The Kerala High Court recently ruled that if an insurance policy is cancelled immediately after its preparation due to non-payment of premium, and it was never delivered to the insured, there is no requirement for the insurer to issue a separate cancellation notice.
This decision was delivered by Justice C. Pratheep Kumar while allowing a Motor Accidents Claims Appeal (MACA No. 285 of 2017) filed by HDFC Ergo General Insurance Company Ltd., challenging the Tribunal’s direction to pay compensation.
The case involved a fatal road accident in which the claimants, the wife and children of the deceased, had filed a compensation petition. The insurer, however, contended that there was no valid insurance policy at the time of the accident as the policy (Ext. B1) was cancelled immediately after preparation due to non-payment of premium.
Read Also:- Rajasthan High Court Denies Bail to Ankit Bansal in ₹704 Crore GST Fraud Case
“If Ext.B1 was issued to the 2nd respondent, its original would have been in his possession. The 2nd respondent has not offered any explanation as to how the original along with all four copies happened to be in possession of the Insurance Company.”
The insurer presented evidence, including the proposal form cum cover note (Ext.B1), and deposed through a witness (RW1) that the policy was never handed over and all copies remained with the insurer. The Tribunal had previously found the insurance company liable, suggesting the policy might have been returned later by the RC owner—despite no supporting evidence.
The High Court highlighted that since the policy was cancelled immediately and never reached the insured, there was no need to issue a separate notice.
“Since Ext.B1 was cancelled immediately after its preparation and retained by the Insurance Company itself, it is to be held that the factum of its cancellation was very much known to the owner of the vehicle then and there.”
The Court also pointed out that the purpose of a cancellation notice is to inform the insured, but in this case, the insured already knew as the policy was never delivered.
Read Also:- Rajasthan High Court Reiterates Section 15 of Rent Control Act Is Directory, Not Mandatory
“Separate notice or intimation is required only when the policy is cancelled after being issued and delivered to the insured.”
Concluding, the Court set aside the Tribunal’s direction to the insurer and held the registered owner (RC owner) of the vehicle liable for the compensation of ₹42,34,589 awarded to the claimants.
Case Title: HDFC Ergo General Insurance Co. Ltd. v. Zeenath and Ors.
Case No: MACA No. 285 of 2017
Appellant Counsel: Sri. George Cherian (Sr.), Smt. Latha Susan Cherian, Smt. K.S. Santhi
Respondents’ Counsels: N. Ajith, Nireesh Mathew, N.L. Bitto
