National Insurance Co. Ltd. vs Deorao S/O Bhayyaji Patne And Ors.
2002 Latest Caselaw 667 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. This First Appeal is directed against an order dated 25-3-1996 passed by the Motor Accident Claims Tribunal, Nagpur, on an application for compensation under Section 140 of the Motor Vehicles Act, 1988. The Tribunal has allowed the application for compensation and has directed the Insurance Company, which is in Appeal before this Court, to pay to the claimants an amount of Rs. 25,000/- together with interest at the rate of 12% per annum from the date of the application until the realization of the amount. Consequential directions have been issued as regards the payment of l/7th of the amount deposited to each of the claimants.

2. Briefly stated, the facts relating to the case are that respondents 1 to 7 filed an application under Section 140 of the Motor Vehicles Act, 1988 claiming compensation on account of no-fault liability for the death of one Ranjana Deorao Patne on 9-12-1989 in the course of an accident with a truck bearing registration No. MWY 2682 belonging to the 8th respondent. The 8th respondent filed a reply before the Claims Tribunal contending that the vehicle had been insured with the appellant on the date of the accident and the appellant ought to be joined as a party to the claim proceedings. The 8th respondent produced a cover note purported to have been issued by the Appellant on 3-12-1989 showing the period of validity of the contract from 4-12-1989 until 3-12-1990. The appellant came to be joined as a party to the proceedings in pursuance of the order passed by the Tribunal on 5-5-1990. The appellant filed its reply to the application under Section 140 of the Act. The case of the appellant is that the cover note which had been relied upon by the 8th respondent was tampered and that on the date on which the accident took place, i.e. 9-12-1989 the vehicle had not been insured by the appellant. The appellant in support of its contentions produced a certified copy of the cover note which shows that the cover note was issued on 13-12-1989, and that the policy of insurance for the vehicle which was involved in the accident was actually issued on 14-12-1989.

3. In the course of the adjudication of the application filed under Section 140 of the Act by the original claimants, evidence came to be adduced before the Claims Tribunal. The appellant examined its Branch Manager and the Agent who had prepared and issued the Cover Note to the 8th respondent. The appellant produced its office record before the Tribunal to substantiate its case that the premium which had been paid, had been paid on 14-12-1989. The Insurance Agent in the course of his examination deposed that the truck had been insured with the appellant through his agency and that the period covered by the policy was 14-12-1989 to 13-12-1990. The Agent also deposed that the effective date in the cover note was 14-12-1989. The Agent deposed to the fact that he had obtained from the office of the R.T.O. the certified insurance and registration particulars in respect of the vehicle and the validity period in the certificate issued by the R.T.O. was 14-12-1989 to 13-12-1990. In the copy of the cover note, which was produced by the owner of the vehicle, the date which was shown as the commencement of the contract was 3-12-1989. According to the Agent, this date had been inserted by the owner fraudulently. The Agent also specifically stated that the owner had paid to him premium on 13-12-1989 and that the cover note had been issued to him on the same date.

4. The Branch Manager of the concerned branch of the appellant similarly deposed to the fact that the cover note had been issued by the appellant on 13-12-1989; that the premium was received by the Branch on 14-12-1989 and, therefore, the policy was effective from 14-12-1989. The Branch Manager produced a photo copy of the policy of insurance and deposed that the period covered thereunder was 14-12-1989 to 13-12-1990. From the office record, the Branch Manager deposed to the fact that the cover notes immediately preceding the cover note which had been produced by the owner were of the date 13-12-1989, while the immediately succeeding cover note was of 14-12-1989. He stated that it was the stand of the Insurance Company that on 9-12-1989 there was no valid insurance cover in force and the insurance policy was issued on 14-12-1989 after the accident had taken place.

5. The Motor Accident Claims Tribunal, Nagpur, by the impugned order dated 25-3-1996 allowed the application filed under Section 140 of the Act, as already noted, and directed the appellant to pay to the claimants Rs. 25,000/- with interest at the rate of 12% per annum from the date of application till realization of the amount. The reason which has weighed with the learned trial Judge was that the dispute between the owner and the Insurance Company ought not to result in the application of the claimants filed under Section 140 of the Act being kept pending. The learned Member held that if it was found later that the owner had forged and tampered with the cover note, he would be directed to return the amount to the Insurance Company together with penal interest. Though evidence was recorded in the proceedings under Section 140 of the Act, there is no reference to the evidence in the impugned order passed by the Tribunal.

6. The learned counsel for the appellant impugned the finding which has been arrived at by the Claims Tribunal in the present case. The learned counsel urged that the scope of an enquiry under Section 140 of the Act is limited. However, this is a case where on the facts, as they stand, there was no contract of insurance in existence at all on the date when the accident took place. Evidence was adduced before the Claims Tribunal in the proceedings relating to the application under Section 140 and from the evidence that has been adduced, it has become abundantly clear that the insurance premium was paid on 14-12-1989; the insurance policy was issued with effect from 14-12-1989; the office copy of the insurance policy and the cover note are of the date 14-12-1989 and, therefore, the cover note which was sought to be relied on by the owner of the vehicle has to be discarded. In any event, it was urged that once the insurance policy was issued, it is the insurance policy which must govern the contractual relations between the parties and the insurance cover must, therefore, be regarded as having commenced on 14-12-1989. The learned counsel urged that, in these circumstances, the basic question that has been urged before the Tribunal is that there was in fact no insurance cover in existence on the date of the accident. Learned counsel urged that it has been abundantly shown on the basis of the evidence that there was no contract of insurance and the Tribunal erred in allowing the application for no-fault compensation.

7. On the other hand, the learned counsel for the original claimants submitted that the claimants have no concern with the dispute, if any, between the appellant and the insured. On the basis of this submission, it was urged that the appellant must, in accordance with the orders of the Claims Tribunal, be directed to pay no-fault compensation to the claimants which the appellant can ultimately recover from the owner of the motor vehicle, if the Court comes to the conclusion that there was no valid contract of insurance in existence on the date when the accident took place.

8. Section 140(1) of the Motor Vehicles Act provides that when the death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of the section. The amount of compensation is specified in Sub-section (2) of Section 140. Sub-section (3) provides that in any claim for compensation under Sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person. Similarly, under Sub-section (4) a claim for compensation under Sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death of permanent disablement the claim has been made.

9. The provisions of this section have been interpreted in several decided cases. In New India Assurance Company Ltd. v. Minguel Lourenco Correia and Ors., 1986 Mh.L.J. 242, this Court while interpreting the corresponding provisions of Section 92-A of the Motor Vehicles Act 1939, held that the questions which arise before the Court are whether (a) a vehicle had been involved in an accident; (b) a person died or sustained permanent disablement as a result of such accident; and (c) with whom the vehicle was insured. This is so, it was held, because irrespective of any fault, the legal representatives of the dead person or the person who had suffered a permanent disablement are to be given quick and effective temporary relief. While the Insurance Company may raise such defences as are available in law, those defences have to be dealt with in the course of the proceedings for compensation under Section 110 of the erstwhile Act. In New India Assurance Co. Ltd. v. Savitribai Tukaram Londhe, 1997(1) Mh.L.J. 315 = 1997(2) T.A.C. 219 (Bom.), a learned Single Judge of this Court, Mr. Justice R. M. Lodha, referred to the decision in 1986 Mh.L.J. 242 (supra). The learned Single Judge noted that this Court has not ruled that even if on the face of the policy, the insurer was not liable, still under Section 92-A it could be directed to pay compensation towards no-fault. The learned Single Judge held that the observations of this Court in the earlier judgment to the effect that the defence of the Insurance Company would have to be decided in the course of the hearing of the main application, did not mean that even though on the face of the insurance policy, without going into the matter any further, the Company was not liable, still an order was liable to be passed against the Insurance Company under Section 92-A of the erstwhile Act. Lodha, J. therefore, held that while the enquiry is narrow and limited yet, at the same time, it does not exclude the prima facie consideration by Tribunal as to whether or not the risk was covered on the face of the Insurance Policy and thai prima facie opinion would have to be based on the face of the Insurance Policy alone and upon no other material and evidence.

10. In the present case, the Insurance Policy which had been issued was for the period 14-12-1989 to 13-12-1990. This has also been deposed to by both the Agent as well as by the Branch Manager. In paragraph 2 of the evidence of the Branch Manager, he has relied upon a document under a list marked as Ex. 43/7 which is a photo copy of the policy issued to the Insurer and is maintained in the Branch Office. The period of the policy is 14-12-1989 to 13-12-1990. The date of the cover note is referred to as 13-12-1989. Therefore, on the face of the policy, as it stands, I am of the view that the claim for no fault compensation under Section 140 of the Act was not maintainable.

11. Having regard to these facts and circumstances, I am of the view that there has been a clear error on the part of the Tribunal in awarding compensation under Section 140 of the Act in this case. The First Appeal is accordingly allowed. The impugned order of the Tribunal dated 25-3-1996 shall stand set aside.