New India Assurance Company Limited vs Mohida Khatoon And Ors

Heard Mr. D. C. Ghose, counsel appearing for the appellant- New India Assurance Company Limited.

Heard Mr. Arvind Kumar Lall, counsel for the respondent no. 8(a) - the owner of the Bus No. BR-33P-7749.

Heard Mr. Manish Kumar, counsel for the respondent no. 7(a) i.e. National Insurance Company Limited (Insurer of offending Truck No. BR-14G 9205).

Nobody appears on behalf of the remaining respondents.

Counsel for the appellant submits that the appellant is aggrieved by the judgment dated 24.04.2004 passed by learned Ist Additional District Judge, Saraikela in Compensation Case No. 8 of 2000 whereby the learned court below has saddled 30% of the entire liability arising out of accident dated 08.11.1999 upon the appellant. He submits that on 08.11.1999, there was an accident in which Bus No. BR-33P-7749 as well as the Truck No. BR-14G-9205 were involved. The bus was insured with the appellant - New India Assurance Company and the truck was insured with the respondent- National Insurance Company Limited. The bus was covered under the insurance policy issued on 09.01.1999 which was exhibited before the learned court below. The accident had taken place on 08.11.1999 and therefore, the insurance policy issued by the appellant, did not cover the liability arising out of the accident.

Counsel further submits that the appellant had filed show-cause as well as additional show-cause before the learned court below and had taken a specific plea that the insurance policy was valid with effect from 09.11.1999 and the accident had occurred on 08.11.1999. He further submits that in spite of this plea having been taken by the appellant before the learned court below, the learned court, while passing the impugned judgment, had saddled the appellant - insurance company with a liability to the extent of 30% of the assessed compensation and has held that the policy issued by the appellant covered the liability under the accident.

The counsel, during the course of argument, has referred to two judgments passed by Hon'ble Supreme Court reported in (2000) 9 SCC 229 (New India Assurance Company Limited Vs. Rakesh Talwar) and (1998) 1 SCC 365 (Oriental Insurance Company Limited Vs. Sunita Rathi and Ors.). By referring to the aforesaid judgments, he submits that the judgment passed by Hon'ble Supreme Court in the case reported in (1990) 2 SCC 680 (New India Assurance Company Vs. Ram Dayal) has been distinguished in these judgments.

The counsel further refers to First Information Report filed before the learned court below and submits that as per the First Information Report, the time of accident is about 10 a.m. in the morning and accordingly, the premium which was deposited by the owner of the bus, could not have been deposited and the insurance policy issued by the appellant does not cover the accident involved in this case.

Counsel for the private respondent, on the other hand, submits that from the perusal of the insurance policy involved in this case, which was exhibited before the learned court below, it is apparent that the cover note was issued on 08.01.1999 vide receipt no. 172967 and the premium was admittedly paid on 08.11.1999. He further submits that in the insurance policy, the time of issuance of cover note has not been mentioned nor the cover note was produced by the insurance company before the learned court below to ascertain the coverage. He submits that the policy has been shown to be effective from 09.11.1999, but, in view of the fact that the premium was received on 08.11.1999 vide cover note number 172967, the policy will be covering the accident right which had taken place on 08.11.1999 at about 10.00 am. He further submits that as the time of issuance of cover note is not on record , the policy should be deemed to be effective from 0.00 hours of 08.11.1999 in view of the judgment passed by Hon'ble

He submits that it was never the case of the insurance company before the learned court below that the premium was paid and the cover note was issued after the accident. He further submits that onus was upon the insurance company to take such a plea before the learned court below. Neither any such plea has been taken nor any such evidence has been adduced by the appellant insurance company and accordingly, it is not open to the insurance company to contend that the policy was not effective from zero hours of 08.11.1999. By referring to the judgment passed by Hon'ble Supreme Court reported in (1990) 2 SCC 680, the counsel submits that it has been held by Hon'ble Supreme Court that in case when the policy is taken on a particular date, its effectiveness is from the commencement of the date and therefore, it will be effective from zero hours. He submits that the same principle would apply so far as the payment of premium is concerned and admittedly, in the instant case, the premium was paid on 08.11.1999 and accordingly, the policy would be effective from zero hours of 08.11.1999. He submits that otherwise also the accident had taken place at about 10.00 am and accordingly it cannot be said that the premium was not deposited prior to the accident as the offices generally open at 10.00 am. The cover note having not been produced before the learned court below it cannot be assumed that the accident had taken place before issuance of cover note. This argument of the respondent is without prejudice to the contention that the policy would be effective from 0.00 hours of 08.11.1999.

The counsel for the respondents has also referred to Section 64 VB of the Insurance Act, 1938, and has submitted that this provision clearly lays down that once the premium has been paid in cash or by cheque, the date of effectiveness of the policy would be from the date of payment of premium.

After hearing the counsel for the parties, this Court finds that the only point for determination in this appeal is Whether, under the facts and circumstances of this case, the learned court below was justified in holding that the appellant insurance company was liable to pay the compensation to the claimants to the extent indicated in the impugned judgement, although the accident had taken place on 8.11.99 at about 10.00 am and the insurance policy was issued with effect from 9.11.1999, on the basis of the fact that the premium was received and cover note was issued on 8.11.1999?

After considering the materials on record, this Court finds that admittedly the accident involved in this case had taken place on 08.11.1999 and as per the First Information Report, the time of accident was tentatively 10 a.m. in the morning and the information to the police regarding the accident was given at around 01:00 p.m.

This Court finds that the insurance policy involved in this case, to the extent it relates to the appellant, was issued on 09.11.1999 and the cover note was issued on 08.11.1999 vide receipt no. 172967 and this fact has been mentioned in the insurance policy itself. In the insurance policy, the time of issuance of cover note has not been mentioned. The cover note has not been produced by the insurance company. The policy indicates that the policy would be effective from 09.01.1999. The insurance company had taken a specific plea in its additional show-cause filed on verification of the policy, it transpired that on 08.11.1999 till 12 mid-night, the owner of the bus did not obtain the valid policy, but he obtained the policy on 09.11.1999 i.e. after the accident, which occurred on 08.11.1999. Thus, the specific case of the appellant before the learned court below was that the policy was effective from 09.11.1999 and not from 08.11.1999 and the accident had taken place on 08.11.1999. This Court finds that the insurance company neither took any plea that the cover note which was issued on 08.11.1999 was issued after the accident nor produced the cover note.

This Court further finds that no such evidence was led by the insurance company as to when the cover note was issued and as to when on 08.11.1999 the premium was received from the owner of the vehicle. This Court finds that the learned lower court, while deciding the case, has taken this aspect of the matter and has considered the fact about the payment of premium on 08.11.1999. The said authority has referred to Section 64 VB of the Insurance Act, 1938 and has also indicated that the onus was on the insurance company to discharge that the policy was not effective from prior to the time of the accident on 08.11.1999 and this onus was not discharged by the insurance company.

This Court is of the considered view that the view taken by the learned court below is in accordance with law and as per the provisions of Section 64 VB of the Insurance Act, 1938.

This Court is of the considered view that the cover note was admittedly issued on 08.11.1999 and the insurance company, having failed to bring on record the time of issuance of cover note and the time of receipt of premium, the same would cover the accident in the instant case which is said to have taken place at about 10.00 a.m. and it cannot be assumed that the accident had taken place prior to deposit of the premium on 08.11.1999. Moreover, the manner in which the premium was deposited has also not been brought on record by the insurance company i.e. by case or by cheque or through the agent etc.

This Court further finds that no such plea was ever taken by the insurance company that the cover note was issued after the accident on 08.11.1999 before the learned court below as is apparent from the additional written statement, which was filed by the appellant before the learned court below.

So far as the judgment which has been relied upon by the appellant which is reported in (2000) 9 SCC 229 is concerned, this Court finds that in the said case, the insurance company through written statement, had taken a specific plea regarding the time and date of issuance of the policy and the time of issuance of cover note. But, in the instant case, no such plea was ever taken by the insurance company and accordingly, the aforesaid judgment does not apply to the facts and circumstances of this case, which is clearly distinguishable.

So far as the judgment reported in (1998) 1 SCC 365 is concerned, here also the cover note was produced before the court indicating its date and time which has not been done in the instant case.

In this background, the claimants had argued before the learned court below that although the policy formally came into existence on 9.11.1999 but for all purposes it had come into existence on 8.11.1999 itself being the date of proposal and deposit of the premium. This plea was accepted by the learned court below by a well-reasoned order. The learned court below has also considered that the insurance company being an instrumentality of the state ought to have produced the policy papers before the learned court below.

In the peculiar facts and circumstances of this case, this Court does not find any illegality or perversity in the impugned judgment dated 24.04.2004 passed by Ist Additional District Judge, Saraikela in Compensation Case No. 08 of 2000 and accordingly, the liability which was fixed by the impugned order upon the appellant is hereby upheld.

The statutory amount which has been deposited before this Court is directed to be sent to the learned court below to be disbursed to the claimants upon proper identification.