HC holds the Insurance Company liable and Increases the Compensation Amount for the death of a 14-year-old

 

Justice B.P. Routray, while holding the insurance company liable to pay the third-party compensation as they failed to show that they informed the owner of the car regarding the cancellation of the policy, increased the compensation of the 14-year-old minor girl on the ground of future prospects of the national income.

Brief Facts:

Since all three appeals are related to the death of two people in the same accident, they have been taken up together.

The Facts of the case are that on 3^rd March 2012, a minor girl named Sonali was on a motorcycle driven by her uncle, Narendranath Marandi on NH-49. A Bolera Car was coming from the opposite side at high speed and being driven in a rash and negligent manner dashed the motorcycle. Narendranath died on spot, whereas Sonali died at the Hospital. A case was registered and the investigation ended with a chargesheet against the accused driver. It is in relation to these facts that the current appeals have been filed. The issues in the appeals can be categorized in the following manner –

• The dispute raised by the insurer – Appellant in MACA No. 503 and 568 of 2018 is the insurance company and the dispute is related to the validity of the insurance policy and its liability to indemnify the compensation amount. It is alleged that the insurance of the offending vehicle was canceled from the date of its inception due to dishonor of the cheque. Therefore, since the contract of insurance was not in subsistence on the date of the accident, the insurer should not be liable. The tribunal decided that though cancellation of the policy has been made, the required intimation was not sent to the owner (insured) and the RTO and hence, the insurer cannot be absolved of its liability under the policy. This has been challenged by way of an appeal in MACA No.503 and 568 of 2018, wherein it is contended that the intimation about the cancellation of the policy was given to the owner as well as the RTO and the tribunal has not appreciated it.
• The dispute raised by the claimants – In MACA No.27 of 2018 the claimants have demanded an enhancement of the compensation amount concerning the death of the minor girl named Sonali Soren who was a 14-year-old who died in the above-mentioned accident. It has been asked on the grounds of future prospects for national income. Further, In MACA No. 568 of 2018, the award of the tribunal passed in MACA No. 152 of 2012 where a compensation of Rs. 6,30,000/- concerning the death of Narendranath Marandi has been challenged.

Observations of the court:

 

The Court referred to the stance of the Supreme Court regarding the point of cancellation of the policy due to dishonor of cheque, according to which if the cheque for the third-party insurance is dishonored and the insurance company decides to cancel the policy, and if the company informs the owner before the occurrence of the accident then the company would not be liable to award the compensation. But if in case the company has no material to show that the owner was informed about the cancellation of the policy as required by Section 147(4) of the M.V. Act, then the insurer would be liable to pay the compensation amount to the third party. With regards to the current factual circumstances, the High Court upheld the decision of the Tribunal that the intimation to the owner by the Registered Post regarding cancellation of the policy is not established on the record and it was concluded that the insurer failed to discharge their duty. Accordingly, the insurance company cannot be absolved of its liability in respect of the third party as per the contract of insurance, but since the dishonored cheque was produced as evidence, liberty was granted to the insurer to recover the compensation amount from the owner (the insured).

For the MACA No. 27 of 2018, which was filed by the claimants for enhancement of the compensation amount for the death of the minor girl, the court referred to the judgment of the Supreme Court in the case Kirti and Another v. Oriental Insurance Co. Ltd., (2021) 2 SCC 166. And accordingly, the court was inclined to enhance the compensation amount to Rs. 5,00,000/- This was done keeping in view that the age of the deceased was 14 years, and therefore, future prospects to the extent of 40% were to be added against 25% granted by the tribunal. The court further found no merit in interfering with the compensation quantified for the other deceased Narendranath Marandi.

The Decision of the Court:

 All the appeals were disposed of with the direction to the insurer for depositing the compensation amount for the death of the two deceased. 

 

Case Title: The Divisional Manager, New India Assurance Co. Ltd. V. Dasaratha Soren, and others

Coram: Justice B.P. Routray 

 

Case No.: MACA No.503, 27, 568 of 2018

Advocate(s) for the appellant:  Mr. Somnath Roy, Advocate in MACA No.503 & 568 of 2018

;Mr. B.B. Singh, Advocate in MACA No.27 of 2018

 

Advocate for the Respondent: Mr. B. K. Mohanty, counsel for Respondent No.3 and ; Mr. B.B. Singh, counsel for Respondents 1 & 2 in MACA No.503 & 568 of 2018;  Mr. Somanath Roy, counsel for Respondent No.2 in MACA No.27 of 2018

Read Judgment 

 

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