Allahabad High Court
THE ORIENTAL INSURANCE CO.LTD.versusFAIMUDDIN AND OTHERS
- Decided
Holding
The insurance company is not liable for the compensation because the vehicle was uninsured at the time of the accident; the award is modified to be payable by the vehicle owner.
Summary
The Motor Accident Claims Tribunal had awarded Rs.1,67,000 with interest to the claimant, holding Oriental Insurance Co. liable for compensation. The insurer appealed, contending that the offending vehicle was not insured on the accident date because the premium cheque issued by the owner was dishonoured. Evidence showed the cheque dated 07.05.1996 was returned for insufficient funds and the insurer had notified the owner of this default on 13.09.1996. The High Court found that the vehicle indeed lacked insurance on 16.03.1997, the date of the accident, and therefore the insurer could not be held liable. Consequently, the award was modified to make the vehicle owner responsible for payment, and any sums already paid by the insurer were to be recovered.
Issues considered
- Whether the insurance company is liable for motor accident compensation when the vehicle was not insured at the time of the accident due to a dishonoured premium cheque
- Whether the award against the insurer can be altered to place liability on the vehicle owner
Subjects
- insurance
- motor accident
- liability
- uninsured vehicle
- compensation
- award modification
- service of notice
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
FIRST APPEAL FROM ORDER No. - 1102 of 1999
The Oriental Insurance Co.Ltd.
.....Appellant(s)
Versus
Faimuddin And Others
.....Respondent(s)
Counsel for Appellant(s) : Arvind Kumar
Counsel for Respondent(s) : Akhilesh Kumar Pandey, Manoj Kumar
Singh, Pradhumn Kumar Pandey,
V.S.Chauhan
Court No. - 54
HON'BLE ANIL KUMAR-X, J.
1. Heard Shri Achintya Kumar holding brief of Shri Arvind Kumar,
learned counsel for the appellant-Insurance Company. Shri P.K. Pandey,
learned counsel for respondent/claimant is present.
2. Despite various efforts to serve notice upon the owner of the offending
vehicle, the same could not be served upon him as he was not found on
the given address. Accordingly, the service of notice upon the respondent-
owner is held sufficient.
3. This appeal has been filed on behalf of the appellant-Insurance
Company with a prayer to set aside the impugned judgment dated
28.9.1999 passed by Motor Accident Claims Tribunal, Meerut in
M.A.C.P. No.347 of 1997 (Faimuddin vs. Jeet Singh & Ors.) whereby the
claim petition was allowed and an award of Rs.1,67,000/- together with
12% interest has been passed in favour of the claimant-respondent and
that the entire liability of the award was fastened upon the Insurance
Company to pay the compensation to the claimant.
4. The sole contention of the learned counsel for the appellant-Insurance
Company is that liability to satisfy the award has been fastened upon the
Insurance Company, whereas the offending vehicle was not insured on
the date of accident. He submitted that the owner of the offending vehicle
had submitted Cheque No. 009413 dated 07.05.1996 issued by Allahabad
Bank in order to deposit the premium of the insurance policy. However,
the said cheque was dishonoured due to insufficiency of funds and the
FAFO No. 1102 of 1999
2
said fact was duly proved by DW-1 N.S. Neemwal, Branch Manager of
Allahabad Bank, Bindapur, Delhi. It was submitted that this fact is
sufficient to substantiate that the offending vehicle was not insured on the
date of accident.
5. Heard learned counsel for the appellant and perused the impugned
judgment.
6. It is very much evident that the accident had taken place on 16.03.1997.
The cheque issued by the owner on 07.05.1996 was dishonoured,
regarding which information through registered post was sent by the
Insurance Company to the owner on 13.09.1996. It is, therefore, evident
that the offending vehicle was not insured on the date of accident. Hence,
the Insurance Company could not be held liable to satisfy the award.
7. Accordingly, the impugned award is modified to the extent that the
compensation awarded in favour of the claimant shall be payable by the
owner / respondent No. 2.
8. Any amount which has been paid by the Insurance Company towards
satisfaction of the award, shall be recoverable by it after adopting proper
legal course.
9. The amount, which is still in the custody of the Tribunal in the form of
FDRs etc., deposited by the Insurance Company for satisfaction of the
award, shall be returned to the Insurance Company by the concerned
Tribunal.
10. The amount so released in favour of the claimant shall also be
recoverable by the Insurance Company from the owner of the offending
vehicle.
11. In view of the aforesaid, this appeal is partly allowed to the extent
indicated above.
(Anil Kumar-X,J.)
September 23, 2026
SK
Digitally signed by :-
SUSHEEL KUMAR
High Court of Judicature at Allahabad
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