ORDER
U.C. Maheshwari, J.
1. This order shall govern the aforesaid both the appeals, i.e., M.A. No. 1356/97 and M.A. No. 1357/97 as both are arising out of the same award, although from the different claim cases but relating to the same accident.
2. The appellant owner of the offending vehicle has directed this appeal under Section 173 of the Motor Vehicles Act, in short 'The Act' being aggrieved by the award dated 30-6-1997 passed by the Additional Motor Accident Claims Tribunal, Chhindwara in Claim Case No. 189/92 and Claim Case No. 190/92 awarding the claim of respondent Nos. 1 to 4 against the appellant and the respondent No. 5, the driver by exonerating the respondent No. 6-insurer and respondent No. 7, the rickshaw puller.
3. The facts giving rise to these appeals are that on dated 25-5-1989 at about 9 o'clock in the night Namdeo Karade and his wife Smt. Kamla Bai, the mother of the respondent Nos. 1 to 4 alongwith children were going toward the Railway Station in a rickshaw of respondent No. 7. On the way in between the Bail Bazar and PWD Road, (Chhindwara-Seoni road), the said rickshaw was dashed by Truck No. MTG 1590, driven by respondent No. 5 in the rash and negligent manner. Resultantly, the rickshaw was turned turtle and said Namdeo Karade and Kamla Bai were run over by the said truck and died on the spot. The offence was registered under Section 304A of IPC against the respondent No. 5. The dead bodies of the deceased were sent to hospital where post-mortem was carried out and after holding investigation the respondent No. 5 was charge-sheeted for the aforesaid offence.
4. The deceased Namdeo Karade was working as Diesel Assistant in Railway and getting the salary of Rs. 2200/- after all the deduction. The was aged 48 years on the date of the accident. While Kamala Bai being household lady also doing the work of stitching and knitting by which she was earning Rs. 1000/- per month. She was 38 years old on the date of the accident. Due to untimely death of mother and father of the respondent Nos. 1 to 4 they have been deprived of their dependency, love, affection and their company. With this background on account of death of father Namdeo the Claim Case No. 189/92 was filed for compensation of Rs. 7,92,000/- while on account of mother Kamla Bai the Claim Case No. 190/92 was preferred for compensation of Rs. 4,80,000/-and also prayed for interest in both the claims on the aforesaid sum.
5. As per further averments of the claim on the date of the accident the offencing truck was owned by the appellant as registered owner and it was driven by the respondent No. 5 with the consent and under the employment of the appellant. While the same was insured with the respondent No. 6-insurer. Therefore, aforesaid claims were preferred with a prayer to saddle the liability against respondent Nos. 5 and 6 and the appellant jointly and severally.
6. In reply of respondent No. 5-the Driver, the factum of accident has been accepted but the contention regarding rash and negligent driving of the truck was denied. According to it, the accident took place due to negligence of the rickshaw puller. It was also pleaded that on holding any liability of him. Then, the truck, was duly insured with the respondent No. 6. Hence the insurer is liable to indemnify such claim. No liability can be saddled against this respondent. He also pleaded that the cover note No. MR-86/280559 was issued on behalf of the respondent No. 6.
7. As per record the appellant and respondent No. 7 were remained ex parte and no reply or written statement was filed on their behalf.
8. In the written statement of respondent No. 6 insurer the averments of claim petition were denied. It was also denied that the offending truck was insured with it on the date of the accident. It was pleaded that cover note No. SR 86/280559 was issued by agent of respondent No. 5 under the assurance of the appellant that within couple of hours the sum of premium would be paid. But subsequent to it, when the premium was not paid, the concerning agent had taken back the original cover note and cancelled the same. Accordingly, the respondent had not covered any risk of such vehicle. So in the absence of insurance, the respondent No. 5 is not liable to indemnify any claim, as prayed by the respondent Nos. 1 to 4.
9. In view of the aforesaid pleadings of the parties, the Tribunal has framed issues on which the parties have led their evidence. On appreciation of the same by exonerating the respondent No. 6-insurer and respondent No. 7 the Claim Case No. 189/92 regarding death of Namdeo was allowed against appellant and respondent No. 5 for the sum of Rs. 1,75,000/- and the Claim Case No. 190/92 was awarded for the sum of Rs. 50,000/- alongwith interest @ 12% p.a. from the date of the application for aforesaid both the sums. According to award in view of the rash and negligent driving of respondent No. 5, he was held liable for the alleged accident while no fault was found against the respondent No. 7 rickshaw puller. Hence, registered owner of the truck has come to this Court by these appeals with a prayer for saddling the liability against the respondent No. 6-insurer.
10. Mr. Y.K. Munshi, learned Sr. Counsel assisted by Mr. Rajesh Nema has vehemently submitted that the findings of the Tribunal that vehicle was not insured with the respondent No. 6 on the date of the accident is contrary to available evidence by adopting the wrong proposition of law. According to him the cover note is always issued after receiving the sum of the premium and after issuing the cover note the issuance of policy by the insurer is only a procedural formality. As soon as the cover note is issued and the same is not cancelled by adopting some proper procedure and under intimation to the insured, i.e., Insured vehicle then it cannot be deemed that the risk covered by the cover note has been cancelled. By referring Ex. D-l the cover note by which the risk of vehicle was covered on which the endorsement of cancelled written by the insurer has said that regarding such cancellation neither a date or any other endorsement was made. In such circumstances, this cannot be deemed to be cancelled. Besides this he also referred Ex. D-2, the letter dated 26-4-1993 written by the Development Officer to the Branch Manager of respondent No. 6 and said that if the cover note was cancelled on 26-8-1988, then why at very belated stage after more than four years it was informed to the Branch Manager. Even on considering the letter, it does not speak as to under what manner and what procedure the cover note was cancelled. Hence, merely on account of Ex. D-2, the cover note could not be held to be cancelled. Thus, the Tribunal has committed grave error in not relying upon the cover note and on holding that the premium was not paid by the appellant. According to his submission, there was sufficient circumstance to saddled the liability against insurer-respondent No. 6 but contrary to it, was exonerated. He prayed to allow his appeal by saddling the liability against the respondent No. 6-insurer. He also placed reliance on some decided cases.
11. Mr. S.K. Rao, learned Sr. Advocate assisted by Mr. V.K. Pandey, and also Smt. Amrit Ruprah, learned Counsel for the respondent No. 6-insurer have submitted that the cover note was issued by the Agent under the assurance of the appellant that sum of premium would be paid during the course of the day in banking hours but the same was not paid by the appellant in spite of making demand by the Agent. Then the original cover note Ex. D-l was taken back from him and the same was cancelled on the same day on which it was issued. So in the absence of the evidence regarding payment of premium on behalf of the appellant the approach of the Tribunal in respect of exonerating the insurer from the liability was correct and in accordance with law. In support of his contention he referred the deposition of Dilip Kumar (NAW 3/1), the Branch Manager, Insurer and Riyaz Khan (NAW 3/2), the then Development Officer of the Insurer and Dipak Verma (NAW 3/3), the Insurance Agent who issued the cover note and said that as per depositions of these witnesses it has been proved that the amount of premium was never paid by the appellant either to the agent said Dipak Verma or in the office of the insurer. Even after issuing the cover note same was taken back and the same has been produced from the custody of the respondent No. 6-the Insurance Company, on which the endorsement 'cancelled' has also been made. Even letter D-2 of the Development Officer showing that the cover note was cancelled on account of non-payment of the premium on the same day and such evidence has not been rebutted by the appellant in any manner, even by examining himself. In such circumstances the non-entering of the appellant in the witness box is sufficient circumstance to draw an inference against him that payment of the premium was not made by him. Hence, the cover note was cancelled within few hours from issuing the same. Therefore, at this stage, the impugned award does not require any interference and prayed for dismissal of the appeal.
12. Having heard, learned Counsels. On perusing the record, it appears that due to alleged accident made by the offending truck driver by the respondent No. 5 in rash and negligent manner the parents of respondent Nos. 1 to 4 Namdeo and Kamla Bai died on the spot and they have been deprived of their dependency and also love, affection and their company and regarding Such accident there is sufficient evidence is available on record. Hence, the Tribunal has not committed any error in passing the award in favour of the respondent Nos. 1 to 4.
13. So far exonerating the respondent No. 6, insurer is concerned, it appears that the Tribunal has committed grave error in not saddling the liability against the insurer. Although the appellant neither filed his reply nor produced any evidence on his behalf. In spite it, on admission of insurer that the cover note was issued and the risk was covered but on account of non- payment of the premium the same was cancelled on the same day. It was duty of the insurer to prove the cancellation of such cover note by some reliable and admissible evidence and proposition of law, although the Ex. D-l, the original cover note was produced from the custody of the insurer on which the endorsement of cancelled is written. We have not found any evidence on record or any documents showing when and by whom and also under what procedure it was cancelled. If these things are not proved on record then merely on the basis of depositions of some witnesses examined on behalf of the insurer, it cannot be assumed that the cover note was cancelled in few hours from the time of issuing it. Although, if the premium is paid though cheque and the same is dishonoured and the same is intimated to the insured then in such circumstances insurer can be exonerated but when the cover note was issuing showing the cash payment of the premium then without any cogent, reliable and admissible evidence, the same cannot be deemed to be cancelled. If it was cancelled, then on the cover note, some endorsement should have been made by concerning officer with proper explanation. But neither the endorsement is there nor the signature of the concerning officer is there regarding cancellation. Although in some factual matrix this question was raised before the High Court of Orissa and the same was answered by his Lordship Mr. Justice A. Pasayat who the then was the Judge of such High Court in the matter of National Insurance Co. Ltd. v. Madhab Chandra Das and Ors. reported in , in which it was held as under:
From the facts situation as depicted by the Tribunal in the award, it is clear that no information was given to the registering authority within the prescribed time. There is also no definite material about cancellation of the policy, which is evident from Exh. B, which refers to cancellation of 'insurance certificate'. There is no material to show regarding the procedure adopted for cancellation of policy and/or insurance certificate. Therefore, the conclusion of the Tribunal cannot be faulted, though it seems to have confused between a certificate of insurance and a policy while making a reference to the requirements of Section 105.
A further question that needs determination is whether in the absence of payment the cover note becomes ineffective and there was no policy which obliged the insurer to pay the compensation. The view expressed in United India Insurance Co. Ltd.'s case 1991 ACJ 650 (SC), is categoric. It has been observed that when the premium has not been paid and the cheque which covered the premium was not honoured, a cover note became ineffective and there was no policy which obliged the insurer to pay the compensation. The Apex Court observed that it would not be correct to hold that in the absence of steps for cancellation of cover note the risk would be subsisting. When a cheque issued has bounced, it is within the knowledge of the insured and at any rate that would be the presumption and, therefore, no special notice is required to be issued to the insured. The principle that can be called out from the view of the Supreme Court is that when the premium has not been paid, the cover note become ineffective and there can be no existence of policy which obliges the insurer to pay the compensation. The question whether premium has been paid has to be established by the person who claims to have made payment.
14. In view of the aforesaid precedent if the case at hand is examined then it is apparent that the answer of the High Court of Orissa is directly applicable here also, because the procedure and the manner in which the cover note was cancelled, has not been proved by the respondent No. 6 by any reliable, cogent and admissible evidence. Therefore, it is held that the Tribunal has committed perversity and grave error in not saddling the liability against the insurer. Hence, the finding of the Tribunal regarding exoneration of the insurer is liable to be dismantled and accordingly the same is set aside by saddling the liability against the respondent No. 6-insurer also.
15. Therefore, in view of the aforesaid discussion the appeal is allowed and the award passed by the Tribunal in the aforesaid both the cases are hereby affirmed for the principal amount as awarded in it by saddling the liabilities against the respondent No. 6-insurer also. Such award shall also carry the interest @ 6% p.a. in all for eight years not more than this instead @ 12% p.a. from the entire duration. Such payment has to be made within 60 days from today by the appellant and the respondent Nos. 5 and 6 jointly and severally failing which they would be liable to pay interest @ 6% p.a. from the date of initiation of the claim application upto the realization of the sum. Accordingly these appeals are allowed. There shall be no order as to costs.