National Insurance Company Limited vs Rajender Kumar and Others

Dr. Bharat Bhushan Parsoon, J.�Respondent-claimant Rajender Kumar in a petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act) for the injuries sustained on 20.7.1999 at 9.00 A.M. on the intersection of Ridge Road and Shankar Road, New Delhi due to negligence in driving of car bearing registration No. DL-1Y-0480 being driven by respondent Ajit Singh and owned by respondent M/s. B.S. Travels, Delhi Cantt which stood insured with the National Insurance Company Limited, was awarded a compensation of Rs. 75,000/- with interest @ 9% per annum. The insurance company preferring the present appeal has claimed that in absence of any subsisting contract between the insurer and owner of the car particularly when no premium had been paid by the insured/owner, it was not liable to make any compensation.

Counsel for the respondents though had initially been appearing, did not appear after 21.2.2014 and thereafter. Sequelly, hearing has been provided to the counsel for the appellant while going through the paper book.

Plea of the insurance company that the cheque issued by the owner to defray the premium charges for insurance was dishonoured vide memo (Ex. R3) of the concerned bank as mere were no funds in the account. This fact has been proved not only by Suraj Raina (RW2) but has also not been denied by owner Balbir Singh (RW1) who merely feigned ignorance on this count. Oriental Insurance Co. Ltd. Vs. Inderjit Kaur and Others, , the Motor Accidents Claims Tribunal had held that the insurance company cannot escape its liability to pay compensation on the plea that the cheque had been dishonoured. Issuance of cover note (Ex. R1) by the appellant-insurance company in respect of the car for the period of 19.5.1999 to 18.5.2000 against receipt of cheque from the owner has not been denied. In these circumstances, the Tribunal holding the insurance company jointly and severally liable to make payment of compensation, had permitted it to pursue its remedy under the law to recover compensation, so paid from owner of the car.

There is no representation on behalf of the respondents. Recovery rights were already granted by the Tribunal vide Award of 26.7.2001. Since there is no explanation much less convincing coming forth from the respondent-owner so as to avoid his liability under the Award, it is a clear case where insurance premium was not paid as the cheque vide which it was sought to be paid had bounced and cover note (Ex. R1) had remained as such.

In view of the above discussion, an Award is made against the owner i.e. M/s. B.S. Travels, Delhi Cantt who is held liable for payment of awarded compensation. Sequelly, accepting this appeal, the owner is called upon to make payment of the amount of compensation with interest @ 9% per annum from the date of payment till the date of recovery by the appellant insurance company.