Accident Insurance – Intimation of policy cancellation was not served on the insured prior to the accident – Third party claim- Direction to the Insurer first to pay compensation & recover from the owner is valid

In the accident of rickshaw and the truck, the deceased died on 2.4.2015. The compensation claim of Rs.25 lakhs was filed the passengers in the vehicle against the owner of rickshaw and the insurance company.

According to the Insurer, the truck was not involved in the accident, premium cheque was bounced since the account was closed and the insured was intimated about cancellation of the insurance policy.   Thus, as on 28.3.2015 of accident, there was no policy in existence for the following dates –

12.2.2015              Cheque was issued for renewal.  Cover note was issued

                               Cheque was dishonoured.

12.3.2015              Intimate for cancellation of policy was issued but could not served for want of address

22.2.2015             Earlier insurance policy expired 

28.3.2015             Accident

The Tribunal held that the policy was not valid. The owner was held liable for compensation of Rs.3,87,000/-.  However, the Insurer was directed to pay the compensation and recover from the owner.

HELD that there was no evidence led by the appellant that policy cancellation intimation was served on the insured prior to the accident.  Moreover, the right and claim of third party (not party to the contract of insurance) is involved in the matter.  The insured has no sought compensation of his own wrong.

Judgment dated 1.12.2023 in First Appeal No.2929 of 2019 – HDFC ERGO General Insurance Company Ltd Vs. Nayajoddin Nijamuddin and others