APHC010840342015 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3506] TUESDAY,THE SIXTEENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE CHALLA GUNARANJAN MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 493/2025 & MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL No.944 of 2025 Between: 1. THE UNITED INDIA INS CO LTD., KADAPA, REP. BY ITS DIVISIONAL MANAGER,DIVISIONAL OFFICE, KADAPA. ...APPELLANT AND 1. KODAVATIGANTI PULLAMMA KADAPA DIST AND ANR, W/O.MARIANNA,50 YRS. R/O.6/1220-10,SANKARAPURAM,KADAPA TOWN AND DIST. 2. T KESAVA RAO, ,S/O.PRAHALADAHA,OWNER OF AUTO, R/O 2/100,PULI STREET,KALASAPADU VILLAGE, KADAPA DIST. ...RESPONDENT(S): Appeal filed under Order 41 of CPC praying thet the Highcourt may be pleased tobegs to prefer this memorandum of appeal being aggrieved by the decree and judgment passed in MVOP. 416 0F 2009 dated 23-6-2014 on the file of MOTOR ACCIDENTS CLAIMS TRIBUNAL-CUM-PRINCIPAL DISTRICT JUDGE,AT KADAPA IA NO: 1 OF 2015(MACMAMP 755 OF 2015 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to condone the delay of 90 days in filing the appeal against MVOP: 416 0F 2009, dated 23-6-2014 on the file of MOTOR ACCIDENTS CLAIMS TRIBUNAL- CUMPRINCIPAL DISTRICT JUDGE,AT KADAPA and to pass IA NO: 2 OF 2015(MACMAMP 917 OF 2015 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay of all further proceedings including the execution of decree and award dt. 23/06/2014 in MVOP.No. 416 of 2009 on the file of the MACT-cum- Principal District Judge at Kadapa, pending disposal of the above Appeal in the interest of justice Counsel for the Appellant: 1. SRINIVASA RAO VUTLA Counsel for the Respondent(S): 1. The Court made the following: THE HONOURABLE SRI JUSTICE CHALLA GUNARANJAN M.A.C.M.A. No.493 of 2025 and M.A.C.M.A. No.944 of 2025 COMMON JUDGMENT: Both these appeals arise out of very same common incident that occurred, resulting in the claimants sustaining injuries, therefore, since have preferred independent claims before Tribunal under Section 166 of M.V. Act and were awarded compensation, they are disposed of by the common order. 2. (a) By order dated 23.06.2014 passed in M.V.O.P. No.416 of 2009 on the file of Motor Accident Claims Tribunal 3 cum 3 Principal District Judge, Kadapa, compensation of ¹1,07,000/- came to be awarded along with interest @ 7.5% per annum and costs thereon. Assailing the same, the Insurer preferred M.A.C.M.A. No.493 of 2025. (b) Similarly, by order dated 23.06.2014 passed in M.V.O.P. No.417 of 2009 on the file of Motor Accident Claims Tribunal 3 cum 3 Principal District Judge, Kadapa, compensation of ¹77,000/- came to be awarded along with interest @ 7.5% per annum and costs thereon. Assailing the same, the Insurer preferred M.A.C.M.A.(Sr) No.7215 of 2015. 2 CGR, J MACMA. No.493 of 2025 & batch 3. (a) Both the injured in M.V.O.P. Nos.416 and 417 of 2009 have boarded auto bearing No.AP 16X 9658, and while returning home after attending the church, en route, the driver of auto drove in rash and negligent manner, unable to control the speed, dashed into the stationed tractor, resulting in both claimants sustaining injuries. They were shifted to hospital for treatment. Crime No.6 of 2008 came to be registered for offences under Section 337 of IPC and later, charge sheet was laid against driver of the auto. (b) Claimant in M.V.O.P. No.416 of 2009 claimed compensation of ¹2,00,000/- with interest and costs on account of the pain and suffering, medical expenses and other heads. Similarly, claimant in M.V.O.P. No.417 of 2009 claimed compensation of ¹1,50,000/- with interest and costs on account of the pain and suffering, medical expenses and other heads. (c) 1st respondent owner of auto remained ex parte in both cases. The 2nd respondent 3 Insurer filed written statement inter alia denying that accident occurred due to rash and negligent driving of the driver of the auto. (d) Further, it was specifically contended that the policy issued to 1st respondent covering the risk came to be cancelled on account 3 CGR, J MACMA. No.493 of 2025 & batch of dishonour of cheque bearing No.405118, dated 26.12.2008, which was duly intimated to both insured as well as RTA, therefore, there was no contract of insurance in force for the insurer to compensate. It was also pleaded that even the driver of auto did not possess valid driving license, besides disputing the nature of injuries, age, earnings and medical expenses incurred. (e) The Tribunal framed issues in both cases. 1st issue is whether the accident occurred on account of rash and negligent driving by driver of auto and whether respondents 1 and 2 were jointly and severally liable to the claim, which is common to both the claims and second issue independently dealt with the quantum of compensation respective claimants entitled to be awarded. (f) In support of claimants, the injured persons were examined as P.W.1 in both cases and got marked Exs.A1 to A4 respectively. Likewise, for the insurer, its officer came to be examined as R.W.1 and got marked Exs.B1 to B4, which are common to both cases. (g) The Tribunal, after appreciating evidence on record, has come to conclusion that the accident occurred on account of the rash and negligent driving of the driver of the auto. Further, with respect to the stand pleaded by insurer regarding non-existence of 4 CGR, J MACMA. No.493 of 2025 & batch contract of insurance, it came to be decided that the insurer failed to establish the aspect of cancellation of policy through valid service on insured. Therefore, it has come to conclusion that when issuance of policy has been admitted and not in dispute, third-party claim cannot be denied. Accordingly, the claimant in MVOP No.416 of 2009 was awarded compensation of ¹1,07,000/- under the heads pain and suffering, medical expenses, loss of earnings, extra nourishment and transportation, loss of comforts, along with interest @7.5% per annum. Similarly, claimant in MVOP No.417 of 2009 was awarded compensation of ¹77,000/- under the heads pain and suffering, medical expenses, loss of earnings, extra nourishment and transportation, loss of comforts, along with interest @7.5% per annum. (h) Assailing the same, present appeals are preferred by insurer. 4. Heard Sri Srinivasa Rao Vutla, learned counsel for appellants. Despite service of notice, none appeared for respondents. 5. Learned counsel for appellants in both these appeals mainly contended that the Tribunal has committed error in fastening 5 CGR, J MACMA. No.493 of 2025 & batch liability on the insurer when it was demonstrably shown that the insurance policy that was issued came to be cancelled on account of dishonour of cheque for reasons of insufficient funds, which since has been clearly communicated to both insured as well as RTA by way of registered post, for all purposes, there existed no contract of insurance, hence, question of mulcting liability on the insurer does not arise. Except for the said plea, no other grounds have been urged. 6. Considering the submissions made above, this Court is proceeding on the basis that there is no challenge to the quantum of compensation fixed and also the occurrence of accident. The only ground that is urged for consideration is non-existence of the contract i.e., cancellation of the contract of insurance which initially covered. The policy, which was issued, covers the period from 27.12.2007 to 26.12.2008. While issuing the policy, the insured has issued cheque bearing No.405118, dated 26.12.2007. It is the case of insurer that the said cheque, on presentation, came to be dishonoured due to insufficient funds. The copy of bank memo dishonouring cheque has been marked as Ex.B2. Thereafter, aforesaid aspect of dishonouring was stated to have resulted in cancellation of the policy and accordingly, the endorsement of 6 CGR, J MACMA. No.493 of 2025 & batch cancellation of policy came to be issued under Ex.B1. The same has been dispatched to both insured as well as RTA, in support Ex.B4 came to be marked, which is dispatch register. Further copy of registered postal receipt under Ex.B3 also came to be marked. In the evidence adduced by R.W.1, it has been stated that after dishonour of cheque, insurer had cancelled the policy and the same has been intimated to insured and also RTA. The Tribunal while appreciating the evidence of R.W.1 has observed that mere dispatch of the endorsement of cancellation of policy through registered post as evidenced by Ex.P3 postal receipt, by itself would not satisfy due service on the insured and RTA as well. 7. It has been specifically observed that insurer has not filed any piece of evidence to show notice was issued to insured and the same was duly served on him, and also that such intimation was duly served on RTA intimating cancellation of policy. In view of the same, Tribunal has come to conclusion that insurer has miserably failed to establish that it had duly intimated to the insured and also RTA about the cancellation of policy. Though learned counsel for appellant tried to refer to Exs.B3 and B4, which essentially related to registered postal receipts and dispatch register, to contend that the notice has been duly sent to insurer as 7 CGR, J MACMA. No.493 of 2025 & batch well as RTA, as rightly found by Tribunal, such mere dispatch and sending of registered post itself would not amount to valid service to contend that cancellation of policy has been duly intimated. 8. Be that as it may, the Tribunal by placing reliance on the judgment of Hon9ble Apex Court in New India Assurance Company Limited v. Rula and others1 and also the judgment of High Court of Allahabad in Oriental Insurance Co. Ltd through its Assistant Manager v. Hari Narayan Thathera and others2, which dealt with liability towards third parties to the policy, applying the same to facts of this case, ultimately determined liability on the insurer, along with the owner of auto as well. 9. Recent judgment of the Hon9ble Apex Court in National Insurance Company Limited v. Sunita Devi and others3, summarized the issue of liability on insurer in case of cancellation of policy on account of dishonour of the cheques towards the premium and emphasized that the statutory liability of insurer to indemnify third parties cannot be avoided unless the insurance policy was cancelled and intimation of such cancellation reached 1 2000 ACJ 630 2 2005 ACJ 774 3 2025 SCC OnLine SC 1647 8 CGR, J MACMA. No.493 of 2025 & batch the insured before the accident. Even otherwise also, the Hon9ble Apex Court has applied the principle of pay and recovery. Therefore, to see whether really insurer be exonerated from liability, it has to be satisfied that the insurer has intimated the cancellation of policy to the parties concerned. The evidence on record and also findings of Tribunal go to show that insurer has miserably failed to establish that it intimated the cancellation of policy to the insured and also RTA. Therefore, question of it being absolved from the liability to pay compensation does not arise. 10. In view of aforesaid observations, these appeals lack merit and accordingly, the same are dismissed. No costs. As a sequel, miscellaneous petitions pending consideration, if any, in this case shall stand closed. _______________________ CHALLA GUNARANJAN, J 16.09.2025 SS