The Burden Is Of The Insurer To Prove That Cancellation Of Policy Has Been Intimated To Vehicle Owner : Kerala HC [Read Judgment]

Following a full bench decision, the High Court of Kerala has set aside the award of a Motor Accidents Claims Tribunal, which had exonerated the insurer from liability in a motor accident claim.

The Tribunal had accepted the insurer's stand that the cover note issued by them was cancelled by them as the cheque issued by the owner got dishonoured. 

Challenging the exoneration of the insurer, the claimant filed the appeal before the High Court.

Claimant can challenge exoneration of insurer

The single bench of Justice P B Suresh Kumar first decided the preliminary issue regarding the maintainability of appeal filed by claimant against the exoneration of insurer.

The Court noted that claimants will be aggrieved by exoneration of insurer as it is difficult to realise compensation from the vehicle 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. Such an interpretation of Section 173, according to me, would go against the social welfare provisions contained in Chapter XI of the Act", the Court said.

Insurer did not discharge burden

On facts, the Court held that the insurer could not discharge the burden that it had intimated the cancellation of policy to the owner. 

Though a receipt purported to be acknowledgement of despatch of notice of cancellation was produced, the owner testified that he had not received it.

"At the outset, it has to be noted that the premium of the policy was only about Rs.1000/- and under normal circumstances, there is no reason for a person who issues a cheque for the said amount, that too, for obtaining a policy of insurance for his vehicle, to cause the same to be dishonoured. As such, the possibility of the owner being not aware of the bouncing of the cheque issued to the insurer for the said purpose cannot be ruled out", observed the Court.

It Is The Burden Of Insured To Prove That Intimation Of Cancellation Of Insurance Policy Was Not Received From Insurer : Kerala HC Full Bench [Read Judgment]

The recent full bench decision which had held that it was the burden of the insurer to prove that the intimation was received by the owner was followed.

The insurer could not prove that the intimation was received by the owner, ruled the Court. The appeal was allowed, fixing liability on the insurer.

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