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1997 DIGILAW 468 (KER)

George P. Varghese v. Daniel

1997-12-04

A.R.LAKSHMANAN, K.A.ABDUL GAFOOR

body1997
Judgment :- A.R. Lakshmanan, J, Heard both sides. This appeal is directed against the award dated 10.11.1995 in O.P. (M.V.) No. 208/1990 on the file of the 11 Addl. Motor Accidents Claims Tribunal, Kollam. The owner and the driver of the vehicle No. KB V 3496 are the appellants in this appeal. The accident took place at about 9,30 a.m. on 28.8.1989. It is the case of the claimants that when the deceased Alexander reached the North Western side of Kottarakkara K.S.R.T.C. Bus Stand, a car bearing registration number KBV 3496 driven by the second appellant herein negligently and with enormous speed, came from East to West and dashed against him and thereby the accident occurred. He sustained severe head injuries and he took treatment in the Medical College Hospital, Trivandrum. The police also have registered a case in connection with the accident involving the death of Alexander as Crime No. 262/89. The first appellant is the owner of the vehicle, The 8th respondent is the insurer. Appellants 1 and 2 have filed a joint written statement before the Tribunal denying the accident and contending that the car bearing registration No. KBV 3496 belonging to the first appellant was never involved in an accident on 28.8.1989 or on any other day. According to them, the case of the applicants as to the death of Alexander having been caused in an accident involving the car KBV 3496, while it was driven by the 2nd appellant, is nothing but an invented story to give paternity to the accident. The insurance company disowned the liability to indemnify the first appellant, the owner of the vehicle alleged to be involved in the accident, contending that the vehicle was not having a valid policy as and when the accident took place. According to the insurance company, the policy was issued to the first respondent in respect of the vehicle at 4.50 pm on 28.8.1989 and that policy is void as it has been obtained by willful nondisclosure of the material fact that the vehicle was involved in an accident at the time when the policy was applied for. 2. Before the Tribunal Exts. Al to A8 and B1 to B4 were marked on the respective sides. On the side of the claimant PWs.1 and 2 were examined. 2. Before the Tribunal Exts. Al to A8 and B1 to B4 were marked on the respective sides. On the side of the claimant PWs.1 and 2 were examined. On the side of the respondents one Pradeep Kumar was examined as rw1 and one Mathew P. George (the second appellant herein) as RW 2. The learned District Judge on a consideration of the entire materials placed before him and also the evidence, both oral and documentary, came to the conclusion that the owner and driver of the vehicle, the appellants herein, alone are liable to pay compensation in this case. In the result, an award was passed for Rs. 63,000/- as compensation to applicant Nos.1 and 2, parents of the deceased, together with interest at 12% from the date of filing of the application till the date of realization, jointly and severally from respondents Nos.1 and 2 (the appellants herein). Certain other directions were also given. 3. Aggrieved by the award of the Tribunal, the owner and driver of the vehicle have preferred the above appeal under S.173 of the Motor Vehicles Act. The learned counsel for the appellant contended that the award of the Tribunal is against facts, law and evidence. According to the learned counsel, it was a clear case of false implication of the car and the driver in their attempt to give paternity to the accident and to harass the appellants and that all the circumstances in this case clearly points to the only conclusion that it was a hit and run case by some unidentifiable vehicle. 4. Learned counsel appearing for the Insurance Company invited our attention to the findings of the Tribunal and argued as to how the insurance company is not liable for the claim and that the appellants alone are liable to pay the amount awarded by the Tribunal. 5. We have carefully gone through the entire materials placed before us and the award of the Tribunal. In our opinion, the award of the Tribunal is perfectly in order and is not liable to be interfered with. The only question that arise for consideration in this case is as to whether the appellants are liable to pay the amount awarded to the claimants or the insurance company is liable to pay the same. The learned Tribunal, in its detailed order, has discussed the entire evidence placed before it. The only question that arise for consideration in this case is as to whether the appellants are liable to pay the amount awarded to the claimants or the insurance company is liable to pay the same. The learned Tribunal, in its detailed order, has discussed the entire evidence placed before it. The Tribunal has clearly stated that the owner of the vehicle has no case that the policy was applied for at a point of time prior to the occurrence involved in this case, but it was issued only at the time as stated in Ext. B2. There is also no dispute with regard to the time of the accident which took place at 9.30 am on 28.8.1989 and the policy was also obtained only at 4.50 pm on that evening. The insurance company has taken a specific plea in the written statement that the policy obtained by the owner is void in as much as it has been obtained by suppression of material facts as regards the accident which occurred earlier on the same day. In support of this contention the insurance company has also examined its Assistant Divisional Manager as RW 1. It is his evidence that the insurance policy was taken at 4.50 pm and that the first appellant had not disclosed anything about the occurrence of the accident involved in this case. There is no reason to' disbelieve the evidence of a responsible officer who is working in the 3rd respondent Company. We have also perused Exts. B1 to B3. Ext. B1 is the inquest report, Ext. B2 is a copy of the insurance policy. In the policy the date and time has been clearly mentioned as 28.8.1989 and at 4.50 pm. Ext. B3 is the proposal form for insurance of the vehicle. Except the proposer 's signature, the columns assigned for place and date are left blank. The proposal form was signed by the first appeal lain himself without mentioning the date. The totality of the circumstances would only disclose that the policy has been obtained by the owner of the vehicle at 4.50 p.m. on 28.8.1989 by suppressing the material fact that the vehicle was involved in an accident at 9.30 am on that day. The proposal form was signed by the first appeal lain himself without mentioning the date. The totality of the circumstances would only disclose that the policy has been obtained by the owner of the vehicle at 4.50 p.m. on 28.8.1989 by suppressing the material fact that the vehicle was involved in an accident at 9.30 am on that day. It is therefore, to be concluded that the policy is void and that the insurance company has no liability, whatsoever, to pay the compensation in respect of the accident which occurred prior to the issue of the policy which had been obtained by suppression of material facts. We are also of the view that sub-s.(2)(b) of S.149 of the Motor Vehicles Act is a statutory exception which has been provided by the legislature in its wisdom, enabling an insurance company to avoid liability inspite of the policy having been. issued on the necessary facts having been established as regards suppression of material facts. In our opinion, the contract of insurance in this case is based on utmost bad faith and that when a contractual party, by suppressing material facts, the disclosure of which is vital for entering into the contract, forms a contract for indemnification by an insurance company, such a contract for indemnification is void and not merely voidable. In so far as an indemnification by the insurance company in respect of a policy issued by it as to the use of a motor vehicle, the statute, as already stated, enables it to disown the liability by treating the policy as void if it had been obtained by non-disclosure of a material fact. It has been established in this case that the policy was obtained without disclosing material facts. Therefore, the insurance company is not liable to pay any compensation to the injured. The award of the Tribunal directing appellants 1 and 2 to pay the compensation is correct and no interference is called for. 6. Learned counsel for the appellant invited our attention to the judgment of the Supreme Court reported in New India Assurance Co. Ltd. v. Ram Dayal (1990 (1) KLT 817) for the proposition that the policy taken during any part of the day becomes operative from the commencement of that day. 6. Learned counsel for the appellant invited our attention to the judgment of the Supreme Court reported in New India Assurance Co. Ltd. v. Ram Dayal (1990 (1) KLT 817) for the proposition that the policy taken during any part of the day becomes operative from the commencement of that day. Citing the above decision, learned counsel for the appellant contended that since the policy was taken at 4.50 pm on the day of occurrence, the policy becomes operative on the commencement of that day, ie, 28.8.1989. The above judgment, in our opinion, is distinguishable on facts. In the said case the vehicle was insured earlier upto 31.8.1984 and even though the same was available to be renewed, instead of obtaining a renewal, a fresh insurance policy was taken from 28th of September, 1984, which is the date of the accident. In the instant case, the policy was taken, admittedly, after the accident. We have already noticed that there is suppression of material facts in obtaining the insurance policy after the accident. Therefore, the decision relied on by the counsel for the appellant is of no assistance to the appellant. 7. Learned counsel for the insurance company has relied on a judgment of the Supreme Court reported in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi & Ors. (1997) 1 SCC 66 in support of his contention. That case was confined to the question as to whether the accident had occurred during the operation of the insurance policy in controversy. It was a case of renewal of the insurance policy. The Supreme Court has also referred to the decision reported in 1990(2) SCC 680 =1990 (1) KLT 817 (New India Assurance Co. Ltd. v. Ram Dayal). In the above case the facts are different. In that case a special contract was entered into between parties and in the insurance policy it was mentioned that the policy would be operative from 4 pm. on the date of payment of premium and the accident having occurred earlier thereto, the insurance coverage would not enable the claimant to seek recovery of the amount from the insurance company. In the instant case, it is mentioned in the policy that the policy would be effective from 28.8.1989 at 4.50 pm. 8. on the date of payment of premium and the accident having occurred earlier thereto, the insurance coverage would not enable the claimant to seek recovery of the amount from the insurance company. In the instant case, it is mentioned in the policy that the policy would be effective from 28.8.1989 at 4.50 pm. 8. For the foregoing reasons, we dismiss the appeal, confirm the award of the Tribunal and hold that the appellants, the owner and driver of the vehicle alone are liable to pay compensation awarded in this case together with interest at 12% from the date of tiling of the application till the date of realisation, jointly and severally. C.M.P. No. 4851/1996 also stands dismissed.