Research › Search › Judgment

Allahabad High Court · body

2019 DIGILAW 1756 (ALL)

National Insurance Co Ltd. v. Neelam

2019-07-23

RAJNISH KUMAR

body2019
JUDGMENT : Rajnish Kumar, J. 1. Heard, Shri R.C.Sharma, learned counsel for the appellant. None appeared for the respondents even in the revised list. 2. The instant First Appeal From Order under Section 173 of the Motor Vehicles Act, 1988 has emanated from the judgment and award dated 30.03.1996, passed in Motor Accident Claim Petition No.19 of 1994 (Smt.Neelam and others Versus Sohan Lal Tandon and others) by the Motor Accident Claims Tribunal/IV Additional District Judge, Hardoi. By the impugned judgment and award in appeal the learned Motor Accident Claims Tribunal (hereinafter referred as MACT) has awarded compensation of Rs.1,20,000/- to the legal heirs of the deceased Daya Shanker as per the apportionment made in the order. 3. Brief facts of the case giving rise to the instant appeal are that the deceased Daya Shanker was going from Mallawan to Hardoi on 26.10.1993 by Bus No.USD-3940. The accident occurred at about 6.30 p.m. due to collision between the Bus No.USD-3940 and Tractor No.UP-30-5741. On account of accident, the deceased suffered serious injuries and he died. Therefore the claim petition No.19 of 1994, claiming compensation, was filed by his wife Smt. Neelam @ Dayawati and the minor daughters and son, namely, Km.Anupam, Rahul, Km.Ruby and Km.Suchi and the widow mother of the deceased Smt. Rama Devi against the owner of the vehicles and the Insurance Companies, namely, the Oriental Insurance Company and the National Insurance Company. 4. After exchange of pleadings, seven issues were framed and certain documents were filed by the parties. Thereafter, after evidence and hearing the parties, the learned Tribunal allowed the claim petition and awarded an amount of Rs.1,20,000/- as compensation holding the contributory negligence of the bus and the tractor involved in the accident and directed to the Oriental Insurance Company Limited and the National Insurance Company Limited i.e. insurer of the vehicles to pay Rs.60,000/- each along with 12% interest. It has further been provided that out of the compensation awarded Smt. Nilam @ Dayawati will get Rs.35,000/- Km. Anupam Rs.20,000/-, Rahul Rs.20,000/-, Km. Ruby Rs.20,000/- and Km. Suchi Rs.20,000/- and Smt. Rama Devi Rs.5,000/-. It has further been provided that the amount awarded to Km. Anupam, Km. Ruby, Km. Suchi and Rahul would be deposited in the State Bank of India for a period of 8 years. Anupam Rs.20,000/-, Rahul Rs.20,000/-, Km. Ruby Rs.20,000/- and Km. Suchi Rs.20,000/- and Smt. Rama Devi Rs.5,000/-. It has further been provided that the amount awarded to Km. Anupam, Km. Ruby, Km. Suchi and Rahul would be deposited in the State Bank of India for a period of 8 years. Hence the present appeal has been filed by the National Insurance Company Limited (opposite party no.8 in the Claim Petition) for setting aside the impugned award dated 30.03.1996 to the extent of the liability fixed on the appellant; National Insurance Company Ltd. 5. Submission of learned counsel for the appellant is that the tractor involved in the accident bearing Registration No.UP-35-7541 belonging to the respondents no.10, 11 and 12 was ensured by the appellant Insurance Company w.e.f. 30.09.1992 to 29.09.1993 and thereafter w.e.f. 01.11.1993 to 31.10.1994 as such, there was a gap between the earlier policy which lapsed on 29.09.1993 and the next policy which had started w.e.f. 01.11.1993 so it was not insured on the date of accident in question i.e. 26.10.1993. Therefore, there was no contract of insurance between the appellant and the owners of the Tractor i.e. the respondents no.10, 11 and 12 on the said date. As there was no contract of insurance on the date of accident, therefore, the appellant is not liable to pay any compensation on account of death of Daya Shanker as a consequence to the accident in question. 6. Learned counsel for the appellant, relying on Section 64-VB of the Insurance Act, 1938, submitted that no insurer shall assume any risk till the premium is received in advance. In other words, the insurance cover becomes available only on payment of premium and in the present case premium was paid on 01.11.1993, five days after the accident. Learned counsel for the appellant has relied on the case laws New India Assurance Company Ltd. Vs. Smt. Sita Bai and Ors., 2000 1 TAC 3 (SC) and New India Assurance Company Ltd. Vs. Bhagwati Devi & Ors., 1999 2 TAC 441 (SC). 7. Learned counsel for the appellant submitted that the learned claims Tribunal has misread the statutory validity clause of the cover note which provides that the validity of this cover note will expire within two months which does not mean that the insurance cover would continue for a period of two months after its completion. 7. Learned counsel for the appellant submitted that the learned claims Tribunal has misread the statutory validity clause of the cover note which provides that the validity of this cover note will expire within two months which does not mean that the insurance cover would continue for a period of two months after its completion. But it is in terms of the statutory provision in Rule 142 of the Central Motor Vehicles Rules 1989 and the said period is the validity period of the cover note and it has been provided because actual policy is issued and sent subsequently which takes some time. 8. He further informed that the Insurance Company of the Bus involved in the accident has already satisfied his part of the award. 9. On the basis of above learned counsel for the appellant submitted that the impugned judgment and award is not sustainable in the eyes of law and prayed to allow the present appeal with costs and set aside the judgment and award dated 30.03.1996 to the extent the liability has been fixed on the appellant-National Insurance Company Ltd. 10. I have considered the submissions of the learned counsel for the appellant and perused the records of this First Appeal From Order as well as the Lower Court Record. 11. The claim petition was filed by the respondents-claimants No.1 to 6 on account of the death of Daya Shanker in the accident which occurred on 26.10.1993 at about 6.30 p.m. due to collision between the Bus No.USD-3940 and the Tractor No.UP-30-5741. The deceased Daya Ram was travelling in the bus in question at the time of accident. He suffered serious injuries in the accident and succumbed to his injuries and died. After considering the pleadings and evidence the learned Tribunal recorded a finding that the accident was on account of the contributory negligence of the rash and negligent driving of the driver of Bus and the driver of the tractor. The factual finding regarding the accident recorded by the learned Tribunal has not been challenged. 12. The sole argument of the learned counsel for the appellant in the appeal is that the insurer of the tractor i.e. the appellant is not liable to pay the compensation in absence of contract of insurance on the date of accident between the appellant-National Insurance Company Ltd. and the owners of the vehicle (tractor). 12. The sole argument of the learned counsel for the appellant in the appeal is that the insurer of the tractor i.e. the appellant is not liable to pay the compensation in absence of contract of insurance on the date of accident between the appellant-National Insurance Company Ltd. and the owners of the vehicle (tractor). Perusal of the written statement filed by the appellant-National Insurance Company before the Claims Tribunal indicates that it was specifically denied that the bus No.USD-3940 and the tractor No.UP-30-5741 were insured with the insurance company. The owner and driver of the vehicle had filed a common written statement. They neither pleaded in their written statement nor lead any evidence to establish insurance coverage on the date of accident ie. 26.10.1993. On the contrary Abdul Hamid; owner of the vehicle, examined as O.P.W.1, admitted in his evidence on oath that the insurance of the tractor had lapsed 6-7 days before the date of accident. In the cross examination also he admitted that on the date of accident the tractor was not insured and it had expired 6-7 days before the date of accident. As such the owner of the tractor failed to discharge his burden to prove the insurance coverage of the vehicle in question on the date of accident. 13. On the other hand the copy of the cover note of the insurance coverage issued by the National Insurance Company Limited filed as paper No.52-ga before MACT shows that the tractor in question was insured w.e.f. 01.11.1993 to 31.10.1994. A copy of the other cover note of the Insurance coverage of the tractor filed with the appeal shows that it was insured w.e.f. 30.09.1992 to 29.09.1993 which is recorded in the impugned judgment and award also, therefore, it is crystal clear that on the date of accident i.e. 26.10.1993 the offending tractor UP-30-5741 was not insured by the appellant Insurance Company. 14. The question, therefore, which falls for consideration is as to whether the MACT has misread the statutory mandatory clause mentioned in the cover note that the validity of the cover note will expire within two months and erred in holding that the appellant-National Insurance Company Limited is liable for paying compensation for and on behalf of owners of the offending tractor No.UP-30-5741 even in absence of the contract of insurance on the date of accident. 15. 15. Chapter XI of the Motor Vehicles Act, 1988 (here-in-after referred as the Act of 1988) provides the Insurance of motor vehicles against the third party risks. Section 145(a) provides the meaning of the "authorised insurer". Sub-section (b) provides "certificate of insurance" meaning a certificate issued by an authorised insurer in pursuance of sub-section (3) of Section 147 and includes a cover note complying with such requirements as may be prescribed, and where more than one certificate has been issued in connection with a policy, or where a copy of a certificate has been issued, all those certificates or that copy, as the case may be. Therefore a cover note is a certificate of insurance, but the cover note will be valid for the period mentioned on it. 16. Section 146 (1) of the Act of 1988 provides that no person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter. However, the said section shall not apply to the vehicles owned by Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise and the appropriate Government may also exempt certain authorities mentioned therein. Therefore, the motor vehicle except and unless exempted cannot be used in a public place unless it has a policy in force in relation to the use of vehicles. 17. Section 147 provides the requirements of policies and limits of liability. Section 147 is extracted below:- "147 Requirements of policies and limits of liability. Therefore, the motor vehicle except and unless exempted cannot be used in a public place unless it has a policy in force in relation to the use of vehicles. 17. Section 147 provides the requirements of policies and limits of liability. Section 147 is extracted below:- "147 Requirements of policies and limits of liability. -- (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which-- (a) is issued by a person who is an authorised insurer; and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)-- (i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place: Provided that a policy shall not be required-- (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen's Compensation Act, 1923 (8 of 1923) in respect of the death of, or bodily injury to, any such employee-- (a) engaged in driving the vehicle, or (b) if it is a public service vehicle engaged as conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. Explanation. Explanation. --For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:-- (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand: Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases. (4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe. (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons." 18. Sub-Section (3) of Section 147 specifically provides that a policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed Form and containing the prescribed particulars of any condition subject to which the policy is issued etc. Sub-section (4) provides that where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe. Therefore it is apparent that the period prescribed on the cover note is for the validity of the cover note during which period the policy of insurance can be issued. 19. The insurance of motor vehicles against third party risks has been provided under Chapter VII of the Central Motor Vehicles Rules, 1989. Rule 141 provides that an authorised insurer shall issue to every holder of a policy of insurance, a certificate of insurance in Form 51 in respect of each such vehicle. Rule 142(1) provides that every cover note issued by an authorised insurer shall be in Form 52 and as per sub-rule (2) a cover note shall be valid for a period of sixty days from the date of its issue and the insurer shall issue a policy of insurance before the date of expiry of the cover note. Rule 142 and Form 52 are extracted below:- "142. Cover notes.- (1) Every cover note issued by an authorised insurer shall be in Form 52. Rule 142 and Form 52 are extracted below:- "142. Cover notes.- (1) Every cover note issued by an authorised insurer shall be in Form 52. (2) A cover note referred to in sub-rule (1) shall be valid for a period of sixty days from the date of its issue and the insurer shall issue a policy of insurance before the date of expiry of the cover note." FORM 52 [See rule 42 (1)] COVER NOTE 1. Registration mark, number and description of the vehicle insured …………….. 2. Name and address of insured …………… 3. Effective date and time of commencement of insurance for the   purpose of this Act. …………… 4. Date of expiry of insurance …………… 5. Persons or classes of persons entitled to drive …………… 6. Any limitations as to use of motor vehicle …………… 7. The period of validity of this cover note will expire on …………… I/We hereby certify that this cover note is issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, 1988. Authorised Insurer" 20. It is specifically mentioned at the cover note that Form 52 Rule 142(1) of the Central Motor Vehicles Rules, 1989. As per sub-rule (2) of Rule 142 a cover note shall be valid for a period of 60 days. Therefore, in view of the statutory requirement it is mentioned in the cover note issued to the respondents no.10, 11 and 12 that the validity of this cover note is two months, which cannot be construed that the period of policy of insurance has been extended for a period of two months. The effective date and time of commencement of insurance and date of expiry of insurance are given at serial no.3 and 4 respectively, which was in the present case w.e.f. 30.09.1992 to mid-night of 29.09.1993. Therefore, the finding recorded by the learned Tribunal that the tractor was ensured w.e.f. 30.09.1992 to 29.09.1993 and thereafter two months further period was provided for its legal validity is against the statutory prescription and based on misreading of the provision, therefore, the finding recorded in this regard is perverse and against law which is not sustainable. 21. Therefore, the finding recorded by the learned Tribunal that the tractor was ensured w.e.f. 30.09.1992 to 29.09.1993 and thereafter two months further period was provided for its legal validity is against the statutory prescription and based on misreading of the provision, therefore, the finding recorded in this regard is perverse and against law which is not sustainable. 21. Sub-Section (5) of Section 147 provides that an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons. Therefore an insurer will be liable to indemnify if there is a policy. 22. Section 64-VB of the Indian Insurance Act, 1938 would be relevant in this regard. It is extracted as under:- "64-VB. No risk to be assumed unless premium is received in advance.-- (1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner. (2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer. Explanation.--Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be. (3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent. (4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collection excluding bank and postal holidays. (5) The Central Government may, by rules, relax the requirements of sub-section (1) in respect of particular categories in insurance policies." [(6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer.]" 23. The aforesaid provision of the Insurance Act makes it clear that no insurer shall assume any risk in respect of any insurance policy unless and until the premium payable is received by him from the insured in such manner and within such time as may be prescribed in advance and as such the insured Tractor owners in the present case cannot be benefited from the insurance cover certificate obtained subsequent to the date of accident by paying premium on a date later to the accident. 24. The witness (O.P.W.1) for the owners of the offending tractor has admitted in his cross-examination that mistakenly a gap of few days occasioned between two policies of insurance. This is also an established law that Court has to look into the contract of insurance to discern whether any particular time has been specified for commencing or expiry, as the case may be, of the policy of the insurance. This court finds that specific period has been provided. 25. Section 149(1) provides the duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. For the purpose of convenience the entire Section 149 of the Act of 1988 is extracted below:- "149. This court finds that specific period has been provided. 25. Section 149(1) provides the duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks. For the purpose of convenience the entire Section 149 of the Act of 1988 is extracted below:- "149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-- (1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (l) of section 147 (being a liability covered by the terms of the policy) 1[or under the provisions of section 163A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:-- (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-- (i) a condition excluding the use of the vehicle-- (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the non- disclosure of a material fact or by a representation of fact which was false in some material particular." (3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India: Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2). (4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. (5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. (6) In this section the expression "material fact" and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy. (7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation.--For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168." 26. Explanation.--For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168." 26. On bare reading of aforesaid provisions, it becomes clear that compulsorily before the use of motor vehicle an insurance is necessary as provided under Section 147 of the Motor Vehicles Act, 1988. Thereafter only, the insurer has a liability to compensate in respect of death or bodily injury to any person including owner of the goods or his authorized representative, candidate in the vehicle or admitted to any property of third party caused by, arisen out of the use of the vehicle in a public place. For the purpose of the Section, the owner of the vehicle is insured who enters into the contract of insurance to cover the third party risk with the insurer. Section 149 which assigns a duty to the insurer as a liability under the statute to satisfy the judgment and awards against the person insured in respect of third party risk though he might not have any liability arising out of the contract of insurance existing between him and the insurer. This statutory obligation of insurer is thus by virtue of the mandatory contract of insurance under Section 147 of the Act between the insurer and the insured. This statutory obligation above and beyond the obligation under the terms of existing contract of insurance is imposed by reason of the beneficient scheme of the Act provided in favour of the accident victims. Though Sub-Section (2) of Section 149 of the Motor Vehicle Act provides some defences to the insurer in case of any breach of specified conditions of the policy on the ground that the policy is void, it was obtained by non-disclosure of a material fact or by a representation of fact which was false in some material particular. Section 149 (4) provides that even in the case of breach of any condition specified in the terms of policy which has been issued under Sub-Section (3) of Section 147, the insurance company has to first pay the damages as awarded by the Court against the insured to the third person and then to recover from the insurer. Section 149 (4) provides that even in the case of breach of any condition specified in the terms of policy which has been issued under Sub-Section (3) of Section 147, the insurance company has to first pay the damages as awarded by the Court against the insured to the third person and then to recover from the insurer. As such all these provisions pre-supposes existence of a contract of insurance necessary between the insurer and the insured at the time when the death or bodily injury occurred to a third party in the use of motor vehicle. 27. Now the question arises as to whether the Insurance Company is liable to make the payment with liberty to recover it from the insured even if there is no contract of insurance on the date of accident. The Hon'ble Apex Court in the case of National Insurance Company Limited Versus Swarn Singh and others, 2004 3 SCC 297 , after considering Section 149(2) of the Act of 1988, held in paragraphs 39 to 42 as under:- "39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject matter of decisions in a large number of cases. 40. It is beyond any doubt or dispute that under Section 149 (2) of the Act an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action on any of the grounds mentioned therein. 41. However, Clause (a) opens with the words "that there has been a breach of a specified condition of the policy", implying that the insurer's defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence. 42. We may also take note of the fact that whereas in Section 3 the words used are 'effective licence', it has been differently worded in Section 149 (2) i.e. ' duly licensed'. 42. We may also take note of the fact that whereas in Section 3 the words used are 'effective licence', it has been differently worded in Section 149 (2) i.e. ' duly licensed'. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 149 of the Act but Section 149 pertains to insurance as regard third party risks." 28. The aforesaid judgment of the Hon'ble Apex Court thus deals with the defences taken by the Insurance Companies in common in regard to a contract of insurance which is like any other contract and the intention of the parties must be gathered from the expressions used therein. In case of breach of the terms and conditions of the contract, which can be deduced from the policy, the Companies are not liable to pay the compensation. The Hon'ble Apex Court has held that as such in the case of a contract of insurance the liability of the insurer to satisfy the decree at the first instance under the Act of 1988 may by considered as primary duty under sub-section (4) & (5) of Section 149 of the Act being the beneficial legislation. The Hon'ble Apex Court has also held that the liability of the insurer is statutory and he should satisfy the decree passed in faovur of the third party. 29. Having considered the facts and circumstances of the present case in the light of the directions issued by the Hon'ble Apex Court in the case of Swarn Singh (Supra) this court finds that the award of the learned Tribunal has not been challenged on the grounds mentioned in Section 149(2) of the Act of 1988 regarding breach of policy or under the circumstances considered in the said judgment. The term 'breach' used in the Motor Vehicles Act, 1988 has its dictionary meaning 'an act of breaking promise, agreement or relationship'. This also indicates that there must be some agreement between the insurer and insured and on account of violation of the terms and conditions of the agreement the provisions of Section 149(2) of the Act would be attracted. The term 'breach' used in the Motor Vehicles Act, 1988 has its dictionary meaning 'an act of breaking promise, agreement or relationship'. This also indicates that there must be some agreement between the insurer and insured and on account of violation of the terms and conditions of the agreement the provisions of Section 149(2) of the Act would be attracted. As such in case breach of terms and conditions on the part of the insured has been established the duty to satisfy the judgment and award by the Insurance Company against the insured arises with right to recover thereafter from him as provided under Section 149(4) and (5) of the Act. But in the present case the challenge of the impugned judgment and award is mainly on the ground that there was no contract as the vehicle in question was not insured on the date of accident. Therefore the contention of the learned counsel for the appellant not to satisfy the award in absence of contract is liable to be considered failing which it would render the proviso of sub-section (4) as well as sub-section (5) of Section 149 of the Act of 1988 otiose. 30. The Hon'ble Apex Court in the case of National Insurance Company Limited Versus Parvathneni and another, 2009 8 SCC 785 , on challenge to the judgment of the High Court on the ground that there was no insurance coverage for the vehicle on the date of accident so it is not liable to pay the compensation, but the High Court had directed to pay the compensation to the claimants with liberty to the Insurance Company to recover the same from the owner, the Hon'ble Apext Court referred the matter to a larger bench to decide the following questions:- "(i) If an Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under Motor Vehicle Act, 1988 or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle? (ii) Can such a direction be given under Article 142 of the Constitution of India and what is the scope of Article 142? Does Article 142 permits the Court to create a liability whether there is none? 31. (ii) Can such a direction be given under Article 142 of the Constitution of India and what is the scope of Article 142? Does Article 142 permits the Court to create a liability whether there is none? 31. The aforesaid judgment specifically formulated the question that if an Insurance Company can prove that it does not have any liability to pay any amount to the claimants under the Motor Vehicles Act or any other enactment, can the court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle. 32. On the aforesaid reference the Larger Bench of three Hon'ble Judges dismissed the Special Leave to Appeal with the observations that the questions of law raised in the petition are kept open to be decided in appropriate case in National Insurance Company Limited Versus Parvathneni, 2018 9 SCC 657 . 33. In view of above this court finds that the learned Tribunal has not traversed into the pleadings and evidences as to the extent of contract of insurance between the appellant-Insurance Company and the owners of the offending Tractor No.UP-30-5741. As discussed above the claimant-respondents or the owners of the tractor have failed to establish that there was a contract of insurance on the date of accident i.e. 26.10.1993, rather it has been admitted by the owner that there was no insurance on the date of accident. The Insurance Company has also succeeded in proving that there was no insurance on the date of accident as as per the cover note (supra) the insurance was w.e.f. 30.09.1992 to 29.09.1993 and thereafter from 01.11.1993 to 31.10.1994, which remained un-rebutted. The learned Tribunal, despite specific pleading of non existence of the insurance coverage on the date of accident, did not frame any issue as to the non existence of contract of insurance between the appellant-Insurance Company and the offending tractor or as to the liability of the appellant-Insurance Company towards the risk covered in use of motor vehicle, on the relevant date of accident in absence of any insurance coverage certificate against such risk. The learned Tribunal without recording any finding in regard to the said relevant question held the appellant-Insurance Company liable to pay compensation for and on behalf of the owners of the offending vehicle (tractor) to the claimants under the Motor Vehicles Act 1988. 34. The learned Tribunal without recording any finding in regard to the said relevant question held the appellant-Insurance Company liable to pay compensation for and on behalf of the owners of the offending vehicle (tractor) to the claimants under the Motor Vehicles Act 1988. 34. In view of above this court is of the considered opinion that the learned Tribunal has erred in law as well as on facts in directing the appellant-Insurance Company to pay the 50% of the compensation under the award to the claimants because there was no contract of insurance coverage existing at the relevant date when the accident occurred. 35. A three judges bench of Hon'ble Apex Court in the case of Oriental Insurance Company Limited Versus Sunita Rathi and others, 1998 1 SCC 365 /1998(1) TAC 697 (SC) has held that when the insurance policy and the cover note was obtained by the insured subsequent to the accident even though on the same date the liability will have to be of the owner of the vehicle. 36. Considering the above and other judgments Hon'ble Apex Court, in the case of National Insurance Company Ltd. Versus Sobina Iapai (Smt.) and others, 2007 7 SCC 786 held in paragraph 19 as under:- "19.In order to curb this widespread mischief of getting insurance policies after the accidents, it is absolutely imperative to clearly hold that the effectiveness of the insurance policy would start from the time and date specifically incorporated in the policy and not from an earlier point of time. 37. The Hon'ble Apex court, in the case of J. Kalaivani & others Versus K.Shivashankar & another, 2007 7 SCC 792 , has held that the interregnum created the void in respect of the vehicle vis-à-vis the Insurance Company cannot be mulcted with the liability in respect of the award granted by the Tribunal. The relevant paragraph 6 is reproduced as under:- "6.Therefore the position has become now well-nigh settled. The Court has to look into the contract of insurance to discern whether any particular time has been specified for commencement or expiry, as the case may be, of the policy of insurance. The copies of the erstwhile policy as well as the present policy have been produced for our perusal, the authenticity of which has not been questioned before us. The copies of the erstwhile policy as well as the present policy have been produced for our perusal, the authenticity of which has not been questioned before us. The erstwhile policy shows that it expired by the midnight of 7-2-1996 by specific terms incorporated in the policy. The next policy has clearly indicated that it had commenced only at 10.00 a.m. on 8-2-1996. The interregnum created the void in respect of the vehicle vis-à-vis the Insurance Company. The unavoidable consequence of it is that the Insurance Company cannot now be mulcted with the liability in respect of the award granted by the Tribunal." 38. In the case in hand the erstwhile policy shows that it expired by midnight of 29.09.1993 and the next policy commenced on 01.11.1993. Therefore there was a void in the interregnum in respect of its vehicle i.e. tractor no.UP-30-5741 and the appellant insurance company. Therefore, the appellant insurance company cannot be held liable for payment of compensation on account of accident during the said period. 39. In view of above this court is unable to uphold the impugned judgment and award dated 30.03.1996 passed by the learned Tribunal and constrained to hold that the learned Tribunal has erred in directing the appellant Insurance Company to pay 50% compensation for and on behalf of the owners of the offending vehicle (tractor) in absence of any contract of insurance coverage. 40. The F.A.F.O. No.145 of 1996 is, accordingly, allowed. The part of the impugned judgment and award dated 30.03.1996 by which the appellant-National Insurance Company Limited has been directed to pay 50% of the total compensation to the claimants for and on behalf of owners of the offending vehicle is modified to the extent that the 50% of the amount of the award shall be paid by the owners of the tractor no.UP30-5741 i.e. the respondents no.10, 11 and 12 jointly and severely in terms of the impugned judgment and award dated 30.03.1996 along with interest as awarded by the Tribunal, which shall be paid by them within a period of 60 days from the date of this judgment. No order as to costs. 41. The amount, if any, deposited by the appellant in this F.A.F.O., shall be refunded to the appellant in accordance with law. 42. Lower court record be sent back to the M.A.C.T. concerned forthwith.