Sri Udipta Saikia vs Icici Lombard Motor Insurance Co. Ltd And Anr

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GAHC010197762018

2026:GAU-AS:13866
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : MACApp./909/2018
SRI UDIPTA SAIKIA
S/O SRI LAKHESWAR SAIKIA, VILL. BARANGABARI, P.S. GOHPUR, DIST.
SONITPUR, ASSAM, 784172
VERSUS
ICICI LOMBARD MOTOR INSURANCE CO. LTD AND ANR
GUWAHATI-22, PIN 781022 (INSURER OF THE MOTOR CYCLE VIDE POLICY
NO. 3005/23930720/21124/000 VALID UP TO 11.8.2015)
2:SRI GHANA SAIKIA
S/O LATE BHOLA SAIKIA
VILL. BARANGABARI
P.S. GOHPUR
DIST. SONITPUR (ASSAM) 784168 (OWNER CUM RIDER OF MOTOR CYCLE
BEARING REGN. NO. AS-12/H-4885
Advocate for the Petitioner : MS D D ROY, MS. P R BARUAH,MS. A BEGUM,MS.
KAWIZENGDAULIU
Advocate for the Respondent : MR T KALITA, S BHUYAN(R2)

BEFORE
THE HON’BLE MRS. JUSTICE YARENJUNGLA LONGKUMER


For the appellant : Ms. D.D Roy, Advocate

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For the respondents :Mr. T Kalira, Advocate
Date of hearing :15.09.2026

Date of Judgment &Order :18.09.2026


JUDGMENT &ORDER (CAV)


1. The present appeal under Section 173 of the M.V. Act has been preferred by
the claimants, challenging the judgment dated 18.5.2018 passed by the learned
MACT No. 3, Kamrup, Guwahati inMAC Case No. 1999/2015.
2. Heard Ms. DD Roy, the learned counsel for the appellant. Also heard Mr. T
Kalita, the learned counsel for the respondents.
3. The facts leading to the filing of the instant appeal is that the
claimant/appellant had preferred the MAC Petition No. 1999/2015, praying for
compensation for the injury caused to him in a motor vehicle accident on
20.03.2015 involving vehicle Motorcycle No. AS-12 H-4885, which was insured
with ICICI Lombard Insurance Company Limited. The accident occurred on
20.03.2015, when he was travelling as a pillion rider of the offending motorcycle
and the rider of the motorcycle could not control the vehicle due to excessive
speed and it met with an accident, as a result of which the appellant/claimant
sustained grievous injuries.A case was registered as Gohpur P.S, GD Entry No.
597 dated 20.03.2015.
4. The owner-cum-driver of the vehicle did not contest the case, however, the
insurer/ICICI Lombard Insurance Company Limited contested the case by filing
written statement.
5. The appellant/claimant adduced their evidence and exhibited all the required

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documents as exhibit1 to exhibit 5 (4) series.The insurer of the vehicle also
examined one witness as DW1 and exhibited their documents as Exhibit A and
B.
6. After appreciating the evidence and after hearing the parties, the Tribunal
awarded a compensation of Rupees 3,57,467/-(rupees three lakhs fifty seven
thousand four hundred and sixty seven) only with interest at 7.5%p.a from the
date of filing the claim petition in favour of the claimant. However, the Tribunal
directed the vehicle owner to pay the awarded amount instead of directing the
Insurance company.
7. Being aggrieved, the claimant/appellant has preferred the instant appeal
against the impugned judgment dated 18.5.2018 passed in MAC Case No.
1999/2015 on the ground that the Tribunal had erred in law by directing the
owner to pay the awarded amount.
8. It is stated that the learned Tribunal had accepted the oral statement of the
DW1 and did not take into consideration that the dishonoured cheque towards
the premium payment was never produced before the court, nor exhibited.
9. The learned counsel for the appellant/claimant submits that the two exhibits
of the insurance company are an intimation letter to the owner and intimation
letter to the Regional Transport Authority respectively. However, there is no
postal receipt and the insurer had also not proved the two exhibits by
summoning the owner and the Regional Transport Authority to prove the said
exhibits. As such, the learned Tribunal could not have come to the conclusion
that the offending vehicle was not covered with a valid insurance policy. In view
of above submissions, the counsel for the appellant prays that the impugned
judgment dated 18.05.2018 passed in MAC Case No. 1999/2015 may be

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modified to the extent that the insurer/ICICI Lombard should be directed to
satisfy the award amounting to Rs. 3,57,467/-. The learned counsel for the
appellant relies on the case of United India Insurance Co. Ltd, Kurnool vs
Boya Siva Kumar and Another passed by the High Court of Andhra Pradesh
reported in 2006 (3) TAC 278 (AP) and the order passed by a Coordinate
Bench of this court in MAC App 98/2013 .
10. On the other hand, the counsel for the respondent/insurance company, Mr. T.
Kalita, has submitted that by a letter dated 06.10.2014, the owner of the vehicle
has already been intimated regarding the dishonour of the cheque for the
payment of his premium towards the policy. The said letter dated 06.10.2014
has been exhibited by the insurer as Exhibit 1. The DW1 deposed that the
insurance policy in respect of the offending vehicle covered risk for the period
12.08.2014 to 11.08.2015. As a premium for the continuation of the insurance
policy, the owner of the vehicle had issued an account payee cheque being No.
972154 dated 12.08.2014 in favour of theICICI Lombard Insurance Company
Limited. However, the cheque issued by the vehicle owner was returned
dishonoured by the bank. Accordingly, the insurance policy stood cancelled with
effect from 12.08.2014. Besides intimating the vehicle owner, the Regional
Transport Officer was also intimated by letter dated 06.10.2014 regarding the
cancellation of insurance and the said letter was exhibited as Exhibit B. Letter to
the owner is Exhibit A and letter to the Regional Transport Officer is Exhibit B.
Since the accident occurred on 20.03.2015, the policy had already been
cancelled on the date of the accident and the vehicle owner had also been
intimated regarding the cancellation and dishonour of his cheque as far back as
on 6.10.2014.
11. The counsel for the insurance company has also raised the issue of

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maintainability of the present appeal. Learned counsel submits that the claim
petition of the claimants/appellants has been allowed and the Tribunal has
awarded compensation in favour of the claimant and therefore, it cannot be said
that the appellant is an aggrieved party. He submits that it is only the vehicle
owner who can be said to be an aggrieved party and he is not before this court.
12. Learned counsel for the respondent/insurance company submits that the
respondent insurance company ceased to be the insurer of the offending vehicle
from the day when the premium was due, on account of non-realization of the
premium, which amounted to non-compliance of Section 64 VB of the Insurance
Act. Therefore, the contract of insurance was void ab initio due to non-
consideration. It is well-settled that a contract involves consideration, and
without consideration there can be no contract.
13. Learned counsel for the respondent Insurer, therefore, submits that the
learned tribunal has rightly arrived at the conclusion that the offending vehicle
was not covered with any insurance policy on the date of the accident, and as
such the insurance company is not liable to pay any compensation.
Consequently, learned counsel submits that the claimant/appellant has not been
able to make out a case for the interference of this Court under Section 173 of
the Motor Vehicles Act.
14. This Court has duly considered the submission of the learned counsel for the
parties and also examined the pleadings as well as the trial court records and
the judgments relied upon.
15. At the outset, this Court will consider as to whether the instant appeal by the
claimant is maintainable in a case where the tribunal has awarded
compensation, but has exonerated the insurer and directed the owner alone to

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satisfy the award.
16. Section 173 Clause (1) of the Motor Vehicles Act gives a right of appeal to any
person aggrieved by an award of a claims tribunal. A claimant is an aggrieved
person where the award places the liability exclusively on the owner of the
vehicle instead of the insurer, because the claimant has a legitimate interest in
obtaining satisfaction of the award from the insurer. Therefore, the claimant
need not be dissatisfied with the quantum, and appeal can be confined to the
finding on liability and can seek modification of the award by directing the
Insurer to satisfy it. Therefore, this Court is of the view that the instant appeal
is maintainable, and the court can consider the appeal on merits, more so, in a
case like the present one where the vehicle owner did not appear and did not
contest the claim petition.
17. The Supreme Court in the case of United India Insurance Company
Limited vrs Laxmamma reported in 2012 (5) SCC 234 , held that ordinarily
the insurer remains liable to third parties when a premium cheque is
dishonored. However, there is an exception in as much as that liability ceases
when the insurer cancels the policy and the intimation of cancellation reaches
the insured before the accident. The pertinent point is that the Supreme Court
in the case of Laxmamma (supra) did not merely state that the insurer must
cancel the policy before the accident. It says that the insurer’s liability ceases
when intimation of such cancellation has reached the insured before the
accident. Applying the said principle, the insurer, therefore, has to establish not
merely that it cancelled the policy and sent an intimation letter on 06.10.2014,
but the insurer also has to prove that the cancellation intimation reached the
owner before 20.03.2015 i.e., before the date of the accident. Therefore, the
insurer must prove by cogent evidence that the cancellation was communicated

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to the insured before the accident.
18. In the case of Boya Siva Kumar (supra) referred by the appellant also, the
court held that the question as to whether the cheque was dishonored at all is a
matter of fact which must be proved to the satisfaction of the tribunal. The
issuance of a cheque and dishonor of the same are internal matters between
the insurer and the insured, and the victim of an accident would not have any
role in this regard. Mere exhibition of the intimation letters does not constitute
the proof of the factum of dishonor of cheque.
19. In the instant case, it has been observed that the insurance company did not
exhibit the dishonored cheque, nor did it exhibit any acknowledgment or postal
tracking report to prove the receipt by the vehicle owner. In fact, the recipients
of the intimation letter, i.e., the vehicle owner or the Regional Transport
Authority, were never examined in order to prove the receipt of the intimation
letters. In such a case, the insurer has not discharged the burden necessary to
establish the exception recognized in the case of Laxmamma (supra) .
20. The legal position which remains, therefore, is that a policy issued against a
cheque continues to attract third-party liability despite dishonor, unless the
cancellation is communicated to the insured before the accident, and the burden
of proving such communication lies on the insurance company.
21. In the instant case, the insurance company may have cancelled the policy
internally, but in the absence of satisfactory evidence that the cancellation was
communicated to and reached the insured vehicle owner before the accident,
the insurer cannot escape its statutory liability towards the third-party claimants.
Consequently, the insurer would remain liable to satisfy the award. The
statutory scheme of the Motor Vehicles Act is intended to protect third-party

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victims. Therefore, a plea by the insurer that it was absolved from liability on
account of cancellation of the policy must be established by cogent evidence
before the statutory liability towards the third party claimant is displaced and
the insurer cannot take advantage from the cancellation which was not shown
to have been effectively communicated before the accident.
22. In the facts and circumstances stated above, the finding of the learned
Tribunal exonerating the insurer cannot be sustained. The claimant/appeal is,
therefore, maintainable and deserves to be allowed to the extent of liability.
23. The impugned judgment date 18.05.2018 is accordingly modified to the extent
that the respondent /ICICI Lombard Motor Insurance Company Limited is liable
to satisfy the compensation awarded by the learned Tribunal to the claimant
with interest as directed in the judgment dated 18.5.2018 passed by the learned
MACT No. 3, Kamrup, Guwahati in MAC Case No. 1999/2015.
24. Resultantly, the appeal is allowed.
25. The Registry shall send back the Trial Court records.

JUDGE
Comparing Assistant