The Oriental Insurance Co. Ltd. vs Porselvi and Haja Mohamed

P.P.S. Janarthana Raja, J.—The appeal is preferred by the appellant-Insurance Company against the award dated 13.07.2000, made in

M.C.O.P. No. 33 of 1998, by the Motor Accident Claims Tribunal (Principal Sub-Judge), Mayiladuthurai.

Background facts in a nutshell are as follows:

The injured Porselvi met with a motor vehicle accident on 28.05.1996, at about 03.00 p.m. When the injured was walking near the RTO Office at

Mayiladuthurai, Ambassador car belonging to the second respondent and insured with the appellant-Insurance Company, came in a rash and

negligent manner and hit against the injured. Due to which, the injured sustained fracture and grievous injuries all over her body. The injured

claimed a compensation of Rs. 80,000/-. The appellant-Insurance Company resisted the claim. On pleadings the Tribunal framed the following

issues:

Whether the accident had occurred due to the rash and negligent driving of the driver of the Ambassador car?

Whether the respondents are liable to pay compensation?

Whether the petitioner is entitled to get any compensation? and if so, what is the quantum of compensation?

What other reliefs the petitioner is entitled to get?

After considering the oral and documentary evidence, the Tribunal held that the accident had occurred only due to the rash and negligent driving of

the driver of the Ambassador car and awarded a compensation of Rs. 55,000/- with interest at 12% per annum from the date of petition and the

details of the same are as under:

Transport charges Rs. 500/-

Extra nourishment Rs. 1,500/-

Medical expenses Rs. 8,000/-

Pain and suffering Rs. 10,000/-

40% disability Rs. 35,000/-

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Total .... Rs. 55,000/-

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Aggrieved by that award, the Insurance Company has filed the present appeal. It is stated by the learned Counsel for the appellant that earlier this

Court by its order dated 22.12.2006 rejected the claim of the Insurance Company by observing that Insurance Company is liable to pay

compensation since the cover note operative from the date of issue. The date of issue of the cover note was 28.05.1996. Ex.B1 is the Cover

Note. The accident was occurred on 28.05.1996. Aggrieved by that order, the appellant had taken the matter to the Hon''ble Supreme Court and

the Hon''ble Supreme Court by order dated 02.04.2009 remitted the matter back to the High Court for fresh disposal with a direction to consider

the factual position in the light of the decision of the Apex Court in the case of New India Assurance Co. Ltd Vs. Smt. Sita Bai and Ors, . This is

how the matter is before this Court.

The learned Counsel appearing for the appellant submitted that they are not liable to pay compensation on the ground that though the cover note

was issued on 28.05.1996, the policy comes into effect only from 29.05.1996 and since the accident was occurred on 28.05.1996, they are not

liable to pay compensation.

The learned Counsel appearing for the claimant submitted that the date of cover note is the relevant date. Therefore, the Tribunal is correct in

awarding the compensation and the said order is to be confirmed.

Heard the Counsel. Before the Tribunal, the appellant Insurance Company marked Ex.R4-cover note. The cover note categorically states that

the policy was valid only from 29.05.1996. The relevant portion thereof reads as follows:

Effective date of commencement of insurance for the purpose of the Act, from 0'' clock on (date) 29.5.1996 to midnight of 28.5.1997.

The Hon''ble Supreme Court in the case of New India Assurance Co. Ltd Vs. Smt. Sita Bai and Ors, , considering the scope of policy coming into

effect when there is specific mention of time, held that when a date is mentioned in the cover note/policy, the same comes into effect only from that

particular date and the Court held as follows:

The correctness and applicability of the judgment in New India Assurance Co. Ltd. Vs. Ram Dayal and Others, came up for consideration

before this Court subsequently in a number of cases. In New India Insurance Co. Vs. Bhagwati Devi and Others, a three-Judge Bench of this

Court relied upon the view taken in M/s. National Insurance Co. Ltd. Vs. Smt. Jijubhai Nathuji Dabhi and others, wherein it had 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. Vs. Sunita Rathi and Others, by a three-Judge Bench of this Court also.

From the aforesaid decision of the Hon''ble Supreme Court it is clear that the coverage under the Insurance Policy takes effect only from

29.05.1996. Since the accident had occurred on 28.05.1996, there is no policy coverage on the date of accident. In view of the above, the order

of the Tribunal is set aside and the Insurance Company is not liable to pay compensation. It is stated by the appellant that they have deposited the

entire award amount, before the the Tribunal and the claimant was permitted to withdraw the amount. Since the award amount has been withdrawn

by the claimant, the Insurance Company is entitled to recover the amount from the owner of the vehicle ie.the second respondent by initiating

executive proceedings in accordance with law in the same proceedings.

With the above modification, the Civil Miscellaneous Appeal is disposed of. No costs.