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2006 DIGILAW 435 (AP)

New India Assurance Co. , Ltd. v. B. Gopala

2006-03-27

L.NARASIMHA REDDY

body2006
J U D G M E N T The only question that is urged by the appellant herein is that the policy and cover note for the vehicle bearing No.TN-22-3147 taken out on 15.5.1998 at 4.15 p.m. does not cover the liability arose out of an accident which took place at 12.30 noon on that day. 2. The facts that gave rise to the filing of this appeal are not in dispute. The second respondent filed O.P.No.251 of 2000 before the Motor Vehicle Accidents Claims Tribunal-cum-III Additional District Judge, Anantapur alleging that he is a carpenter by profession and that on 15.5.1998 when he was proceeding on a motorcycle, a tractor bearing No.A.P.02-V-2612 belonging to the first respondent, and insured with the appellant came in a rash and negligent manner, and hit him. He is said to have sustained serious injuries and claimed a sum of Rs.1,00,000/- towards compensation. 3. The first respondent filed a counter affidavit pleading that there was no rash or negligent driving on the part of the driver of the tractor. The claim was mainly resisted by the appellant herein. It was pleaded that the insurance policy was taken out at 4.15 P.M. on 15.5.1998 and it cannot cover the liability which arose out of an accident which took place at 12.30 P.M. 4. The second respondent was examined as P.W.1 and he filed Exs.A1 to A6. On behalf of the appellant herein R.Ws.1 and 2 were examined. The printed copy of insurance policy dated 15.5.1998 was marked as Ex.B.1, carbon copy for the receipt of payment was marked as Ex.B.2, and carbon copy of cover note was marked as Ex.B.3. Ex.B.4 is the copy of the insurance policy. On appreciation of oral and documentary evidence before it, the Tribunal awarded a sum of Rs.48,000/- as compensation with interest @ 9% per annum. The appellant and first respondent were held jointly and severally liable to pay the amount. 5. The learned counsel for the appellant submits that it was clearly mentioned in Exs.B.3 and B.4 that the policy was issued at 4.15 P.M. on 15.5.1998 and that there was no dispute that the accident took place at 12.30 p.m. intervening 14th and 15th of May 1998. 5. The learned counsel for the appellant submits that it was clearly mentioned in Exs.B.3 and B.4 that the policy was issued at 4.15 P.M. on 15.5.1998 and that there was no dispute that the accident took place at 12.30 p.m. intervening 14th and 15th of May 1998. He contends that once it has emerged that the accident took place much before the policy was issued, there was no basis or justification for the Tribunal in holding the appellant herein is liable to pay the compensation. He placed reliance upon several judgments of the Supreme Court. 6. The learned counsel for the second respondent, on the other hand, submits that whenever a policy is taken out, it becomes effective from the preceding mid night of the day, except where there exists a contract to the contrary, and that in the instant case, no such contract existed. He too placed reliance on judgments of this Court and also the Supreme Court. 7. It is not in dispute that the accident took place at 12.30 P.M., and the policy was taken out at 4.15 P.M., on 15.5.1998. Way back in 1990 the Supreme Court held that in NEW INDIA ASSURANCE CO.LTD., vs RAM DAYAL AND OTHERS(1) that a policy obtained on the date of accident would also cover the liability on the part of the insurer and that it would take effect from the mid night of the date of insurance. This decision was followed by this Court in MADHUKURI RAGHU MURTHY & ANR., vs KOYYADA SAKKU BAI & ORS(2). It was held that the policy would commence from 00.00 hrs., of the date on which it was issued. 8. In NEW INDIA ASSURANCE CO.LTD. Vs BHAGWATI DEVI AND OTHERS(3) and KRISHNA SUBBARAO NAIK AND ANOTHERS vs PALANI SWAMY AND OTHERS(4), it was held as a principle that, a policy would take effect from the midnight of the day on which it was taken, but if there exists a contract to the contrary as to the exact time of commencement, the policy would become enforceable only from such time. Several other judgments were also rendered, on the same line. Several other judgments were also rendered, on the same line. Therefore, as of now, the position in law is that in the absence of a contract to the contrary, the policy of insurance would be effective from the mid night of the day on which it is taken and if there exists a specific contract, as to the exact time of its commencement, it would become enforceable from the time, so specified in the policy or cover note, as the case may be. 9. In the instant case, the respondent has filed as many as four documents, which are various forms or facets, constituting the insurance policy. Prominent among them are Ex. B.3 carbon copy of cover note, and Ex.B4, copy of insurance policy. 10. In Ex.B.4 the time at which the policy was issued was clearly stated as 04.15 p.m. on 15.5.1998. Ex.B.3 is a cover note issued by the agent. For all practical purposes, it is a contract in the ordinary parlance. Column No.3 of the contract reads as under: “ Effective date of commencement of insurance for the purpose of the Act” The entry against this column is “ from ........O’Clock on 15.5.1998". Column-4 is the date of expiry of insurance. The entry against this column is; “ to midnight on 14.5.1999” 11. Against column No.3 in Ex.B.3 no time was indicated but the date was specified as 15.5.1998. Therefore, it cannot be said that there was a contract to the contrary. At the bottom of Ex.B.3 against the column ‘date of issue’ it was indicated as 15.5.1998 at 4.15 P.M. Once it has emerged that the column relating to the commencement of policy did not contain any stipulation as to time, it cannot be said that there exists any contract to the contrary, so that the policy could have been effective from a particular time on the date of issue. 12. In this regard, the definition of Insurance Policy under Section 145 of the Motor Vehicles Act becomes relevant. Policy of Insurance is defined in clause-d, to the effect that, “policy of insurance includes certificate of insurance”. The expression ‘certificate of insurance’ is defined under clause-B of that Section, as meaning the one, issued by an authorized insurer, under Section 147, and to include the cover note. Ex.B.3 is the cover note in the instant case. Policy of Insurance is defined in clause-d, to the effect that, “policy of insurance includes certificate of insurance”. The expression ‘certificate of insurance’ is defined under clause-B of that Section, as meaning the one, issued by an authorized insurer, under Section 147, and to include the cover note. Ex.B.3 is the cover note in the instant case. It answers the description of “certificate of insurance” and thereby the “policy of insurance”. A combined reading of these definitions together with the obligation of the insurer under Section 156 of the Act, squarely makes the appellant herein liable to cover the claim of the owner of the vehicle. Therefore, this Court is not inclined to interfere with the order under appeal. 13. The C.M.A. is accordingly dismissed. --X—