United India Insurance Co.Ltd. vs Alka Lahu Mane And Ors.

CNR No : HCBM010273632006

2026:BHC-AS:45275
1 Fa-2067-2006 final.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO. 2067 OF 2006
WITH
CROSS OBJECTION (ST) NO. 23757 OF 2006
United India Insurance Co.Ltd. ...Appellant
Vs.
1. Alka Lahu Mane
2. Master Karan Lahu Mane
3. Kumari Archana Lahu Mane
4. Master Kunal Lahu Mane
5. Smt. Indubai Pandurang Mane
6. Raju Rangnath Wagh ...Respondents
*
Mrs. Urmila K. Sanil Advocate for the Appellant
(through VC)
Mr. T. J. Mendon for the Respondent
*
CORAM : S. M. MODAK, J.
nd
DATE : 02 NOVEMBER 2026
JUDGMENT:-
1. The only issue arisen in this appeal is “ whether the Tribunal has
committed wrong in directing the insurer-Appellant and the insured to
pay jointly and severally an amount of Rs. 2,19,000/- by way of
Digitally
signed by
SEEMA
KSHITIJ
YELKAR
Date:
2026.11.05
18:36:42
+0530
SEEMA
KSHITIJ
YELKAR
Seema 1/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

compensation alongwith other benefits” . This is so because the insurer
has cancelled the policy by writing a letter to the insured, who is
opponent no. 1 before the tribunal. It is on account of dishonour of the
cheque due to insufficient funds. The relevant dates are as follows:-
a) The duration of the policy from 27.09.2000 upto
26.09.2001.
b) Date of the cheque 18.10.2000 drawn on Canara bank
towards the premium.
c) Date of the letter about dishonour from the Canara Bank
20.10.2000.
d) The letter sent by insurer to the insured – Exh. 24. A copy
of this letter is not available on record.
e) Date of the accident 07.12.2000.
2. From the above dates, it is clear that accident took place after the
date of the cancellation of the policy. So this is only issue involved in
this appeal as whether tribunal has committed any wrong in allowing
the petition.
3. On this background, I have heard learned Advocate Ms. Sanil for
the Appellant-insurer and learned Advocate Shri Mendon for the
Respondent Nos. 1 to 5, who was legal representatives of the deceased
Lahu Pandurang Mane. Respondent No. 6 is owner of Motor lorry
Seema 2/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

bearing registration No. MTF-8679. There is no dispute about
issuance of the policy and it was comprehensive policy. On the date of
the accident i.e. on 07.12.2000, the deceased was travelling in motor
lorry and it was driven by driver of the insured. The driver dashed
electric poll and deceased Lahu Mane was occupant of the lorry
sustained injuries and he died. He was 30 years old and he was doing
hamali work and he was cleaner in that motor lorry. His monthly wages
were Rs. 4500/- per month.
4. Insured has not contested the claim but it was only contested by
the insurer. Defence taken was policy was not in existence and as such
they cannot be saddled with the liability. On behalf of the Claimant the
widow of deceased gave evidence. The insurer has also examined his
officer Harish Sonawane. As most of the facts are admitted, the
question relates to the interpretation of the provisions of Motor
Vehicles Act.
5. Ms. Sanil has filed written notes of the arguments. So also she
argued orally. During her arguments, she raised the following points:
a) The cheque towards premium of Rs. 3044/- was
dishonoured and it was informed to the insured prior to
Seema 3/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

the date of the accident. However, he has not made any
attempts to pay the premium.
b) It was also contended that it was informed to the
Regional Transport office, Thane vide letter dated
07.06.2001 about cancellation of the policy.
According to Mr. Mendon there is no acknowledgment and it is not
disputed by Ms. Sanil. Admittedly, this letter to RTO was sent after
date of the accident.
c) A reliance is placed on the provisions of Section 64-VB
of the Insurance Act, 1938 and it is pleaded that any
agreement made without consideration is void as
contemplated under Section 25 of the Indian Contract
Act.
d) The reliance is placed on observations in case of
National Insurance Company Limited V/s Seema
1
Malhotra and Ors . .
e) No third party is involved. The deceased was working as
cleaner and driver of the motor lorry and driver of lorry,
in which deceased was travelling was found negligent.
f) The deceased was an employee of the owner of the
vehicle and as such claim for compensation lies as per
the provisions of the Workmen’s Compensation Act and
not as per the Motor Vehicles Act.
1
2001 (3) SCC 151
Seema 4/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

6. As against this Mr. Mendon has made the following
submissions:-
a) The cancellation of the policy does not affect third
party.
b) As per the provisions of Section 64-VB of the Insurance
Act, once insurer has issued the policy on the basis of
the cheque, they cannot deny the responsibility arising
out of such policy just because cheque is dishonoured.
c) He placed reliance on observations in case of Oriental
Insurance Co. Ltd. Vs. Inderjit Kaur and Others (Three
2
Judges bench) and observations in case of Oriental
Insurance Company Ltd. Vs. Prakash Chunilal Mirgany
3
and Others .
d) According to him, if employee during the course of the
employment has died due to vehicular accident, he has
got two options. One as per the provisions of the
Workmen’s Compensation Act and another as per the
provisions of Motor Vehicles Act. His client has chosen
the second option. He placed reliance on the
observations in case of National Insurance Company
4
Limited Vs. Prembai Patel and Others .
2 1998 ACJ 123
3 2006 ACJ 15
4 2005 ACJ 1323
Seema 5/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

e) According to him, even the compensation granted by
the Tribunal is on lower side and according to him, the
Tribunal ought to have considered the income of the
deceased at Rs. 4500/- and compensation ought to have
been awarded on that basis and less compensation was
granted on other heads.
7. By way of reply, Ms. Sanil submitted that in fact her client cannot
be held responsible for want of policy and there is no question of the
enhancement of the compensation.
Existence of the policy
8. In judgment of National Insurance Company Limited V/s Seema
Malhotra and Ors . (supra), there was policy and cheque for Rs. 4492/-
was issued towards the first installment of the premium and cheque
was issued. On 31.12.1993, the accident took place and there was death
of the insured. On deposit of the cheque, it was informed by the
banker that cheque was dishonoured on 10.01.1994 and it was
informed to the insured on 20.01.1994. So admittedly cheque was
deposited after the date of the accident. Claim was filed not before the
Tribunal but before the Consumer Protection Commission. It was
Seema 6/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

rejected. The appeal was filed before the High Court of Jammu and
Kashmir. The order of the dismissal was reversed and the insurer was
held liable. The Supreme Court has also considered the provisions of
Section 64-VB of the Insurance Act. If the insurance is paid outside
India then risk in India is not covered. The Supreme Court has also
considered the provisions under Sections 51, 52 and 54 of the Indian
Contract Act. When the insured has failed to perform his promises,
then insurer cannot claim benefits from the insurer. Section 25 of the
Indian Contract Act is also referred. That is how the decision of the
Division bench was set aside. Admittedly in that case third party is not
involved that was dispute in between insurer and insured.
9. On this background, it will be relevant to consider the
observations by the Hon’ble Supreme Court in Oriental Insurance Co.
Ltd. Vs. Inderjit Kaur and Others. In that case also the accident took
place after knowledge of the dishonour. The premium was paid in cash
but after the date of the accident and after the date of the intimation,
the provisions of Section 64-VB of the Insurance Act were interpreted.
The observations in para no. 9 are relevant.
“9. The policy of insurance that the appellant issued was a
Seema 7/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

representation upon which the authorities and third parties
were entitled to act. The appellant was not absolved of its
obligations to third parties under the policy because it did
not receive the premium. Its remedies in this behalf lay
against the insured.”
10. The Tribunal has also referred about this judgment. Similarly,
learned Single Judge of this Court in case of Oriental Insurance
Company Ltd. Vs. Prakash Chunilal Mirgany and Others (supra)
arising out of Motor Vehicles Act, 1939 has reiterated the same ratio.
11. Learned Advocate Ms. Sanil has not quoted any other judgments
taking the contrary view. In view of that there is no question of
interfering in finding of the tribunal holding the insurer and insured
liable to pay compensation. At the most, there is issue in between
insurer and insured. During cross-examination the witness of the
insurer could not show any documents about giving intimation to
RTO about cancellation of policy.
12. It is true in case of National Insurance Company Limited Vs.
Prembai Patel and Others (supra) , deceased was employee of the owner
of the truck. The truck overturned and driver sunder died. The claim
petition was filed under Section 166 of the Motor Vehicle Act. It was
Seema 8/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

dismissed by the Tribunal but High Court allowed it with unlimited
liability. It was challenged by the Insurer. The Supreme Court
distinguished between contractual policy and statutory policy. In that
case, it was Act policy and hence the liability of insurer was restricted to
terms of the policy. Plea was taken that claimant ought to have failed as
per Workmen’s Compensation Act. In para no. 8, the Supreme Court
has reiterated the terms of the policy and it was Act policy.
13. Though copy of the policy is not produced. Mr. Mendon invited
my attention to Written Statement filed by the Insurer. It is true it is
not pleaded that the policy was Act policy. Second aspect whether the
Cleaner of the vehicle being an employee was required to approach
Labour Court and not the Tribunal. It is true as per the provisions of
Section 147 (1)(b)(i), the word used is ‘ any person ’. As per Motor
Vehicles Act, 1939, these words were not there. So cleaner is also
included.
14. Admittedly the deceased was not driver of the vehicle he has
accompanied driver. There is evidence that the driver was any way
responsible for the accident. There is a finding that driver of lorry was
negligent. So in such cases, it cannot be said that the deceased falls in
Seema 9/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

the shoes of the insurer. In such scenario the deceased can certainly be
a third party even though he was traveling in offending vehicle and as
such he can claim compensation either under the Workmen’s
Compensation Act or as per the Motor Vehicles Act.
15. In this case, claim was made under the Motor Vehicles Act
wherein the issue of the negligence is involved. So the submission of
learned Advocate Ms. Sanil is not accepted.
16. So the appeal of the Appellant failed .
Enhancement
17. The deceased was earning income through wages. He was doing
hamali and his wife claims that her husband used to receive Rs. 4,500/-
per month and he used to pay Rs. 3,000/- towards household expenses.
Admittedly, no documentary evidence was produced and even widow
admits the same during cross-examination. The tribunal has considered
monthly income by way of wages to the tune of Rs. 1,500/- per month.
It was on the basis of the notional monthly income. This is on the
lower side. Even if we will consider the daily income of the person at
Rs. 100 per day, he can get Rs. 3,000/- per month. I considered the
income of the deceased as Rs. 3,000/- per month. Additionally, he is
Seema 10/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

entitled for compensation on the following heads:-
a) Considering his age as 30 years, he is entitled for future
prospect @ 50% as he is in employment.
b) He is entitled for Consortium @ Rs. 48000/- X 5
dependents, Loss of the estate and funeral expenses.
18. In view of that compensation is recalculated is follows:-
Name of the deceased Lahu Pandurang Mane
Age of deceased 30 years
Income considered Rs. 3000/- per month
Future Prospect Rs. 1500/-
(3000 X 50%)
Rs. 3000 + 1500 =Rs. 4500/-
Dependency (1/4) – Rs. 4500 - 1125=Rs. 3375/-
4500/4=1125
Multiplier 17
Rs. 3375 X 12 X 17
Rs. 6,88,500/- A
Consortium
(Rs. 48,000X 5)
Rs. 2,40,000/- B
Funeral Expenses Rs. 18000/- C
Loss of Estate Rs. 18000/- D
Total (A+B+C+D) Rs. 9,64,500/-
Less Tribunal granted Rs. 2,19,000/-
Enhancement
Amount
Rs. 07,45,500/-
Seema 11/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24

1 Fa-2067-2006 final.doc

19. Hence Order :-
ORDER
a) The appeal is dismissed.
b) Cross objection is allowed.
c) The Appellant and Respondent No. 6 are directed to pay
sum of Rs. 07,45,500/- (Rupees Seven Lakhs Forty Five
Thousand and Five Hundred Rupees only) within a
period of 12 weeks from the date of uploading order
alongwith interest of 6% from the date of petition till the
payment.
d) On deposit of the amount, the Tribunal is directed to
apportion the amount amongst Claimants.
e) The Tribunal to confirm whether the Appellant Nos. 2 to
4 have attained majority and if they have not attained the
majority, the amount be paid to Appellant No. 1 being
their natural guardian.
f) Statutory deposit be transferred alongwith interest to the
Tribunal so as to include in the amount of the
compensation.
g) Claimants to pay Court fees on enhanced amount, if they
have not paid earlier.
20. With the above observations, the First Appeal is disposed of.
[S. M. MODAK, J.]
Seema 12/12
Uploaded on - 05/11/2026 Downloaded on - 05/11/2026 18:55:24
Powered by TCPDF (www.tcpdf.org)