United India Insurance Co Ltd vs Surekha Kisan Shirke And Ors
2021 Latest Caselaw 14128 Bom

                                                                        FA-873-2004.odt




             IN THE HIGH COURT OF JUDICATURE OF BOMBAY
                        BENCH AT AURANGABAD

                           FIRST APPEAL NO. 873 OF 2004

 United India Insurance Co. Ltd;
 Through it's Divisional Manager and
 authorised representative and signatory,
 Ahmednagar Divisional Office,
 Kisan Kranti Building, Ahmednagar,
 Dist. Ahmednagar                                        ... Appellant

                Versus

 1)       Surekha Kisan Shirke
          Age 33, Occu: Household,

 2)       Mahendra Kisan Shirke
          Age 12. ½ years, Occu: Nil,

 3)       (Mangal) Kiran Kisan Shirke
          Age 14 years, Occu: Nil,

          Nos. 2 & 3 minors through
          Guardian mother applicant No.1,
          All R/o. Arangaon Dumala,
          Tq. Shrigonda, Dist. Ahmednagar

 4)    Lahanu Bajaba Shinde, age major,
       Occ. Transport R/o. Arangaon Dumala,
       Tal. Shrigonda, Dist. Ahmednagar          ... Respondents
                                   ....
 Mr. A. B. Gatne, Advocate for appellant
 Mr. U. S. Malte, Advocate for respondent Nos. 1 to 3
 Mr. H. U. Dhage, Advocate for respondent No.4
                                   ....

                                       CORAM : R. G. AVACHAT, J.

RESERVED ON : 28th SEPTEMBER, 2021 PRONOUNCED ON : 30th SEPTEMBER, 2021

(( 2 )) FA-873-2004.odt

J U D G M E N T :-

. This is an Insurance Company's appeal, taking exception

to the judgment and award dated 29.12.2003, passed by the learned

Member, Motor Accident Claims Tribunal (Tribunal), Ahmednagar, in

Motor Accident Claim Petition (Petition) No.1336 of 1994. By the

impugned award, the appellant - Insurance Company has been

directed to pay, jointly and severally a sum of Rs.1,23,000/- with

interest at the rate 9% p.a. as compensation on account of death of

Kisan in vehicular accident.

2. Tractor bearing registration No.MH-16-8304, met with

an accident on 06.10.1994. Deceased Kisan along with 3 - 4 other

persons was travelling on the said tractor. As a result of the injuries

suffered in the said accident, Kisan and one more person died.

Others suffered injuries. The widow and two minor children of

deceased Kisan, therefore, preferred petition for compensation. The

same was allowed with a direction to the tractor owner and the

appellant - Insurance Company to pay the petitioners, compensation

as stated herein above.

                                                                              2 of 22





                                      (( 3 ))                           FA-873-2004.odt

3. The appellant - Insurance Company filed its written

statement to take exception to the claim on the following grounds:

(a) The tractor did not have insurance cover on the day it met with the accident;

(b) It denied the deceased was a labour on the tractor involved in the accident;

(c) The tractor and trailer were suppose to be used for agricultural purpose. The tractor was however used for commercial purpose. The same constituted the breach of the terms and conditions of the insurance policy.

4. The Tribunal held that the agent of the appellant -

Insurance Company did receive premium towards insurance cover on

01.10.1994. A proposal to that effect was forwarded to the

appellant - Insurance Company by its agent through Under Postal

Certificate. In view of the acceptance of the premium towards grant

of insurance cover, the policy of the insurance should be deemed to

have been issued on the day on which the premium was received.

5. Heard. The learned Advocate for the appellant -

Insurance Company would submit that the application preferred by

the claimants under Section 140 of the Motor Vehicles Act (for short,

'M.V. Act') for compensation under no fault liability was rejected

3 of 22

(( 4 )) FA-873-2004.odt

against the appellant. An application (Exh.69) was, therefore, moved

before the Tribunal for deleting the appellant - Insurance Company

from the array of the petition. The claimants gave no objection

thereto. The Tribunal therefore allowed the application. However,

the claimants have not deleted the name of the appellant from the

array of the claim petition, and it remained to be executed. Tribunal

went ahead and decided the claim petition without hearing

arguments on behalf of the appellant - Insurance Company. When

the judicial order was passed allowing application for deletion of the

appellant from the claim petition, the Tribunal ought not to have

insisted the learned Advocate for the appellant - Insurance Company

to participate in the proceeding. The revision had been preferred

against the order rejecting application under Section 140 of the M.V.

Act. The High Court remitted the matter back to the Tribunal for

deciding the claim petition within time frame. Learned Advocate

representing the appellant - Insurance Company did not participate

in the proceeding before the Tribunal on her own. The Tribunal,

however, insisted her to cross examine the witnesses examined in the

case. A detailed purshis was filed before the Tribunal expressing the

appellant Company's inability to take part in the proceedings.

                                                                           4 of 22





                                   (( 5 ))                           FA-873-2004.odt

6. Learned Advocate would further submit that the award

impugned in this appeal is therefore non-est. Turning to the merits of

the matter, he would submit that the tractor owner and agent of the

appellant - Insurance Company joined hands to show the tractor to

have insurance cover since before it met with the accident. After

having found the agent's involvement in the mischief, his agency has

been terminated. The tractor owner had, in fact, approached the

agent after five days of the accident. He, however, issued a

backdated cheque. Learned Advocate took me through the relevant

evidence to make out his claim. He also relied on the reasons given

by the Tribunal for rejecting the application for compensation under

no fault liability claim. Learned Advocate would further submit that

the tractor was meant to be used for agricultural operations only. It

was however used for commercial purpose when it met with the

accident. The said constituted the breach of terms and conditions of

the policy of insurance. The FIR was also relied upon to show that

the deceased and other 4 - 5 persons were travelling on the tractor

unauthorisedly. Policy of insurance did not cover risk of such persons

travelling on the tractor. Learned Advocate, therefore, ultimately

urged for allowing the appeal.

                                                                            5 of 22





                                   (( 6 ))                           FA-873-2004.odt

7. Both the learned Advocates representing the tractor

owner and the claimants relied on the reasons given by the Tribunal

in support of the impugned award. According to the learned

Advocate for the claimants, a contract entered into by the appellant

- Insurance Company, through its agent, is valid one. The agent did

receive the premium on 01.10.1994. The insurance proposal along

with the cheque of the premium were forwarded to the appellant -

Insurance Company on the same day through post. Only with a view

to defeat the claim, the date 01.10.1994 was forged into 11.10.1994.

The insurance agent, the concerned Post Master and other witnesses

have testified in support of the case that the policy of insurance was

meant to be issued on 01.10.1994. Learned Advocate for the tractor

owner, reiterated the submissions made on behalf of the claimants.

In addition thereto, the learned Advocate for the claimants urged for

enhancement of compensation. According to him, compensation

could be enhanced even there being no appeal or cross-objection

preferred by the claimants. In that regard, the learned Advocate has

relied on the following authorities.

(i) Oriental Insurance Company Limited vs Dharam Chand and others - (2010) 15 SCC 141;

6 of 22

(( 7 )) FA-873-2004.odt

(ii) Cholamandalam MS General Insurance Company Limited vs Sumitra Debu Vishwas and others - 2018 DGLS (Bom.) 60;

(iii) The Branch Manager, National Insurance Company Limited vs Bishal Chettri and another - MAC App. No.11 of 2019 (High Court of Sikkim : Gangtok);

(iv) National Insurance Co. Ltd. vs. Komal & Ors - MAC App. No.595 of 2007 (High Court of Delhi);

(v) Munusamy and others vs. Managing Director, Tamil Nadu State Transport Corporation (Villupuram) Limited

- (2018) SCC 765;

(vi) National Insurance Company Limited vs. Dhan Singh and others - FAO No. 7336 of 2018 (O & M) (High Court of Punjab and Haryana at Chandigarh);

(vii) Sangita Arya and others Vs. Oriental Insurance Company Limited and others - (2020) 5 SCC 327;

(viii) M/s Shriram General Insurance Company Limited vs. Surekha Rajendra Nakhate and others - First Appeal No.2564 of 2016 (High Court of Bombay, Bench at Aurangabad).

8. The tractor met with the accident on 06.10.1994. The

deceased Kisan was travelling on the said tractor along with few

others. Two of them including Kisan succumbed to the injuries

suffered in the said accident. Legal representatives of both of the

deceased preferred two separate claim petitions. It has been

informed that the other petition has been dismissed against the

appellant - Insurance Company. The said order is said to have

7 of 22

(( 8 )) FA-873-2004.odt

attained finality. Oral evidence was recorded before application

(Exh.5) for compensation under no fault liability, was heard. The

said application was rejected against the appellant - Insurance

Company. The said order was challenged before the High Court.

Without interference with the said order, the matter was remitted

back to the Tribunal with a direction to decide it within time frame.

Based on the order on application Exh.5, the appellant - Insurance

Company, preferred application for its deletion from the array of the

claim petition. In view of no objection given by the applicant, the

Tribunal allowed the said application. The appellant - Insurance

Company, however, remained to be deleted. It is its case that it

partially participated in the proceedings before the Tribunal only at

the insistence by the Tribunal. It, however, needs to be mentioned

that witnesses examined in the proceedings have been cross

examined by the learned Advocate representing the appellant -

Insurance Company. It also examined its officer. Neither in the

grounds averred in the appeal memo nor was there oral submission

for remand of the matter with a view to give appellant - Insurance

Company an opportunity of further hearing. The said issue therefore

is taken to have been concluded.

                                                                          8 of 22





                                     (( 9 ))                             FA-873-2004.odt

9. The tractor met with the accident on 06.10.1994. The

owner of the tractor came with a case to have had approached the

agent of the appellant - Insurance Company on 01.10.1994 and gave

him cheque towards amount of premium, same day. It needs to be

mentioned here itself that it was not a case of renewal of an existing

policy of insurance. It is not known whether the tractor involved in

the accident had insurance cover on or before 30 th September, 1994.

Be that as it may.

10. Admittedly, the owner of the tractor is resident of village

Arangaon. Shri Satav, the insurance agent also hails from very

village. It is in evidence of Shri Satav that the tractor owner had

come to his residence on 01.10.1994 and then he went to Arangaon

for inspection of tractor and trailer. Whereas, the evidence of the

tractor owner indicates that just 2 - 3 days before 01.10.1994, he

had requested Shri Satav to come to his place as he wanted to have a

policy of insurance for tractor involved in the accident. The

insurance proposal (Exh.101) is admitted to have been in

handwriting of the tractor owner. True, on the last page of the

proposal, the policy of insurance was sought for the period

9 of 22

(( 10 )) FA-873-2004.odt

commencing from 01.10.1994 to 30.09.1995. It needs no mention

that the proposal form could be antedated. On the first page of the

proposal Exh.101, agent Shri Satav had made an endorsement -

'tractor and trailer are found in good condition and correct for

insurance'. He has put his signature below the said endorsement

with date 11.10.1994. It is a case of the tractor owner that the date

01.10.1994 has been manipulated to 11.10.1994. Close examination

of the said date leads me to observe that there is no sign of any

manipulation as has been alleged. Section 64-VB(4) of the Insurance

Act, 1938 mandates the insurance agent to 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.

11. In view of this Court in the ordinary course of business,

any communication despatched from any postal office in the district

of Ahmednagar to the appellant Company's office in Pune, shall

reach within three days of its despatch. In the case in hand, the

proposal (Exh.101) has been received by the appellant's office in

Pune, on 14.10.1994. The appellant - Insurance Company examined

its official Shri Nikam. It is in his evidence that the proposal form

10 of 22

(( 11 )) FA-873-2004.odt

duly filled in, was received by Pune office on 14.10.1994. He put his

initials thereon in acknowledgment of the receipt thereof. It is in his

evidence that the authorised agent gets proposal form filled in from

the customer/consumer. He, then, calculates the amount of

premium, accepts the same either in cash or by cheque, inspects the

vehicle. The agent, then issues a cover note on the spot. Admittedly,

the agent Shri Satav had not issued the tractor owner the cover note

on the spot. Admittedly, the cover note was despatched from Pune

office long after 14.10.1994. It has to be assumed that the same

came to be issued in due course of its official business. The appellant

is in the business of insurance. It is not an individual entity. It's

official therefore cannot be assumed to have any personal interest to

manipulate the date on the insurance proposal. Admittedly, Shri

Satav had not informed the company that the vehicle met with the

accident. It is also not the case of the owner of the tractor to have

had intimated in writing to the appellant - Insurance Company the

factum of accident. The services of Shri Satav, as an agent, were

terminated on account of his involvement in the present matter.

There is every reason to suspect him to have indulged to favour the

owner of the tractor since both of them hail from one and the same

village. True, Shri Satav gave his oral evidence in support of the

11 of 22

(( 12 )) FA-873-2004.odt

tractor owner. It is his case that on 01.10.1994 itself he transmitted

the proposal form along with premium cheque to the Pune office

through Post at Dhawalgaon.

12. Under Certificate of Posting has been placed on record

vide Exh.41. Shri Satav is well educated. It is not known as to why

he did not fill in the form of Under Certificate of Posting. The same

has been filled in by Shri Sitaram Kute. Both the owner of the tractor

and Shri Kute were serving with the Irrigation Department. It is also

not known as to why they went to Post Office at Dhawalgaon when

there was Sub-Post Office at Arangaon itself. It is true, it is in the

evidence that Arangaon Post Office would remain open only for

twenty minutes. The same is unpalatable.

13. It is true that Shri Maruti Dhavale - Post Master at

Dhawalgaon testified that Under Certificate of Posting (Exh.41),

he had received three envelopes for despatch. Admittedly, the

appellant - Insurance Company had made an investigation of the

matter independently. The Post Master (Shri Maruti Dhavale) has in

no uncertaint terms admitted to have had given a statement to the

Investigator that the receipt of Under Certificate of Posting shown to

him, was not issued by his office in the official course of business. It

12 of 22

(( 13 )) FA-873-2004.odt

is further in his evidence that it was he, who used to write the name

and address of the sender in Marathi and put his signature below the

same. Exh.41 does not bear any matter in his handwriting or even

his signature. According to Shri Satav, on the given day, he had sent

three insurance proposals of Shri S. H. Munot of Shirur, Shri Z. N.

Musthafa of Thane and Shri C. S. Deshmukh of Shirur. Even if it is

accepted, then there ought to have been four articles to be delivered

to the Post Master for onward transmission. It needs no mention that

as per instruction No.5 overleaf Exh.41, such certificate furnishes no

proof of the nature of contents of the articles sent through post.

Instruction No.1 mandates 'sender should enter in ink the class of

article'. It is reiterated that except the address of the appellant -

Insurance Company on Exh.41, there is no other matter. This Court

has, therefore, every reason to observe that Exh.41 must have been a

got up document. The evidence of the Post Master does not inspire

confidence. He tried to run with hare and hunt with the hound. Had

the insurance proposal really been despatched on 01.10.1994, it

would not take two weeks time to reach the appellant's Pune office.

The policy of insurance came to be issued in the name of the owner

of the tractor for the period commencing from 14.10.1994 for a

period of next one year. All these things have happened in the

13 of 22

(( 14 )) FA-873-2004.odt

natural and official course of business. It is reiterated that the

appellant - Insurance Company was not in the know of the tractor to

have met with the accident on 06.10.1994 and it therefore delayed

in issuance of policy of insurance.

14. Two persons died in the very accident. Two separate

petitions for compensation were filed. The decision in another claim

petition went against the tractor owner. He did not challenge the

same. This fact is very much relevant here. Though may not operate

res-judicata strictly speaking.

15. True, the premium was paid by cheque dated

01.10.1994. The counterfoil of the cheque was placed on record very

late. It is very easy for a person interested in the matter to issue a

backdated cheque. Since the tractor met with the accident on

06.10.1994 and there being no evidence to indicate the tractor to

have had an insurance cover immediately before 01.10.1994, there is

every reason for the tractor owner to make all out efforts to have

insurance cover antedated. It is reiterated that the insurance agent

has put his endorsement on the proposal about having inspected the

tractor on 11.10.1994. As is required by Section 64-VB(4), above,

the proposal along with the premium, cheque must have been

14 of 22

(( 15 )) FA-873-2004.odt

despatched the same day. The same was therefore received by the

office of the appellant - Insurance Company in Pune on 14.10.1994.

It is only with a view to create evidence to have had approached the

insurance agent on 01.10.1994, everything has been done. There is

no cogent and reliable evidence to indicate the proposal of insurance

was in fact received on 01.10.1994 and was despatched the same

day. The entire case is based on oral evidence. It is reiterated that

cheque could be issued antedated. Same is the case about

mentioning the period of insurance in the proposal for the period

from 01.10.1994 for the next one year. The Tribunal had rejected

application Exh.5 with well reasoned order. I reiterate those reasons

for allowing the present appeal. Even if it is accepted that proposal

along with cheque was received on 01.10.1994, he did not issue

cover note. Unless and until the proposal is accepted, it will not be a

contract of insurance. The proposal was received on 14.10.1994. The

same day it was accepted. The acceptance is indicated by issuing the

policy of insurance commencing from the very day. The judgment in

case of Dharam Chand and others (supra) would not have any

assistance for the owner of the tractor, since the facts therein would

indicate that cheque for the insurance policy was received on

07.05.1998 at 4.00 p.m. The vehicle met with the accident, same day

15 of 22

(( 16 )) FA-873-2004.odt

at 8.30 p.m. The cover note was issued at the same time stating

therein that the insurance would commence from 08.05.1998. The

vehicle met with accident a few hours after issue of the cover note.

16. In the case in hand, the insurance agent did not issue

cover note on the spot, though he had authority to issue the same.

There is every reason to believe that the proposal was received on

11.10.1994 and despatched the same day. It was received in Pune

office on 14.10.1994. The same day the policy of insurance was

issued with effect from the very day. The appellant - Insurance

Company was not in the known of the vehicle to have met with the

accident. Both the tractor owner and the insurance agent hail from

one and the same village. They had, therefore, every reason to show

the tractor to have insurance cover since before it met with the

accident.

17. In the case of Balwant Singh and Sons vs. National

Insurance Company Limited and another - (2020) 11 SCC 745 , it has

been observed thus:

"C. Insurance - Contract of Insurance/Insurance Policy/Cover Note - Completion of - Essentials, reiterated - Held, the general rule is that the contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates

16 of 22

(( 17 )) FA-873-2004.odt

his acceptance to the person making the offer - The rule of sub silentio acceptance does not apply to insurance contracts."

Here, the proposal has been accepted on 14.10.1994, it

could therefore be said that contract of insurance came into

existence on the same day and not there-before.

18. In the case of National Insurance Company vs Sobina

Iakai (Smt) and others - (2007) 7 SCC 786, it has been observed:-

"Motor Vehicles Act, 1988 - S. 147 - Policy when becomes operative - Special clause in insurance policy mentioning time of commencement of policy - Necessity of strict compliance with - Duty of court, to prevent abuse - Held, in order to curb the 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. - In present case, accident having taken place prior to coming into force of the policy on the same day, held, Tribunal and High Court seriously erred in ignoring the insurance policy and motor renewal endorsement which specified the time and which were on record before them and deciding the case on the ground of non-production of the cashier and development officer of the insurer. Hence no award could have been made against the insurer. ...."

19. The learned Member of the Tribunal simply relied on the

evidence of the owner of the tractor and his witnesses and allowed

the claim petition against the appellant - Insurance Company. On

17 of 22

(( 18 )) FA-873-2004.odt

re-appreciation of the evidence in the matter, the conclusion arrived

at by the learned Member of the Tribunal is unacceptable.

20. Two more grounds have been urged in support of the

appeal. First one is about the use of the tractor for commercial

purpose. True, the averments in the claim petition suggest that the

tractor was returning after transporting grit. Admittedly, the trailer

was detached from the tractor. Thereafter the tractor met with the

accident. The learned Member of the Tribunal has, therefore, rightly

observed that when it met with the accident, the same was not being

used for commercial purpose.

21. Third ground is as regards the deceased travelling as an

unauthorised passenger on the tractor. The deceased was said to

have been serving as a labour on the tractor. It appears that this

ground has first time been raised in oral submissions. The same is

not reflected in the appeal memo. The same was not the stand before

the Tribunal as well. This new ground of challenge would, therefore,

not be addressed to.

22. Learned Advocate for the claimants would submit that

the amount of compensation awarded by the Tribunal is grossly

18 of 22

(( 19 )) FA-873-2004.odt

inadequate. A Constitution Bench judgment of the Apex Court in

Pranay Sethi's case - (2017) 16 SCC 680 , came to be passed during

pendency of this appeal. The appeal, therefore, needs to be governed

by the directions/dictum therein.

23. Admittedly, the claimants have neither filed appeal nor

preferred cross objection for enhancement of compensation.

24. Learned Advocate for the claimants relying on the

judgments cited (supra) would contend that the Court is expected to

grant just compensation. If the Court finds the amount of

compensation to be inadequate, it has every power to enhance the

same. In support of his contention, the learned Advocate relied on

the aforesaid authorities - (para-7).

25. The Hon'ble Apex Court in the case of Sangita Arya

(supra), has observed that even though claimant appellants did not

file appeal against award of Tribunal before High Court, appropriate

to enhance compensation by exercising jurisdiction under Article 142

of the Constitution in order to do complete justice between parties.

26. In case of Ranjana Prakash & Ors vs. Divisional Manager

& Anr. - 2012 AIR SCW 848, it has been observed thus:

19 of 22

(( 20 )) FA-873-2004.odt

"....... It would only mean that in an appeal by the owner/insurer, the claimants will not be entitled to seek enhancement of the compensation by urging any new ground, in the absence of any cross-appeal or cross- objection."

Moreover, in case of Shivawwa and another vs. Branch

Manager, National India Insurance Company Ltd. and another -

2019(1) Mh.L.J. 1, it has been observed thus:

"(b) Motor Vehicles Act (59 of 1988), SS. 168 and 149 - Appeal to set aside decision of High Court in first appeal preferred by insurer - High Court exonerated insurer from any liability vis-a-vis award against respondents - Appellant - claimants did not file an appeal for enhancement of compensation amount against that part of award passed by Tribunal nor chose to file any cross- objection in first appeal - Not appropriate for Court to consider - Therefore, plea regarding quantum of compensation cannot be raised for first time by appellant - claimants before Supreme Court."

27. In view of the Apex Court judgments, the submissions of

the learned Advocate made relying on the judgments of the High

Courts, could not be accepted. In short, this Court is of the view that

appellate Court cannot enhance the amount of compensation unless

the claimants file appeal or cross-objection for enhancement.

                                                                             20 of 22





                                      (( 21 ))                             FA-873-2004.odt

28. For the aforesaid reasons, the appeal succeeds. Hence

following order:-

ORDER

(i) The First Appeal is allowed.

(ii) The award dated 29.12.2003, passed by the learned

Member, Motor Accident Claims Tribunal (Tribunal),

Ahmednagar, in Motor Accident Claim Petition

(Petition) No.1336 of 1994, is hereby set aside.

(iii) The claim petition stands dismissed against the

appellant - Insurance Company.

(iv) The amount of compensation deposited by the

appellant - Insurance Company and permitted to be

withdrawn by the claimants, be paid to the appellant -

Insurance Company by the tractor owner.

(v) There is no question, the appellant - Insurance

Company to be directed to pay the amount of

compensation and then recover it from the tractor

owner, since the tractor did not have insurance cover

at all.

                                                                                 21 of 22





                                    (( 22 ))                           FA-873-2004.odt




        (vi)     If the tractor owner fails to pay the appellant -

Insurance Company the amount, which it has paid

under the impugned award, the same shall be

recoverable in an execution proceeding.

[ R. G. AVACHAT, J. ]

SMS

22 of 22