respect of the vehicle covering the period from
7.11.1992 to 6.11.1993. A petition claiming compensation was filed before the IVth
Additional Member, Motor Accidents Claims Tribunal, Dewas (in short the
'MACT'). The claim was lodged by the widow, three minor children and the mother
of the deceased. In the claim petition the owner of the vehicle, the driver of
the vehicle and the appellant Insurance Company were arrayed as the
respondents. The MACT taking into account the evidence on record held that the
owner of the vehicle and the driver were liable to pay the compensation fixed
at Rs.1,20,000/- with interest. So far as the present dispute is concerned the
quantum of award and the interest is really not relevant. The MACT took note of
the fact that the offending vehicle was not the subject matter of insurance
with the appellant-insurance company because the cheque which was issued to
cover the premium had been dishonored and the policy had become inoperative.
Copy of the insurance policy was annexed as Annexure P-1. It was therefore held
that present appellant has no liability with regard to the accident as on the
fateful day the vehicle was not the subject matter of insurance with it. The
claimant preferred an appeal questioning the conclusions regarding absence of
liability of the present appellant. The High Court held that the quantum
awarded was reasonable. It was, however, held that bouncing of cheque issued on
a later date cannot take away liability of the insurer qua a third party.
Accordingly the High Court allowed the appeal in part and held that the
appellant-Insurance company was also liable along with owner and the driver in
respect of the award.
review application was filed. It was brought to the notice of the High Court
that even if it is accepted for the sake of argument that bouncing of the cheque
is not of any relevance, the liability cannot be fastened on the appellant as
the cheque issued related to a subsequent period and the insurance cover as
noted above was relatable to the period from 7.11.1992 to 6.11.1993 i.e. after
the date of accident i.e. 17.8.1992. It is pointed out that during the said
period, as the records show, the vehicle was the subject matter of insurance
with National Insurance Company Ltd. which was not even arrayed as a party in
the claim petition.
is no appearance on behalf of the respondents in spite of service of notice.
support of the appeals, learned counsel for the appellant submitted that the
question involved is not the effect of bouncing of cheque and the real question
is the period for which the insurance cover was issued.
appears that the High Court has not taken note of the basic issue involved so
far as the present appellant is concerned. Its specific stand was that even the
cheque which was issued and subsequently dishonored related to the period from
7.11.1992 to 6.11.1993. The period obviously was subsequent to the date of
accident. The copy of the cover note is annexed as Annexure P-2 to the
Memorandum of Appeal before this Court and it clearly shows that the period
covered was 7.11.1992 to 6.11.1993. This aspect was also highlighted in the
review petition before the High Court. That being so, the High Court was
required to examine the liability, if any, of the appellant-Insurance Company.
In that factual background the question whether bouncing of the cheque
subsequently affected the liability of the insurer was really not relevant for
the purpose of the present case. Additionally, National Insurance Company Ltd.
which is stated to be the insurer for the relevant period, during which the
accident took place, was not pleaded as party before the MACT.
aforesaid background, the case is remitted to the High Court for fresh hearing
and adjudication. If so felt desirable, the High Court may permit the claimants
to implead the National Insurance Company Ltd. as respondent so that its stand
can be taken note of.
appeals are allowed to the aforesaid extent but in the circumstances without
any order as to costs.
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