An insurer is statutorily bound to assume risk from the date and time of premium receipt. The insurer cannot postpone the commencement of coverage to a later date via policy conditions if the premium was already tendered, as this would defeat the purpose of mandatory third-party insurance.

ORDER

This Miscellaneous Appeal under Section 173(1) of the Motor Vehicles Act, 1988 has been preferred by the appellant/Insurance Company by taking exception to the Award dated 26/02/2022 passed by the Fourth Additional Motor Accident Claims Tribunal, Gwalior in Claim Case No.500108/2015, whereby the Claims Tribunal awarded compensation in favour of the claimants by imposing liability upon the Insurance Company.

2. The date of accident and negligence are not in dispute. However, the findings recorded by the Claims Tribunal in this regard are not under challenge.

3. Learned counsel for the appellant/Insurance Company submitted that the impugned award passed by the Claims Tribunal is erroneous and contrary to the facts, evidence and material available on record. It is submitted that the Claims Tribunal failed to properly appreciate the evidence of Anand Shrivastava (DW-2), which clearly establishes that the subject motorcycle bearing registration No. MP 07 MT 9688 was not insured with the appellant Company on the date of accident, i.e., 19/04/2015, but was insured for the period from 21/04/2015 to 20/04/2016 under a “Two Wheeler Liability Only” policy. It is further submitted that the Claims Tribunal committed an error in holding that the appellant/Insurance Company had received the premium on 16/04/2015 through fund transfer by Rajaram Sahu, as reflected in the policy document. Learned counsel submits that the appellant/Insurance Company, by adducing cogent oral and documentary evidence, proved that agent Rajaram Sahu had deposited an advance amount with the Company and whenever any insurance policy was issued, the premium amount was deducted from the said advance deposit. According to the appellant, the date 16/04/2015 mentioned in Ex.D/2 pertains to the advance deposit made by Rajaram Sahu and not to the payment of premium by the insured. It is also contended that the premium amount was actually paid on 20/04/2015, whereafter the policy was issued and made effective from 21/04/2015. It is further argued that the Claims Tribunal failed to properly appreciate Ex.D/3, which is a computer-generated entry relating to the fund transfer. From the said document, it is evident that agent Rajaram Sahu had an advance deposit of Rs.15,000/- with the Company, whereas the premium amount of the subject vehicle was only Rs.548/-. It is submitted that the fund transfer dated 16/04/2015 mentioned in the policy related to the advance deposit of Rajaram Sahu and not to the premium deposited by the insured. Therefore, according to the appellant, the Claims Tribunal erred in fastening liability upon the Insurance Company. It is further submitted that insurance is contractual in nature between the insurer and the insured. Since, as per Ex.D/2, the policy commenced from 21/04/2015 and the accident occurred on 19/04/2015, the offending vehicle was not insured on the date of accident and, therefore, the appellant/Insurance Company cannot be held liable to pay compensation. . Reliance has been placed upon the judgments in Deokar Exports PVt. Ltd Vs New India Assurance Company Ltd , 2009 ACJ 133, Oriental Insurance Company Ltd VS. Sunita Rathi and others , 1998 (1) ACJ 121, Oriental Insurance Company Ltd Vs. Poreselvi and another 2009 (5) SCC (civil) 926, National Insurance Co. Ltd Vs Jijubhai Nathuji Dabhi and Ors. , Manu/SC/0525/1997, New India Assurance Co. Ltd VS Sita Bai , 1999 (2) JLJ 415 (SC) and M/s National Insurance Company Ltd Vs Smt. Jijub