Honourable Sri Justice L. Narasimha Reddy
1. Kaki Keshava Swamy and his cousin, Kaki Prabhakar, were proceeding on a Scooter, bearing No. AP 28 M 597, towards Ravirala Village of Ranga Reddy District, at 7.30 p.m., on 24.01.2002. A Tractor, bearing No. AAL 9748, owned by M. Rameshwar, and insured with the appellant herein, dashed against the scooter. While Keshava Swamy died of accident, Prabhakar received injuries. The legal representatives of Keshava Swamy filed O.P.No. 744 of 2002 before the Motor Accidents Claims Tribunal-cum-IV Additional Chief Judge, Hyderabad, claiming a sum of Rs. 4,00,000/-, as compensation for the injuries. The Tribunal passed an order, dated 13.08.2004, awarding a sum of Rs. 2,33,220/- and apportioned the same among the claimants therein. Similarly on 16.08.2004, in O.P.No. 1951 of 2002, the Tribunal passed an order awarding a sum of Rs. 56,962/-, to Prabhakar. These two appeals arise out of the orders passed therein.
2. Sri E.Venugopal Reddy, Learned Counsel for the appellant, submits that there was no insurance coverage for the tractor as on 24.01.2002. He contends that the insurance policy was taken out on 29.01.2002, but an official of the appellant-company issued the policy, as though it is in force with effect from 24.01.2002. Learned Counsel submits that the Tribunal did not address this vital issue and held the appellant is also liable to pay the compensation. He contends that permission may be accorded to the appellant to proceed against the owner of the vehicle to recover the amount, in case it is required to pay. He submits that the rate of interest awarded by the Tribunal is excessive.
3. Learned Counsel for the respondents, and in particular the owner of the vehicle submits that the appellant in its counter filed in the O. Ps., clearly stated that the insurance policy was taken at 10.45 a.m., on 24.01.2002 and that the accident occurred at 7.30 p.m. on that day. They contend that though a plea was raised to the effect that the policy would become operative, on expiry of 24 hours after it was issued, neither any provision of law, nor any decided cases are cited in support thereof.
4. The claimants i.e., respondents 1 to 4 in C.M.A.No. 2004 of 2005 and 1st respondent in C.M.A.No. 1908 of 2005, stated that the accident occurred, on account of the rashness and negligence on the part of the driver of the tractor and that there existed an insurance policy issued by the appellant, covering the tractor. It is no doubt true that the 1st respondent remained ex parte. However, in its counter, the appellant, even while denying its liability, stated that an insurance policy was issued at 10.45 a.m. on 24.01.2002 and that the accident occurred at 7.30 p.m. on that day. Though a plea was raised to the effect that the policy would become operative 24 hours after it was issued, neither any principles of law, nor any decided cases were referred to.
5. In O.P.No. 744 of 2002, PWs.1 to 3 were examined and Exs.A.1 to A.9 were filed.. A copy of the insurance policy was marked as Exs.B.1, but no oral evidence was adduced by the appellant.
6. The appellant does not seriously contest the findings recorded by the Tribunal, as regards the liability on the part of the driver of the tractor or the quantum of compensation. It is only about the fastening of liability on it by proceeding on the assumption that there exists a valid insurance policy.
7. Taking out an insurance policy is mandatory under the Motor Vehicles Act. Having made the taking out a policy as compulsory, the Act has imposed certain obligations on the insurer to cover the liability that arises out of accident, involving the insured vehicle. In the instant cases, the claimants clearly mentioned that there existed valid insurance policy, covering the tractor, at the relevant point of time. A perusal of Ex. B.1 discloses that it was issued on 24.01.2002 and is valid till 23.01.2003. It also reflects that the receipt for the premium was generated on 29.01.2002. The date of receipt hardly would have any bearing upon the date with effect from which, the policy would become operational. Further, there is nothing in law, which would suggest that a policy would become enforceable from the date of issuance of receipt.
8. The gist of the arguments advanced by the Learned Counsel for the appellant is that the owner of the tractor played fraud or mischief in procuring a policy after occurrence of the accident and that an official of the insurance company had colluded with him. Enquiry is said to be in progress. This plea, however, does not find place in the counter filed by the appellant. On the other hand, it is suggestive of existence of a policy issued at 10.45 a.m., on 24.01.2002. Though it was mentioned that the policy would become operative after expiry of 24 hours from the time of issue, nothing is placed before this Court to substantiate the same. On the other hand, the law on the subject suggests otherwise. Once a policy is issued on a particular date, it covers the liability or risk, that arises out of any event, from the first hour of that date.
9. There is absolutely no basis or foundation for the plea advanced by the appellant that the policy was obtained by fraud or misrepresentation. Any party to the proceedings, which intends to raise the plea of fraud or misrepresentation or the like, must plead the relevant facts with required amount of detail. Rule 4 of Order VI C.P.C., makes this aspect very clear. Unless the opposite party is made aware of the allegations of fraud against him, he would not be in a position to contradict the same. Therefore, unless a plea of fraud or misrepresentation is specifically taken, it cannot be permitted to be raised or expanded, at a later stage.
10. Here itself it needs to be mentioned that, wherever the insurance company takes a specific plea in the counter/written statement, that the insurance policy was obtained or procured by playing fraud or misrepresentation, an issue deserves to be framed on that and the insurance company can certainly establish its plea, by adducing evidence.
11. Alternatively, a request was made by the Learned Counsel for the appellant that his client be permitted to proceed against the owner. This cannot be accepted. The reason is that the occasion to permit the insurer to proceed against the owner arises, only when a finding is recorded to the effect that the vehicle was put in use at the time of accident, in contravention of the conditions of policy. Such is not the plea raised by the appellant. A plea is raised in the appeal to the effect that there did not exist any valid policy at all. Not only there does not exist any support for this plea, but also there exists a pleading, which suggests exactly the opposite. The only step, which the appellant could have taken in this regard, against the owner of the vehicle, was to file a suit. Even to file such a suit, the limitation would have started from the date on which the appellant became aware of the relevant facts. Obviously, such facts became evident in the year 2002, when the claim was made on the basis of the policy. The limitation had expired and this Court cannot make any cause of action alive, if it was already barred by limitation.
12. this Court, however, finds some strength in the plea of the Learned Counsel for the appellant, as regards the rate of interest. The Tribunal awarded interest at 9% p.a. The Supreme Court held that in matters of this nature, interest of 7% would be reasonable and adequate.
13. Hence, the appeals are partly allowed upholding the orders passed by the Tribunal, in all other respects, but reducing the rate of interest at 7%p.a.
14. There shall be no order as to costs.
