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1997 Supreme(Mad) 761
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE E. PADMANABHAN
Oriental Insurance Company Ltd., Nagercoil, Kanyakumari District
Versus
S. Mariyal & Others
A.A.O. No. 941 of 1995
Decided On :Decided on : 30-07-1997
For the Appellant:N. Vijayaraghavan, Advocate.
For the Respondents: No Appearance.
An insurance company is not liable to pay compensation for an accident that occurs when the vehicle is not covered by an insurance policy.
Headnote:
MOTOR VEHICLES ACT - INSURANCE - LIABILITY OF INSURER - INSURANCE POLICY EXPIRED ON 28.11.1992 - ACCIDENT OCCURRED ON 30.11.1992 - RENEWAL POLICY ISSUED ON 1.12.1992 - INSURANCE COMPANY NOT LIABLE TO PAY COMPENSATION - OWNER OF THE VEHICLE LIABLE.
Fact of the Case:
A cyclist was killed in an accident on 30.11.1992. The accident was caused by the rash and negligent driving of the vehicle involved in the accident. The vehicle was insured with the appellant-Insurance Company. The insurance policy expired on 28.11.1992. A renewal policy was issued on 1.12.1992. The Tribunal held that the Insurance Company was liable to pay compensation to the claimants. The Insurance Company challenged the award and decree of the Tribunal.
Finding of the Court:
The Court held that the Insurance Company was not liable to pay compensation as the vehicle was not covered by an insurance policy at the time of the accident. The Court also held that the owner of the vehicle was liable to pay compensation.
Issues: Whether the Insurance Company was liable to pay compensation for an accident that occurred on 30.11.1992 when the insurance policy had expired on 28.11.1992 and a renewal policy was issued on 1.12.1992.
Ratio Decidendi: The Court held that the Insurance Company was not liable to pay compensation as the vehicle was not covered by an insurance policy at the time of the accident. The Court relied on the following principles: * A Motor vehicle insurance policy is effective only for the period specified in the policy and not from the date of expiry of an earlier policy if any, in respect of the same vehicle, issued by the same insurer. * In view of Section 64-V(b) of the Insurance Act the risk on the part of the insurer commences only on the payment of the premium by the insured. * In the present case the premium was paid at 11 a.m. on 17.11.1983 and the policy was also issued to be effective from 11 a.m. on 17.11.1983 till 16.11.1984 and therefore it did not cover the risk arising out of the accident which took place at 10 a.m. on 17.11.1983.
Final Decision: The Court allowed the appeal and set aside the award and decree of the Tribunal against the Insurance Company. The Court held that the owner of the vehicle was liable to pay compensation.
1. This appeal has been preferred by the Insurance Company, challenging the Award and decree of the District Court (Motor Accident Claims Tribunal), Tuticorin, dated 30.3.1995, made in M.C.O.P. No. 303 of 1992.
2. In this appeal, the appellant has not challenged the finding of the Tribunal below that the accident was caused by the rash and negligent driving of the vehicle involved in the accident and also the quantum of compensation awarded by the Tribunal.
3. The only contention that has been raised by the appellant-Insurance Company is that it is not liable to pay the compensation as on the relevant date and time of the accident, the vehicle was not covered by the policy issued by the appellant-Insurance Company.
4. In the present case, the accident occurred on 30.11.1992 around 5.00 P.M. and the cyclist Samuel died on the spot. The claimants are his widow and son respectively. The vehicle involved in the accident is admittedly the van TN-74.1274, owned by the 3rd respondent in this appeal, who is the first defendant in the M.C.O.P.
5. The Tribunal, while holding that the said van was driven rashly and negligently held that the owner of the vehicle, the 1st respondent before it, is liable vicariously, and awarded a total compensation of Rs. 40,000/- with interest at 12% per annum from the date of petition. The Tribunal below has held that the insurer of the vehicle, the 2nd respondent before it, is liable to pay the compensation.
6. The only question that has been raised in this appeal is, as to the liability of the insurer of the vehicle. The vehicle in question owned by Jesiah, the 1st respondent in the original petition, was initially insured with the 2nd respondent-Insurance company as seen from Exs. R.1 and R.2. Ex. R.1, insurance policy was for the period 29.11.1991 to 28.11.1992. Ex. R. 2 also was for the period 1.12.1992 (11.10 A.M.)to 30.11.1993.
7. The Assistant Divisional Manager of the Insurance Company, who was examined as R.W. 1, deposed that the policy Ex. R.1 would cover the period 29.11.1991 to 28.11.1992 and the policy Ex. R.2 would cover the period commencing from 11.10 A.M. on 1.12.1992 to 30.11.1993. According to R.W.1, on 30.11.1992, the date of accident, the vehicle in question was not covered by a policy and the vehicle was not insured at all. As deposed by R.W.1, the vehicle was not covered by the Insurance policy for two days, viz., 29.11.1992 and 30.11.1992. Ex. R.3 would show that on 1.12.1992 alone premium has been paid by the owner of the vehicle. Basing upon such payment. Ex. R.2 policy had been issued for the period commencing from 11.10 A.M. on (sic) 30.11.1993(?). These facts, as deposed by R.W.I, had not been challenged and the Tribunal below also had recorded the same. Thus, at the material point of time, viz., on 30.11.1992 at 5.00 P.M., the vehicle in question was not covered by an insurance policy. The Tribunal took the view that there is a gap of two days and though the policy has been renewed on 1.12.1992 by the same Insurance Company, it is a continuation of the previous policy and being a renewal, the Insurance Company is liable and the liability of the Insurance Company in no way ceases even though the policy issued expired on 28.11.1992.
8. Learned counsel for the appellant contended that in the absence of a valid insurance at the relevant point of time, the appellant-Insurance Company is not liable at all and the Tribunal below ought to have exonerated the Insurance Company from payment of the compensation.
9. There is force in the contention raised by learned Counsel for the appellant. This Court heard learned counsel for the appellant in detail. Learned Counsel for the respondents claimants, despite opportunity being given, have failed to appear on more than three occasions and in the circumstances, this Court reserved judgment.
10. Learned Counsel for the appellant placed reliance upon the decisions in Asma Begum and Others v. Nisar Ahmed and others (1990 ACJ 832 (F
