(Prayer: Appeal filed under Order 41 of CPC praying thet the Highcourt may be pleased toagainst the Order and Decree passed on dt.25.06.2013 in O.P.No.626 of 2011 on the file of the MACT-cum-II Addl Dist Judge (FTC), Parvathipuram.

IA NO: 1 OF 2014(MACMAMP 348 OF 2014

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased

IA NO: 2 OF 2014(MACMAMP 485 OF 2014

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased)

Heard,

Sri Ravi Teja, learned counsel representing Smt. A.Jayanthi, learned counsel for the appellant and Ms. T.Soumya, learned counsel representing Sri Taddi Nageswara Rao, learned counsel for the respondent Nos.1 to 4/claimants as well as Sri G.Sai Narayana Rao, learned counsel for the respondent No.6, who have submitted their arguments and placed reliance on the judgments of the Hon‟ble Supreme Court.

1. Assailing the Award and Decree dated 25.06.2013 passed in M.V.O.P.No.626 of 2011 by the Motor Accidents Claims Tribunal-cum-II Additional District Judge (FTC), Parvathipuram (hereinafter referred to as “the Tribunal”), the present appeal has been filed by the appellant/insurance company.

2. The parties herein are referred as they were before the Tribunal.

3. The facts leading to the case are that, on 23.04.2010 at about 08:30 P.M., the deceased along with one Suvvada Prasad were going to their duty at Jagiram Jute Mill on a motor bike keeping themselves on extreme left side of the road and when they reached the Lorry Union Office at Salur, the crime vehicle i.e., Lorry bearing No.APA 35 V 3604 driven by its driver, who is the 1st respondent in a rash and negligent manner with high speed and without any caution, signal or horn dashed behind the deceased. As a result, the deceased and his colleague fell down and received injuries and that the colleague died on the spot. The deceased was shifted to Government Hospital at Salur, where he succumbed to injuries on the same day and that due to the sudden demise of the deceased, the claimants became destitutes having lost their livelihood as dependents of the deceased besides incurring huge amount towards transport and funeral expenses.

4. In oppugnance, the 3rd respondent-insurer of the crime vehicle filed his counter, denying all the allegations particularly with respect to the manner of accident resulting in death of the deceased, relationship, legal heir ship and dependency in between the claimants and the deceased, the age and avocation along with income. He averred that the claimants are not entitled for any compensation. The claim against the 1st respondent, who is the driver was dismissed as per the docket order dated 31.01.2012 and the 2nd respondent, who is the owner of the crime vehicle remained ex parte.

5. The principal contention of the 3rd respondent is that the insurance company is not liable to pay the compensation since there is no contract of indemnity in between the 2nd respondent and the 3rd respondent, since the cheque issued by the 2nd respondent-owner towards premium was dishonoured on the ground of insufficient funds after issuance of the policy and as such, the policy was cancelled to the knowledge of the 2nd respondent- owner and his case is that the 2nd respondent-owner is alone liable to pay the compensation, if any awarded.

6. The Tribunal framed the following issues:

                  i. Whether the accident and death of the deceased viz. Gavara Venkatara is due to the rash and negligent driving of the vehicle (lorry) bearing No.GG 17 GA 0432 by its driver?

                  ii. What is the correct age of the deceased as on the date of accident?

                  iii. Whether the petitioners are entitled to any compensation and if so, at what quantum and from which of the respondents?

                  iv. To what relief?

7. While answering the issue No.1, the Tribunal examined the evidence placed on behalf of the claimants as well as respondents particularly the 3rd respondent, who was alone contesting the case. As could be seen from the Award, exhibits on behalf of the claimants were marked and witnesses were also examined. Insofar as issue No.1 is concerned, the Tribunal answered in favour of the claimants and against the respondents.

8. Insofar as issue Nos.2 and 3 are concerned, the Tribunal relying upon the judgment of Hon‟ble Supreme Court in the case of Sarla Verma & Others vs. Delhi Transport Corporation & Another (2009 (3) ALD 83 (SC)) , has taken the multiplier „17‟. The age of the deceased was considered as 30 years on the date of the accident, on the basis of Ex.A3-Postmortem Certificate and which remained unrebutted. The notional income of the deceased was taken as Rs.3,000/- per month by the Tribunal holding that the claimants did not place any supporting documentary evidence except the statement of PW1 that he was working as electrical mechanic in Jigaram Jute Mill and the monthly income is Rs.6,000/- per month. The Tribunal has awarded Rs.5,000/- towards funeral expenses and the 1st petitioner being the wife is entitled for Rs.10,000/- towards loss of consortium and the 2nd petitioner being minor son is entitled for Rs.10,000/- towards loss of love and affection and guidance of his father. The petitioners 3 and 4 being aged parents were awarded Rs.5,000/- each, totaling Rs.10,000/- towards loss of love and affection for the death of the deceased. In total, after applying the multiplier method, the petitioners are entitled for compensation at Rs.4,94,000/-.

9. At paragraph No.17, the Tribunal has restricted to Rs.4,00,000/- only on the ground that reasons are not assigned by the petitioners to grant more compensation than the claim amount. Relying upon the judgment of Hon‟ble Supreme Court in the case of Nagappa vs. Gurudayal Singh((2003) 2 SCC 274), the amount was restricted to Rs.4,00,000/-, apart from the other benefits which were totally pooled up as Rs.4,94,000/-.

10. The adversaries of both the counsel on behalf of their respective parties limited their arguments only to the question of law as to whether the insurer was liable to pay the compensation in the event the cheque was bounced and the premium was not paid by the owner of the crime vehicle.

11. Upon a holistic consideration of the entire facts of the case, this Court is of the opinion that the main and principal ground is whether the insurer is to be saddled with the liability of paying compensation in view of the bouncing of the cheque issued by the 2nd respondent-owner. The Tribunal has not framed any issue on this point, but elaborately considered at paragraph Nos.19 and 20 of the Award.

12. To rebut the contention of the claimant regarding the compensation despite the cheque being bounced, the Tribunal has answered in favour of the claimants. The reasons for coming to such conclusion were answered meticulously by adverting to the legal aspect as well as the facts which are foundation. The Exhibits marked before the Tribunal are as follows:

                  B1 : Policy Copy

                  B2 : Returned cheque dated 08.04.2010 for Rs.45,580/- B3 : Receipt issued by the insurer dated 09.04.2010

                  B4 : Letter addressed by the Andhra Bank, Parvathipuram B5 : Returned letter

                  B6 : Office copy of letter issued to 2nd respondent, dated 06.05.2010 B7 : Acknowledgment of 3rd respondent dated 17.05.2010

                  The above dates throw light to coming to the conclusion that the insurer is liable to indemnify.

13. The facts are not in dispute as stated ibid and the arguments have taken place by the counsel on either side only on the aspect of liability by the insurer. The accident took place on 23.04.2010 by the crime vehicle which is lorry bearing No.APA 35 V 3604 driven by the 1st respondent, against whom the claim was dismissed. The 2nd respondent remained ex parte. The policy was valid from 10.04.2010 to 09.04.2011 and the date of intimation of 2nd respondent about dishonor was 06.05.2010 and receipt of the acknowledgment by the 2nd respondent was 17.05.2010. Admittedly by mere considering the dates of the accident and acknowledgment received by the 2nd respondent, it can be safely concluded that the information regarding the dishonor of cheque on 17.05.2010 much later to the accident which was occurred on 23.04.2010. While considering the judgment relied upon by the insurer in the case of Munagala Srinivasa Rao and others vs. S.Rajendra Singh and others(2009 (5) ALT 193), wherein the erstwhile High Court of Andhra Pradesh has taken note that the cancellation was communicated to the insurer before the date of accident and after considering the same, the Tribunal has dismissed the plea of the insurer and proceeded with awarding the compensation.

14. As stated above, the counsels representing their respective parties were only on the question of liability as to whether the insurer is really liable to pay the compensation according to the facts and circumstances in the present case. Admittedly, the information regarding bouncing of the cheque was given to the owner after the accident in the present case. In support of his arguments, learned counsel for the appellant relied upon the judgments of the Hon‟ble Supreme Court in the cases of United India Insurance Company Limited vs. Laxmamma and Others ((2012) 5 SCC 234) , National Insurance Company Limited vs. Sunita Devi and Others(2025 SCC OnLine SC 1647) and National Insurance Company Limited vs. Seema Malhotra and Others ((2001) 3 SCC 151) . Learned counsel for the respondent Nos.1 to 4/claimants strongly relied upon the judgment of the Hon‟ble Supreme Court in the case of Deddappa and Others vs. Branch Manager, National Insurance Company Limited((2008) 2 SCC 595).

15. This Court has meticulously gone into the above cases referred by the counsels. The judgment referred by the learned counsel for the appellant in the case of United India Insurance Company Limited vs. Laxmamma and others (supra 3) really supports the case of the claimants, wherein the Hon‟ble Supreme Court after considering the earlier judgments in the cases of Oriental Insurance Company Limited vs. Inderjit Kaur [(1998) 1 SCC 371], New India Assurance Company Limited vs. Rula [(2000) 3 SCC 195] and National Insurance Company Limited vs. Seema Malhotra (supra 5), finally concluded at paragraph Nos.26 and 27 as follows:

                  “26. In our view, the legal position is this: where the policy of insurance is issued by an authorised insurer on receipt of cheque towards the payment of premium and such a cheque is returned dishonoured, the liability of the authorised insurer to indemnify the third parties in respect of the liability which that policy covered subsists and it has to satisfy the award of compensation by reason of the provisions of Sections 147(5) and 149(1) of the MV Act unless the policy of insurance is cancelled by the authorised insurer and intimation of such cancellation has reached the insured before the accident. In other words, where the policy of insurance is issued by an authorised insurer to cover a vehicle on receipt of the cheque paid towards premium and the cheque gets dishonoured and before the accident of the vehicle occurs, such insurance company cancels the policy of insurance and sends intimation thereof to the owner, the insurance company’s liability to indemnify the third parties which that policy covered ceases and the insurance company is not liable to satisfy awards of compensation in respect thereof.

                  27. Having regard to the above legal position, insofar as the facts of the present case are concerned, the owner of the bus obtained the policy of insurance from the insurer for the period 16-4-2004 to 15-4-2005 for which premium was paid through cheque on 14-4-2004. The accident occurred on 11-5-2004. It was only thereafter that the insurer cancelled the insurance policy by communication dated 13-5-2004 on the ground of dishonor of cheque which was received by the owner of the vehicle on 21-5-2004. The cheque which was received by the owner of the vehicle on 21-5-2004. The cancellation of policy having been done by the insurer after the accident, the insurer became liable to satisfy the award of compensation passed in favour of the claimants.”

16. As per the above decisions, the insurer was held liable. The cases referred by the learned counsel for the appellant were duly considered by the Hon‟ble Supreme Court in the above referred judgments and finally the Hon‟ble Supreme Court observed that the insurer will be liable in the event the insurer is informed about the dishonor of the cheque prior to the date of accident and hence the other judgments are of no assistance.

17. Coming to the said judgment relied upon by the learned counsel for the respondent Nos.1 to 4/claimants in Deddappa‟s case (supra 6) is also not in assistance to the present case and the Hon‟ble Supreme Court in exercise of Article 142 of the Constitution of India, directed the 1st respondent therein to pay the claim amount on the ground that the appellant hails from the lowest strata of society. The principle emanated from Deddappa‟s case is that “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”.

18. After giving anxious hearing and considering the ratio laid down by the Hon‟ble Supreme Court in United India Insurance Company Limited‟s case (supra 3), wherein it throws light that if the insurer is informed after the accident occurred regarding the bouncing of the cheque, the insurer is definitely liable to indemnify and hence considering the above ratio which is the law of the land, this Court feels it appropriate to fasten the liability on the insurer.

19. In view of the foregoing reasons narrated, the Award and Decree dated 25.06.2013 passed in M.V.O.P.No.626 of 2011 by the Motor Accidents Claims Tribunal-cum-II Additional District Judge (FTC), Parvathipuram, is upheld since there is no legal infirmity or inconsistency with the provisions of the statute.

20. In the result, the Motor Accidents Civil Miscellaneous Appeal is dismissed. There shall be no order as to costs.

21. As a sequel, Interlocutory Applications pending, if any, shall stand closed.