The New India Assurance Co Ltd vs Sajna Devi And Ors
2016 Latest Caselaw 3806 Del

$~R-108

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                              Date of Decision: 19.05.2016
+      MAC.APP. 718/2007

       THE NEW INDIA ASSURANCE CO LTD
                                                          ..... Appellant
                         Through      Mr. Ramesh Kumar, Adv.

                         versus

       SAJNA DEVI AND ORS
                                                              ..... Respondent
                         Through      None
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
                         JUDGMENT

R.K.GAUBA, J (ORAL):

1. The accident claim case (suit No.977/06) instituted by the first and second respondents (claimants) on 16.05.1997 arose out of death of Ram Lawat in motor vehicular accident that had occurred on 09.02.1997 statedly on account of negligent driving of truck No.DL 1LA 5699 (offending vehicle). In the said case, the appellant insurance company was impleaded as a party on the ground that it had issued an insurance policy against third party risk in respect of the offending vehicle covering the date of cause of action. In addition, driver and owner of the offending vehicle were shown in array as respondents. The motor accident claims tribunal (tribunal) held inquiry and, by judgment dated 05.09.2007, while upholding the case of death by negligent driving, awarded compensation in the sum of

₹3,51,200/- with interest in favour of the claimants and directed the appellant company to pay. The proceedings before the tribunal were resisted by the appellant on the ground that the claim of insurance policy was based on cover note No.249239 dated 07.02.1997. It was pointed out by the insurer to the tribunal, inter alia, through its witness (RW1), that the cover note, though issued on 07.02.1997 against premium paid in cash, itself had indicated that the insurance contract would commence from 13.02.1997 and be effective till 12.02.1998. Since the accident had occurred on 09.02.1997 before the said effective date, though after issuance of the cover note, the appellant took the plea that it was not liable to indemnify. The tribunal, however, rejected this contention referring, inter alia, to Oriental Insurance Co. Ltd. v. Sheela Bai 2007 ACJ 798 and Oriental Insurance Co. Ltd. v. Vedathal II (2000) ACC 34 besides Kishore Singh v. Bharat Singh 1987 ACJ 700 (Raj.).

2. The insurance company, by the appeal at hand, questions the correctness of the abovesaid finding and consequent direction to it to satisfy the award.

3. The owner and driver of the offending vehicle in spite of notice and having put in appearance earlier, have not appeared to assist at the time of final hearing. This was the state of affairs even on the last date of hearing. There is no reason why the matter should be deferred yet again.

4. Having heard the counsel for the appellant, this Court finds the approach of the tribunal to be erroneous. Since the claim for indemnity was based on the aforementioned cover note, it clearly indicating the date of commencement to be 13.02.1997, the said contract would apply and benefit

thereof cannot be claimed from an anterior date, not even the date of payment of the premium or issuance of the cover note. This is the letter and spirit of the law settled and reiterated consistently by the Supreme Court in a series of judgments. For illustration, reference may be made to New India Assurance Co. Ltd. v. Ram Dayal (1990) 2 SCC 680; National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi 1997 ACJ 351; New India Assurance Co. Ltd. v. Bhagwati Devi (1998) 6 SCC 534; Oriental Insurance Co. Ltd. v. Sunita Rathi (1998) 1 SCC 365; New India Assurance Co. Ltd. v. Smt. Sita Bai (1999) 7 SCC 575: J. Kalaivani v. K. Sivashankar JT 2001 (10) SC 396 and Oriental Insurance Co. Ltd. v. Porselvi MANU/SC/0680/2009.

5. Thus, the appeal is allowed. The finding returned by the tribunal holding the insurance company to indemnify is set aside.

6. It is noted that while awarding the compensation by the impugned judgment, the tribunal had directed certain parts of the amounts apportioned in favour of the claimants to be kept in fixed deposit receipts for periods specified. By order dated 18.04.2009, the appellant company had been directed to deposit the entire awarded amount with interest with the tribunal within the period specified whereupon the execution was stayed. It was directed that upon such amount being deposited with the tribunal, it may release the same except the amount directed to be kept in fixed deposit. It was further directed that the claimants would be entitled to draw periodical interest from the amount retained in fixed deposit receipt till disposal of the appeal.

7. In the facts and circumstances, as fairly conceded by the counsel for the appellant, the amount retained in fixed deposits shall also be released to

the claimants. The appellant company, however, is granted the right to recover the amounts thus paid as compensation to the claimants from the owner of the offending vehicle by appropriate proceedings before the tribunal.

8. It is now submitted by the counsel for the appellant that under directions of this Court in the order dated 28.07.2009, the original claim file which is the record of the appellant company was retained with the Court file. The registry shall now return the same.

9. The appeal is disposed of in above terms.

R.K. GAUBA (JUDGE) MAY 19, 2016 VLD