The New India Assurance Co. Alld. vs Murli Manohar Saxena And Another
2023 Latest Caselaw 10366 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Neutral Citation No. - 2023:AHC:106340
 

 
Court No. - 64							Reserved                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        									   A.F.R.
 
Case :- FIRST APPEAL FROM ORDER No. - 1208 of 1992
 

 
Appellant :- The New India Assurance Co. Alld.
 
Respondent :- Murli Manohar Saxena And Another
 
Counsel for Appellant :- Rajiv Chaddha
 
Counsel for Respondent :- N.C. Rajvanshi, Mukesh Kumar Kushwaha
 

 
Hon'ble J.J. Munir,J.

1. This is an appeal by the Insurance Company challenging an award of the Motor Accident Claims Tribunal/ XIth Additional District Judge, Agra dated 13.10.1992 passed in Motor Accident Claims Petition No.64 of 1992, allowing the claim.

2. According to the claimant-respondent No.1, Murli Manohar Saxena on the 4th of September, 1991 at half past ten in the morning hours, he was proceeding from Kamla Nagar to the Civil Court, Agra, riding pillion on Scooter, bearing registration No. UTM-8322, driven by his younger brother, Bhagwanji Saxena. The Scooter was moving on the left hand side of the road and had reached the Abbu Ullah Dargah Bypass Road when suddenly a Jeep, bearing registration No. UVJ-6096 appeared, driven negligently and at a high speed. The driver of the Jeep did not sound any horn and hit the Scooter, that the claimant-respondent No.1 (for short, 'the claimant') was riding. In consequence of the impact, the claimant and his brother fell down injured. They fainted. The Scooter was damaged. The claimant's right lower limb was fractured, and in addition, he sustained injuries to his brain and eyes, besides a number of other body parts. The claimant says that despite treatment, his right lower limb does not function normally. The claimant cannot move about conveniently. He has turned quite a handicapped man both physically and mentally. The claimant was an upcoming lawyer, who had a bright future. However, on account of the injuries sustained in the accident, his practice was adversely affected. Accordingly, the claimant demanded a compensation in the sum of Rs.10 lacs.

3. The Uttar Pradesh State Bridge Corporation Limited are the owners of the offending Jeep. They put in a written statement asserting that the claimant is not entitled to relief. The Uttar Pradesh State Bridge Corporation, who are arrayed as respondent No.2 to this appeal, shall hereinafter be called 'the owners'. The owners in their written statement further on said that the claimant has incorrectly shown his monthly income. He has not disclosed the particulars of the Scooter's insurance nor impleaded the Scooter's insurers as parties to the claim petition. According to the owners, on 04.09.1991, Jeep bearing registration No. UVJ-6096 was being driven by their driver Prithvi Singh, who was proceeding from the owners' office in Nehru Nagar to their work site at the Yamuna Bridge. He was driving the vehicle at a controlled speed. At the Abbu Ullah Dargah, a scooter, proceeding from the direction of the Bhagwan Talkies, overtook the offending Jeep and hit the claimant's Scooter, causing it to be thrown to the ground. The rider of the scooter did not sustain any injury nor was the Scooter damaged. The rider of the scooter, however, escaped. In the disarray, the Jeep driver, in order to save the claimant, jumped off the road into a kachcha pit by the roadside and proceeded on. Suddenly, a Scooter came on from the direction of Kamla Nagar and collided with the owners' Jeep. There was no collision, however, between the offending Jeep and the Scooter, the claimant was riding. Whatever compensation the claimant has sought, he is not entitled to.

4. The New India Assurance Company Limited, who are the insurers of the offending Jeep, were arrayed as opposite party No.2 to the claim petition. The said Insurance Company are the appellants here. They will hereinafter be referred to as 'the Insurers'. A written statement was filed on behalf of the Insurers, denying the allegations in the claim petition generally. It is the Insurers' case that at the time of the accident, the offending Jeep was not insured with the Insurers. The claim petition is barred by Section 149 of the Motor Vehicles Act, 1988 (for short, 'the Act'). On 04.09.1991 at 2:00 p.m., a Senior Engineer got the offending Jeep insured with the Insurers. At the time the Insurance Policy was taken out, the fact was suppressed by the owners that earlier in the day at 10:30 a.m., the offending Jeep was involved in an accident. It is pleaded that if the fact of the accident was within the Insurers' knowledge, they would never have issued the Insurance Policy. It is the Insurers' case that the policy was taken out by the owners playing fraud upon the Insurers. According to the Insurers, they are not obliged to indemnify the owners on the policy held by them.

5. On the pleadings of parties, following issues were struck (translated into English from Hindi):

"1. Whether the accident on 04.09.1991 at 10:30 a.m. happened on account of the negligence and mistake of the driver of Jeep, bearing registration No. UVJ-6096?

2. Whether the accident was not caused by Jeep, bearing registration No. UVJ-6096?

3. Whether Jeep No. UVJ-6096 at the time of the accident was insured with opposite party No.2, New India Assurance Company Ltd.?

4. Whether the claimant is entitled to receive any compensation, if yes, how much and from whom?"

6. On behalf of the claimant, Mr. Shailendra Kulshreshtha, Advocate testified as PW-1, who is an eye-witness of the accident. The claimant, Murli Manohar Saxena testified as PW-2. On behalf of the Insurers, Suresh Chandra Goyal, a Development Officer with the Insurers, was examined as DW-1 and the driver of the offending Jeep, Prithvi Singh was examined as DW-2. Documentary evidence was also led on both sides, to which allusion would be made during the course of this judgment.

7. The Tribunal decided Issues Nos.1 and 2 together. And, rightly so in our opinion, because both issues are identical and involve a similar controversy to decide albeit with some difference. In answering the two issues, the Tribunal considered the evidence of PW-1, who had seen the accident from a distance of about 15 yards. According to this witness, the offending Jeep proceeded from the side of the Bhagwan Talkies, driven at a high speed and negligently. It attempted to overtake the ill-fated Scooter. It is in that attempt that the offending Jeep hit the ill-fated Scooter, causing the accident. The Tribunal has taken note of the fact that it is this witness, who carried the injured to emergency medical aid and lodged a report at Police Station New Agra. The Tribunal has taken note of this witness's testimony, where it is said that he was accompanied by Mr. Naim Sheikh, Advocate, who caught the driver of the offending Jeep on the spot and handed him over to the Police. It is this witness, who has proved the FIR in the case. The Tribunal has noted that PW-1 was cross-examined at length on behalf of the owners, but the cross-examination does not create any doubt about the witness's presence at the site of the accident. PW-2 also supported his claim, the case of accident involving the offending Jeep and the injuries sustained in the accident. The witness does not appear to have been much discredited in the cross-examination.

8. The Tribunal has then taken note of the testimony of the two witnesses produced on behalf of the Insurers. It has been recorded by the Tribunal that DW-1, Suresh Chandra Goyal has said in his testimony that he had insured the offending Jeep on 04.09.1991 against third party risk. The insurance was taken out by the Senior Manager of the owners and it was issued in the name of the Senior Engineer. A Junior Engineer in the owners' establishment, Ashok Varma had come to take out the Insurance Policy. This witness has said in his cross-examination that the policy was taken out at 2 o'clock in the afternoon. He has also said that the coverage of the risk is there after the deposit of money on account of premium due on the policy is accepted. It has further been said that if the premium is not deposited, the coverage of risk does not come into force. The Tribunal has remarked that this witness (DW-1) has testified to the fact that the offending Jeep's insurance was taken out at 2 o'clock in the afternoon.

9. The Tribunal has considered the testimony of DW-2, Prithvi Singh, who is the driver of the offending Jeep. This witness has been noticed to say that on 04.09.1991 between 10:00 - 10:45, he was proceeding from the Nehru Nagar Office to the Water Works Office. As soon as he reached near the Abbu Ullah Chauraha, a scooter overtook him at high speed. At that time, another scooter came from the opposite direction and collided with the other scooter. The riders of one of the two scooters were thrown down. The witness has said that he stopped his vehicle and helped the injured board a three wheeler to ferry them to the hospital. The witness has said that after he had proceeded across some distance, he was caught by 7 or 8 Advocates. The witness has been noticed to say that he requested the Advocates that he did not cause the accident, but he was forced to ride a motorcycle and his vehicle was parked, where he had been stopped. The witness has also said that he was mistreated and got detained at the police station.

10. The Tribunal has remarked that the accident did not happen the way DW-2, Prithvi Singh has described it. It has also been observed that the witness's version is not dependable. It has been observed by the Tribunal that the witness under reference has said that both scooters were thrown down and damaged, but he does not give out the number of the other scooter or its description. The Tribunal has also recorded the fact that the witness has acknowledged in his cross-examination that when the offending Jeep was got released from the Police Station, its mudguard was damaged. The bonnet was depressed and the glass also damaged. The witness does not say in his cross-examination that he had made any report to the Police regarding this damage to the Jeep caused elsewhere. The Tribunal has remarked that since no FIR regarding the damage sustained by the Jeep was lodged, it is evident that it was this witness, who was driving the Jeep negligently, and it is the offending Jeep, which caused the accident. The issues, therefore, were answered in the manner that the accident was caused on account of the rash and negligent driving by the driver of the offending Jeep and further that it was the offending Jeep, that was involved in the accident.

11. Heard Mr. Rajiv Chaddha, learned Counsel for the Insurers in support of the appeal and perused the records. No one appears for the owners.

12. The learned Counsel for the Insurers has attempted to assail the findings of the Tribunal on the two issues aforesaid saying that the offending Jeep was not involved in the accident nor the driver negligent. Upon going through the testimony of PW-1, who is not at all an interested witness, the involvement of the offending Jeep as also the driver's negligence are evident.

13. The driver has acknowledged that the offending Jeep had sustained damage to its mudguard, that was broken. The bonnet and the wind shield were also broken. Though, it is said that this was the condition of the Jeep, when it was released from the Police Station, but in the absence of any action taken by the owners, who are themselves no less a face of the Government than the Police, lends credence to the claimant's case that the offending Jeep was the one involved in the accident and the damage mentioned in his testimony by DW-2, Prithvi Singh, the driver of the Jeep, is attributable to the very accident, that caused injury to the claimant. Also, the fact that the Jeep and the driver were apprehended on the spot and the Jeep later on released from the Police Station, are assurance enough about the involvement of the Jeep. The Tribunal's findings on Issues Nos.1 and 2 cannot be faulted. Those findings are, accordingly, upheld.

14. The Insurers assail the findings of the Tribunal recorded on Issue No.3. It is argued with much vehemence on behalf of the Insurers that the Tribunal has erred in holding that the Insurers are liable, because they did not get the Insurance Policy cancelled, a course of action they should have followed if it was their case that the policy was taken out at 2:00 p.m. on 04.09.1991, after the accident had already happened earlier in the day at 10:30 a.m. It is submitted on behalf of the Insurers that the policy was obtained by the owners practicing fraud on the Insurers and the policy is, therefore, void. The Insurers say that they are not liable to satisfy the award.

15. Upon a perusal of the records, this Court finds that the original cover note issued by the Insurers dated 04.09.1991 is on record as paper No. 44-Ga. Besides that, there are photostat copies of the cover note also on record as paper Nos. 39-Ga and 46-Ga and another photostat copy, paper No. 5-Ga. The cover note, that has been filed on record and marked as paper No. 44-Ga, clearly mentions the time of issue as 2:00 p.m. on 04.09.1991, whereas the photostat copy bearing paper No. 46-Ga does not mention any time. Again, the photostat copy, bearing paper No. 5-Ga, does not mention the time of issue, whereas the photostat copy, bearing paper No. 39-Ga mentions the time of issue as 2:00 p.m.

16. Going by the principles of admissibility of documentary evidence, the original alone is admissible and there is no reason to look into secondary evidence when the primary evidence is there. The photostat copies, numbering two, that do not mention the time of issue of the cover note, could possibly have been used to discredit the genuineness of the document while cross-examining DW-1, Suresh Chandra Goyal, but Suresh Chandra Goyal in his cross-examination has stood firm by the fact that the cover note was issued by him on behalf of the Insurers on 04.09.1991 at 2:00 p.m. He took the said stand in his examination-in-chief, where he has said:

"सशपथ ब्यान किया कि मैं न्यू इंडिया इस्योरेंस कम्पनी OP No.2 में विकास अधिकारी हूँ और बीमा करता हूँ। दिनांक 4.9.91 को दोपहर 2 बजे जीप नम्बर UVJ 6096 का बीमा केवल Third Party Risk के लिए सीनियर इंजीनियर यू पी स्टेट बृज कारपोरेशन के नाम से किया था। बीमा कराने J.E. अशोक वर्मा व एक बाबू चौहान कम्पनी के ब्रांच आफिस महात्मा गांधी रोड आगरा पर आये थे और उन्होंने जीप का बीमा करने को कहा था। 4.9.91 से पहले यह गाड़ी न्यू इंडिया में इन्सोर्ड नहीं रही। 4.9.91 का बीमा First बीमा था। रिनूअल नहीं था। पिछले बीमा का कोई कागज नहीं दिखाया था। यह लोग गाड़ी लेकर नहीं आए थे। इनके द्वारा यह नहीं बताया गया था 4.9.91 को सुबह 10.30 बजे इस जीप से कोई दुर्घटना हुई है।"

17. This witness when cross-examined on behalf of the owners stood firm by his stand that the cover note was issued by him at 2:00 p.m. on 04.09.1991. DW-1 has stated in his cross-examination, at the instance of the owners, thus:

"एक समय में कवर नोट का असल सहित चार कापी बनती है। एक Original Party के पास चली जाती है बाकी आफिस में रहती है। कवर नोट पर मेरे ही दसखत हैं किसी अन्य अधिकारी के नहीं होती। चारो कापियों पर समय एक सा है। बकाया कि दो कापी आफिस में है जीप नम्बर UVJ 6096 का बीमा मैंने किया था। यह मैंने 4.9.91 को दोपहर दो बजे किया था। मैंने यह नहीं कहा कि बीमा दो बजे के बाद किया था। दाखिलशुदा कवर नोट के अलावा मैं अन्य रिकार्ड इसलिए नहीं लाया कि मुझे बताया नहीं गया था। बीमा के समय जीप उपलब्ध नहीं थी व जीप मैंने नहीं देखी। Third Party बीमा पार्टी के विश्वास पर बिना वाहन देखे किया जाता है। असल कवर नोट व कार्बन कापी एक ही समय एक ही Process में लिखी व दसखती है। असल व कार्बन कापी में भिन्नता नहीं है। यह कहना गलत है कि दुर्घटना के समय जीप बीमित हुई है। यह भी कहना गलत है कि दाखिलशुदा कार्बन कापी में समय बढ़ा दिया गया हो।"

18. This Court finds that the original cover note, bearing paper No. 44-Ga has been filed through a list of documents, bearing paper No. 41-Ga by Mr. Rama Kant Dixit, Advocate, Civil Court, Agra. This Court finds from a perusal of paper No. 45-Ga, which is a letter dated 28.05.1992, addressed by the Deputy Project Manager of the owners to Mr. Rama Kant Dixit, Advocate that Mr. Dixit was the owners' Counsel. Thus, it is apparent that the original cover note, bearing paper No. 44-Ga was filed on behalf of the owners, from whose custody it should have logically come. DW-1, Development Officer of the Insurers, has already said in his cross-examination that the original cover note was issued to the owners, which otherwise too is obvious. Therefore, the cover note, being filed by the learned Counsel for the owners, is a document, produced from custody of the party, with whom it should have been. The cover note clearly indicates that it was issued on 04.09.1991 at 2:00 p.m. At the same time, the author of the cover note, who issued it on behalf of the Insurers, has said that it was not a case of renewal, where the Insurers were renewing an existing policy of theirs. He had issued a fresh cover note, without examining the vehicle, which this Court must say, he ought not have done, trusting the onwers. It must be remarked that the Insurers' official should never have issued a cover note, which was a fresh proposal, without examining the vehicle, that does not appear to be a new vehicle. The reference to the trust reposed in the owners, for whatever worth it might be, can only be salvaged for the Insurers by the fact that the owners were a Government Corporation, and it was not expected that they would indulge in practice of fraud or tell falsehood to the Insurers. Unfortunately, in this case the way the evidence has turned out, the officials of the owners, a State Corporation, have practiced apparent fraud on the Insurers, by deliberately not disclosing the fact that the vehicle they proposed to be insured, had met with an accident earlier in the day. Therefore, it must be held that the cover note, on which the owners rely, was issued on 04.09.1991 at 2:00 p.m. Thus, there was no proposal for the Insurers to insure the offending Jeep on 04.09.1991, prior to 2:00 p.m. of that day. The accident happened at 10:30 a.m. on 04.09.1991. At that time, there was no cover note issued by the Insurers.

19. There is no case on behalf of the owners that the Jeep was insured under a policy of insurance by some other Insurer that was expiring on 04.09.1991. Thus, the inference is that until the cover note was issued by the Insurers at 2:00 p.m. on 04.09.1991, there was no insurance cover for the offending Jeep.

20. An issue arises whether a policy issued on a particular day would cover the risk for that day commencing the previous midnight, or what would be the time when the cover note purchased on a particular day becomes effective pending issue of a policy. The question fell for consideration of the Supreme Court in New India Assurance Co. Ltd. v. Ram Dayal and others, (1990) 2 SCC 680, where it was held:

"2. The insurer repudiated its liability by maintaining that the policy had been taken after the accident and, therefore, it had no liability to meet the award of compensation against the owner. The Tribunal accepted this stand and rejected the claim against the insurer. In appeal, the High Court took the view relying upon certain decisions that the insurance policy obtained on the date of the accident became operative from the commencement of the date of insurance -- i.e. from the previous midnight and since the accident took place on the date of the policy the insurer became liable.

3. Apart from the judgment under appeal, we find that this view is supported by two judgments of the Madras High Court and an earlier decision of the Punjab and Haryana High Court. Two Division Benches of the Madras High Court have taken the view after discussing the law at length that the policy taken during any part of the day becomes operative from the commencement of that day. Besides these judgments a Division Bench decision of the Allahabad High Court in Jaddoo Singh v. Malti Devi [AIR 1983 All 87] supports this view on principle.

4. There is evidence in this case that the vehicle was insured earlier up to August 31, 1984 and the same was available to be renewed but instead of obtaining renewal, a fresh insurance was taken from September 28, 1984, which is the date of the accident. We are inclined to agree with the view indicated in these decisions that when a policy is taken on a particular date, its effectiveness is from the commencement of the date and, therefore, the High Court, in our opinion, was right in holding that the insurer was liable in terms of the Act to meet the liability of the owner under the award."

21. The decision in Ram Dayal (supra) was distinguished in Oriental Insurance Co. Ltd. v. Sunita Rathi and others, (1998) 1 SCC 365 on principle, depending on the fact that the commencement of the liability of the insurer would be different, where just the date of the issue of the insurance policy or the cover note was mentioned and a cover note where the date and time of the issue of the insurance policy or the cover note was also mentioned. In Sunita Rathi (supra), which is a three Judge Bench decision of their Lordships of the Supreme Court, it was held:

"2. The motor accident occurred on 10-12-1991 at 2.20 p.m. It was only thereafter the same day at 2.55 p.m. that the insurance policy and the cover note were obtained by the insured, owner of the motor vehicle involved in the accident. There is express mention in the cover note that the effective date and time of commencement of the insurance for the purpose of the Act was 10-12-1991 at 2.55 p.m. The applicability of the decision in Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] has to be considered on these facts. In our opinion the decision in Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] is distinguishable and has no application to the facts of this case. The facts of that decision show that the time of issuance of the policy was not mentioned therein and the question, therefore, was of presumption when the date alone was mentioned and not the time at which the insurance was to become effective on that date. In such a situation, it was held in Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] that in the absence of any specific time being mentioned, the logical inference to draw was that the insurance became effective from the previous midnight and, therefore, for an accident which took place on the date of the policy, the insurer became liable. There is no such difficulty in the present case in view of the clear finding based on undisputed facts that the accident occurred at 2.20 p.m. and the cover note was obtained only thereafter at 2.55 p.m. in which it was expressly mentioned that the effective date and time of commencement of the insurance for the purpose of the Act was 10-12-1991 at 2.55 p.m. The reliance on Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] by the Tribunal and the High Court was, therefore, misplaced. We find that in a similar situation, the same view which we have taken, was also the view in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi [(1997) 1 SCC 66 : (1996) 8 Scale 695] wherein Ram Dayal case [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] was distinguished on the same basis."

(emphasis by Court)

22. The issue again came up for consideration before the Supreme Court in National Insurance Co. Ltd. v. Sobina Iakai (Smt.) and others, (2007) 7 SCC 786. In Smt. Sobina Iakai (supra), it was held:

"14. This Court had an occasion to examine the similar controversy in New India Assurance Co. Ltd. v. Ram Dayal [(1990) 2 SCC 680 : 1990 SCC (Cri) 432 : (1990) 2 SCR 570] . In this case, this Court held that in absence of any specific time mentioned in the policy, the contract would be operative from the midnight of the day by operations of the provisions of the General Clauses Act but in view of the special contract mentioned in the insurance policy, the effectiveness of the policy would start from the time and date indicated in the policy.

15. A three-Judge Bench of this Court in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi [(1997) 1 SCC 66] has held that in the absence of any specific time mentioned in that behalf, the contract would be operative from the midnight of the day by operation of provisions of the General Clauses Act. But in view of the special contract mentioned in the insurance policy, it would be operative from the time and date the insurance policy was taken. In that case, the insurance policy was taken at 4.00 p.m. on 25-10-1983 and the accident had occurred earlier thereto. This Court held (at SCC p. 67, para 3) that "the insurance coverage would not enable the claimant to seek recovery of the amount from the appellant Company".

16. Another three-Judge Bench of this Court in Oriental Insurance Co. Ltd. v. Sunita Rathi [(1998) 1 SCC 365] dealt with similar facts. In this case, the accident occurred at 2.20 p.m. and the cover note was obtained only thereafter at 2.55 p.m. The Court observed that the policy would be effective from the time and date mentioned in the policy.

17. In New India Assurance Co. v. Bhagwati Devi [(1998) 6 SCC 534] this Court observed that, in absence of any specific time and date, the insurance policy becomes operative from the previous midnight. But when the specific time and date is mentioned, then the insurance policy becomes effective from that point of time. This Court in New India Assurance Co. Ltd. v. Sita Bai [(1999) 7 SCC 575 : 1999 SCC (Cri) 1322] and National Insurance Co. Ltd. v. Chinto Devi [(2000) 7 SCC 50 : 2000 SCC (Cri) 1272] has taken the same view.

18. In J. Kalaivani v. K. Sivashankar [(2007) 7 SCC 792 : JT (2001) 10 SC 396] this Court has reiterated clear enunciation of law. The Court observed that it is the obligation of the court to look into the contract of insurance to discern whether any particular time has been specified for commencement or expiry of the policy. A very large number of cases have come to our notice where insurance policies are taken immediately after the accidents to get compensation in a clandestine manner.

19. In order to curb this widespread mischief of getting insurance policies after the accidents, it is absolutely imperative to clearly hold that the effectiveness of the insurance policy would start from the time and date specifically incorporated in the policy and not from an earlier point of time."

(emphasis by Court)

23. In view of the findings of this Court that the policy was issued in fact at 2:00 p.m. on 04.09.1991 and the accident happened at 10:30 a.m., earlier in the day, the principles of law laid down by the Supreme Court in Sunita Rathi and Smt. Sobina Iakai, squarely apply to the Insurers' case. In the opinion of this Court, therefore, the liability to satisfy the award would go to the owners and the insurers have to be relieved.

24. In the result, this appeal succeeds and is allowed. The impugned judgment and award dated 13.10.1992 passed by the Motor Accident Claims Tribunal is modified and it is ordered that the award shall be satisfied by the owners and not the Insurers. The Insurers shall be entitled to costs in the sum of Rs.10,000/- recoverable from the owners.

Order Date :- 10.4.2023

Anoop