1 2025:CGHC:43337 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 919 of 2018 1 - The New India Insurance Company Limited Divisional Manager, The New India Insurance Company Limited Office S.A.D.A. Complex Taxi Stand T.P.Nagar Korba, District Korba, Chhattisgarh, District : Korba, Chhattisgarh ...Appellant versus 1 - Puran Singh S/o Shivbhajan Singh Paraste Aged About 40 Years R/o Parsabhata Prem Nagar Near Bajrang Dham Darri Road Balko P.S. Balko Nagar Tehsil And District Korba, Chhattisgarh, District : Korba, Chhattisgarh 2 - Yasir Khan S/o Naseer Khan Aged About 25 Years R/o Ward No.8 Village Chamrahi Post Sangrahikala P.S. Gadhva (Jharkhand) Presently Residing At Vaishali Nagar Near Kusmunda Petrol Pump Tehsil Katghora District Korba, Chhattisgarh (Driver), District : Korba, Chhattisgarh 3 - Manouwar Khan S/o Naimun Haq Khan R/o Ward No. 43 Imlichapar Kusmunda Tehsil Katghora, District Korba, Chhattisgarh (Owner), District : Korba, Chhattisgarh ... Respondent(s) For Appellant : Mr. Priyanshu Gupta, Advocate appearing on behalf of Mr. B. N. Nande, Advocate For Respondents : None (Hon'ble Shri Amitendra Kishore Prasad, Judge) Order on Board 26/08/2025 1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, being aggrieved by the Award dated 18.01.2018 passed by the learned Second Upper Motor Accident Claims Tribunal, Korba, Distt. - Korba (C.G.) in Claim Case No. 29/2017. 2. The averment in in this appeal, in brief, is that the on 19.11.2016, Puran Singh, a mason by profession, was returning home after Digitally signed by SHAYNA KADRI 2 completing his work at around 1:15 PM. He was riding a bicycle when a Heavy Goods Vehicle (H.G.V.) bearing registration number CG-12 S- 4185, approaching from behind, struck him. The collision caused Puran Singh to suffer grievous injuries to his hand, leg, and other parts of his body. Following the accident, he was initially taken to the District Hospital in Korba and later transferred to a hospital in Balko for further medical treatment. The accident occurred within the jurisdiction of Police Station Balko Nagar, District Korba, Chhattisgarh. On the same day, i.e., 19.11.2016, one Mahesh Paraste lodged a report with the Police, leading to the registration of an FIR under Sections 279, 337, and 338 of the Indian Penal Code (IPC) against the driver of the offending vehicle at Crime No. 301/2016. Upon completion of the investigation, a charge sheet was filed in the competent Criminal Court against the said driver. Subsequently, the injured Puran Singh filed a Claim Petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for the injuries sustained in the accident. The petition was filed against the driver, the owner of the offending vehicle, and the insurance company responsible for insuring the said vehicle. In response to the claim, the driver and owner of the vehicle filed a joint return before the learned Claims Tribunal, disputing the quantum of compensation sought by the claimant as being exaggerated and inflated. However, they admitted that the vehicle was covered by a valid insurance policy at the time of the accident and maintained that any compensation deemed appropriate should be borne by the insurance company. On the other hand, the insurance company denied liability on the grounds of a breach of policy conditions. It contended that the driver of the vehicle did not possess a valid and effective 3 driving license at the time of the accident. Additionally, the owner of the vehicle allegedly failed to ensure the vehicle had a valid permit and fitness certificate and knowingly allowed an unlicensed driver to operate the vehicle, thereby breaching policy terms. Based on these assertions, the insurance company sought to be absolved from any liability. Upon considering the rival pleadings, the learned Claims Tribunal framed five issues for determination, as reflected in paragraph 6 of the impugned Award. After evaluating the evidence, the Tribunal concluded that the insurance company had failed to establish any breach of policy conditions. Consequently, the Tribunal held all three parties, the driver, the owner, and the insurance company, jointly and severally liable for compensation, primarily fastening the liability on the insurance company to indemnify the award. In compliance with the statutory requirement for preferring an appeal, the appellant-insurance company deposited 50% of the awarded amount, i.e., Rs. 17,767/-, and furnished the receipt. Since the appeal challenges only the aspect of liability as determined by the Tribunal, the appellant claims that filing an application under Section 170 of the Motor Vehicles Act is unnecessary, and a separate application for exemption has been submitted. Aggrieved by the findings and award passed by the learned Tribunal, particularly with respect to the liability fastened on it, the insurance company has preferred the present appeal before this Court. 3. Learned counsel for the appellant submits that the insurance policy in question did not legally exist at the time of the accident. This is because the cheque issued by the owner of the vehicle, who was the policy seeker, as payment towards the premium amount was dishonored. This crucial fact, although reflected in the official records, 4 was inadvertently not mentioned in the return filed by the insurance company. The dishonor of the cheque demonstrates that the premium payment was never effectively made, thereby rendering the policy invalid from the beginning. Furthermore, the owner of the vehicle, being fully aware of the cancellation of the insurance policy due to the dishonored cheque, deliberately suppressed this fact. The owner took undue advantage of the omission in the pleadings filed by the insurance company and thus misled the Tribunal. Such suppression of material facts amounts to unfair practice and vitiates the claim against the insurer. It is also submitted that the cancellation of the insurance policy on account of dishonor of the cheque is mandated under Section 64 VB of the Insurance Act. This provision clearly stipulates that non- payment of premium, such as through a dishonored cheque, leads to automatic cancellation of the policy. The relevant office records of the insurance company corroborate this fact beyond doubt. Moreover, the owner of the vehicle deliberately chose not to appear before the Tribunal to testify and establish the bona fide status of the insurance policy. This evasive conduct on the part of the owner further supports the contention that the policy was not valid at the time of the accident and that the claim against the insurer ought to be rejected. In order to bring to the notice of this Court the full extent of the unfair conduct by the owner/insured, the appellant insurance company has already taken appropriate steps from its office. All relevant documents, which are material to prove the suppression and the subsequent cancellation of the policy, have been sought to be admitted in this appeal by way of a separate application for additional documents. In light of the above submissions, it is therefore prayed that this Court may kindly be 5 pleased to allow the appeal, set aside the impugned award, and hold that the insurance policy was already cancelled at the time of the accident due to non-payment of premium as evidenced by the dishonored cheque. Accordingly, the insurance company may be absolved from all liability to indemnify the award passed by the learned Tribunal. 4. I have heard learned counsel for the appellant and also perused the documents annexed along with the record. 5. Having carefully examined the entire record, pleadings, evidence, and submissions advanced by the learned counsel for the appellant, this Court finds that the appeal filed under Section 173 of the Motor Vehicles Act, 1988, challenging the award dated 18.01.2018 passed by the Second Upper Motor Accident Claims Tribunal, Korba, is devoid of merit. 6. The appellant - insurance company primarily disputes its liability on the ground that the insurance policy was allegedly cancelled prior to the accident due to dishonor of the premium payment cheque, rendering the policy invalid ab initio. However, this assertion is not borne out by the material placed on record before the Tribunal, nor has the appellant satisfactorily established any breach of policy conditions. The Tribunal, after considering all relevant evidence and framing the necessary issues, rightly concluded that the insurance company had failed to prove the cancellation of the policy at the time of the accident. The circumstances of the case show that Puran Singh sustained grievous injuries in a road accident involving the insured vehicle, which was admitted to be covered under a valid insurance policy by the owners and the driver. The denial of insurance company of liability on technical 6 grounds, without adequate proof and in the face of the evidence to the contrary, cannot be sustained. Moreover, the contention regarding suppression of material facts by the owner of the vehicle is not sufficiently substantiated to vitiate the award. 7. Mainly looking to the amount in question, which is approximately Rs. 35,000/-, this Court does not find the present case to be a fit case for interference considering the meagre amount of award passed by the learned Claims Tribunal. The Tribunal has rightly passed the award in favor of the claimant after a proper appraisal of the facts and evidence. 8. Accordingly, the appeal is dismissed. The award of compensation dated 18.01.2018 passed by the Second Additional Motor Accident Claims Tribunal, Korba, stands affirmed and upheld. Sd/- (Amitendra Kishore Prasad) JUDGE Shayna