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1999 Supreme(MP) 876
High Court Of Madhya Pradesh
V. K. AGRAWAL
SURESH CHAND AWASTHI - Appellant
Versus
AJESH KUMAR CHOUBEY - Respondents
M. A. 1361 Of 1998
Decided On : 11/19/1999
K.S.VADHVA, S.K.RAO
The time of coverage of risk mentioned in the cover note issued by the insurance company would be relevant and binding on the insurer and the insured, and the insurance company's liability would commence from that time.
Headnote:
MOTOR VEHICLES ACT, 1988 - SECTION 145(B), 145(D), 147(3), 166 - INSURANCE - COVER NOTE - VALIDITY - TIME OF COVERAGE OF RISK - INSURANCE COMPANY LIABLE FROM TIME MENTIONED IN COVER NOTE, NOT FROM MIDNIGHT OF DATE OF INSURANCE.
Fact of the Case:
A truck insured by respondent No. 3, New India Assurance Co. Ltd., Jabalpur, met with an accident on 10.12.1991 at 12.00 noon, causing injuries to the claimant. The Tribunal held that the truck was not insured at the time of the accident and absolved the insurance company from liability. The owner of the truck appealed, contending that the insurance policy covered the risk from 10.12.1991 to 9.12.1992 and became operative from the previous midnight of the date of insurance.
Finding of the Court:
The court held that the cover note issued by the insurance company, which mentioned the time of coverage of risk from 3.15 p.m. on 10.12.1991, would be treated as a policy of insurance and the time of coverage of risk mentioned therein would be relevant and binding on the insurer and the insured. The court further held that the accident, which occurred at 12.00 noon on 10.12.1991, was not covered by the insurance policy as the insurance company's liability commenced from 3.15 p.m. on that date.
Issues: Whether the insurance company was liable to pay the compensation awarded by the Tribunal, considering that the accident occurred prior to the time of coverage of risk mentioned in the cover note.
Ratio Decidendi: The court relied on the provisions of the Motor Vehicles Act, 1988, and the Motor Vehicles Rules, 1989, to hold that the cover note issued by the insurance company would be treated as a policy of insurance and the time of coverage of risk mentioned therein would be relevant and binding on the insurer and the insured. The court also relied on the Supreme Court decision in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi, 1997 ACJ 351 (SC), which held that the insurance policy would be operative from the time and date mentioned in the policy document.
Final Decision: The court dismissed the appeal, holding that the insurance company was rightly exonerated from liability by the Tribunal as the accident occurred prior to the time of coverage of risk mentioned in the cover note.
( 1 ) THIS miscellaneous appeal is directed against the award dated 20. 7. 1998 in M. V. C. No. 254 of 1994 by xii Additional Motor Accidents Claims tribunal, Jabalpur.
( 2 ) INDISPUTABLY, a petition was filed under section 166 of the Motor Vehicles act, 1988 (hereinafter referred to as 'the act' for short) by the respondent No. 1, the claimant, claiming compensation on account of injuries sustained by him in an accident by truck No. MBJ 887 on 10. 12. 1991. It is also not in dispute that the appellant is the owner of the said truck, while it was driven by respondent No. 2. It was averred by the claimant that the truck was insured at the relevant time by respondent No. 3, New India Assurance co. Ltd. , Jabalpur. The insurance policy, exh. NA3-4, indisputably has been issued by the respondent No. 3 for the period from 10. 12. 1991 to 9. 12. 1992.
( 3 ) THE learned Tribunal held that the accident as above occurred on 10. 12. 1991 at about 12. 00 noon due to which the claimant-respondent No. 1 herein sustained injuries. An award of Rs. 25,000 with interest, therefore, was granted and it was held that the appellant owner and the respondent No. 2 driver of the truck were jointly and severally liable to pay the said amount. However, it was held by the learned Tribunal that at the time the accident took place, the truck causing the accident was not insured and, therefore, the respondent No. 3, the insurance company was absolved from the liability of payment of the amount of award.
( 4 ) IN this appeal, the owner has challenged the finding of the Tribunal that the truck was not insured at the time of the accident and, therefore, the insurance company was not liable.
( 5 ) THE learned counsel for the appellant has urged that the policy of insurance marked as Exh. D/4 of non-applicant No. 3 covered the risk from 10. 12. 1991 to 9. 12. 1992. Relying upon Shyamabai v. Vasudeo Rudranarayan Awasthi, 1997 (1)mplj 327, it was urged that the policy having been obtained on the date of accident had become operative from the previous midnight of the date of insurance after zero hour of the midnight and, therefore, the insurance company could not be absolved from liability of the payment ofthe award. Reliance, by the learned counsel, has also been placed on New India assurance Co. Ltd. v. Ram Dayal, 1990 acj 545 (SC ). It has also been urged that it is the insurance policy and not the cover note, which covers the risk and determines the rights and liability of the insurance company, vis-a-vis, the third party and, therefore, the mentioning of the time in the cover note (marked as Exh. NA3-1 by the tribunal) would not absolve the insurance company from its liability. Reliance in this connection has been placed on Prakash v. Amrutlal, 1996 ACJ 940 (MP ).
( 6 ) AS against this, the learned counsel for the respondent No. 3 insurance company has urged that the cover note marked as Exh. NA3-1 in pursuance of the proposal form Exh. NA3-2, for the insurance of the truck was issued after 3. 15 p. m. on 10. 12. 1991. Since the accident occurred prior to it at about 12. 00 noon, the truck was obviously not insured at that time. Therefore, relying upon National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi, 1997 ACJ 351 (SC), it has been contended that the insurance company was rightly absolved from liability of the amount of award.
( 7 ) IN the instant case, proposal form, exh. NA3-2, was filled up by the owner, respondent No. 2. In the said proposal form, date and time has been filled up which is 3. 16 p. m. of 10. 12. 1991. On the basis of said proposal form, cover note, exh. NA3-1, was issued by the appellant insurance company, which also indicates that the risk was covered from 3. 15 p. m. of 10. 12. 1991 to midnight of 9. 12. 1992. Thereafter policy document of insurance, as per Exh. NA3-4 was issued, covering the risk from 10. 12. 1991 to 9. 12. 1992. It is true that in the policy document, Exh. NA3-4, the time of coverage of risk has
