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Gauhati High Court · body

2008 DIGILAW 28 (GAU)

United India Insurance Co. Ltd. v. Nilima Nandi

2008-01-09

T.NANDAKUMAR SINGH

body2008
JUDGMENT T. Nandakumar Singh, J. 1. Heard Mr. S. Dutta, learned Counsel appearing for the appellant/Insurance Company as well as Ms. R. Lahkar, learned Counsel appearing for the respondents i.e. respondent Nos. 1, 2 and 3. None appears for the respondent No. 4, Sri Upen Chandra Bhuyan. 2. From the record of the present appeal it is clear that service of notice of present appeal to the respondent No. 4 had been properly effected. Over and above, Mr. S.K. Barkataki, learned Counsel had entered appearance on behalf of the respondent No. 4 by filing the Vakalatnama. 3. By this appeal, the appellant/Insurance Company is challenging the judgment and award dated 16.12.99 passed by the learned Motor Accident Claims Tribunal, Darrang, Mangaldoi in MAC Case No. 2/92 only on one ground that the amount of Rs.1,50,000/- (one lack fifty thousand) awarded as compensation for the motor accident which took place on 16.07.91 should not be fasten to the appellant/Insurance Company, inasmuch as, the respondent No. 4, the owner of the offending vehicle having registration No. ASU 8927 had entered an Insurance Policy with the appellant/Insurance Company with effect from 2.45 PM of 16.07.91 and the said motor accident took place before 2.45 PM of 16.07.91. 4. The short facts which would be sufficient for deciding the present appeal are that the husband of the claimant/respondent No. 1 Sri Sibu Nandi was the handyman of the offending Bus bearing registration No. ASU 8927. When the Bus was plying on 16.07.91 had an accident near Balipukhuri on 16.07.91. As a result of the motor accident of the offending Bus, the appellant/husband succumbed to injuries. 5. Both the parties i.e. the appellant and respondent are not disputing the fact that the offending Bus having the registration No. ASU 8927 had accident on 16.07.91 and also the owner of the offending Bus had entered an Insurance Policy with the appellant/Insurance Company. Only the disputes in the present case were about the time of the said motor accident on 16.07.91 and also the coverage of the said motor accident by the new business policy which would be effective from 2.45 PM of 16.07.91. The claimant also had exhibited authenticated copy of the Insurance Policy as Ext. 3 before the Motor Accident Claims Tribunal. The claimant also exhibited another Insurance Policy as Ext. 4 which was valid upto 15.07.91. 6. On perusal of the Insurance Policy Ext. The claimant also had exhibited authenticated copy of the Insurance Policy as Ext. 3 before the Motor Accident Claims Tribunal. The claimant also exhibited another Insurance Policy as Ext. 4 which was valid upto 15.07.91. 6. On perusal of the Insurance Policy Ext. 3, it is crystal clear that the effective date and the hour of commencement of the policy is 2.45 PM of 16.07.91. 7. Regarding the time of motor accident which took place on 16.07.91, the appellant/Insurance Company had filed written statement before the Claims Tribunal stating that the said vehicular accident of the offending vehicle took place at 10 AM of 16.07.91. From the record, it appears that in support of the case of the appellant/Insurance Company, some documents including the report of the hospital Superintendent where the victim's husband was admitted and treated had been filed. As per the report of the hospital Superintendent which had been filed and exhibited as Ext. Gha, it appears that the victim husband was admitted to the hospital at 1.35 PM of 16.07.91. The claimant herself i.e. respondent No. 1, when she was examined as PW-1 before the Motor Accident Claims Tribunal, stated that her husband was admitted to the hospital between 12.30 to 1.00 PM of 16.07.91. 8. From the statement of the PW-1 as well as from the said hospital record, it appears that the said accident took place before 2.45 PM on 16.07.91. The learned Motor Accident Claims Tribunal in the impugned judgment and award dated 16.12.99 made a finding that as the insurance of the offending vehicle with the appellant/Insurance Company was only a renewal of the earlier policy on 16.07.91 at 2.45 PM, the continuity of the earlier policy can easily be presumed. For easy reference, the relevant finding of the learned Tribunal in the impugned judgment and award dated 16.12.99 is quoted hereunder: The learned advocate also argued by giving reference to reported law that effectiveness is from the commencement of that date i.e. from previous midnight, if the policy is not avoided or cancelled. It is argued in the light of the judgment of the aforesaid referred case that it is only the date and date certainly starts from the previous midnight. It is argued in the light of the judgment of the aforesaid referred case that it is only the date and date certainly starts from the previous midnight. The learned advocate also referred another case law 1950 T.A.C. SC 133 that in case the policy on the date, the accident occurred, it would be operative from the previous midnight and the Insurance Company will be liable effectiveness of the policy from the commencement of the day. It is argued to say that when a policy is taken on a particular date, its effectiveness is from the commencement of the date and therefore, the Insurance Company is liable. In the instant case it is seen that there was a policy in force with the same Insurance Company which expired on the midnight of 15.07.91 and that the policy was renewed on 16.07.91 at 2.45 P.M. The continuity of the policy can easily be presumed in the light of the aforesaid decision of the Hon'ble High Court and Supreme Court. The policy can be easily determined even if accident occurred according to the opposite party Insurance Company at 10 A.M. and not at 4 P.M. as claimed by the claimant. So, on careful perusal and appreciation of evidence on record, I have no hesitation to hold that the accident took place at that time claimed by the claimant and that it was covered by policy with the opposite party No. 3 Insurance Company. On the other hand, the policy in force covering the date of accident which is Ext. 3 is in continuity of policy Ext. 4 which also gives continuity of the aforesaid policy covering the risk by the O.P. Insurance Company. 9. Mr Dutta, learned Counsel appearing for the appellant in order to substantiate his case had referred to the decisions of the Apex Court. (1) National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi (Smt.) and Ors. AIR 1997 SC 2147 . (2) Oriental Insurance Co., Ltd. v.Sunita Rathi and Ors. AIR 1997 SC 4228. (3) National Insurance Company Ltd. v. Chinto Devi (Smt) and Ors. (2000) 7 SCC 50 and (4). New India Insurance Co. v. Bhagwati Devi and Ors. (1998) 6 SCC 534 . 10. The Apex Court in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi (Smt.) and Ors. (supra) after discussing the earlier decision of the Apex Court (Two Judges) in New India Assurance Co. (2000) 7 SCC 50 and (4). New India Insurance Co. v. Bhagwati Devi and Ors. (1998) 6 SCC 534 . 10. The Apex Court in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi (Smt.) and Ors. (supra) after discussing the earlier decision of the Apex Court (Two Judges) in New India Assurance Co. v.Ram Dayal [1990] 2 SCR 570 held that the Insurance Policy would be operative from the hour and date mentioned in the policy and the earlier policy would not be operative from the midnight of the day on which the earlier policy expired. Paras 2 and 3 of the SCC in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi (Smt.) and Ors. AIR 1997 SC 2147 are quoted hereunder: Para 2. The tribunal also had recorded, as a fact, that on 25.10.1983 at 4.00 p.m. the contract of renewal had come into force and it would be operative upto 24.10.1984. The tribunal also recorded, as a fact, that the accident had occurred on 25.10.1983 at 11.14 a.m. that is, before the renewal of the contract. Under these circumstances, it would be clear that the accident had occurred when the renewal had not taken effect. Para 3. This Court in New India Assurance Co. Ltd. v. Ram Dayal had held that in the absence of any specific time mentioned in that behalf, the contract would be operative from the midnight of the day by operation of provisions of the General Clauses Act, 1897. But in view of the special contract mentioned in the insurance policy, namely, it would be operative from 4.00 p.m. on 25.10.1983 and the accident had occurred earlier thereto, the insurance coverage would not enable the claimant to seek recovery of the amount from the appellate Company. 11. The ratio laid down by the Apex Court in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi (Smt.) and Ors. (supra) had been followed in Oriental Insurance Company Ltd. v. Sumita Rathi and Ors. (supra), New India Insurance Co. v. Bhagwati Devi and Ors. (supra) and National Insurance Co. Ltd. v. Chinto Devi (Smt) and Ors. (supra). Paras 2 and 3 of SCC in Oriental Insurance Company Ltd. v. Sumita Rathi And Ors. (supra) are quoted hereunder: Para 2. (supra) had been followed in Oriental Insurance Company Ltd. v. Sumita Rathi and Ors. (supra), New India Insurance Co. v. Bhagwati Devi and Ors. (supra) and National Insurance Co. Ltd. v. Chinto Devi (Smt) and Ors. (supra). Paras 2 and 3 of SCC in Oriental Insurance Company Ltd. v. Sumita Rathi And Ors. (supra) are quoted hereunder: Para 2. The motor accident occurred on 10.12.1991 at 2.20p.m. It was only thereafter the same day at 2.55 p.m. that the insurance policy and the cover note were obtained by the insured, owner of the motor vehicle involved in the accident. There is express mention in the cover note that the effective date and time of commencement of the insurance for the purpose of the Act was 10.12.1991 at 2.55 p.m. The applicability of the decision in Ram Dayal case has to be considered on these facts. In our opinion the decision in Ram Dayal case is distinguishable and has no application to the facts of this case. The facts of that decision show that the time of issuance of the policy was not mentioned therein and the question, therefore, was of presumption when the date alone was mentioned and not the time at which the insurance was to become effective on mat date. In such a situation, it was held in Ram Dayal Case that in the absence of any specific time being mentioned, the logical inference to draw was that the insurance become effective from the previous midnight and, therefore, for an accident which took place on the date of the policy, the insurer became liable. There is no such difficulty in the present case in view of the clear finding based on undisputed facts that the accident occurred at 2.20 p.m. and the cover note was obtained only thereafter at 2.55 p.m. in which it was expressly mentioned that the effective date and time of commencement of the insurance for the purpose of the Act was 10.12.1991 at 2.55pm. The reliance on Ram Dayal case by the Tribunal and the High Court was, therefore, misplaced. We find that in a similar situation, the same view which we have taken, was also the view in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi wherein Ram Dayal case was distinguished on the same basis. Para 3. The reliance on Ram Dayal case by the Tribunal and the High Court was, therefore, misplaced. We find that in a similar situation, the same view which we have taken, was also the view in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi wherein Ram Dayal case was distinguished on the same basis. Para 3. It follows that the insurer cannot be held liable on the basis of the above policy in the present case and, therefore, the liability has to be of the owner of the vehicle. However, we find that the High Court, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the High Court on this point. Para 4 and 5 of SCC National Insurance Co. Ltd. v. Chinto Devi (Smt) and Ors. are quoted hereunder: Para 4. However, there is dispute of time as to when this insurance policy was issued. According to the insured the policy was taken out at 10.00 a.m. and not 4.45 pm. Reliance is placed on his deposition and that insurance policy does not refer to any time though the date is there. Further submission is that no cover note was issued to the insured. On the other hand, submission on behalf of the appellant is that the cover note clearly indicates date and time of the insurance policy and thus non-mentioning of time in the insurance policy would be of no consequence as it can only follow the cover note. Further the insurance policy refers to the number of cover note correlating to the same number as that referred in the cover note. Therefore, submission is that the time recorded in the cover note is correct. The insured seriously disputes the time of issuance of the insurance policy. Para 5. Further the insurance policy refers to the number of cover note correlating to the same number as that referred in the cover note. Therefore, submission is that the time recorded in the cover note is correct. The insured seriously disputes the time of issuance of the insurance policy. Para 5. It is not necessary for us to enter into this controversy in this appeal regarding the correctness of time of the issuance of the insurance policy as this is a question of fact and this point has not been adjudicated by the Tribunal or taken note of by the High Court. But now in view of the decision by this Court, in the aforesaid two cases, the adjudication of time becomes necessary for which it would be necessary that now adjudication be made by the Tribunal as to what was the time of the insurance of the policy itself. In view of this, we set aside the impugned order of the High Court qua the liability of the Insurance Company and remand the case back to the Tribunal for deciding the aforesaid limited question regarding the time when the insurance policy was issued and then decide consequential liability if any, on the Insurance Company. Since this point was not in issue then, we grant opportunity to both the parties to lead any further evidence if they are so advised before the Tribunal to the extent it affects the appellant. 12. From the ratio laid down by the Apex Court in the cases discussed above, it is now settled law that the Insurance Policy would be effective from the time and date mentioned in the insurance policy itself and, even if, there was earlier policy which had been expired, the new policy would not be taken as continuation of the earlier policy. 13. In the instant case, it appears that the said vehicular accident of the offending vehicle took place before 2.45 PM on 16.07.91. Therefore, the appellant/Insurance Company cannot be fasten with the compensation amount of Rs.1,50,000/- (One lack fifty thousand) mentioned in the impugned judgment and award dated 16.12.99. 13. In the instant case, it appears that the said vehicular accident of the offending vehicle took place before 2.45 PM on 16.07.91. Therefore, the appellant/Insurance Company cannot be fasten with the compensation amount of Rs.1,50,000/- (One lack fifty thousand) mentioned in the impugned judgment and award dated 16.12.99. The owner of the vehicle/respondent No. 4, Sri Upen Chandra Bhuyan shall make the payment of compensation of Rs.1,50,000/- (One lack fifty thousand) as mentioned in the impugned award dated 16.12.99 within 2(two) months from today with an interest of 15% per annum from the date of institution of the said MAC Appeal till realization. 14. The appellant/Insurance Company is at liberty to recover the amount of Rs.50,000/-(Fifty thousand) already paid as no fault liability to the claimant from the owner i.e. respondent No. 4, Sri Upen Chandra Bhuyan. 15. Registry is directed to release a statutory amount of Rs.25,000/- (Twenty five thousand) deposited by the appellant/Insurance Company at the time of filing of the present appeal to the Insurance Company. With the above observations and directions, this appeal is disposed of.