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The Burden Is On The Insurer To Prove That Cancellation Of Policy Has Been Intimated To Vehicle

In MACA.No. 2017 of 2013, SMT.PRASANNA.B vs KABEER.P.K. & ICICI LOMBARD MOTOR INSURANCE CO. LTD., the claimant sustained injuries in a motor accident took place on 12.08.2008. The insurer of the vehicle contested the claim petition contending that they are not liable to indemnify the owner, as the cover note issued by them for the vehicle on 16.05.2008 was cancelled on 23.05.2008, when the cheque issued by the owner towards the premium of the policy was dishonoured. The Tribunal accepted the case of the insurer and exonerated them from the liability holding that the vehicle was not covered by a policy at the time of accident. It is the said decision of the Tribunal that is under challenge in this appeal preferred before the Kerala High Court by the claimant.

First rejecting the objection to maintainability of the appeal, the High Court observed that Sub section (1) of Section 173 of the Motor Vehicle Act contains the expression the expression 'any person aggrieved by an award' and just because the owner would be liable to pay compensation to the claimant, does not mean that only the owner would be aggrieved in such cases. In a case where the owner pays to the claimant the compensation directed to be paid or where the claimant would be in a position to realise the compensation from the owner without much difficulty, the claimant may not be aggrieved by the award. But, in cases where the claimants are not in a position to realise the compensation from the owners, they would certainly be aggrieved by the award. Even in cases where the claimants would be in a position to realise the compensation from the owners, it is common knowledge that it would be a cumbersome effort for the claimants to realise the compensation from them, while insurers would deposit the compensation payable to the claimants by default, in cases where they have liability. In the above circumstances, it cannot be said that the legislature intended to deprive the claimants in proceedings before the Motor Accidents Claims Tribunal a right of appeal for challenging the award exonerating the insurer from the liability to indemnify the owner. If the contention taken by the insurer is accepted, in cases where the Tribunal exonerates the insurer from the liability erroneously and the owner who is consequently made liable is not aware or otherwise prevented by circumstances from preferring an appeal challenging the exoneration of the insurer, the victim might be deprived of compensation which he/she is entitled for the loss caused on account of the accident.

On the issue of informing the insured about cancellation of policy, the Court observed that the case of the insurer is that the cancellation of the cover note was intimated by them to the owner by Ext.B3 communication sent under certificate of posting and in the light of the Full Bench decision of this Court in Prasanna v Kabeer (2018 (4) KLT 722), the insurer is certainly entitled to contend that the document must be presumed to have been received by the owner. However even the presumption attached to the delivery of an article sent by registered post in terms of Section 27 of the General Clauses Act, 1897 can be rebutted by the addressee by appearing before the court as a witness and stating that he has not received the article. The burden would then shift to the party who wants to rely on the presumption to satisfy the court by leading oral or documentary evidence to prove the service of such article on the addressee [Green View Radio Service v. Laxmibai Ramji [(1990)4 SCC 497] and Kulkarni Patterns Pvt. Ltd. v. Vasant Baburao Ashtekar [(1992) 2 SCC 46]. The Court decided that he owner has managed to rebutt the presumption as to the receipt of the communication claimed to have been sent by the insurer under certificate of posting. In that event, it was obligatory for the insurer to prove the service of the postal article claimed to have been sent by them to the owner which the insurer has failed to do and therefore the Tribunal was not justified in exonerating the insurer from the liability.

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