Research › Search › Judgment

Gauhati High Court · body

2019 DIGILAW 767 (GAU)

New India Assurance Co Ltd v. Abharani Handique

2019-06-19

KALYAN RAI SURANA

body2019
JUDGMENT : Kalyan Rai Surana, J. Heard Mr. K.K. Bhatta, learned counsel for the appellant- insurer. Also heard Mr. M.B.U. Ahmed, learned counsel for respondent Nos.1 to 5 claimants, and Mr. P.P. Das, learned counsel appearing for respondent No.6, i.e. the owner of the offending vehicle. 2. By this application under section 173 of the Motor Vehicles Act, the appellant- insurer has challenged the judgment and award dated 15.12.2012, passed by the Learned Member, Motor Accident Claims Tribunal, Dibrugarh in MAC Case No.62/2011 corresponding to MAC Case No. 312/2006. By the said judgment, the appellant was directed to pay a sum of Rs.7,30,096/- as compensation to the respondent Nos.1 to 5 with interest at the rate of 6% p.a. from the date of filing of the claim petition till realization. 3. In the claim petition, it was projected that on 29.11.2005, while Late Gunaram Handique was riding his motorcycle bearing Registration No. AS-04-D-6773 from Demow to Pothalibam, a truck bearing Registration No. ASQ-6921 which was proceeding from Dibrugarh to Sivasagar side and driven in a rash and negligent manner, hit the motorcycle of the victim. As a result of the injury, the victim died. Accordingly, the respondent Nos.1 to 5 had filed a claim petition seeking compensation. 4. The respondent No.6, who is the owner along with the driver of the said offending truck (Opp. Parties No. 1 and 2 in the claim petition) had filed their joint written statement, wherein it was projected that the deceased coming from opposite direction had hit the rear back side of the truck. It was claimed that the insurance premium was paid by the owner of the vehicle (respondent No.6) at 11.00 am on 29.11.2005, which was accepted by the appellant herein by issuing a money receipt. 5. The appellant, who was the insurer of both the truck as well as the motorcycle had filed its written statement, wherein a plea was taken to the effect that the accident had occurred at 3.00 pm. on 29.11.2005, and after the accident, the appellant had issued the insurance policy at 3.35 pm. on 29.11.2005, covering the risk from 0.00 (zero) hours of 30.11.2005 to the midnight of 29.11.2006. Accordingly, it was claimed that as the accident had occurred at about 3.00 pm on 29.11.2005, the offending vehicle was without a valid insurance coverage at the time of the accident. on 29.11.2005, covering the risk from 0.00 (zero) hours of 30.11.2005 to the midnight of 29.11.2006. Accordingly, it was claimed that as the accident had occurred at about 3.00 pm on 29.11.2005, the offending vehicle was without a valid insurance coverage at the time of the accident. On the basis of pleadings the following issues were framed:- 1. Whether the alleged accident occurred on 29.11.2015 at Dihajan Gaon on NH37 at about 3.00 pm caused due to rash and negligent driving of the driver of the vehicle bearing Registration No. S-Q-6921 (Truck)? 2. Whether Late Gunaram Handique died as a result of the said motor accident? 3. Whether the claimants are entitled to get any compensation for the death of Late Gunaram Handique in the said accident, if so; what will be the just and reasonable amount of compensation? 4. Who amongst the Opposite Parties is liable to pay the compensation to the claimants? 6. In support of the claim, the respondents No.1 to 5 had examined 2 (two) witnesses, viz., appellant No.1 and 3. The appellant herein had also examined 1 (one) witness, namely, Sri Ajay Kumar Das, Assistant Manager, Tinsukia Divisional Office. On appreciating the evidence on record, in respect of issues No.1 and 2, the learned Tribunal had held that the various exhibits viz. FIR (Ext.1), Accident Information Report (Ext.3), Postmortem report (Ext.4), MVI Report (Ext.5) and Death Certificate (Ext.9) were proved and accordingly, it was held that the accident had caused death of the victim and it was further held that the accident involving the offending truck has also not been disputed. Thus, on the basis of evidence of P.W.1 and 2, it was held that the deceased had died in a motor accident out of rash and negligent driving of the offending truck and, as such, the issues No.1 and 2 were decided in favour of the respondent Nos.1 to 5. In respect of issues No.3 and 4, the learned Tribunal had applied the multiplier of 13. Although the salary slip (Ext.8) disclosed that the deceased was getting monthly salary of Rs.23,298/-, but it disclosed that the net salary of the deceased was Rs.8,924/-. After deducting one-third of income towards personal and living expenses of the deceased, the loss of dependency was calculated at Rs.7,20,096/-. Further sum of Rs.5,000/- was awarded towards funeral expenses and loss of consortium respectively. After deducting one-third of income towards personal and living expenses of the deceased, the loss of dependency was calculated at Rs.7,20,096/-. Further sum of Rs.5,000/- was awarded towards funeral expenses and loss of consortium respectively. As regards the policy given effect from the midnight of 30.11.2005, the learned Tribunal had opined that the proposal form (Ext.A) was a photocopy. It was held that as the premium was paid on 29.11.2005, the insurer/appellant had to take the liability of the policy as soon as it receives their premium. Therefore, as the premium was accepted on 29.11.2005 and the accident also took place on the same day, it was held that presumption would be as if the policy coverage would include 29.11.2005 and accordingly, the learned Tribunal held that insurance company cannot escape the liability by giving effect to the policy from zero hours of 30.11.2005 on its whims when admittedly, the premium was accepted on 29.11.2005. Hence, all the issues were decided in favour of the respondents No.1 to 5 (claimants) and the appellant was directed to pay the awarded sum with interest upon adjustment of any payment made under "no fault liability", if any. The awarded amount was directed to be paid within a period of 1 (one) month from the date of the order. 7. The learned counsel for the appellant has placed reliance on the case of (i) Oriental Insurance Co. Ltd. in Porselvi & Anr., (2009) 15 SCC 116 , (ii) National Insurance Co. Ltd. Vs. Sobina Iakai & Ors., (2007) 7 SCC 786 , and (iii) New India Assurance Company Ltd. Vs. Sita Bai & Ors., (1999) 7 SCC 575 and accordingly, it is submitted that as the policy was valid from zero hours of 30.11.2005 to 29.11.2006. Hence, the effect of such policy would only commence on and from the time given in the policy. It is further submitted that date of acceptance of the proposal would be of no consequence in the contact of insurance. 8. Per-Contra, the learned counsel for respondents No.1 to 5 and for the respondent No.6 have both made their respective submissions in support of the impugned judgment and award passed by the learned Tribunal. It is further submitted that date of acceptance of the proposal would be of no consequence in the contact of insurance. 8. Per-Contra, the learned counsel for respondents No.1 to 5 and for the respondent No.6 have both made their respective submissions in support of the impugned judgment and award passed by the learned Tribunal. It is submitted by the learned counsel for respondents No.1 to 5 that they are third party victims of the motor vehicle accident and, as such, they were required to be compensated by the insurer and if the insurance coverage was not available, then the appellant should be permitted to exercise its right to recover the award money from the insurer if at all their plea is found to be sustainable. It is submitted that the accident leading to death of their predecessor had occurred on 29.11.2005, which is more than 14 years ago, and till date, the award passed in their claim petition has not been paid to the respondents No.1 to 5. The learned counsel for respondent No.6 has submitted that the proposal form (Ext. A) proved by the appellant does not contain the signature of any official of the respondent No.6 and moreover, the said exhibited document was a photocopy and, as such, the learned Tribunal had refused to take cognizance of such photocopy and accordingly, there is no infirmity in holding that the insurance premium having been received on 29.11.2005, the starting point of insurance coverage from zero hours of 30.11.2005 was on the whims of the appellant and the same was rightly found to be not sustainable. It is further submitted that the proposal form (Ext. A) could not be a basis to allow the appellant to disown their liability to satisfy the award. Hence, it is submitted that there is no infirmity in the impugned judgment and award dated 15.12.2012, passed by the Learned Member, Motor Accident Claims Tribunal, Dibrugarh in MAC Case No.312/2006. Accordingly, it is submitted that the present appeal was liable to be dismissed with cost. 9. Having examined the materials on record. It is seen that in his evidence- onaffidavit, the DW-1 had stated that the proposal of insurance was accepted at 3.35 pm. on 29.11.2005 and that the policy covered risk from 30.11.2005 to midnight of 29.11.2006 and that the policy was not valid at the material time of accident. 9. Having examined the materials on record. It is seen that in his evidence- onaffidavit, the DW-1 had stated that the proposal of insurance was accepted at 3.35 pm. on 29.11.2005 and that the policy covered risk from 30.11.2005 to midnight of 29.11.2006 and that the policy was not valid at the material time of accident. However, nothing adverse to the appellant was elicited in the cross examination of DW-1. The DW-1 had replied in his cross examination that premium was paid on 29.11.2005. The DW-1 had not received the premium. He had stated that proposal was accepted first and premium was taken later. He had stated that premium was taken by the cashier. This Court finds that Ext.A was a mere photocopy and, as such, the learned Tribunal had rightly rejected to take cognizance of the entries contained in a photocopy document. 10. Therefore, the only point of determination which arises for consideration of this Court is whether the finding by the learned tribunal to the effect that as the premium was accepted on 29.11.2005 and the accident also took place on the same day, presumption would be as if the policy coverage would include 29.11.2005 and the insurance company cannot escape the liability by giving effect to the policy from zero hours of 30.11.2005 on its whims is sustainable on facts and in law. 11. In the case of Porselvi (supra), the Supreme Court of India, on finding that the policy was valid from 29.05.1996 to 28.05.1997, though it was issued on 28.05.1996. Paragraph 4 and 5 thereof is quoted below:- "(4) Learned counsel for the appellant brought to our notice the cover note which clearly indicates that the policy was valid from 29.5.1996 to 28.5.1997 though it was issued on 28.5.1996. A copy of the policy was brought on record. Relevant portion thereof reads as follows: "Effective date of commencement of insurance for the purpose of the Act, from O' clock on (date) 29.5.1996 to midnight of 28.5.1997." (5) A three Judge Bench of this Court in New India Assurance Co. Ltd. v. Sita Bai (Smt) & Ors., (1999) 7 SCC 575 inter alia observed as follows: "6. The correctness and applicability of the judgment in Ram Dayal case, (1990) 2 SCC 680 came up for consideration before this Court subsequently in a number of cases. In New India Assurance Co. Ltd. v. Sita Bai (Smt) & Ors., (1999) 7 SCC 575 inter alia observed as follows: "6. The correctness and applicability of the judgment in Ram Dayal case, (1990) 2 SCC 680 came up for consideration before this Court subsequently in a number of cases. In New India Assurance Co. v. Bhagwati Devi, (1998) 6 SCC 534 a three-Judge Bench of this Court relied upon the view taken in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi, (1997) 1 SCC 66 wherein it has been held that if there is a special contract, mentioning in the policy the time when it was bought, the insurance policy would be operative from that time and not from the previous midnight as was the case in Ram Dayal case where no time from which the insurance policy was to become effective had been mentioned. It was held that should there be no contract to the contrary, an insurance policy becomes operative from the previous midnight, 'when bought during the day following, but in cases where there is a mention of the specific time for the purchase of the policy, then a special contract comes into being and the policy becomes effective from the time mentioned in the cover note/the policy itself. The judgment in Jikubhai case has been subsequently followed in Oriental Insurance Co. Ltd. v. Sunita Rathi, (1998) 1 SCC 365 by a three-Judge Bench of this Court also." 12. Similar ratio has been laid down by the Supreme Court of India in the case of Sobina Iakai (supra). Paragraphs 8 to 19 are quoted below:- "(8) The appellant company, being aggrieved by the order of the Tribunal, filed MA (F) No. 4 (SH) of 1998 before the Shillong Bench of the Gauhati High Court. The High Court noticed the pleadings and referred to the decided cases of this Court. Paragraphs 8 to 19 are quoted below:- "(8) The appellant company, being aggrieved by the order of the Tribunal, filed MA (F) No. 4 (SH) of 1998 before the Shillong Bench of the Gauhati High Court. The High Court noticed the pleadings and referred to the decided cases of this Court. The High Court, after discussing the various judgments of this Court, culled out the following propositions of law: (i) If time is mentioned in the insurance policy or cover note, the effectiveness of the policy would start from that time and date and not from an earlier point of time; (ii) If the accident takes place on that very date before the time which is mentioned in the insurance policy, the insurer will not be liable to indemnify the insured; (iii) If the time is not mentioned in the insurance policy, it would commence from the date which means midnight and in case the accident occurred on the date of taking the policy, the insurer will be liable to meet the liability of the insured under the award. (9) The ratio culled out by the High Court of the decided cases of this Court is correct but the High Court has wrongly applied the ratio of these cases and erroneously held that the insurance company is liable to pay compensation for the reason that the Cashier and the Development Officer have not been produced by the appellant company. (10) We have heard the learned counsel for the parties and also perused the relevant documents carefully. The learned counsel appearing for the appellant submitted that the controversy involved in the case is no longer res integra. In the instant case, though the High Court has correctly enunciated the law, but has seriously erred in not applying the ratio of the judgments of this Court correctly. He further submitted that when the insurance policy and the motor renewal endorsement were duly filed and these documents were duly proved before the Tribunal, in that event, the entire controversy ought to have been decided on the basis of these two documents and the production of Cashier and the Development Officer was not at all necessary for deciding the controversy in the case. (11) On the other hand, the learned counsel for the respondents supported the judgments of the Tribunal and the High Court. (11) On the other hand, the learned counsel for the respondents supported the judgments of the Tribunal and the High Court. (12) Admittedly, at the time when the accident had occurred at 9.15 a.m. on 20.7.1994, the respondent did not have the insurance cover. The insurance policy was obtained at 2.00 p.m. on 20.7.1994, which is clearly evident from the motor renewal endorsement set out in the earlier part of the judgment. (13) The insurance policy and the motor renewal endorsement were on record. Both these documents were produced and proved by the appellant company. The Tribunal and the High Court have seriously erred in ignoring these basic and vital documents and deciding the case against the appellant company on the ground of non-production of the Cashier and Development Officer. This manifestly erroneous approach of the High Court has led to serious miscarriage of justice. (14) This Court had an occasion to examine the similar controversy in the case of New India Insurance Company v. Ram Dayal, (1990) 2 SCC 680 . In this case, this Court held that in absence of any specific time mentioned in the policy, the contract would be operative from the mid- night of the day by operations of the provisions of the General Clauses Act but in view of the special contract mentioned in the insurance policy, the effectiveness of the policy would start from the time and date indicated in the policy. (15) A three-judge Bench of this Court in M/s National Insurance Co. Ltd. v. Smt. Jikhubhai Nathuji Dabhi, (1997) 1 SCC 66 has held that in the absence of any specific time mentioned in that behalf, the contract would be operative from the mid-night of the day by operation of provisions of the General Clauses Act. But in view of the special contract mentioned in the insurance policy, it would be operative from the time and date the insurance policy was taken. In that case, the insurance policy was taken at 4.00 p.m. on 25.10.1983 and the accident had occurred earlier thereto. This Court held that the insurance coverage would not enable the claimant to seek recovery of the amount from the appellant company. (16) Another three-Judge Bench of this Court in M/s Oriental Insurance Co. Ltd. v. Sunita Rathi, (1998) 1 SCC 365 dealt with similar facts. This Court held that the insurance coverage would not enable the claimant to seek recovery of the amount from the appellant company. (16) Another three-Judge Bench of this Court in M/s Oriental Insurance Co. Ltd. v. Sunita Rathi, (1998) 1 SCC 365 dealt with similar facts. In this case, the accident occurred at 2.20 p.m. and the cover note was obtained only thereafter at 2.55 p.m. The Court observed that the policy would be effective from the time and date mentioned in the policy. (17) In New India Assurance Co. vs. Bhagwati Devi, (1998) 6 SCC 534 , this Court observed that, in absence of any specific time and date, the insurance policy becomes operative from the previous midnight. But when the specific time and date is mentioned, then the insurance policy becomes effective from that point of time. This Court in New India Assurance Co. Ltd. v. Sita Bai, (1999) 7 SCC 575 and National Insurance Co. Ltd. v. Chinto Devi, (2000) 7 SCC 50 has taken the same view. (18) In Kalaivani & Ors. v. K. Sivashankar & Ors., (2007) 7 SCC 792 , this Court has reiterated clear enunciation of law. The Court observed that it is the obligation of the Court to look into the contract of insurance to discern whether any particular time has been specified for commencement or expiry of the policy. A very large number of cases have come to our notice where insurance policies are taken immediately after the accidents to get compensation in a clandestine manner. (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. 13. Thus, it appears that the law is too well settled on the point as to the effective time from when the coverage of an insurance policy commences. Therefore, notwithstanding that the insurance policy was obtained on 29.11.2005, but as the Insurance Policy of the respondent No.6 in respect of the offending truck bearing registration No. ASQ- 6921 categorically mentioned that the insurance was valid from 0.00 hours of 30.11.2005 to midnight of 29.11.2006, this Court is inclined to hold that at the time of insurance coverage, there was no valid insurance of the offending vehicle. 14. Under such circumstances, and in view of the cases cited herein before, as there was no valid contract of insurance at the time of the accident, this Court is inclined to hold that the decision of the learned Tribunal on issue No. 4 to hold the appellant liable to satisfy the award is not sustainable on facts and in law. Accordingly, the point of determination is answered in the negative and in favour of the appellant. It is held that the finding by the learned tribunal to the effect that as the premium was accepted on 29.11.2005 and the accident also took place on the same day, presumption would be as if the policy coverage would include 29.11.2005 and the insurance company cannot escape the liability by giving effect to the policy from zero hours of 30.11.2005 on its whims is not sustainable on facts and in law. 15. It is seen that in the case of Shiwawwa & Anr. Vs. Branch Manager, National India Insurance Co. Ltd., (2018) 5 SCC 762 , the Supreme Court of India had directed the insurer to satisfy the award and then recover the said amount from the owner of the vehicle. However, in that case it was held that the offending vehicle was insured by the insurer. However, in the instant case, at the time of insurance, the offending vehicle had no insurance policy coverage as on 29.11.2005. Hence, this Court is not inclined to invoke the "pay and recover" principle. 16. Accordingly, this Court while affirming the decision of the learned Tribunal on issues No.1 to 3, is inclined to set aside the decision in respect of issue No.4 and in that regard, it is held that it would be the liability of the respondent No.6, i.e. the owner of offending truck bearing registration No. ASQ- 6921 to satisfy the award dated 15.12.2012, passed by the learned Member, Motor Accident Claims Tribunal, Dibrugarh in MAC Case No. 62/2011 corresponding to MAC Case No. 312/2006 together with interest that has accrued thereon from 20.02.2006 i.e. the date of filing the claim petition till recovery. 17. The appeal stands allowed. Let the LCR be returned together with a copy of this order. ORDER 18. 17. The appeal stands allowed. Let the LCR be returned together with a copy of this order. ORDER 18. The award dated 15.12.2012, passed by the learned Member, Motor Accident Claims Tribunal, Dibrugarh in MAC Case No. 62/2011 corresponding to MAC Case No. 312/2006 stands modified by directing that the said award together with interest accrued thereon shall be paid and/or satisfied by the respondent No.6, namely, Debo Prasad Dutta, the owner of the offending vehicle.