1. These appeals are filed by the second respondent/insurer of the motorcycle bearing registration No.KCT/307 challenging the liability to pay the amount awarded in O.P (MV) Nos.53 & 68 of 2010 on the file of the Motor Accidents Claims Tribunal, Tirur. The respondents in MACA No.2309/2012 are the claimants 1 to 4, claimants 7 to 10 and supplemental third respondent before the tribunal in O.P.(MV) Nos. 68 of 2010 and the respondents in MACA No. 2580/2012 are the claimant and the third respondent before the tribunal in O.P.(MV) No.53 of 2010.

2. The brief facts of the case are as follows: On 30.12.2007, while the petitioner in O.P.(MV) No.53/2010 was riding his motorcycle bearing registration No.KL-54/5708 from Chamravattom junction to Puthuponnani with the claimant in O.P.(MV) No.68/2010 as pillion rider, another motorcycle bearing registration No.KCT/307 came from the opposite side hit against the motorcycle in which the claimants were travelling and thereby, the claimants sustained serious injuries and the claimant in O.P.(MV) No.68/2010 succumbed to the injuries while undergoing treatment. The claimants who are the legal        heirs approached of  the deceased  in O.P.(MV) the tribunal claiming a total No.68 of 2010, compensation of ₹6,00,000/-. The claimant in O.P.(MV) No.53 Of 2010 approached   the tribunal claiming       a totalcompensationof ₹2,00,000/-.

3. Before the tribunal, the first respondent/owner of the offending vehicle was reported dead and supplemental third respondent was impleaded as his legal representative. He filed written statement denying the ownership of the first respondent over the vehicle bearing registration No.KCT/307. The first respondent was the previous owner in respect of that motorcycle and he expired on 25.05.2007. Prior to his death, he sold the vehicle on 26.12.2008 to one Mr. Pradeep, S/o Kumaran, Menakath House, Pallapuram, Ponnani Taluk, Malappuram District and he executed all documents for transfer of ownership in the name of Pradeep. From 26.12.2008 onwards, the first respondent was not the owner of that vehicle. The second respondent, insurer filed a written statement denying the negligence attributed on the part of the rider of the motorcycle bearing registration No.KL-54/5708. The third respondent filed a written statement and additional written statement, admitting that there was valid insurance policy for the vehicle bearing registration No.KCT/307, in the name of the first respondent, Zakkariya. He produced the copy of the death certificate of the first respondent. Before the tribunal, Exts.A1 to A21 and Ext.B1 and C1 were marked. The tribunal, after analysing the pleadings and materials on record, awarded a sum  of  ₹1,26,792/-  which  is  rounded  to  ₹1,26,800/-  and ₹4,97,200/- in O.P.(MV) No.53 of 2010 and O.P.(MV) No.68 of 2010 respectively as compensation under different heads with interest @7.5% per annum from the date of petition till realization with proportionate costs against the second respondent being the insurer of the offending vehicle and recover the same from the supplemental third respondent/ the legal heirs of the first respondent-owner. Challenging the liability to pay the award amount, the second respondent/insurer has come up with the above appeals.

4. Heard the learned standing counsel appearing for the appellant – insurance company, the learned counsel appearing for the 10th respondent/legal heir of the owner and the learned counsel appearing for the respondents/claimants.

5. The learned standing counsel appearing for the insurance company submitted that the policy was renewed in the name of a deceased person, suppressing the death of the insured  and,  therefore,  the  policy  is  null  and  void  and consequently, there was no valid insurance coverage for the offending vehicle in the eye of law. The learned standing counsel further submitted that the accident was on 30.12.2007, whereas the insured had died much prior to the date of the accident. Since the policy was renewed without disclosing the death of the insured, there was suppression of material facts. Hence, as per Section 149 of the Motor Vehicles Act, the insurer is not liable to indemnify the insured.

6. The learned counsel appearing for the 10th respondent submitted that he was impleaded in the year 2010 in the claim petitions at the instance of the claimants, after the death of the alleged owner, Zakariya. He had raised a contention in the written statement that the first respondent/owner  soldthe vehicle on    26.12.2006 toone Pradeep, the driver of the offending vehicle and that the first respondent or his legal heirs are not liable to pay the amount awarded by the tribunal.

7. The learned counsel appearing for the claimants raised contentions mainly on three grounds. The first contention is that the policy issued was a liability policy and therefore, there was third-party coverage. Secondly, it is argued that the insurer was informed in 2010 that the insured had expired prior to the accident, and even then, no evidence has been adduced by the insurer to show that the policy issued in respect of the vehicle was cancelled in 2010. Even thereafter, the registered owner was shown as Zacharia, S/o Abdu. The vehicle had a valid insurance policy.

8. Further the third contention is that under Section 149(2) of the Motor Vehicles Act, if there is any breach of policy condition, the insurer has to pay the award amount and then recover the same from the owner of the vehicle. The learned counsel further argued that as per the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002, (in short “IRDA Rules”) while issuing proposal for insurance, it is the duty of the insurer to furnish to the insured free of charge, within thirty days of the acceptance of a proposal, a copy of the proposal form and also when a proposal form is not used, the insurer shall record the information obtained orally or in writing and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof is on the insurer, if no such information is recorded and hence, it was argued that it was the bounden duty of the insurer to get themselves satisfied whether there was any suppression of any material facts. It was also argued that the non-disclosure of the death of the insured does not constitute a material fact, affecting the premium or the fundamental terms of the contract. Even if the death had been intimated, the only consequence is a change in the name of the insured, and no additional premium would have been payable.

9. The learned counsel for the claimants relied on the judgment of the Apex Court in United India Insurance Co. Ltd v. Santro Devi & Ors. [2009 KHC 71] and argued that unless there is an allegation of fraud, the insurance company cannot be exonerated from the liability to pay the award amount.

10. I have considered the rival contentions raised by both sides.

11. It is an admitted fact that the insured of the vehicle had expired on 25.05.2007, prior to the date of the accident. Though the accident occurred on 30.12.2007, the legal heirs came into the picture only in 2010. It was only in 2010 that the insurer also became aware of the fact that the insured was no more. The case of the legal heir is that the vehicle had been sold to one Pradeep even prior to the accident; however, no evidence has been adduced to prove the same. Admittedly, the registered owner of the vehicle continued to be Zacharia, S/o Abdu, who had died prior to the accident. The issue that arises for consideration is whether the insurer can be exonerated from the liability to satisfy the award amount.

12. It is a mandatory and statutory condition that the vehicle cannot be plied on the road unless there is a valid insurance policy. Here also, there is no case that there was no valid insurance policy for the vehicle. The policy had been renewed year after year by a person unknown to the insurer, and it was only in 2010 that the insurer came to know that the insured had already passed away. Even now, no evidence has been adduced by the insurer to prove that after 2010, no valid policy was issued to the vehicle and the policy issued to the vehicle was cancelled in 2010 and they have returned premium paid by the insured.

13. Regulation 4 of the IRDA Rules, 2002 reads as follows:

                  4. Proposal of insurance

                  (1) Except in cases of a marine insurance cover, where current market practices do not insist on a written proposal form, in all cases, a proposal for grant of a cover, either for life business or for general business, must be evidenced by a written document. It is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form.

                  (2) Forms and documents used in the grant of cover may, depending upon the circumstances of each case, be made available in languages recognised under the Constitution of India.

                  (3) In filling the form of proposal, the prospect is to be guided by the provisions of Section 45 of the Act. Any proposal form seeking information for grant of life cover may prominently state therein the requirements of Section 45 of the Act.

                  (4) Where a proposal form is not used, the insurer shall record the information obtained orally or in writing, and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. The onus of proof shall rest with the insurer in respect of any information not so recorded, where the insurer claims that the proposer suppressed any material information or provided misleading or false information on any matter material to the grant of a cover.

                  (5) Wherever the benefit of nomination is available to the proposer, in terms of the Act or the conditions of policy, the insurer shall draw the attention of the proposer to it and encourage the prospect to avail the facility.

                  (6) Proposals shall be processed by the insurer with speed and efficiency and all decisions thereof shall be communicated by it in writing within a reasonable period not exceeding 15 days from receipt of proposals by the insurer.

14. Insurance policies are often renewed automatically, leading to situations where insurers only discover the policyholder’s death when a claim is made, highlighting a need for more proactive systems to handle such cases. Even going by the IRDA Rules, it is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, copy of the proposal form and further, if the proposal form is not used, the insurer has to record the information obtained orally or in writing and confirm it within a period of 15 days thereof with the proposer and incorporate the information in its cover note or policy. In the present case also, if the insurer had issued the proposal form to the owner in the address shown in the record, it would have been returned with an intimation that the insured was no longer alive. No such proposal form was admittedly issued by the insurer at the time of renewal of the policy to the insured.

15. In Santrodevi (supra), the Apex Court has held that, ‘thus in a case where the owner of the motor vehicle had expired, there does not exist any statutory interdict for the person in possession of the vehicle to ply the same on the road; but there being a statutory injunction that a vehicle cannot be plied on the road unless a valid policy of insurance is obtained, we are of the opinion that the contract of insurance would be enforceable. It would also be so in a case of this nature as for the purpose of renewal of insurance policy only the premium is to be paid’. The contract cannot be treated as void unless it is shown to be vitiated by fraud. For a vehicle to ply on the road, the certificate of insurance is mandatory. A motor vehicle cannot be permitted to be used in a public place without a valid insurance policy. For renewal of an insurance policy, payment of the premium alone is required. In the present case, it is not disputed that the premium for renewal was duly paid. Moreover, the insurer does not have a case that the contract was vitiated by fraud; no such plea is found either in the appeal or in the written statement filed by the insurer. The insurer has also not adduced any evidence to substantiate any allegation of fraud, apart from the production of the insurance policy. Hence, there is no reason to exonerate the insurer from the liability to pay the award amount.

                  In the impugned awards, the tribunal found that the motorcycle was overloaded and there was violation of policy conditions, hence the insurer was granted the right to recover the award amount from the owner of the vehicle, which remains unchallenged. Hence, I find no reason to interfere with the award passed by the tribunal.

                  Accordingly, the appeals are dismissed. However, this court directs the insurance companies to adhere to IRDA Rules, 2002, especially Regulation 4, Clause 1 and 4, when renewing policies, ensuring compliance with regulatory guidelines.