MACMA/2828/2014 of HDFC ERGO General Insurance Co. Ltd., Vs Thotte Kanakaraju, on 30 December 2014

JUDGMENT:

M.A.C.M.A.No.2828 of 2014

Aggrieved of the award dated 04.01.2013 in M.V.O.P.No.1289 of2009 passed by the learned Chairman, Motor Accident Claims Tribunal-cum-Principal District Judge, Warangal (‘the tribunal’, for short), the 2[nd]respondent-insurance company had preferred this Civil MiscellaneousAppeal.

2. In this appeal, the parties shall hereinafter be referred to as theclaimants, the owner-cum-insured and the insurance company forconvenience and clarity.

3. I have heard the submissions of the learned counsel for theappellant-insurance company and the learned counsel for the claimants. None appeared for the owner/insured as no notice was served on him; and,both the learned counsel had stated that in this appeal, no notice isnecessary to the said respondent, in view of the Division Bench judgment ofthis Court in Meka Chakra Rao v. Yelubandi Babu Rao @ Reddemma andothers[[1]].

4. I shall first advert to the contentions of both the sides in this appealto underscore the scope and ambit of the contentions and then precisely dealwith the relevant issues involved in the appeal.

5. The insurance company had filed this appeal broadly contendingthat the vehicle involved in the accident was not insured with it and that nopolicy of insurance was issued in respect of the said vehicle and that certaincover notes of the company were lost and that one such lost cover note waspressed into service by forging its contents to claim that the subject vehiclewas insured with the insurance company and that no premium was collectedunder the said cover note in question at any point of time and as such, therewas no policy issued in respect of the said vehicle pursuant to the said forged cover note and therefore, there is no contract between the owner-cum-insuredand the insurance company and that the tribunal had failed to take note of thecontentions of the insurance company and had erroneously saddled theinsurance company with the liability in spite of the fact that the insurancecompany is able to establish that a lost cover note was mis-used by forgingits contents and that a false claim was laid against the insurance companyand that no premium was paid and no policy was issued by the insurancecompany in respect of the said vehicle. It is also urged by the insurancecompany that the deceased travelled as an unauthorised passenger in theauto trolley at the time of the accident and that the owner-cum-insured havingallowed the deceased to travel in the auto trolley had violated the terms andconditions of the insurance cover note, which was lost by the insurancecompany and which was forged and pressed into service, and that therefore,the finding of the tribunal that the insurance company is liable to pay thecompensation is erroneous and is liable to be set aside. It is also furthercontended that the tribunal had wrongly determined the age and the multiplierand had grossly erred in awarding a compensation of Rs.4,09,000/-, which ismore than the compensation that was claimed by the claimants, and that thetribunal also erred in awarding interest @ 7.5% per annum instead ofawarding interest @ 6% per annum, in any view of the matter.

6. Accordingly, it is necessary to deal with the following issues in thisappeal:appeal:

1. Whether the cover note relating to the auto trolley was one ofthe cover notes, which was lost by the insurance company?And, if so, whether such lost cover note was pressed intoservice even without paying the premium, after forging thecontents as contended by the insurance company? And ifso, whether there is no valid contract of insurance? And, ifso, whether the insurance company cannot be fastened withany liability?the cover notes, which was lost by the insurance company?And, if so, whether such lost cover note was pressed intoservice even without paying the premium, after forging thecontents as contended by the insurance company? And ifso, whether there is no valid contract of insurance? And, ifso, whether the insurance company cannot be fastened withany liability?

2. Whether the deceased travelled in the auto trolley as agratuitous passenger as contended by the insurancecompany?gratuitous passenger as contended by the insurancecompany?

3. Whether the compensation awarded is not a just and faircompensation? And if so, what shall be the just and faircompensation to be awarded to the claimants?compensation? And if so, what shall be the just and faircompensation to be awarded to the claimants?

4. To what relief?

7. ISSUE Nos.1 to 4:

7. (a) Coming to the first issue as to whether or not the cover note istrue, it is necessary to first refer to the relevant pleadings of the claimants aswell as the insurance company. The case of the claimants, which is relevant,is as follows: ‘The claimants are the husband, Son and daughter of thedeceased. The 1[st] respondent is the owner-cum-driver-cum-insured of theauto trolley bearing registration No.AP 36 W 6959, in which the deceasedhad travelled at the time of the accident. He had insured the said vehicle withthe insurance company, vide Policy No.000001833614 and the said policywas valid from 04.06.2009 to 03.06.2010 and the subject accident had takenplace on 20.10.2009, i.e., during the validity period of the said policy. Therefore, both the owner-cum-insured and the insurance company are liableto pay the compensation to the claimants.’ The case of the 1[st] respondent, inbrief, is this: ‘He had insured his vehicle with the 2[nd] respondent/insurancecompany and the policy bearing No.000001833614 was valid from04.06.2009 to 03.06.2010 and was in force at the time of the accident. He didnot violate the terms and conditions of the policy. The 2[nd]respondent/insurance company has to indemnify by paying the claim amount,if any, to be awarded to the claimants.’ The case of the insurance company,which is relevant, in brief, is as follows: ‘The auto trolley, which was involvedin the accident, was insured with the company at the time of the allegedaccident is denied. No policy was in force at the time of the accident inrespect of the said auto trolley. Certain cover notes of this company,including the cover note bearing No.000001833614 under which the abovesaid auto was alleged to have been insured, were lost. On 03.08.2009, thisrespondent company has lodged a complaint with the police of GopalapuramPolice Station, Secunderabad intimating the loss of cover notes. The saidpolice had acknowledged the receipt of the said complaint. This companyhad also published a public notice in Eeenadu Telugu daily dated28.12.2009 informing the general public that certain cover notes including theabove cover note were lost. The above said lost cover note was misused byforging it as if the above auto was insured with this company. No premium was collected by this company under the said cover note. The allegedaccident took place subsequent to the lodging of the complaint with the policeby this company. The said fact proves that the cover note was forged andmisused to claim compensation from this company and to cause wrongfulloss to it. Hence, the insurance company is not liable to pay thecompensation.’

7. (b) Now, it is necessary to refer to the relevant evidence. PW1, thehusband of the claimant affirmed the pleaded case in his affidavit filed in lieuof examination in chief. In his cross-examination, the following points wereelicited on behalf of the insurance company: ‘R1 is the owner-cum-driver. Heis a resident of my village. It is true that after the accident, a panchayat washeld in our village and in the said panchayat, R1 has stated that theinsurance company will pay the compensation amount as the offendingvehicle is having insurance and it is in force at the time of the accident andthat if the offending vehicle is not having insurance, he would pay a sum ofRs.3,00,000/- towards compensation.’ When it was suggested to him that theoffending vehicle is not covered by any insurance policy and that the vehicleis not having an insurance policy at the time of the accident, he had deniedthe said suggestions as ‘not true’. When it was further suggested to him thatat the time of the accident there is no insurance to the offending vehicle andthat after the accident, R1 had obtained the cover note to the offendingvehicle, he denied the said suggestion as ‘not true’. PW2 is an eye witnessto the accident. The Legal Manager of the insurance company wasexamined as RW1. He had exhibited exhibit X1, the extract of ‘B’ register ofthe auto trolley. In his cross-examination, when the attested copy of the covernote was shown to him, he had admitted as follows: ‘The attested Photostatcopy of the cover note shown to me is issued by our company. Witness addsthat the said cover note was not issued to the insured as it is a lost cover notecase. The seal on the attested copy of the cover note belongs to ourcompany.’ In his further cross examination done for the claimants thefollowing further points were elicited: ‘I am not aware whether Ch.RajeshwaraRao had worked as an agent in our company. At that time, I was not working

in the insurance company. It is true that unless amount is paid, no cover notewill be issued. It is true that as per the marked cover note, the coverageperiod is there as on the date of the accident. [The witness added that thecompany is disputing the cover note.] It is true that as per the charge sheetfiled by the police, the alleged crime vehicle is insured with us. It is true thatas per the MVI’s report, the alleged crime vehicle is covered by the said covernote. It is true that we have not lodged police complaint in every branchpolice jurisdiction where we operate our business.’ He had denied thefollowing suggestions: ‘It is not true to say that we have lodged policecomplaint two months after issuing alleged cover note. It is not true to say thatI am deposing falsehood to avoid payment of compensation. It is not true tosay that I am not competent to depose with regard to fake cover note.’ RW2is an employee of RTA office and he was examined to speak about theseating capacity of the subject vehicle. RW3 is the owner-cum-insured of thevehicle. He had asserted in his examination-in-chief that he is the owner-cum-driver of the goods vehicle and that in connection with accident, acriminal case is pending and that one Velishala Raju took away all insurancepapers from him. He had denied the suggestion that his vehicle is not havinginsurance policy and that he had not paid premium. He had denied thefurther suggestion that as his vehicle is not having policy, he had entered intocompromise with the relatives of the deceased and got closed the matter. Inthe cross-examination done for the claimants, he had stated that he had paidthe premium and that a policy was issued and that the policy number wasmentioned in the crime record and that no case is filed against him forpossessing fake policy and that the insurance company has to pay thecompensation.

7. (c) I have carefully gone through the entire relevant evidence onrecord. Having gone through the evidence brought on record this Court hadnoticed that in the affidavit of PW1 filed in lieu of examination-in-chief, there isa reference to the Photostat copy of the insurance policy in the list ofdocuments. However, the same was not exhibited. Similarly, there is areference in the evidence of RW1 to the cover note as marked cover note and

he was cross-examined by confronting the cover note to him, however, thesaid cover note is also not exhibited. The tribunal ought to have permitted thesaid documents to be exhibited and ought to have examined the contents ofthe same in juxtaposition with the oral evidence and ought to have arrived ata just decision in the matter. It was not done so. The owner-cum-insured wasexamined as RW3. It appears that he was examined in chief by the counselfor the insurance company. Even in the examination-in-chief, certainsuggestions were given as if the witness was being cross-examined. And, itappears that certain questions in the nature of cross-examination were put,even without seeking the permission of the court to put such questions. Further, this witness had stated the number of the policy and its validityperiod. He had further stated that a criminal case has been filed against himin connection with the accident and that the same is pending. He had alsostated that one Velishela Raju took away the insurance papers from him. The said person ought to have been summoned to produce the documents, ifany, like the original policy (copy of the insured) and the same and any otherrelevant documents ought to have been marked. In the considered view ofthis court, unless those documents, at least the ones which are alreadyavailable on record, are exhibited by giving an opportunity of adducing furtherevidence to the claimants as well as the insurance company and the insured,it is not possible to arrive at a just decision in the matter. Therefore, for thereason that the vital documents are not exhibited, this Court deems itappropriate to set aside the award and remit the matter to the tribunal for freshdisposal on merits after giving an opportunity to all concerned to adducefurther evidence (both oral and documentary) in accordance with theprocedure established by law. Such a course meets the ends of justice. Inview of the finding supra, it is not necessary to record any findings on theissues involved in the matter. It is appropriate to mention that the amountdeposited by the insurance company shall remain in court deposit and norecovery proceedings for recovery of the amounts, if any, received by theclaimants shall be initiated till the final disposal of the matter afresh by thetribunal.

8. In the result, the Civil Miscellaneous Appeal is allowed and the matteris remitted to the tribunal for fresh disposal on merits and in accordance withthe procedure established by law, after giving an opportunity to all concernedto adduce further evidence (both oral and documentary). It is needless tomention that all the evidence brought on record by the parties shall, however,be considered by the Court for the purpose of disposal of the claim petition onmerits. It is made clear that the tribunal shall dispose of the matter purely onits own merits uninfluenced by the observations, if any, made in thisjudgment. The tribunal shall make an endeavour to dispose of the matter asexpeditiously as possible, preferably, within four months from the date of thereceipt of a copy of this judgment. No costs.

Miscellaneous petitions, if any, pending in this appeal shall standclosed.

_____________________

M. SEETHARAMA MURTI, J

30[th] December 2014Note: -The Registry is directed to send the entire record forthwith to the tribunal as per the practice andprocedure.(B/o) RAR

[1]2001(1) ALT 495 (D.B)