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Madhya Pradesh High Court · body

2001 DIGILAW 692 (MP)

New India Assurance Co. Ltd. v. Amirkhan

2001-09-20

S.B.SAKRIKAR

body2001
JUDGMENT The appellant-The New India Assurance Co. has directed this appeal under S. 173 of the Motor Vehicle Act against the award dtd. 16.12.1997 passed by the M.A.C.T., Ujjain, in Claim Case No. 70/89 thereby allowing the claim petition filed on behalf of the Resp. 1 and passing the award of Rs. 75,000/- in favour of respondent-claimant and against the respondent 2,3 as also the appellant Insurance Company. The amount of compensation was made payable by all the respondents and the appellant jointly and severally. Aggrieved by the said award of the tribunal, the appellant has filed this appeal. The only contention of the learned counsel for the appellant is that the appellant Insurance Company cannot be held liable for the payment of the compensation mainly on the ground that the cover note (Policy of Insurance) was issued by the Insurance Company after the alleged accident has already occurred. In this respect the learned counsel for the appellant invited my attention to the copy of the cover note issued by the Insurance Company and available on the record of the tribunal indicating at the top that the Ujjain branch of the appellant Insurance Co. issued a cover note on 26th Oct. 1988 at 4.50 p.m. It is not disputed that the alleged accident occurred in between 4.00 to 4.15 p.m. on the aforesaid date. In view of the aforesaid facts available on record, the Insurance Company cannot be held liable to pay compensation on the ground that the Policy of Insurance comes into effect after 4.50 p.m. on 26.10.1988. A reliance was placed on the decision of the Apex Court in case of New India Assurance Co. v. Bhagwatidevi and others (1999 ACJ 534). A reliance was also placed on Division Bench decision of this Court in case of New India Assurance Co. v. Ramratan and others (M.A. 438/97 decided on 17th April, 2001). As against this, learned counsel for the respondents-claimants relying on the decision of the Apex Court in case of New India Assurance Co. v. Bhagwatidevi and others (1999 ACJ 534). A reliance was also placed on Division Bench decision of this Court in case of New India Assurance Co. v. Ramratan and others (M.A. 438/97 decided on 17th April, 2001). As against this, learned counsel for the respondents-claimants relying on the decision of the Apex Court in case of New India Assurance Co. v. Ramdayal and others (1990 ACJ 545) and submitted that in the certificate of the Insurance Policy of the offending vehicle of the present case available on the record of the tribunal, does not indicate any time of commencement of policy on 26.10.1988; as such, it will be presumed that the policy comes into effect from the previous mid-night of 26.10.1988 and the learned tribunal has committed no error in holding Insurance Co. also liable for the payment of the compensation award in favour of the respondents-claimants. Considering the submissions of the learned counsel for the parties and in view of the subsequent decision of the Apex Court in case of New India Assurance Co. v. Bhagwatidevi (supra), relied on by the counsel for the appellant, it emerged that when no time of issuance of cover note or the Insurance Policy is mentioned in the said documents then the Insurance Policy comes into effect from the previous mid-night of the date of purchase of the policy. But when a time is mentioned in the cover note then the Insurance shall commence from the said time mentioned in the cover note. The contention of the learned counsel for the respondent cannot be accepted that as the certificate of Insurance of the offending vehicle in this case available on the record does not mention the time of commencement of the policy. In view of the fact that the document of insurance policy is issued within a reasonable time after the issuance of a cover note indicating the date and the time of purchase of the policy of insurance by the insured. In this respect the Division' Bench decision of this Court in case of New India Assurance Co. v. Ramratan (supra) has held that -"The practice followed by the Insurance Co. is to issue cover note by its competent officer/agent immediately on payment of Insurance premium and covers risk in case some accident takes place. In this respect the Division' Bench decision of this Court in case of New India Assurance Co. v. Ramratan (supra) has held that -"The practice followed by the Insurance Co. is to issue cover note by its competent officer/agent immediately on payment of Insurance premium and covers risk in case some accident takes place. It is followed by a formal execution of the Insurance Policy within the reasonable time." In view of the Division Bench decision of this Court it is clear that the insurance policy comes into effect as soon as the cover note is issued and if a time is mentioned in the cover note, then the Insurance Company can be held liable in any accident after the said time. In view of the aforesaid position of the law, and the undisputed facts of the case on hand, as the accident in the instant case occurred prior to the issuance of the cover note on 26.10.1988, the appellant Insurance Co. cannot be held liable for the payment of the compensation as awarded by the tribunal in favour of the respondent-claimants because the policy was not effective at the time of the accident. In the result this appeal filed on behalf of the Insurance Company is allowed. The impugned award only with respect to the accident holding the appellant Insurance Company also liable to pay the compensation, is set aside and the Insurance Company is exonerated from the liability of payment of compensation as awarded by the tribunal. Parties are left to bear their own cost of this appeal.