S. Palanivelu, J.@mdashThe allegations in the claim petition filed by the Claimant/first respondent herein, in brief, are as follows:
1 (i) On 31.7.1996, at about 11.45 p.m. while the claimant was travelling as a passenger in Auto bearing Registration No.TMI 1553 along Sardar Patel Road, Chennai, near Kasthuri Bai Nagar 3rd Cross Street, the driver drove the Auto in a rash and negligent manner, suddenly turned towards south and hence the auto capsized. In the accident the claimant received serious injuries including fractures. She was inpatient in the Government Hospital for 12 days. She was working as Construction Assistant (chithal) and so earning a sum of Rs. 100/- per day. She was aged 35 years at the time of accident. After the accident, she could not pursue the avocation. A sum of Rs. 1,25,000/- is claimed as compensation.
The averments found in the counter of the second respondent/Appellant are concisely as under:2(i) The first respondent was not having valid insurance for the auto at the time of accident. The validity of the policy was from 1.8.1996 to 31.7.1997. But the accident took place on 31.7.1996. Hence, the second respondent is not liable to pay any compensation. It is incorrect to state that the accident took place due to the negligence on the part of the Auto Driver. The age, occupation and income of the claimant as stated in the claim petition are denied. The claim is fanciful and excessive. Hence the petition may be dismissed.
2. The vehicle owner remained exparte.
3. Considering the oral evidence on record and scrutinizing the documentary evidence, learned Tribunal Judge has reached a conclusion that the policy obtained by the vehicle owner was valid and that it would cover the risk even on the prior date, since the contract between the insurer and insured was concluded on 31.7.1996 itself and hence. Insurance Company is liable to pay compensation to the claimant. After analysing other evidence, the Tribunal has awarded a sum of Rs.57,000/- to the claimant, payable by the second respondent/appellant.
4. Ex.R.4 is Insurance Policy, in which it is stated that the policy was in force from 9.00 a.m. of 1.8.1996 to the mid night of 31.7.1997. It is the definite case of the appellant that inasmuch as the Cover Note and Policy came to existence on 1.8.1996 alone, enabling the insurance to take effect from 9.00 a.m. onwards, it is not correct to state that the contract was concluded on the previous day making the Insurance Company liable, which finding is not sustainable.
5. Conversely, the claimant side would state that since the agreement with regard to the insurance took place on 31.7.1996 at 4.30 p.m. itself, the insurance coverage starts from that point of time and it is futile to contend that policy took effect only at 9.00 a.m. on 1.8.1996.
6. In order to have a thorough glimpse of the matter in issue, it has become inevitable to re-appreciate and to go deep into the oral evidence on record with reference to the events which brought about the insurance coverage for the vehicle.
7. R.W. 1 Development Officer has been working in the appellant Insurance Company for about 32 years. He says that on 31.7.1996 at about 4.30 p.m., the vehicle owner came to the office and produced the vehicle, that, after inspection he gave the proposal form and also informed him that for getting a comprehensive policy he had to pay premium of Rs.658/-, that the owner of the vehicle brought the Ex.R-1, Proposal Form on 1.8.1996, after filling it up and he paid the premium amount on 1.8.1996, for which R.W. 1 issued Cover Note (Ex.R-2 is its carbon copy), that he remitted the amount into the office at 11.00 a.m. on 1.8.1996, for which he gave receipt Ex.R-3 and that he paid the premium amount at 9.00 a.m. on 1.8.1996. In this juncture, it is to be borne in mind that the accident took place on 31.7.1996 at 11.45 p.m.
8. R.W.1 has denied a suggestion that the premium amount and Ex.R-1 (Proposal Form) were handed over to him even on 31.7.1996. It is his further evidence that only after payment of premium, the Cover Note and the policy would be issued. The Cover Note and the receipt bear the date 1.8.1996. So also Ex.R-6 Motor Premium Control Register maintained by the Insurance Company. Ex.R-1, proposal form filled up and delivered by the vehicle owner plays a vital role in this case. In the column "Period of Insurance" it is filled up by the vehicle owner as "from 1.8.96 9.00 a.m. to 31.7.97". Even though there is an overwriting on the numerical "9", still the date of commencement of policy has been definitely agreed as 1.8.1996. Concisely stating, the vehicle owner intended to have the Insurance Policy to take effect from 1.8.1996. Had he tendered the premium amount on 31.7.96 itself, he might have written in the proposal form that the commencement of policy should be from 31.7.1996 at 4.30 p.m.
9. From the above said features, it is brought to light that the commencement of premium is only from 1.8.1996 at 9.00 a.m. and not from 31.7.1996. From the oral testimony of R.W.I, it is shown that the premium was not paid on 31.7.1996. In the event of premium being paid on 31.7.1996, the cover note and the receipt for the payment would have been issued on 31.7.1996 itself and not at later point of time.
10. Mr. K.S. Narasimhan, learned counsel for the appellant Insurance Company would strenuously contend that so long as the premium was remaining unpaid, even though any agreement is stated to have taken place between the Insurance Company and the insured, it cannot be comprehended that there was a concluded contract and that proposal form shows that the insurance coverage would take effect from 1.8.1996. Existence of the insurance coverage on the previous date could not be discerned. In support of his contention, he placed reliance upon the decision of the Honourable Supreme Court reported in II (1996) ACC 694 = 1997-2-L.W. 457 (SC) [National Insurance Co. Ltd., vs. Smt.Jijubhai Nathuji Dabhi & Others] in which Their Lordships have held as follows:
"3. This Court in New India Assurance Co. v. Ram Dayal, (1990) 2 SCR 570, 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, namely, it would be operative from 4.00 p.m. on October 25, 1983 and the accident had occurred earlier thereto, the insurance coverage would not enable the claimant to seek recovery of the amount from the appellant company."
11. He also garnered support from another decision of the Apex Court reported in 1998-1-L.W. 14 (SC) [Oriental Insurance Co. Ltd., vs. Sunita Rathi & Others] in which it is held that if the accident took place prior to the time of issue of policy, liability for payment of compensation is that of owner of the vehicle and not of the insurance company. The operative portion of the decision goes thus:
"2. The Motor accident occurred on 10th December 1991 at 2.20 PM. It was only thereafter the same day at 2.55 PM that the insurance policy and the cover note were obtained by the insured, owner of the motor vehicle involved in the cover note that the effective date and time of commencement of the insurance for the purpose of the Act was 10th December 1991 at 2.55 P.M....
3. It follows that the insurer cannot be held liable on the basis of the above policy in the present case and, therefore, the liability has to be of the owner of the vehicle. However, we find that the High Court, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basic fallacy in the conclusion reached by the High Court on this point."
12. A Division Bench of this Court has rendered a decision reported in 2004(1) TN MAC 63 (DB) = 2003-3-L.W.637 [National Insurance Co. Ltd., vs. N.Ponnaiya @ Kolappan & Others] in which the learned Judges have followed a case in 1997 ACT 351 (SC) = 1997-2-L.W.457 [National Insurance Co. Ltd., vs. Smt.Jijubhai Nathuji Dabhi & Others] supra.
13. In another Division Bench decision of this Court reported in 2004(1) TN MAC 174 (DB) [National Insurance Co. Ltd., Branch Office, Dharmapuri Vattam vs. Geetha & others] the above said decision in 1997 ACJ 351 (SC) [National Insurance Co. Ltd., vs. Smt.Jijubhai Nathuji Dabhi & Others] has been followed. Further this Court has also referred another Division Bench Decision of this Court in Oriental Insurance Co. Ltd., vs. Vedathal and others decided on 12.11.2002 in L.P.A. No. 190 of 1999, wherein it is held that if no time is mentioned, but a mere date is mentioned, the insurer would be presumed to have assumed the risk from the commencement of the day. If however, besides specifying the date, the time is also specified, the insurer''s liability would be only from the date and time specified and not earlier. It is concluded by this Court that the insurance company is not liable as the insurance policy was issued with a specific mention of time and date of commencement of the insurance and the accident took place before the said time mentioned in the policy.
14. In C.D.J. L.J. (2007) (Appeal (Civil) 1393 of 2001 and 1394 of 2001 dated 09.07.2007) [National Insurance Co. Ltd., vs. Smt. Sobanalakar and others] the Supreme Court has referred to its prior decisions and concluded that 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. In the said case the accident occurred at 9.15 a.m. on 20.07.1994 whereas the policy was obtained at 2.00 p.m. on the same day. The observations of the Tribunal and the High Court were set aside which were on the ground of non-production of the Cashier and Development Officer.
15. Following the ratio laid down in the above said decision by the Supreme court it has to be held that the commencement of the policy would start from the time and date which are mentioned in the policy and not from earlier point of time. If there is adequate evidence to show and establish that a special contract comes into existence with reference to time and date of policy to commence, the policy becomes effective from the said time and date. In the absence of any such special contract and in the case of absence of any proof for the same, it could not be contended that the policy takes effect from the earlier point of time.
16. Mr.A.N. Viswanatha Rao, learned counsel for the first respondent/claimant would argue in vehemence that since enough materials are available to show that the contract was concluded by 4.30 p.m. on 31.7.1996, as observed by the Tribunal, it has to be found that the insurance company is liable even the policy bears the date 1.8.1996. He relies upon the authority of Supreme Court on this point. In 1997(10) Supreme 289 = 1998-1-L.W.11 [Oriental Insurance Co. Ltd., vs. Inderjit Kaur & Ors.] the Apex Court has held that the policy of insurance that the appellant issued was a representation upon which the authorities and third parties were entitled to act and the appellant insurance company was not absolved of its obligations to third parties under the policy because it did not receive the premium and that its remedies in this behalf lay against the insured.
17. In the above said case, on 30.11.1989 policy was issued for which a cheque was tendered towards payment of premium, however, it was dishonoured. On the reminder by the insurance company the owner paid the premium in cash on 02.05.1990. But the accident took place on 19.4.1990. In this circumstance the Honourable Supreme Court analyzed the provisions u/s 64VB of the Insurance Act and held that despite the bar created by Section 64-VB of the Act, an authorized insurer issued policy of insurance to cover the vehicle without receiving premium therefor and by reason of provisions of Section 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in respect of the premium thereon had not been honoured. It is further observed therein that merely because premium was not received, the insurance company was not absolved of its obligations to third parties under the policy.
18. The facts available in the case on hand are different. The policy was issued only on 1.8.1996 and not on 31.7.1996. But in the case before the Supreme Court, on receipt of cheque a policy was issued and long after, the accident occurred and thereafter the premium was paid in cash. It is to be noted that the policy was brought to existence much earlier to the date of accident but the circumstances in the present case are otherwise.
19. Learned counsel for the respondent also placed reliance upon the decision of this Court reported in 2002-2-L.W.379 [The Oriental Insurance Co. Ltd., vs. G. Moses and others] in which it is held as follows:
"5. It is to be noticed that in the police or cover note, the time is not mentioned. Under these circumstances, especially when the cover note and the proposal form bear the date 3.10.87 as put by the agent on behalf of the Insurance Company, it has to be taken that the policy coverage commences from 3.10.87 itself."
20. The facts in the present case are easily distinguishable. In the above said case the accident took place on 5.10.1987, while the premium was received from the insured on 3.10.1987 by agent, who paid the amount into the insurance company on 5.10.1987. There, no time was mentioned in the policy. Hence, it was held that the policy coverage commences from 12.00 midnight on 4/5.10.1987.
21. Reliance was also placed by the claimant''s side on a Rajasthan High Court''s decision in 1999 ACJ 1033 [National Insurance Co. Ltd., vs. Shanti and others] wherein a single Judge has held that depositing of premium amount is not the responsibility of the vehicle owner; benefit of risk covered cannot be denied to the owner of the vehicle who paid the premium on 4.4.1987 and cover note was issued by the Development Officer of the company. In the said case, accident occurred on 5.4.1987 but admittedly the vehicle was not insured on that date. The Court has held that since on 4.4.1987 itself the premium was paid and cover note was issued to the owner, the insurance company was liable. The facts in that case are not akin to those available in this case.
22. On a conspectus of the evidence on record in the light of the decisions of the Supreme Court, it is to be held that inasmuch as the policy was issued only on 1.8.96 stipulating to take effect from 9.00 a.m., in the circumstance that the premium was paid at 9.00 a.m. on 1.8.96 and in the absence of payment of premium on 31.7.1996, there was no insurance coverage for the vehicle on 31.7.1996 at the time of accident. In a nutshell, it can be stated that the policy takes effect only from 1.8.1996 and no question of policy coverage at any point of time on 31.7.1986. The opinion of the Tribunal that there was a concluded contract on 31.7.1996 at 4.30 p.m. is misconceived. Since the vehicle owner has miserably failed to get the insurance policy to take effect on 31.7.1996, the contention that on account of production of vehicle in the insurance company and obtaining the proposal form from the Development Officer would not at all make the insurance company liable to pay compensation. In other words, in view of the absence of completion of contract and absence of any special contract as to the time of commencement, the insurance company cannot be mulcted with the responsibility of paying compensation. It is held that the appellant insurance company is not liable to compensate the claimant who has to proceed against the owner of the auto. In the opinion of this Court, the award of the Tribunal in this regard has to be set aside and it is accordingly set aside.
23. As regards the quantum of compensation, the award of Rs.57,000/- to the claimant is sustainable. However, it is to be paid by the vehicle owner. The Tribunal has awarded a sum of Rs.30,000/- towards permanent disability and a sum of Rs. 15,000/- for loss of earning power. The award need not be under the two different heads, but it has to be under the same head "Permanent Disability". The observation of the Tribunal is modified to the effect that the claimant is entitled for a sum of Rs.45,000/- on account of permanent disability. In other aspects, the findings of the Tribunal is maintained.
24. In fine, the award of the learned IV Judge, Motor Accident Claims Tribunal, Court of Small Causes, Chennai made in O.P. No. 3428 of 1996 on 08.09.2000 is set aside with reference to the liability of the appellant to pay compensation to the claimant and the Civil Miscellaneous Appeal is allowed. The claimant is at liberty to recover compensation from the owner of the vehicle.
25. It is submitted by the learned counsel for the appellant that the entire award amount has been deposited before the Tribunal. In view of the submission made, the appellant is permitted to withdraw the above said amount with interest. In fine, the Civil Miscellaneous Appeal is allowed. No costs.
