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2005 DIGILAW 2254 (RAJ)

New India Assurance Co. Ltd. v. Hemant Kaushik

2005-08-25

VINEET KOTHARI

body2005
Judgment Dr. Vineet Kothari, J.-The present appeal by the New India Assurance Co. Ltd. has been filed against the award dated 07.09.1994 passed by the Judge, Motor Accident Claims Tribunal, Beawar (hereinafter referred to as The Tribunal). On 19.08.1992 at 1.30 p.m. in the afternoon one Lavnesh son of the claiment Hemant Kaushik met with an accident with Truck No. RRN 1101 which was claimed to be insured with the appellant Company. The Tribunal passed an award of Rs. 1,20,000/-holding the Insurance Company, the present appellant liable to pay the said amount of compensation in terms of the award. The respondent No. 2 Mr. Kanhaiyalal, the owner of the offended vehicle was also held jointly and severally liable alongwith the appellant Insurance Company. 2. Being aggrieved with the said award, the Insurance Co. has come up in appeal before this Court on the ground that the owner of the offended truck Mr. Kanhaiyalal fraudulently obtained a policy cover note of the Insurance Co. for the said truck after accident which actually had occurred on 19.08.1992 near Ajmeri Gate, Beawar at 1.30 p.m. in the afternoon by claiming that the premium of Rs. 1,335/-was paid in cash to Mr. Akhilesh Jain, the agent of the Insurance Company on 19.08.1992 itself , and, therefore, the Insurance Company should be assumed to have covered the risk of the said vehicle from the mid night of 18.08.1992 and 19.08.1992 and, therefore, the appellant should reimburse the claim. 3. The case set-up by the appellant Company is that though the money might have been paid to the Insurance Agent on 19.08.1992 the fact remains that the cover note itself , which is on record as Ex. D1 shows that the commencement of insurance would be from 00.00 hours of 20.08.1992 and the policy would remain in force for a period of one year upto 19.08.1993. The Insurance Company further states that the proposal of the said insurance in question was given on 20.08.1992 and the premium amount of Rs. 1,335/-was also deposited in the Company on 20.08.1992 and no receipt showing the payment of Rs. 1,335/-on 19.08.1992 has been produced or proved by the insurer, the owner of the offended vehicle. Therefore, according to the learned Counsel for the Insurance Co. 1,335/-was also deposited in the Company on 20.08.1992 and no receipt showing the payment of Rs. 1,335/-on 19.08.1992 has been produced or proved by the insurer, the owner of the offended vehicle. Therefore, according to the learned Counsel for the Insurance Co. the insurance covered in the present case cannot be said to commence from mid night of 18.08.1992 and 19.08.1992 but it would only commence after the contract of insurance had come to Company i.e. 20.08.1992 and since the accident in question had taken place at 1.30 p.m. on 19.08.1992 itself , the Insurance Company cannot be held liable and to this extent the award impugned deserves to be set-aside. 4. The Tribunal held the Insurance Company liable to pay the amount of compensation relying on the decision of the Honble Supreme Court in the case of New India Assurance Co. Ltd. vs. Ram Dayal & Ors., 1990 (II) ACJ 545. The said Judgment holds that where the renewal of the insurance policy was taken from a particular date i.e. 28.09.1994 which was the date of accident, its effectiveness is from the commencement of the date itself and the word Date was held to commence from 00.00 hours of the previous mid night. The said case is distinguishable from the facts of the present case because no specific timing of taking insurance which is a subject of contract was mentioned and the matter before the Honble Supreme Court appears to have proceeded on the construction of word Date only. 5. Learned Counsel for the appellant Insurance Company relied upon a later Judgment of Honble Supreme Court in the case of New India Assurance Co. Ltd. vs. Rakesh Talwar, 2000 (9) SCC 229 , in which it was held that where the Insurance Policy showing the time of issuance thereof and which was subsequent to the time of accident, the Insurance Company could not be held liable and the owner of the vehicle the insurer was directed to pay the entire amount of the award. He further relied upon the Judgment in the case of Life Insurance Corporation of Indian vs. Raja Vasireddy Komalavalli Kamba & Ors., AIR 1984 SC 1014 , wherein it has been held that mere delay in giving an answer cannot be construed as an acceptance and the acceptance must be communicated to the offeror in order to bring an insurance contract into existence. 6. 6. Learned Counsel for the appellant further relied upon a decision of Division Bench of Karnataka High Court in the case of The Oriental Insurance Co. Ltd. vs. Smt. Rukminibai & Ors. AIR 1995 Karnataka 18 and also the case of Madras High Court in the case of National Insurance Co. Ltd. vs. N. Ponnaiyan @ Kolappan & Ors. 2004 (II) ACC 171, to submit that where the specific time has been mentioned in the cover note or Insurance Policy, the Insurance Company cannot be held liable for an accident occurring prior to that time. He further submits that mere issuance of a cover note by an agent was not sufficient and in this case even the cover note indicated the time of commencement of insurance to be 00.00 hrs. of 20.08.1992. He has also contended that in fact, the cover note was note even available at the time of accident and the same has been produced before the Police Authorities on the next date only. 7. As against this, learned Counsel for the claimants besides relying upon the aforesaid Supreme Court case of New India Assurance Co. Ltd. Vs. Ram Dayal & Ors (Supra), further relied upon a Madras High Court S.B. Decision in the case of Oriental Insurance Co. Ltd. vs. Vedathal & Anr., 2001 ACJ 2022 . In this case of Madras High Court, the premium was paid and accepted by the Insurance Company on 20.05.1991 itself , i.e. the date of accident and, therefore, the Court did not absolve the Insurance Company on the ground that in the policy the date of commencement was mentioned from mid night of 21.05.1991. The facts of this case are also distinguishable from the facts of the present case because the factum of premium having been received by the Insurance Company on 19.08.1992 is seriously disputed and denied by the Insurance Company and the same is said to have been deposited on 20.08.1992 only. 8. From the perusal of the record and aforesaid authorities, it appears that the insured in the present case after the occurrence of the accident gave the amount of premium of Rs. 1,335/- to the agent of the Company and obtained a cover note on 20.08.1992 which itself , clearly shows that the liability of the Insurance Company would commence from 00.00 hours of 20.08.1992. 1,335/- to the agent of the Company and obtained a cover note on 20.08.1992 which itself , clearly shows that the liability of the Insurance Company would commence from 00.00 hours of 20.08.1992. There is no evidence on record to establish that the Insurance Company accepted the said payment of premium on 19.08.192 itself and assumed the risk of the said vehicle with effect from 19.08.1992. On the contrary, there is overwhelming evidence in support of Insurance Company to show that the insurance cover note was given w.e.f. 00.00 hrs. of 20.08.1992 only and not prior to that. The contract of insurance being a contract of utmost faith and a special contract, the risk cover as given by the Insurance Company cannot be extended and the insured cannot unilaterally conclude the contract of insurance and assume that by giving of the premium amount in case to the insurance agent, the insurance policy would automatically commence from that moment itself . 9. In view of the aforesaid position of facts and law, the present appeal of the Insurance Company deserves to be allowed and the impugned part of the award of Tribunal to the extent of holding the Insurance Company liable to pay the awarded amount in question is quashed and set-aside. 10. However, since, the Insurance Company and the owner of the vehicle were held jointly and severally liable to satisfy the amount of award in question, if the Insurance Company has already paid the said amount in question, it will be free to recover the said amount from the insured owner of the vehicle Mr. Kanhaiya Lal. 11. With these observations, the present appeal is allowed. There is no order as to costs.