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Allahabad High Court · body

2003 DIGILAW 2097 (ALL)

EJAZ AHMAD v. UNITED INDIA INSURANCE CO. LTD

2003-09-12

RAJES KUMAR

body2003
RAJESH KUMAR, J. ( 1 ) PRESENT appeal under section 173 of the Motor Vehicles Act, 1988, is directed against the order dated 30. 3. 1995 passed by the Motor Accidents claims Tribunal, Kanpur Dehat by which the claimants appeal was allowed and sum of Rs. 22,000 was awarded against the appellants who are the owner of the vehicle and driver. ( 2 ) BRIEF facts of the case are that the appellant Nos. 1 and 2 are owners of the vehicle, namely, Tempo No. UP 77-9493. On 2. 10. 1991 at about 5 p. m. Rubi was going on footpath along with his brother vinod when a Tempo No. UP 77-9493 on account of negligence and rash driving of the driver without giving any horn dashed rubi with the result she had fallen and suffered fracture in her left leg. Tribunal on consideration of the entire facts and circumstances awarded a sum of Rs. 22,000 to the claimant against the appellants. The claim of the appellants before the Tribunal was that the vehicle was insured with united India Insurance Co. Ltd. and thus united India Insurance Co. Ltd. was liable for the payment of award. Tribunal however, held that the insurance of the vehicle was from 7. 10. 1991 to 6. 10. 1992 and as such on the date of the accident which took place on 2. 10. 1991, the vehicle was not insured. The claim of the appellants was that the vehicle was insured for the period from 1. 10. 1991 to 30. 9. 1992. Being aggrieved by the order of Tribunal, the present appeal has been filed. ( 3 ) HEARD Mr. M. P. Sarraf, the learned counsel for the appellants and Mr. S. K. Mehrotra, learned counsel for the respondent insurance company. ( 4 ) A short question which arises for consideration in the present appeal is-whether the vehicle No. UP 77-9493 was insured from 1. 10. 1991 to 30. 9. 1992 as claimed by appellants or from 7. 10. 1991 to 6. 10. 1992 as held by the Claims Tribunal. Record of the lower court is available for perusal and adjudication of the claim. Three documents are relevant, insurance cover note No. 30789 which is admittedly signed by Vinay K. Nigam, Development officer, in which the period of insurance mentioned is from 1. 10. 1991 to 30. 9. 1992. 1991 to 6. 10. 1992 as held by the Claims Tribunal. Record of the lower court is available for perusal and adjudication of the claim. Three documents are relevant, insurance cover note No. 30789 which is admittedly signed by Vinay K. Nigam, Development officer, in which the period of insurance mentioned is from 1. 10. 1991 to 30. 9. 1992. A perusal of the insurance cover note (document No. 90) shows that there is a overwriting on the date 1 and 3. There is no overwriting on any other date. Insurance passbook (document No. 90b) period of insurance shown is from 1. 10. 1991 to 30. 9. 1992. A renewal notice No. 30789, is signed by Vinay Kumar Nigam, Development officer. In this notice, the period of insurance shown is from 7. 10. 1991 to 6. 10. 1992. Appellants contended that the insurance premium at Rs. 660 was given to an agent, Sudhir Kumar Srivastava, DW 3, on 1. 10. 1991. Sudhir Kumar Srivastava, dw 3, in his statement admitted that the owner of the vehicle had given Rs. 660 on 1. 10. 1991 in afternoon and on the same day he went to deposit the money at 3. 30 p. m. which could not be deposited due to the closure of the cash and thus he had given the money to the Development Officer, v. K. Nigam on which he had issued the insurance certificate No. 30789 at 4. 30 p. m. which was given to the owner of the vehicle. About the renewal of notice he stated that it was the notice for renewal of the insurance and he is not aware that the insurance was earlier done. He denied that on back date any forged certificate was issued. The statement of V. K. Nigam, DW 5, Development Officer, United India Insurance co. Ltd. was also recorded. V. K. Nigam has stated in his statement that thecertificate of insurance No. 30789 for the period from 1. 10. 1991 to 30. 9. 1992 bears my signature and it was issued by me on 7. 10. 1991 at 4 p. m. , it does not bear policy number. He stated that policy was taken on 7. 10. 1991 and the agent has not given any information about the accident. 10. 1991 to 30. 9. 1992 bears my signature and it was issued by me on 7. 10. 1991 at 4 p. m. , it does not bear policy number. He stated that policy was taken on 7. 10. 1991 and the agent has not given any information about the accident. V. K. Nigam also stated that in the certificate 7 was made 1, 6 was made 30 and 10 was made 9. Statement of S. S. Dwivedi, Administrative officer, United India Insurance co. Ltd. , DW 4, was also recorded. He stated that the vehicle was insured from 7. 10. 1991 to 6. 10. 1992. He further stated that the premium amount at Rs. 660 was deposited on 8. 10. 1991 for which receipt no. 668184 dated 8. 10. 1991 was issued against which the certificate No. 30789 was issued. It has been further stated that by overwriting in the certificate the date 1. 10. 1991 to 30. 9. 1992 was mentioned. The aforesaid documents and statement were examined by the Tribunal. Learned tribunal has held that in fact insurance cover note was issued for the period from 7. 10. 1991 to 6. 10. 1992 and by overwriting it was made 1. 10. 1991 to 30. 9. 1992. The tribunal further found that the money was deposited on 8. 10. 1991 and the notice for the renewal in which there is no cutting on the date shows that it was for the period 7. 10. 1991 to 6. 10. 1992. The Tribunal accordingly came to the conclusion that the vehicle was not insured on the date of the accident and was insured from 7. 10. 1991 to 6. 10. 1992 and accordingly held the owners of the vehicle liable for payment of award. ( 5 ) IN my opinion, the view taken by Tribunal is not correct. The Tribunal should have looked into the matter with the angle of the insured, who was the customer of the insurance company. The claim of appellant that the insurance premium of Rs. 660 was given to Sudhir Srivastava, agent of the Development Officer Vinay Kumar nigam on 1. 10. 1991, who in his statement admitted the receipt of the payment on 1. 10. 1991. He has also stated that he went to deposit the money on the same day at 3. The claim of appellant that the insurance premium of Rs. 660 was given to Sudhir Srivastava, agent of the Development Officer Vinay Kumar nigam on 1. 10. 1991, who in his statement admitted the receipt of the payment on 1. 10. 1991. He has also stated that he went to deposit the money on the same day at 3. 30 p. m. which could not be deposited due to the closure of cash and thus the money was given to Vinay Kumar Nigam, Development officer. Vinay Kumar Nigam, development Officer in his statement has also accepted the issuance of insurance certificate for the period 1. 10. 91 to 30. 9. 1992. Vinay Kumar Nigam in his statement has not stated that the overwriting on the date was made by the appellants. Therefore, it cannot be disputed that insurance certificate was issued by Vinay Kumar Nigam, development Officer, was not for the period 1. 10. 1991 to 30. 9. 1992. The insurance passbook (document No. 90b) was also issued for the period from 1. 10. 1991 to 30. 9. 1992, in which there is no cutting. The date of deposit of the amount is wholly irrelevant. Vinay Kumar Nigam, Development officer, in his statement has not disputed that the money was received by him on 1. 10. 1991. In the circumstances, it cannot be said that the insurance cover note was not relating to the period from 1. 10. 1991 to 30. 9. 1992. Further, even if the reliance is placed on the renewal notice in which the period of insurance shown is 7. 10. 1991 to 6. 10. 1992, assumption is that the vehicle was insured for the period prior to 7. 10. 1991 and the notice was issued to the renewal of the insurance. In this way also it cannot be said that on the date of the accident the vehicle was not insured. The claim of the insurance company that the insurance cover note was antedated and forged cannot effect the claim of the insured. If anything wrong has been committed by Vinay Kumar Nigam, Development officer, the necessary action may be taken against him and for the loss to the insurance company recovery may be made from him. The claim of the insurance company that the insurance cover note was antedated and forged cannot effect the claim of the insured. If anything wrong has been committed by Vinay Kumar Nigam, Development officer, the necessary action may be taken against him and for the loss to the insurance company recovery may be made from him. A Development Officer of the insurance company is supposed to act fairly and honestly and in case his action is prejudicial to the insurance company, necessary steps may be taken against such development Officer but the claim of the insured cannot be denied. The record of the case does not show that any action has been taken against Vinay Kumar Nigam, development Officer. ( 6 ) IN the case of Oriental Insurance co. Ltd. v. White Rose, 2002 ACJ 1061 (Allahabad), the Division Bench of this eourt has observed as follows:"the appellant cannot escape its liability to pay the amount once a cover note is issued. In United India Insurance Co. Ltd. v. Kamlesh Singh, 1995 ACJ 657 (Allahabad), this court held that the insurance company is liable to pay compensation on the basis of cover note issued by its agent and the negligence or error of agent does not affect the liability of the insurer and even if he has been removed from service, it is for the insurance company to take suitable action against him. " ( 7 ) IN the case of National Insurance co. Ltd. v. Shanti, 1999 ACJ 1033 (Rajasthan), honble Rajasthan High Court held as follows :"mr. Tyagi, counsel for the appellant, has also argued that the cover note is antedated. The accident took place on 5. 4. 1987. The risk of accident of Jonga jeep No. RJP 3574 was not covered on the date of accident. The cover note, exh. P-1, is antedated. I do not find any substance in the second submission of mr. Tyagi that the cover note was antedated. The cover note has been issued by a permanent Development Officer of the company, N. S. Shekhawat. As per record, the cover note was issued on 4. 4. 1987 and on the same day, the premium of Rs. 180 was paid by the owner of the jeep. Mr. Tyagi submits that the amount has not been deposited in the company by Shekhawat before the date of the accident. As per record, the cover note was issued on 4. 4. 1987 and on the same day, the premium of Rs. 180 was paid by the owner of the jeep. Mr. Tyagi submits that the amount has not been deposited in the company by Shekhawat before the date of the accident. Whether Shekhawat, development Officer of the company deposits that amount after the accident or after a year from the date of payment by the jeep owner, is not the responsibility of the jeep owner. After payment of premium by the jeep owner Ramavtar, the risk is covered and if Shekhawat has not deposited that money in the company, appropriate action can be taken against him, but how the benefit of risk covered can be denied to Ramavtar who paid the premium on 4. 4. 1987 and cover note has been issued by the development Officer of the company in this regard. Even there is no material on record that any action or punishment has been given to Shekhawat for not depositing the premium money with the company in time. In view of these undisputed facts, I do not find any substance in this appeal. The appeal is dismissed in limine. " ( 8 ) IN the case of United India Insurance co. Ltd. v. Kamlesh Singh, 1995 ACJ 657 (Allahabad), the Division Bench of this court held as follows :"mr. Vineet Saran, learned counsel for the insurer, strenuously contended that the issue of cover note by an agent, who had already been removed, would not make the insurer liable. This stand does not impress us. If an agent is removed, all the documents and other valuables are to be recovered from him or a declaration at least should be made that these documents are invalid and could not give any right to any person on that basis, if issued by a removed agent. No such action has been taken in the present case. Accordingly, we hold that the insurer is liable for the payment of compensation on the basis of the cover note issued by an agent which admittedly belonged to the insurer. If the insurer so feels it can recover the amount of compensation from the delinquent agent. No such action has been taken in the present case. Accordingly, we hold that the insurer is liable for the payment of compensation on the basis of the cover note issued by an agent which admittedly belonged to the insurer. If the insurer so feels it can recover the amount of compensation from the delinquent agent. " ( 9 ) FOR the reasons stated above, it is held that the vehicle was insured on the date of the accident and, therefore, insurance company was liable for the payment of compensation to the claimants and not the appellants. ( 10 ) IN the result, the appeal is allowed and the order of the Claims Tribunal dated 30/3/1995 in Appeal No. 21 of 1992 is set aside. So far as it fixed the liability for the payment of compensation on the appellants is concerned and it is held that United india Insurance Co. Ltd. is liable for the payment of compensation. Appeal allowed.