1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B.Civil Writ Petition No.7834/2012 The Oriental Insurance Company Limited V/s.
Ramdhan & ORS.Date of Order ::: 29.04.2014 PRESENT HON'BLE Mr.JUSTICE P.K.LOHRA Mr.Mukul Singhvi for the petitioner.
Mr.Trilok Joshi for respondent No.1.
Although the matter is listed for ascertaining service of notice on respondent Nos.2, 3 and 5, however, on examining the matter in its entirety, this Court feels that service of notice on the unserved respondents is not necessary for adjudicating the lis involved in the matter.
Therefore, service of notice on the unserved respondents is dispensed with.
With the consent of the rival parties, matter is heard finally at this stage.
The petitioner-Insurance Company has laid this writ petition imploring annulment of order dated 27th April, 2012 passed by the Judge, Motor Accident Claims Tribunal, Shahpura (for short, 'the learned Tribunal') in Case 2 No.268/2010, whereby the application of the petitioner- Insurance Company, for its deletion from the array of non- claimants in the claim petition, was dismissed.
The facts in brevity, giving rise to this writ petition, are that respondent No.3, claimant, filed a claim under Section 166 read with Section 140 of the Motor Vehicles Act, 1988 against the petitioner-insurer, owner of the vehicle and the driver, which was involved in the accident.
The Insurance Company was impleaded as party to the claim petition with the averment that on the fateful day, when the accident occurred, disputed bike, i.e., Motorcycle No.RJ-06-SS-1208 was insured with the petitioner-Insurance Company.
After issuance of notice, the Insurance Company submitted an application for deletion of its name on the ground that although the cover note for insurance was issued for the vehicle in question on tendering the requisite cheque of premium by the fiRs.respondent, but subsequently the cheque tendered by the fiRs.respondent was dishonored due to paucity of funds in his account, and therefore, contract of insurance was not completed.
It is also averred in the application that when the cheque tendered by the owner of the vehicle was dishonored, the Insurance Company rescinded the contract of insurance on 7th December, 2007 and intimation to this effect was also divulged to the owner.
It is also stated in 3 the application that the accident for which claim is laid has occurred six months after the cancellation of the insurance.
The learned Tribunal after considering the application by the order impugned has dismissed the application of the Insurance Company and concluded in the impugned order that after issuance of cover note, the vehicle stands insured, and therefore, the liability of the Insurance Company to pay compensation is joint and several.
Mr.Mukul Singhvi, learned counsel for the petitioner, has argued that although the cheque was tendered by the owner of vehicle, but the same has not been encashed, and therefore, the contract of insurance has not been completed.
Thus, he submits that the order impugned is contrary to law and cannot be sustained.
Mr.Mukul Singhvi has also urged that the learned Tribunal has not taken note of a very vital fact that the Insurance Company has already cancelled the insurance six months prior to the occurrence of the accident, and therefore, the impugned order is vitiated and cannot be sustained.
On the contrary, Mr.Joshi, learned counsel for the fiRs.respondent, submits that once the cover note is issued, the vehicle stands insured with Insurance Company, and therefore, Insurance Company cannot plead that it is not liable to pay the compensation.
According to learned 4 counsel after issuance of cover note, Insurance Company cannot be allowed to plead that it is not obliged to indemnify for the acts & omissions of the owner to offer compensation to the victim of the accident.
I have heard learned counsel for the parties and perused the materials available on record.
There is no quarrel in the factual position that the fiRs.respondent, owner, has made endeavour for getting his vehicle insured with the petitioner-Insurance Company and for obtaining insurance cover, it has paid the the requisite amount of premium by way of cheque, which was subsequently dishonored.
The reason for dishonor of cheque was insufficiency of funds in the account of the owner.
True, it is that by tendering a cheque despite paucity of funds in the account the owner has exposed himself for appropriate action under Section 138 of Negotiable Instruments Act, 1872, but that itself cannot create a valid contract of insurance between the owner and the insurer for mere issuance of cover note as concluded by the learned Tribunal.
Facts as emerged out from a bare perusal of the record, makes out a clear case of fraud practised by the owner, and therefore, no charitable view can be taken vis- a-vis an incumbent, who has practised fraud.
Fraus et jus 5 nunquam cohabitant, i.e., fraud and justice never dwell together is a pristine maxim which has never lost its temper over all these centuries.
Lord Denning observed in a language without equivocation that “no judgment of a court, no order of a Minister can be allowed to stand if it has been obtained by fraud, for, fraud unravels everything”.Hon'ble Apex Court in case of United India Insurance Company LTD.V/s.
Rajendra Singh & ORS.[(2000) 3 SCC581, while relying on the verdict of Lord Denning in case of Lazarus Estates LTD.V/s.
Beasley and two other earlier judgments of the Apex Court, has made following observations in para 13 & 14 of the verdict :- 13.
In S.P.Chengalvaraya Naidu v.
Jagannath the two-Judge Bench of this Court held : (SCC p.
2, para
1) “ 'Fraud avoids all judicial acts, ecclesiastical or temporal' observed Chief Justice Edward Coke of England about three centuries ago.
It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law.
Such a judgment/decree – by the fiRs.court or by the highest court – has to be treated as a nullity by every court, whether superior or inferior.
It can be challenged in any court even in collateral proceedings.”
.
14.
In Indian Bank v.
Satyam Fibres (India) (P) LTD.Another two-Judge Bench, after making reference to a number of earlier decisions rendered by different High Courts in India, stated the legal position 6 thus : (SCC p.563, para
23) “23.
Since fraud affects the solemnity, regularity and orderliness of the proceedings of the court and also amounts to an abuse of the process of court, the courts have been held to have inherent power to set aside an order obtained by fraud practised upon that court.
Similarly, where the court is misled by a party or the court itself commits a mistake which prejudices a party, the court has the inherent power to recall its order.”
.
In this view of the matter, in my considered opinion, the conclusion of the learned Tribunal that contract of the insurance existed between the fiRs.respondent and the petitioner-Insurance Company cannot be sustained.
Accordingly, the impugned order is liable to be reversed and set aside.
The upshot of the above discussion is that the writ petition is allowed.
The impugned order dated 27th April, 2012 passed by the learned Tribunal is, hereby, quashed and set aside.
No order as to costs.
(P.K.LOHRA).J.
a.asopa/-