Madhya Pradesh High Court
New India Assurance Co. Ltd. vs Ram Ratan And Ors. on 17 April, 2001
Equivalent citations: 2003ACJ323
Author: A.M. Sapre
Bench: A.M. Sapre
JUDGMENT Bhawani Singh, C.J.
1. Award dated 30.1.1997, of the Motor Accidents Claims Tribunal, Mandsaur, passed in Motor Accident Claim Case No. 81 of 1994, has been challenged through this appeal by the New India Assurance Co. Ltd., Sanghi Colony, Agra-Bombay Road, Indore.
2. On 24.12.1992, the claimant Ram Ratan (34) was travelling by tractor-trolley No. MIU 6731 for going to market. This vehicle was owned by Paraslal, respondent No. 6, driven by Satya Narayan, respondent No. 4 and insured with Oriental Insurance Co. Ltd., respondent No. 7. Truck No. MEN 1232 was owned by Abdul Rashid, respondent No. 3, driven by Satbir Singh, respondent No. 2 and insured with the New India Assurance Co. Ltd., appellant. The accident took place on 24.12.1992, at 8 a.m., when the truck hit the tractor-trolley, which had been parked on the roadside. As a result of this accident, the claimant, who was sitting in rear portion of the tractor, was injured resulting in amputation of his right leg below knee, resulting in disability to the extent of 70 per cent. Compensation of Rs. 13,75,283.69 has been claimed. However, the Claims Tribunal has awarded compensation of Rs. .1,79,100, carrying interest at the rate of 12 per cent per annum from the date of application.
3. The owner and driver of truck No. MEN 1232 have been proceeded ex pane. The owner, driver and the insurer of the tractor-trolley No. MIU 6731 filed written statement, in which allegations have been denied. It has been stated that the tractor-trolley had been parked by the side of road and it was the truck, which committed the accident. It is also stated that criminal case under Sections 279, 337 and 338 of the Indian Penal Code has been registered against the driver of the truck No. MEN 1232. Consequently, liability for accident and -payment of compensation has been denied.
4. The defence of New India Assurance Co. Ltd. is that it is not liable to pay compensation because the vehicle was insured at 2 o'clock while the accident took place at 8 a.m. The contract of insurance has not come into force, apart from the fact that it had been produced by concealment of fact as to the taking place of incident in the same morning.
5. The Claims Tribunal has found that the accident took place due to rash and negligent driving of truck No. MEN 1232 and not due to rash and negligent driving of tractor-trolley No. MIU 6731. It is further found that as a result of this accident, the claimant had suffered serious injuries resulting in permanent disability. Consequently, the compensation of Rs. 1,79,100 carrying interest at the rate of 12 per cent per annum from the date of application has been awarded, payable by the owner and driver of truck No. MEN 1232, jointly and severally and since it was insured with New India Assurance Co. Ltd., the liability, therefore, rested on this company.
6. Oriental Insurance Co. Ltd., with which tractor-trolley No. MIU 6731 was insured, has been exonerated. Consequently, this appeal is at the instance of the New India Assurance Co. Ltd. The claimant is not satisfied with the award, therefore, cross-objections for enhancement of compensation and fixing of liability on both, New India Assurance Co. Ltd. and Oriental Insurance Co. Ltd., has been made.
7. Heard the learned Counsel for the parties and record perused. Mr. S.S. Dandvate, learned Counsel for New India Assurance Co. Ltd., forcefully contends that the award of Claims Tribunal dated 30.1.1997, is liable to be set aside. So far as his claim is concerned, the contract of insurance policy commenced from 24.12.1992, at 2 o'clock as per cover note issued by the insurance company, apart from the fact that, it was procured by the insured without disclosing the factum of incident, which had taken place in the same morning. With a view to support this submission, learned Counsel brought to our notice three decisions reported in New India Assurance Co. Ltd. v. Ram Dayal 1990 ACJ 545 (SC); National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi 1997 ACJ 351 (SC) and New India Assurance Co. Ltd. v. Bhagwati Devi 1999 ACJ 534 (SC). In the first case, the principle laid down by the Apex Court is that where policy is obtained on the date of accident, it becomes operative from the previous midnight of the date of insurance and in case of accident, the insurance company is liable. In this decision, question as to whether the liability can be fastened on the insurance company, when specific time about execution of policy is mentioned, did not fall for consideration. Actually, this question came for consideration in the later two decisions. In Jikubhai Nathuji Dabhi's case (supra), the Supreme Court distinguished Ram Dayal's case (supra) and held that in case time is mentioned in the contract of insurance, liability will arise after that time and not before, meaning thereby, if the accident takes place before the time mentioned in the policy, the insurance company is not liable. This view is further approved in Bhagwati Devi's case (supra). Therefore, the legal position, which emerges, is that the parties are governed by the contract of insurance. Since the insurance company specifically mentioned time for operation of the contract, its liability for payment of compensation arising out of the motor accident starts after the time so mentioned and not before that. [See also Oriental Insurance Co. Ltd. v. Sunita Rathi 1998 ACJ 121 (SC); New India Assurance Co. Ltd. v. Sita Bai 2000 ACJ 40 (SC) and National Insurance Co. Ltd. v. Jagarnath 2002 ACJ 1748 (MP)].
8. Another aspect of the same question is status of cover note. The practice followed by the insurance company is to issue cover note by its competent office/agent immediately on payment of the insurance premium and covers the risk, in case some accident takes place. It is followed by formal execution of policy of insurance within a reasonable time. [See United India Insurance Co. Ltd. v. Surendran Nair 1990 ACJ 581 (Kerala)]. Therefore, it is held that New India Assurance Co. Ltd. is not liable for payment of compensation in this case.
9. The next question is whether Oriental Insurance Co. Ltd. is liable. The Claims Tribunal has exonerated this company from payment of compensation. We are of the opinion that on the basis of evidence, particularly of claimant himself and Satyanarayan (driver of tractor-trolley No. MIU 6731), Oriental Insurance Co. Ltd. is not responsible for payment of compensation. Having exonerated both the insurance companies from payment of compensation, the liability falls on the owner and driver of truck No. MEN 1232, since the accident occurred due to rash and negligent driving of the truck No. MEN 1232. It is in evidence that the tractor-trolley No. MIU 6731 had been parked on the side of the road and there was sufficient space for any vehicle to move on the road. The claimant has stated that three vehicles would pass on the road simultaneously and the tractor-trolley had been parked on the roadside.
10. Through the cross-objections, the claimant is seeking enhancement of compensation. It is submitted that the claimant was 34 years old at the time of accident and permanent disability suffered by him is to the extent of 70 per cent, his right leg having been amputated from under the knee. As a result of this accident, he had to undergo great pain and suffering. He had to move for treatment for a considerable period incurring huge expenses. He possessed 5.5 bighas of land in District Mandsaur. Annual income is stated to be Rs. 50,000. Due to this injury and disablement, he cannot attend agriculture operations regularly and effectively as he had been doing before the accident.
11. With the aforesaid background, we are of the opinion that the award of compensation in this case (Rs. 50,000 for pain and suffering, Rs. 5,000 for medical expenses and Rs. 1,15,000 for loss of earnings for 16 years) appears to be on lower side. Therefore, it is desirable that it is increased to (Rs. 50,000 for pain and suffering, Rs. 15,000 for medical expenses and Rs. 1,50,000 for the loss of income) Rs. 2,15,000, carrying interest at the rate of 12 per cent per annum from the date of application till payment. The compensation is payable by owner and driver of truck No. MEN 1232 jointly and severally within a period of two months.
12. Consequently, the appeal is allowed in terms aforesaid. Costs on parties.