Jaikrishandas vs Chiruthai Ammal and Another

V. Ramaswami, J.—The first respondent before the Motor Accidents Claims Tribunal, the owner of the car CRP 6835 is the appellant

herein. On 30th September 1976, at or about 10-30 a.m. when the appellant who was getting down from his parked car, opened the door, it hit

the scooter TMS 4191, driven by Divakaran, who was proceeding along side the parked car, resulting in the throwing away of the scooter driver

and causing his death. The mother of the deceased filed a petition u/s 110-A of the Motor Vehicles Act, claiming compensation of Rs. 1,15,000/-

for the death of the deceased. The second respondent is the insurance company with whom the appellant has insured his vehicle. The additional

Motor Accidents Claims Tribunal, Madras, by order, dated 19th June, 1979, determined the compensation at Rs. 20,780 under the various

headings. However, the award was given only against the appellant, and the insurance company was held not liable. In this appeal by the insured,

the learned Counsel for the appellant did not question the claim of the first respondent herein, the mother of the deceased, nor the quantum of

compensation fixed. However, he contended that the Tribunal went wrong in absolving the insurance company of the liability to pay the money. If

the award is both against the insured and the insurer, the learned Counsel contended that the insured could have asked the insurance company to

pay, and if he had been made to pay the compensation he would be in a position to recover the same from the insurance company. The question,

therefore, for consideration is whether the second respondent insurance company is liable for the claim.

The facts relevant to this aspect of the matter may now be noticed. The vehicle CRP 6835 was insured with the second respondent originally

from 23rd September. 1975 for a period of one year expiring on 22nd September, 1976. But the insurance was not renewed with effect from

23rd September, 1976. As already stated, on 30th September, 1976 the accident took place at or about 10-30 a.m. On 30th September, 1976

the appellant sent his proposal from Ex. Rule 1 praying for a comprehensive insurance policy. On the same day, the second respondent issued a

temporary cover note for a period to expire on 14th October, 1976. Later, a regular policy was issued on 4th October 1976 noting the period of

insurance from 30th September, 1976 to 29th September, 1977, both days inclusive. The original insurance policy produced by the appellant is

marked as Exh. Rule 11 in this case.

Column 17 of the proposal form related to the period of insurance and he had requested for insurance from 30th September, 1976 to 29th

September, 1977. However, after the words ''from 30th September, 1976, we find in brackets ''5.30 p.m.''. In the temporary cover note issued

on 30th September, 1976 also, we find against the column ''effective date of commencement of insurance for the purpose of the Act,'' ''30th

September, 1976 (5.30 p.m.),'' and against the date and place, it is also mentioned ''5.30 p.m.''. The appellant disputed the reference to ''5.30

p.m.'' in his proposal form, and contended that it was not there when he gave the proposal form and that there were some erasures and over-

writings on ''5.30 p.m.'' and it is not believable. However, we find in the cover note again a reference is made to ''5.30 p.m.'' and there are no

erasures. But this fact, whether the proposal form was given at 5.30 p.m. or the cover not was issued at 5.30 p.m. is not going to matter on the

point raised by the learned Counsel for the appellant, and therefore, we need not dwell to much on this aspect. One other aspect mentioned by the

learned Counsel may also be referred to as a statement, and that was, according to the learned Counsel, the proposal form was sent by the

appellant in the morning on 30th September, 1976, through his Manager and that at the time when he sent the proposal, the accident had not taken

place. The Court below was not willing to place any reliance on this statement of the appellant in view of the fact that the Manager himself has not

been examined. But one thing is clear that the proposal form was not given by the appellant personally to the insurance company, but it was taken

by his Manager, though it may be subsequent to the accident at 10.30 a.m. Therefore, we will proceed to consider the legal question on the basis

that the proposal form was sent on 30th September, 1976 sometime after 10.30 a.m. and the acceptance also was subsequent to the accident.

But, as seen from the original insurance policy produced, which does not mention anything about the time, the period of insurance covered is from

30th September, 1976 to 29th September, 1977. Clearly, therefore the policy shall be deemed to cover from the midnight of 29/30th September

1976, which will cover the time of accident also.

The learned Counsel for the insurance company pointed out that under column 5 of the proposal form, the insurer is asked to state ''what

accidents (if any) have occurred to this or to any other car at any time owned or driven by proposer during the last 5 years'' and the appellant

should have mentioned about the accident if he wanted to claim the benefit of the policy. We find against this column, the appellant had neither

stated that there was an accident nor has he stated that there was no accident. Therefore, we cannot say that the appellant had given a false

statement that there was no accident on the basis of which the policy was given with effect from the same date 30th September, 1976. It is not

unusual, and it has come to the notice of courts also, that sometimes policies are given with retrospective effect. To the extent that policy given in

the day time takes effect from the midnight of the earlier date it is retrospective, in the sense that the policy is not effective from the time when it is

accepted or issued; it is effective from the date on which it is issued. In fact, the policy also states that it is effective from a particular date '' to a

particular date, inclusive of both days. Therefore, the policy was effective on 30th September, 1976, and normally we should take it that it is

effective from the midnight of the previous day. When we are bidden to imagine that though the policy was given in the day time, it takes effect

from the midnight of the previous day we cannot allow our mind to boggle, when it comes to the necessary corollary of treating the accident as

having taken place after the policy took effect. That is the legal situation and that should be given effect to. Therefore, the accident is clearly

covered by the policy.

A similar view was taken by a Division Bench of this Court in United India Fire and General Insurance Company Ltd. Vs. V. Srinivsan and

Others In that case also, the policy was given at 11 a.m. on 6th June, 1969, while the accident took place at 8 a.m. The policy was to cover from

6th June, 1969 to 5th June, 1970, both days inclusive. The Court held that though the policy was issued subsequent to the accident, the risk is

covered as policy is effective from the whole of the day on which it was issued. It is true that in that case, when the proposal was sent by the

insured, he was not aware of the accident to his vehicle earlier. But that makes no difference for the legal effect of the policy itself. The learned

Judges also noticed, referring to the judgment of the Bombay High Court in the Indian Trade and General Insurance Co. v. Shailal Maneklal Desai

AIR 1964 Bom148 that a stipulation with regard to past risk is neither void nor illegal. In fact, the decision in Oriental Fire and General Insurance

Co. Ltd. v. T.G. Kundgol 1983 54 Comp. Cas 356 is very instructive and interesting. In that case, the accident took place on 11th February,

1978. The proposal along with the premium was received by the insurance company on 13th February, 1978. The proposal was accepted and the

insurance was renewed with effect from 10th February, 1978. The question for consideration was whether the vehicle was not insured on the date

of the accident, viz., 11th February, 1978. A Division Bench of the Karnataka High Court held that Section 96(1) of the Motor Vehicles Act is

intended to enable third parties who suffer on account of the user of the motor vehicle to get damages, and their ability to get damages should not

be made dependent either on the financial condition of the driver of the vehicle or the contractual rights and obligations between the insurer and the

insured. The liability of the insurer to third parties being statutory, the right of the third parties flows from the statute and is not contractual. Though

the insurer was entitled to avoid or cancel the policy for breach of certain restrictions, conditions and limitations contained therein, the could not

avoid the liability to third parties. If there was a breach of any restriction, conditions and limitation, the insurer may be entitled to proceed against

the insured, either to avoid or cancel the policy, out the insurer is bound by the provisions of Section 96(1) of the Motor Vehicles Act to pay a

person entitled to the benefit of the decree any sum not exceeding the sum insured therein, if the policy had not already been cancelled before the

claim is made. In this case, the policy was still effective and it was not cancelled, and therefore, apart from the fact that we have a doubt as to

whether, on the facts and circumstances of this case, the insurer could have cancelled the policy, since it is not factually cancelled and the policy

being effective from 30th September. 1976, it would cover the accident in question.

We accordingly modify the award of the Claims Tribunal by giving a decree to the claimant both against the appellant and the second

respondent. The appeal is allowed. But there will be no order as to costs.