1 2025:CGHC:47860 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1657 of 2018 1 - Rajaram Chandravanshi S/o Shri Keshav Ram Chandravanshi Aged About 29 Years R/o Village Ramhepur Khurd, Post Office Raveli, Police Station, Bodala, District Kabirdham Chhattisgarh., District : Kawardha (Kabirdham), Chhattisgarh ... Petitioner(s) versus 1 - Heera Siingh S/o Umend Singh Aged About 37 Years R/o Village Karchuva, Tehsil- Bemetara, District Bemetara Chhattisgarh....................(Claimant Un M Ac/c I S No. 49/2017)., District : Bemetara, Chhattisgarh 2 - Rajbahoran Sahu S/o Shri Ram Karan Sahu Aged About 33 Years R/o Kushiyari, Police Station Bahari, District Siddhi, Madhya Pradesh, Presently Residing At Civil Line, Near Gayatri Mandir, Kawardha, District Kabirdham Chhattisgarh......................Driver., District : Kawardha (Kabirdham), Chhattisgarh 3 - The United India Insurance Co. Ltd. Through Branch Manager, Address- Paras Complex, Opposite State Bank Of India, Gurudwara, Station Road, Durg, District Durg Chhattisgarh.....................Insurer, District : Durg, Chhattisgarh ... Respondent(s) (Cause-title is taken from Case Information System) For Appellant : Mr. Viprasen Agrawal, Advocate For Respondent : Mr. Dashrath Gupta, Advocate Hon’ble Mr. Justice Amitendra Kishore Prasad Order on Board 17.09.2025 1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, being aggrieved by the Award dated 27.07.2018 passed by the Digitally signed by SHAYNA KADRI 2 learned Motor Accident Claims Tribunal, Bemetara, Distt. - Bemetara (C.G.) in Claim Case No. 49/2017. 2. The averment in in this appeal, in brief, is that the appellant is the registered owner of the truck bearing registration number CG 09-JA- 8273, which was being driven by respondent no. 2, Rajbahoran Sahu, at the time of the incident. The vehicle was insured with respondent no. 3, the insurance company. The claimant, respondent no. 1, sustained injuries in an accident that occurred on 03.12.2016. On that day, the claimant along with one Bhuneshwar Verma was traveling to their home village, Karchuva, near Bemetara, on a motorcycle. Near the Academic School on the Bemetara-Kawardha main road, the truck driven by respondent no. 2 collided with the motorcycle, resulting in serious injuries to the claimant and minor injuries to Bhuneshwar Verma. Both were admitted to the District Hospital in Bemetara, and due to the severity of his injuries, the claimant, Heera Singh, was referred to Medishine Hospital, Raipur, where he remained admitted for approximately seven days. 3. Following the accident, a report was lodged at the Bemetara Police Station, and a criminal case was registered against the truck driver, respondent no. 2. The claimant, who was employed as a laborer earning Rs. 1000 per day, was rendered unable to work due to the injuries sustained in the accident. He incurred medical expenses amounting to approximately Rs. 1,00,000/- and filed a claim under Section 108 of the Motor Vehicles Act, seeking compensation of Rs. 3,00,000 for medical expenses, loss of income, and other related costs arising from the accident. After the issuance of notices, the appellant, along with other respondents, appeared before the Motor Accident 3 Claims Tribunal and submitted their written statements. 4. The appellant denied liability, contending that as the registered owner of the truck, the vehicle was insured with respondent no. 3, and therefore, any liability to pay compensation should be borne by the insurance company. The appellant relied on the insurance coverage to discharge liability. The tribunal framed four issues based on the pleadings and recorded evidence from both parties. The appellant presented evidence, including the insurance papers, to substantiate the claim that the vehicle was insured at the time of the accident. However, the tribunal rejected the liability of insurance company on the ground that the insurance policy was not effective on the date of the accident. This was because the cheque provided by the appellant for payment of the insurance premium had bounced, resulting in cancellation of the insurance policy prior to the date of the accident. Consequently, the tribunal passed an award holding the appellant personally liable for the compensation and exonerated the insurance company. Aggrieved by the decision of tribunal, the appellant has preferred this appeal challenging the findings and the imposition of liability in the absence of a valid insurance cover on the date of the accident. 5. Learned counsel for the appellant submits that the claim tribunal has gravely erred in its conclusion regarding the validity of the insurance policy. It is an undisputed fact that there was a valid insurance policy issued in favor of the appellant, covering the period from 29.10.2016 to 28.10.2017. This policy was in full force and effect on the date of the accident, which occurred on 03.12.2016. The appellant had produced the insurance policy documents before the learned Tribunal, but inexplicably, these were either not duly considered or were overlooked. 4 The failure of tribunal to acknowledge the existence and validity of this insurance policy has resulted in an unjust and legally untenable finding. Further, the reasoning of tribunal that the insurance policy was rendered invalid due to the bouncing of the cheque issued for the payment of the premium is fundamentally flawed. Once the insurance policy has been issued, it cannot be treated as automatically cancelled without due notice to the insured. The appellant has categorically stated that no such notice or intimation was ever received regarding the dishonor of the cheque or the purported cancellation of the policy. This procedural lapse and failure on the part of the insurance company to communicate the issue to the appellant vitiate the finding of tribunal. It is a settled legal position that the onus to ensure the validity and continuation of the insurance policy lies on the insurer, particularly when the insured has fulfilled his obligations to the best of his knowledge. Therefore, holding the appellant liable for the entire compensation award solely on the basis of an uncommunicated cheque bounce is unjust and unsupportable. Moreover, the tribunal overlooked the fact that the vehicle involved in the accident is registered in the name of the appellant and was, in fact, insured with the respondent insurance company at the relevant time. The exoneration of the insurance company from liability in this context is contrary to the evidence on record and flies in the face of established legal principles governing motor vehicle insurance claims. It is a well- recognized principle that the insurance company remains liable to indemnify the insured for any compensation awarded in cases of accidents involving insured vehicles, subject to the terms of the policy. In addition to the above, the tribunal failed to consider the subsequent 5 payment of the premium amount by the appellant after becoming aware of the cheque bounce. This payment rectified any procedural deficiency and revived the validity of insurance policy for the stipulated period. The effective coverage of policy, therefore, cannot be disputed or arbitrarily negated by the tribunal’s findings. The immediate action of appellant to regularize the premium payment further reinforces the bona fide nature of the insurance coverage at the time of the accident. He placed reliance upon the decision of Supreme Court in the matter of United India Insurance Co. Ltd. vs. Laxmamma and Others, reported in (2012) AIR SC 2817 and the decision of this Court in the matter of IFFCO Tokiyo General Insurance Company Limited vs. Ravi Kumar passed in MAC No. 570 of 2018 and other connected matters vide order dated 23.06.2025. 6. On the other hand, the learned counsel appearing on behalf of the respondent - Insurance Company submits that the learned Tribunal has rightly appreciated the facts and evidence on record and has correctly exonerated the insurance company from any liability. It is submitted that although an insurance policy was initially issued in favor of the appellant, the cheque issued by the appellant towards payment of the premium was dishonoured due to insufficient funds. Upon dishonour of the cheque, the insurance company immediately took appropriate steps in accordance with law and issued a registered letter dated 08.11.2016 to the appellant, clearly intimating him regarding the dishonour of the cheque and cancellation of the policy. This letter was duly dispatched through registered post and was, in fact, received by the appellant, the registered owner of the offending vehicle. Therefore, the submission of the appellant that no notice or intimation was ever 6 received is entirely incorrect and misleading. The Insurance Company fulfilled its obligation by issuing timely and proper notice. Despite being made fully aware that the insurance policy stood cancelled due to the failed premium payment, the appellant allowed the vehicle to ply on the road without valid insurance coverage. The accident, which occurred on 03.12.2016, took place nearly a month after the appellant had been informed about the cancellation of the insurance policy. Hence, the appellant was fully aware that the vehicle was not covered under any valid insurance policy at the time of the accident. In light of these facts, the Tribunal has correctly held that the vehicle was uninsured on the date of the accident. The findings recorded by the Tribunal are based on documentary evidence, including proof of cheque dishonour and dispatch and receipt of the cancellation notice. As such, the Tribunal was justified in fastening liability to pay compensation solely upon the owner and driver of the vehicle, and not upon the Insurance Company. The Insurance Company further submits that once the policy stood cancelled prior to the accident, it could not be revived automatically unless a fresh premium was paid and the insurer had agreed to reinstate the policy. Mere subsequent payment of the premium or attempts to regularize the cheque bounce, after the fact, does not automatically revive the policy or bind the insurer retrospectively. The appellant has failed to prove that the policy was valid and subsisting on the date of the accident, despite having due notice of its cancellation. There is no illegality or perversity in the award that warrants interference by this Court. The appeal filed by the appellant is wholly misconceived and liable to be dismissed. 7. I have heard learned counsel for the parties and perused the record of 7 the claim case carefully. 8. After considering the rival submissions of the learned counsel for the parties and perusing the record of the case, this Court is of the view that the learned Motor Accident Claims Tribunal has rightly held the appellant-owner liable for the compensation amount and exonerated the Insurance Company from liability. It is undisputed that the cheque issued by the appellant towards the premium for the insurance policy was dishonoured, and upon such dishonour, the Insurance Company issued a registered notice dated 08.11.2016, informing the appellant regarding the cancellation of the insurance policy. The said communication was sent through registered post and has been acknowledged to have been received by the appellant. The accident in question occurred on 03.12.2016, nearly a month after the said notice was issued and served. Therefore, the plea of the appellant that he had no knowledge of the policy cancellation is not tenable and contrary to the evidence on record. The Insurance Company, having duly discharged its statutory obligation of informing the insured about the dishonour of cheque and consequent cancellation of the policy, cannot be held liable for indemnifying the insured in respect of an accident that occurred after such cancellation. 9. It is well-settled that once the insurance policy stands cancelled due to non-payment of premium, and due notice of such cancellation is given, no liability of the insurer arises under the policy for subsequent events. The argument raised by learned counsel for the appellant that he had made the premium payment subsequently and therefore the policy stood revived is also devoid of merit. The record does not disclose any fresh contract of insurance or acceptance of premium by the insurer 8 after the cancellation. Mere payment or deposit of premium after cancellation cannot, by itself, revive the policy retrospectively unless accepted by the insurer in writing. The appellant has failed to produce any such evidence. 10. Furthermore, the Tribunal has recorded findings based on cogent documentary evidence such as the cheque dishonour memo, cancellation letter dated 08.11.2016, and postal acknowledgment, which clearly prove that the appellant had knowledge that the vehicle was not insured at the time of the accident. These findings are well- reasoned and do not call for interference in appeal. The decisions relied upon by the appellant are distinguishable on facts and do not apply to the present case, where the insurer had fulfilled its statutory obligations, and the insured had clear notice of cancellation prior to the accident. No perversity, illegality, or jurisdictional error is found in the award passed by the learned Tribunal. Accordingly, this Court finds no merit in the present appeal. 11. Accordingly, the appeal, being devoid of merits is liable to be and is hereby dismissed. 12. The award dated 27.07.2018 passed by the learned Motor Accident Claims Tribunal, Bemetara in Claim Case No. 49/2017 does not warrant interference. Sd/-Sd/- (Amitendra Kishore Prasad) Shayna Judge