Madras High Court
The Oriental Insurance Company Limited vs Venkataraman on 18 July, 2012
Author: N.Kirubakaran
Bench: N.Kirubakaran
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.07.2012 CORAM THE HON'BLE MR. JUSTICE N.KIRUBAKARAN C.M.A.Nos.542 to 544 of 2008 The Oriental Insurance Company Limited, Rep. by its Branch Manager, Vellore. .. Appellant (CMA.No.542 of 2008) Vs. 1.Venkataraman 2.G.F.Christhuraj 3.B.T.Paul Raj (2nd respondent, driver remained ex parte in the lower court and notice dispensed with for him) .. Respondents (CMA.No.542 of 2008) C.M.A.No.542 of 2008 : This Civil Miscellaneous Appeal is filed under Section 173 of the Motor Vehicles Act, 1988 against the judgment and decree made in MACTOP.No.122 of 2004 dated 29.08.2007 on the file of the Motor Accidents Claims Tribunal (Fast Track Court, Additional District Judge) at Tirupattur. CMA.No.543 of 2008 The Oriental Insurance Company Limited, Rep. by its Branch Manager, Vellore. .. Appellant (CMA.No.543 of 2008) Vs. 1.Ravichandran 2.G.F.Christhuraj 3.B.T.Paul Raj (2nd respondent, driver remained ex parte in the lower court and notice dispensed with for him) .. Respondents (CMA.No.543 of 2008) C.M.A.No.543 of 2008: This Civil Miscellaneous Appeal is filed under Section 173 of the Motor Vehicles Act, 1988 against the judgment and decree made in MACTOP.No.123 of 2004 dated 29.08.2007 on the file of the Motor Accidents Claims Tribunal (Fast Track Court, Additional District Judge) at Tirupattur. CMA.No.544 of 2008 The Oriental Insurance Company Limited, Rep. by its Branch Manager, Vellore. .. Appellant (CMA.No.544 of 2008) Vs. 1.Nandagopal 2.G.F.Christhuraj 3.B.T.Paul Raj (2nd respondent, driver remained ex parte in the lower court and notice dispensed with for him) .. Respondents (CMA.No.544 of 2008) C.M.A.No.544 of 2008: This Civil Miscellaneous Appeal is filed under Section 173 of the Motor Vehicles Act, 1988 against the judgment and decree made in MACTOP.No.124 of 2004 dated 29.08.2007 on the file of the Motor Accidents Claims Tribunal (Fast Track Court, Additional District Judge) at Tirupattur. For Appellant : Mr.M.Krishnamoorthy For Respondents 1 & 3 : Mr.P.S.Kothandaraman For Respondents -2 : Ex-parte JUDGMENT
The appeals have been preferred by the Insurance Company assailing the award on the grounds of
1. No existing policy.
2.The claimants were unauthorized persons.
Three MACTOPs were disposed by a common judgment passed on 29.08.2007 in MCOP.Nos.122,123 and 124 of 2004 and therefore, these appeals are also dealt with and disposed of by this common judgment.
2. The first respondent in respective appeals were travelling in a van insured with the appellant which was engaged for carrying flower bags to Chennai on hire charges. As the goods were perishable goods and the same were to be delivered in time. The van was driven rashly and negligently and the vehicle fell into a pit and caused injuries to the first respondent in these appeals. Therefore, claim petitions were filed. The said claim petitions were resisted by the appellant/Insurance Company, contending that the first respondents/claimants are unauthorized passengers and there was no valid insurance policy.
3.The Tribunal, on enquiry found that
(i) The van was driven in a rash and negligent manner and the driver of the said van was responsible for the accident.
(ii) There was existing policy and third respondent/third claimant are not unauthorized passengers;
Aggrieved by the same only the Insurance Company is before this Court.
4. Mr.M.Krishnamurthy, learned counsel appearing for the appellant would submit that the Insurance Company in specific stated in paragraphs 3 of the counter statement that the accident took place on 27.10.1999 at 1.00 P.M., and the policy took effect only from 28.10.1999 and therefore, there was no valid insurance coverage. In paragraphs 4, it is stated that the first respondents / claimants travelled as unauthorized passengers. He specifically referred Ex.R1 Insurance Policy and submits that it is noted in R1 policy that the policy takes effect from 0.00 hours on 28.10.1999 i.e. Midnight whereas the accident occurred on the previous date namely 27.10.1999 at 11.00 P.M., therefore, there is no insurance coverage. He relied upon the following judgments.
1. New India Assurance Company Limited Vs. Sita Bai and others reported in 2000 ACJ 40.
2.National Insurance Company Limited Vs. N.Ponnaiyan and others reported in 2005 ACJ 1103.
3.National Insurance Company Limited Vs. Geetha and others reported in 2006 ACJ 700.
4.Pahari Lal and others Vs. Mahesh Ram and others reported in 2006 ACJ 1853.
5.Branch Manager, National Insurance Company Limited Vs. Hamza and another reported in 2005 ACJ 325.
Relying upon the above judgments, the learned counsel would strongly argue that the time mentioned in the Insurance cover alone would be the starting point of Insurance coverage and not the date of payment of premium.
5. On the other hand Mr.P.S.Kothandaraman, learned counsel appearing for the respondents/claimants would support the award of the Tribunal by contending that the coverage would come into effect from the time of payment.
6. Heard the parties and perused the records.
7. It is an admitted fact that the accident occurred on 27.10.1999 at 11.00 P.M. when the first respondents/first claimants in all the CMAs. were travelling in the van which fell into a pit causing injuries. It is seen from Ex.P5 - payment receipt issued by the appellant /Insurance Company that the amount was paid in respect of the van on 27.10.1999. Whereas Ex.R1 the Insurance Policy states that the policy period commences by 0.00 hours on 28.10.1999 i.e mid night on 28.10.2000. It is noted in Ex.R1 that the Insurance Policy was issued on 27.10.1999 itself, when the amount premium was collected on 27.10.1999 and the Insurance policy was also issued on 27.10.1999. When the above is the position, the Insurance Company cannot postpone and fix the policy period from 0.00 hours on 28.10.1999. No reason was given as to why the period is fixed from 0.00 hours on 28.10.1999, especially when the amount was received and policy was issued on 27.10.1999 itself. Having received the amount on 27.10.1999, it is obligatory on the part of the Insurance Company to issue the Insurance Coverage Policy immediately commencing the period from the time of receiving the premium amount and it cannot unilaterally fix the subsequent time or date as starting point for policy coverage. If the contention of the Insurance Company is accepted, it would be against the interest of public and more over the said contention itself is against public policy. Having received the premium for indemnifying claim, the Insurance Company has no other option but to accept the commencement of policy from the time of receipt of the premium.
8. As a public undertaking, the Insurance Companies are expected to act fairly and in the name of insurance contract, they cannot put unilateral and unconscionable clauses and employ them against the insured, who discharge their obligations of taking policy as per statutory requirements under Section 146 of the Motor Vehicles Act 1988. Once statutory obligation is discharged by the Insured, the Insurance Policy would duly come into force immediately and any other contention will go against the very purpose of Insurance concept.
9. In this case, as stated above, the Insurance premium was paid on 27.10.1999 and receipt as well as the Insurance Company policy was issued on 27.10.1999. However, strangely, Ex.R1 Insurance policy speaks about the commencement of insurance policy from 0.00 hours on 28.10.1999. In the interregnum, the vehicle met with an accident on 27.10.2000 at 11.00 P.M. itself, as evidenced from Ex.P1 - FIR. In view of the conclusion reached by this Court that the Insurance policy coverage would start from the time of payment of insurance premium irrespect of the time mentioned in the policy, the Insurance Company is liable to pay for the compensation to the victims of the accident.
10. Relying upon the judgment in New India Insurance Company Limited Vs. Sitabai and others reported in 2000 ACJ 40, it was argued by the learned counsel for the appellant that when there is a mention of the specific time for the purchase of the policy, the policy becomes effective from the time mentioned in the cover note of the policy itself. However, it is seen in that case that the Insurance proposal was given even on 16.04.1987 at 21.00 hours and the Insurance cover note was also given on 16.04.1987 at 21.00 hours and the accident occurred at 10.00 AM on 16.04.1987 i.e. much before the commencement of the Insurance Policy. Therefore, the facts of the said judgment are not applicable to the facts of the present case.
11. In National Insurance Company Limited Vs. N.Ponnaiyan and others reported in 2005 ACJ 1103 is concerned, in the said case, the accident occurred on 12.07.1991 at 3.00 PM and the policy was taken only after the accident and therefore, the said judgment is also not applicable to the facts of the present case.
12. In National Insurance Company Limtied Vs. Geetha and others reported in 2006 ACJ 700, it is not specifically mentioned when the amount was paid for insurance policy. It only refers about the issuance of policy which is effective from 15.06.1998 at 10.00 AM Where as, the accident took place on 15.06.1998 at 5.30 PM. The Division Bench rightly relied upon Section 64 VB of the Insurance Act, 1938, and held that unless the Insurance Company accepts and issues policy, the person who paid the premium cannot come forward with a plea that the Insurance Company is having an obligation. Section 64 VB of the Insurance Act reads as follows:-
64 VB No risk to be assumed unless premium is received in advance:-
(1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may prescribed, is made in advance in the prescribed manner.
(2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer.
Explanation : Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be.
(3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent.
(4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collection excluding bank and postal holidays.
(5) The Central Government may, by rules, relax the requirements of sub-section(1) in respect of particular categories in insurance policies.
(6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer.
A reading of Section 64 VB would show that the Insurance Company shall not assume any risk unless premium is received by the Company. The said provision should be understood that as soon as the amount is paid, the Insurance Policy is deemed to have commenced. Even as per the above said Division Bench Judgment, unless the Insurance Company accepts and issues policy, the Insurance Company is not having any obligation. In this case, the amount was paid on 27.10.1999 itself as evident from Ex.P5 and on the same day, the Insurance policy Ex.R1 was issued. Therefore, the said judgment is in favour of the first respondents/claimants. The Supreme Court judgments referred to in the above judgment would speak about the cases where the Insurance Policies were taken subsequent to the accident.
13. It is unnecessary to go into the details of the judgments of the Single Judgment of Madiya Pradesh High Court and Karnataka High Court, reported in 2006 ACJ 1853 and 2005 ACJ 325 respectively. In view of the peculiar circumstances of the case and the above position of law, this Court feels that at the time of accident, there was subsisting Insurance policy and Ex.R1 policy was issued on 27.10.1999 much prior to the time of the accident. Therefore, the appellant is liable to pay the compensation, which was rightly held by the Tribunal.
14. It is stated in Ex.P1 FIR that the first respondents travelled as owners of flowers which were taken to Chennai for sale and confirmed by the oral evidence of claimants and Exs.P5, 11 and P16. In view of the above, the Tribunal categorically came to the conclusion that they travelled only as owners of the goods in the Van. Therefore, the said finding of the Tribunal is based on evidence and the same cannot be set aside.
15. The appellant is liable to pay the amount to the first respondents/first claimants. The appellant is directed to deposit the entire award amount in the Tribunal, if it is not already deposited within a period of eight weeks from the date of receipt of a copy of this order. The Tribunal is directed to pay the entire amount to the respondents/claimants within a period of two weeks thereafter.
16. For the above reasonings, these appeals are dismissed. Consequently the connected Miscellaneous Petitions are closed. No costs.
18.07.2012
Index : Yes / No
Internet : Yes/ No
adl
To
The Motor Accidents Claims Tribunal
(Fast Track Court, Additional District Judge)
Tirupattur.
N.KIRUBAKARAN, J.
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C.M.A.Nos.542 to 544 of 2008
18.07.2012