Gauhati High Court
MACApp./106/2014 on 13 December, 2021
Page No.# 1/22
GAHC010009302014
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MAC APPEAL NO.106 OF 2014
1. Ataur Rahman Choudhury,
S/o- Late A.B. Choudhury
of vill-Hamindpur, P.O/P.S & Dist-Karimganj.
(Owner of the vehicle No.AS-10-5526 Sumo Max Cab)
........ Appellant
-Versus-
1. The Reliance General Insurance Company Ltd.
G.S. Road, Guwahati-781005, Assam.
2. Abu Taher, aged about 8 years,
3. Mina Begum, aged about 30 years
Wife of late Rostum Ali @ Rostum Ali
Vill-Tamua, P.O.-Singaria Bazar, P.S. & Dist-Karimganj
4. Atiqur Rahman
S/o-Aklasur Rahman
of Vill-Badamohakal, P.O.- Mahalkal,
P.S.-Badarpur, Dist-Karimganj, Assam
(Driver of the offending vehicle)
........ Respondents
Page No.# 2/22
MAC APPEAL NO.124 OF 2014
1. Ataur Rahman Choudhury,
S/o- Late A.B. Choudhury
of vill-Hamindpur, P.O/P.S & Dist-Karimganj.
(Owner of the vehicle No.AS-10-5526 Sumo Max Cab)
........ Appellant
-Versus-
1. Mina Begum, aged about 30 years
Wife of late Rostum Ali @ Rostum Ali
Vill-Tamua, P.O.-Singaria Bazar,
P.S. & Dist-Karimganj
2. Abu Taher, aged about 8 years,
S/o-Late Rostum Ali @ Rastum Uddin
Vill-Thamua, P.S. & Dist-Karimganj
Profession-Dependent (minor)
3. Hazira Begum, aged about 5 years
D/o-Late Rostum Ali @ Rastum Uddin
Profession-Dependent (minor)
Vill-Thamua, P.S. & Dist-Karimganj
4. Nazira Begum, aged about 2 years
D/o-Late Rostum Ali @ Rastum Uddin
Vill-Thamua, P.S. & Dist-Karimganj
5. Atiqur Rahman
S/o-Aklasur Rahman
of Vill-Badamohakal, P.O.- Mahalkal,
P.S.-Badarpur, Dist-Karimganj, Assam
(Driver of the offending vehicle)
........ Respondents
Page No.# 3/22
MAC APPEAL NO.125 OF 2020
1. Ataur Rahman Choudhury,
S/o- Late A.B. Choudhury
of vill-Hamindpur, P.O/P.S & Dist-Karimganj.
(Owner of the vehicle No.AS-10-5526 Sumo Max Cab)
........ Appellant
-Versus-
1. The Reliance General Insurance Company Ltd.
G.S. Road, Guwahati-781005, Assam.
2. Mrs. Kutila Begum aged about 20 years,
wife of late Said Uddin
3. Miss Jiliya Begum aged about 2 years
Daughter of late Sad Uddin
4. Md Haji Ajir Uddin aged about 50 years,
Son of late Haji Mubarak Ali
5. Miss Sultana Begum, aged about 10 years
Daughter of Md. Haji Ajir Uddin
All are resident of vill-Roypur, Nivia, P.O-Aliacherra, P.S.-Ratabari, Dist-
Karimganj, Assam
6. Atiqur Rahman,
S/o-Aklasur Rahman,
of Vill-Badamohakal, P.O.-Mahalkal,
P.S.-Badarpur, Dist-Karimganj, Assam
Pin No. 788806
(Driver of the offending vehicle)
........ Respondents
Page No.# 4/22
-Befor e-
hon'ble mr. justice devashis baruah
For the petitioner : Mr. I.A. Talukdar, Advocate.
For respondent : Mr. R. Goswami, Advocate.
Date of hearing : 09.11.2021.
Date of judgment : 13.12.2021.
JUDGMENT & ORDER (CAV)
Heard Mr I.A. Talukdar, learned counsel appearing on behalf of the
appellant and Mr. R. Goswami, learned counsel appearing on behalf of the
respondent Insurance Company. Also heard Mr. K. Uddin, learned counsel for
the claimants.
2. All these 3(three) appeals, raises a common question of law and vide an
order dated 11.11.2020, in MAC Appeal No. 125/2020, all 3(three) appeals have
been tagged together.
3. In all these 3(three) appeals, there is no challenge to the quantum of
compensation awarded by the Member, MACT, in the impugned Awards dated
29.11.2013 in MAC Appeal No. 106/2014, dated 29.11.2013 in MAC Appeal No.
124/2014 and dated 12.05.2015 in MAC Appeal No. 125/2020.
4. The question which arises in all these three appeals is as to whether the
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appellant is liable to pay the compensation or is it the Insurance Company who
is liable to pay the compensation to the third party.
5. In the back drop of the above, let us take the brief facts of the instant
case.
6. The appellant in all the 3(three) appeals is the owner of a vehicle bearing
Registration No. AS-10-5526 which is Tata Spacio Gold (Tata Sumo) and on
22.08.2008 on NH-54 at Marry Lo kham, the said vehicle of the appellant fell
into a deep gorge about 150 feet, and in pursuance to the said accident, a
police case was registered as Kawnpui P.S. Case No. 34/2008 under Sections
337 / 338 / 427/ 304 (A) of the IPC. The said offending vehicle had an
Insurance Policy issued by the respondent Insurance Company bearing No.
1505062324000035 which was valid and effective allegedly from 03.10.2007 to
03.09.2008.
7. Pursuant to the accident, various claims were filed before the MACT
including, MAC Case No. 14/2011, MAC Case No. 99/2008 and MAC Case No.
1320/2008. Now let me take the individual facts of each case.
MAC APPEAL NO. 106/2014
8. The respondent nos. 2 & 3 herein filed a claim petition on account of the
multiple grievous injury and the loss and suffering caused on account of the
accident by the offending vehicle of the appellant claiming an amount of
Rs.2,70,000/- (Rupees Two Lakhs Seventy Thousand) only. The said claim
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proceedings was registered as MAC Case No. 14/2011. In the said proceedings,
the respondent -Insurance Company contested by filing written statement and
also took defence under Section 170 of the MV Act. The appellant as well as the
driver of the offending vehicle did not appear in the said claim proceedings.
9. As many as 4(four) issues were framed of which the Issue No. 2 was in
respect to as to whether the vehicle was insured with the respondent Insurance
Company covering the period of the accident. The Tribunal vide an Award dated
29.11.2013 awarded an compensation amount of Rs.15,000/- (Rupees Fifteen
Thousand) only to the claimants as compensation with interest at the rate of
Rs. 9 % per annum from the date of filing of the case i.e. on 15.02.2011 till
realization.
10. As regards the issue, who is liable to pay the compensation, it was held
that the appellant was liable to pay the compensation as the vehicle was not
covered with the Insurance Policy issued by respondent Insurance Company on
the date of the accident.
MAC Appeal No. 124/2014
11. The respondent nos. 2 to 5 herein had jointly filed a claim petition on
account of the death of Rostum Ali @ Rustum Uddin due to the accident which
occurred on account of the offending vehicle of the appellant wherein an
amount of Rs.10,00,000/- (Rupees Ten Lakhs) only was claimed as
compensation. The said Claim Proceedings was registered and numbered as
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MAC Case No. 99/2008. In the said claim proceedings, the respondent-
Insurance Company contested by filing written statement and took the defence
under Section 170 of the MV Act. The appellant herein as well as the driver of
the offending vehicle did not file their written statement and the case proceeded
ex-parte against them.
12. As many as 4(four) issues were framed of which Issue No. 2 relevant for
the purpose of the adjudication of the instant appeal was as to whether the
vehicle was duly insured with the respondent Insurance Company and whether
the Insurance Policy was valid at the time of the alleged incident. The Tribunal
vide the Award dated 29.11.2013 awarded an amount of Rs.4,23,000/- to the
claimants (the respondent nos. 2 to 5 herein) as compensation with interest at
the rate of 9% per annum from the date of filing of the case i.e. 03.12.2008 till
realisation.
13. In respect to the issue as to who would be liable to make the said
payment, the Tribunal held that the Insurance Company is not liable to pay the
compensation on the ground that the vehicle was not covered with the
Insurance Policy issued by the respondent Insurance Company on the date of
the accident.
MAC APPEAL NO. 125/2020
14. The respondent nos. 2, 3, 4 & 5 filed a claim petition on account of the
death of Sad Uddin due to the accident that took place on 22.08.2008 by the
offending vehicle of the appellant. The said claim proceedings was registered as
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MAC No. 1320/2008. In the said claim proceedings, the respondent nos. 2, 3, 4
& 5, the claimants therein claimed an amount of Rs.17,77,000/- (Rupees
Seventeen Lacs Seventy Seven Thousand) as compensation.
15. The Tribunal vide an Award dated 22.02.2013, directed the respondent
Insurance Company to pay a compensation of Rs.9,30,000/- (Rupees Nine Lakh
Thirty Thousand) only with interest @ 9 % per annum from the date of filing of
the claim petition till realisation of full within 30 days from the date of the award
subject to adjustment if any, received earlier as no fault liability. Thereupon, an
application was filed by the respondent Insurance Company for review of the
award dated 22.02.2013, which was registered as Misc (Review) Case No.
94/2013. While taking up the review application, notice was issued to the
appellant on 17.01.2014, and in response to the said notice, the appellant
submitted a written objection on 11.08.2014.
16. The learned Tribunal, after hearing both the appellant as well as the
respondent Insurance Company, reviewed its earlier Award dated 22.02.2013
thereby by an award dated 12.05.2015, directed the owner of the aforesaid
vehicle i.e. the appellant to pay the awarded compensation of Rs.9,30,000/-
with interest @ 9 % p.a. from the date of filing of the claim application till
realisation of the full and had also exonerated the respondent Insurance
Company from the liability of payment of the awarded compensation.
17. It is against the aforementioned awards passed by the Tribunals that
these Appeals have been filed on a limited question as to whether it is the
respondent Insurance Company who would be liable to pay the claim or is it the
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appellant who has to satisfy the claim as awarded by the Tribunals.
18. To decide the said issue, it is relevant to take note of as to whether the
Insurance Policy issued by the respondent Insurance Company bearing No.
1505062324000035 was valid as on the date of the alleged incident as it is not
denied by the respondent Insurance Company that the Insurance Policy has
been issued by the respondent Insurance Company and it is also not denied as
regards the contents of the Insurance Policy.
19. What is the bone of contention in respect to the Insurance Policy, between
the parties, is to whether the said Insurance Policy was valid for the period from
03.10.2007 to 03.09.2008 (the Appellant Claims) or the Insurance Policy was
valid from 10.03.2007 to 09.03.2008 (the Respondent Insurance Company
Claims).
20. I have heard the learned counsel for the parties at length.
21. The learned counsel for the appellant submits that the Insurance Policy
issued having been duly admitted by the respondent Insurance Company and
the contents thereof, having been admitted and there is no allegations of any
fraud being alleged in respect of the Insurance Policy, the Insurance Policy
would be deemed to be in operation from 03.10.2007, 00:01 hrs to the midnight
of 03.09.2008. Mr. Talukdar, the learned counsel for the appellant, further
submitted that the stand taken by the respondent Insurance Company before
the Tribunal, cannot be accepted in view of the fact that after issuance of the
policy, the Insurance Company never cancelled or rectified the said Insurance
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Policy. It is only after the accident have occurred that the respondent Insurance
Company had repudiated the claim and raised such objections before the Claims
Tribunal. It is the further submission of Mr. Talukdar, the learned counsel for the
appellant, that the Insurance Company cannot be permitted to change its stand
and deny the liability as regards payment of the claim amount after the accident
have occurred. In that regard, the counsel for the appellant placed reliance to
the following judgments:-
1. Oriental Insurance Company Ltd. vs. Inderjit Kaur and Others reported
in (1998) 1 SCC 371.
2. Deddappa and Others vs. Branch Manager, National Insurance Co. Ltd
reported in (2008) 2 SCC 595.
3. United India Insurance Company Limited vs. Laxmamma and Others
reported in (2012) 5 SCC 234.
22. Mr. I. Talukdar, the learned counsel for the appellant further submitted
that there were 12 nos. of cases filed in respect to the same accident involved
in the appeals and out of which the Insurance Company had satisfied the 2 No.
of cases and as regards the 10 No. of cases, the Insurance Company have been
exonerated. On that basis, Mr. Talukdar, the learned counsel for the appellant
submits that the Insurance Company having satisfied 2 claims, the principles of
resjudicata would duly apply as in respect to the same incident the Insurance
Company has already accepted the said awards.
Page No.# 11/22
23. On the other hand, Mr. R. Goswami, the learned counsel appearing for the
respondent Insurance Company submits that the appellant was liable to pay the
said amount as there was no valid Insurance Policy as the offending vehicle was
not covered by any Insurance Policy at the time of the accident issued by the
respondent Insurance Company. He further submitted that from the evidence on
record more particularly, the Proposal Form exhibited as Ext. A, it would be
apparent that the period of insurance sought for was from 10.03.2007 to
09.03.2008. From Ext. C which is the Premium Computation Table of the
respondent Insurance Company, it would be apparent that the cover note dated
bearing No. 1453058 dated 27.2.2007 was issued and the Receipt No. 256636
was dated 01.03.2007. From Ext. A and Ext. C, Mr. Goswami, the learned
counsel appearing for the respondent Insurance Company tried to submit that
the Insurance Policy was issued for a period from 10.03.2007 to 09.03.2008 but
on account of some technical error, the insurance policy was shown to have
issued for the period from 03.10.2007 to 03.09.2008.
24. He further submitted that the Insurance Policy so issued is a contract and
in interpreting the said contract of Insurance, it is necessary that the Proposal
Form and the Premium Computation Table which has been marked as Ext. A and
Ext. C is also required to be looked into. He therefore, submits that the Tribunal
was justified in all the 3(three) claim proceedings to exonerate the respondent
Insurance Company and holding the appellant liable towards the payment of the
claim amount. In that regard, he placed reliance on the judgment of the
Supreme Court rendered in the case of Vikram Greentech India Ltd. & Anr.
vs. New India Assurance Company Ltd. reported in (2009) 5SCC 599,
paragraph 16, to substantiate his contention that Ext. A which is an Insurance
Page No.# 12/22
Proposal Form is a commercial document and being an integral part of the
Policy, reference to the Proposal Form may not only be appropriate but rather
essential. He further relied upon the judgment of the Supreme Court in the case
of Deokar Exports (P) Limited vs New India Assurance Company
Limited reported in (2008) 14 SCC 598 to substantiate his submission as
regards that the Proposal Form is a important piece of documents for the
purpose of interpretating the Insurance Policy.
25. As regards, the technical error on the basis of which the Insurance Policy
issued has been shown for the period from 03.10.2007 to 03.09.2008, he
submits that the said technical error should be considered in the light of human
probabilities and in that regard he refers to the judgment of the Hon'ble
Supreme Court rendered in the case of Sumati Dayal vs. Commissioner of
Income Tax, Bangalore reported in 1995 Suppl (2) SCC 453.
26. On a specific query being made to the counsel appearing for the
respondent Insurance Company as to whether the period mentioned in the
Insurance Policy was on account of technical error only in respect to the instant
Insurance Policy or there were similar Insurance Policy/ Policies which were
issued by the respondent Insurance Company which had a similar technical
error as alleged. Mr. Goswami, the learned counsel appearing for the respondent
Insurance Company most fairly submitted that to his knowledge, there has been
no other such technical error in respect to other Insurance Policies.
27. Further, another query was made by this Court as to whether the
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respondent Insurance Company issues Insurance Policies, in the format of
month, date & year or in the format of date, month and year and if it is the
later, did the respondent Insurance Company intimate the appellant about the
mistake having been committed and thereupon issued an amended Insurance
Policy or issued any communication to read the commencement and expiry of
the insurance period as month, date and year and not date, month and year. To
the said query, Mr R. Goswami, the learned counsel appearing for the
respondent Insurance Company had candidly and with all fairness submits, that
the Insurance Policy issued by the respondent Insurance Company is always in
the format of date, month and year and not month, date and year and there
was no issuance of any communication or amended policy showing the
commencement and expiry to be read as month, date and year.
28. In the backdrop of the above, let me look into the question as to whether
the Court below was justified in holding or in saddling the liability upon the
appellant in the instant cases.
29. Section 64-VB of the Insurance Act, 1938 provides that no risk is to be
assumed unless premium is received in advance. For the purpose of the instant
case, the said section is quoted herein below:-
"64VB. No risk to be assumed unless premium is received in advance....
1. No insurer shall assume any risk in India in respect of any insurance
business on which premium is not ordinarily payable outside India unless
and until the premium payable is received by him or is guaranteed to be
paid by such person in such manner and within such time as may be
prescribed or unless and until deposit of such amount as may be prescribed,
is made in advance in the prescribed manner.
Page No.# 14/22
2. For the purposes of this Section, in the case of risks for which premium can
be ascertained in advance, the risk may be assumed not earlier than the
date on which the premium has been paid in cash or by cheque to the
insurer. Explanation-where the premium is tendered by postal money order
or cheque sent by post, the risk may be assumed on the date on which the
money order is booked or the cheque is posted, as the case may be.
3. Any refund of premium which may become due to an insured on account
of the cancellation of a policy or alteration in its terms and conditions or
otherwise shall be paid by the insurer directly to the insured by a crossed or
order cheque or by postal money order and a proper receipt shall be
obtained by the insurer from the insured, and such refund shall in no case
be credited to the account of the agent.
4. Where an insurance agent collects a premium on a policy of insurance on
behalf of an insurer, he shall 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 excluding bank and postal
holidays.
5. The Central Government may, by rules, relax the requirements of sub-
section (1) in respect of particular categories in insurance policies. The
Authority may, from time to time, specify, by the regulations made by it, the
manner of receipt of premium by the insurer."
30. The Motor Vehicles Act, 1988 for short, "the Act of 1988" in Chapter XI
deals with Insurance of Motor Vehicles against the 3 rd party risk. Section 145 in
that Chapter provides, for the definition of (a) Authorised Insurer (b) Certificate
of Insurance, (c) Liability (d) Policy of Insurance (e) Property (f) Reciprocating
Country and (g) third Party.
Page No.# 15/22
31. Section 146 mandates Insurance of Motor Vehicles against third Party
risks. It inter alia provides that no person shall use the Motor Vehicles in a
public place unless a policy of insurance has been taken with regard to such
vehicle, complying with the requirements as set out in Chapter XI. The owner of
the vehicle, thus, is statutorily mandated to obtain Insurance for the Motor
Vehicles to cover the third party risk except in exempted and exceptional
categories as set out in Section 146 itself.
32. Section 147 makes the provision for requirement of policies and limits of
liability. Sub Section (6) being relevant for the purpose of deciding the instant lis
is quoted herein below:-
"Section 147 (1) to (5)...........
(6) Notwithstanding anything contained in any other law for the time being in
force, an insurer issuing a policy of insurance under this section shall be liable to
indemnify the person or classes of persons specified in the policy in respect of any
liability which the policy purports to cover in the case of that person or those classes
of persons."
33. Section 150 deals with the duty of the insurers to satisfy the judgments
and awards against the persons insured in respect of third party risks. Sub
Section (1) which is relevant for the present purpose reads as under:-
"Section 150......
(1) If, after a certificate of insurance has been issued under sub-section (3) of section
147 in favour of the person by whom a policy has been effected, judgment or
award in respect of any such liability as is required to be covered by a policy under
clause (b) of sub-section (1) of section 147 (being a liability covered by the terms
Page No.# 16/22
of the policy) or under the provisions of Section 164 is obtained against any person
insured by the policy, then, notwithstanding that the insurer may be entitled to
avoid or cancel or may have avoided or cancelled the policy, the insurer shall,
subject to the provisions of this section, pay to the person entitled to the benefit of
the decree any sum not exceeding the sum assured payable thereunder, as if he
were the judgment debtor, in respect of the liability, together with any amount
payable in respect of costs and any sum payable in respect of interest on that sum
by virtue of any enactment relating to interest on judgments."
34. The said provisions came up for consideration before a 3(three) judges
bench of the Supreme Court in the case of Oriental Insurance Co. Ltd vs.
Inderjit Kaur and Others reported in (1998) 1 SCC 371 and in paragraph
nos. 9, 10 & 12, the Supreme Court held as under:-
"9. We have, therefore, this position. Despite the bar created by Section 64-VB of
the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to
cover the bus without receiving the premium therefor. By reason of the provisions of
Sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to
indemnify third parties in respect of the liability which that policy covered and to
satisfy awards of compensation in respect thereof notwithstanding its entitlement
(upon which we do not express any opinion) to avoid or cancel the policy for the
reason that the cheque issued in payment of the premium thereon had not been
honoured.
10. The policy of insurance that the appellant issued was a representation upon
which the authorities and third parties were entitled to act. The appellant was not
absolved of its obligations to third parties under the policy because it did not receive
the premium. Its remedies in this behalf lay against the insured.
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12. It must also be noted that it was the appellant itself who was responsible
for its predicament. It has issued the policy of insurance upon receipt only of a cheque
towards the premium in contravention of the provisions of Section 64-VB of the
Insurance Act. The public interest that a policy of insurance serves must, clearly,
prevail over the interest of the appellant."
35. From a reading of the above quoted paragraphs of the Supreme Court, it
would be apparent that the Supreme Court invoked the Doctrine of Public
interest and held that the Insurance Company was liable to indemnify the third
parties in respect of the liability which the policy covered despite the bar created
by Section 64 VB of the Insurance Act. Though in the said judgment the
Supreme Court left open the question of the insurers entitlement to avoid or
cancel the policy as against insured where the cheque issued for payment of the
premium was dishonoured, however, the said issue stood settled by a judgment
of the Supreme Court in the case of New India Assurance Co. Ltd. Vs Rula
and Ors., reported in (2000) 3 SCC 195 and Supreme Court at paragraphs
no. 13 held as follows:-
"13. This decision, which is a three-Judge Bench decision, squarely covers the
present case also. The subsequent cancellation of the insurance policy in the
instant case on the ground that the cheque through which premium was paid
was dishonoured, would not affect the right of the third party which had
accrued on the issuance of the policy on the death on which the accident took
place. If, on the death of accident, there was a policy of insurance in respect of
the vehicle in question, the third party would have a claim against the
Insurance Company and the owner of the vehicle would have to be indemnified
in respect of the claim of that party. Subsequent cancellation of the insurance
policy on the ground of non-payment of premium would not affect the rights
already accrued in favour of the third party." emphasis applied.
Page No.# 18/22
36. From a reading of the above quoted paragraph 13, it would go to show
that the rights of a third party which had accrued on the issuance of a policy on
the date on which the accident had taken place cannot be taken away on the
ground of subsequent cancellation of an Insurance Policy on the ground of non-
payment of the premium.
37. The Supreme Court further in the case of United India Insurance
Company vs. Laxmamma and Ors. reported in (2012) 5 SCC 234, after
referring to the above mentioned judgments, observed at paragraph no. 26 as
follows:-
"26. In our view, the legal position is this: where the policy of insurance is issued
by an authorised insurer on receipt of cheque towards the payment of premium and
such a cheque is returned dishonoured, the liability of the authorised insurer to
indemnify the third parties in respect of the liability which that policy covered subsists
and it has to satisfy the award of compensation by reason of the provisions of Sections
147(5) and 149(1) of the MV Act unless the policy of insurance is cancelled by the
authorised insurer and intimation of such cancellation has reached the insured before
the accident. In other words, where the policy of insurance is issued by an authorised
insurer to cover a vehicle on receipt of the cheque paid towards premium and the
cheque gets dishonoured and before the accident of the vehicle occurs, such insurance
company cancels the policy of insurance and sends intimation thereof to the owner,
the insurance company's liability to indemnify the third parties which that policy
covered ceases and the insurance company is not liable to satisfy awards of
compensation in respect thereof."
38. From the above observations of the Supreme Court in paragraph no. 26 as
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quoted herein above, it appears that when a policy of insurance has been issued
by authorised insurer, on receipt of a cheque towards the payment of a
premium and such a cheque is returned dishonoured, the liability of the
authorised insurer to indemnify the third parties in respect to the liability, which
the policy covers subsists and it has to satisfy the award of compensation by
reasons of the provisions of Sections 147 and 150 (1) of the Act of 1988, unless
the policy of Insurance is cancelled by the authorized insurer and intimation of
such cancellation has reached the insured before the accident.
39. From the above judgments, read with Section 147 (6), Section 150(1) of
the Act of 1988 and a reading of Ext. B which is the Insurance Policy, it would
be clear, that the said Insurance Policy having been issued by the respondent
Insurance Company with the commencement date from 03.10.2007 to
03.09.2018, the same would be a representation upon which the authorities and
third parties are entitled to act unless and until the respondent Insurance
Company could have shown that it is the normal practice that the date of
commencement and date of expiry are written as month, date and year and not
date, month and year. The Insurance Company, in the instant case failed to
adduce any evidence with that effect. Even otherwise, it was the duty of the
Insurance Company to intimate the insured that there was some technical
mistake which had happened in the issuance of the Insurance Policy for which
the date of commencement and expiry date was mentioned as month, date and
year and not date, month and year. This was not done by the respondents
Insurance Company until the claim petitions were filed after the accident
wherein the Insurance Company sought exoneration from payment of the
liability on the ground of there being a mistake. The representation which the
Page No.# 20/22
respondent Insurance Company gave by issuing the Insurance Policy to the
authorities and third parties cannot be taken away at its whims after the
accident. At this stage, it may further be noted that there is a distinction
between a statutory liability of the Insurance Company vis-à-vis a third party
and a liability to the owner in the context of Section 147 and Section 150 of the
Act of 1988 as amended up to date. The statutory liability of the Insurance
Company vis-à-vis the third party shall continue till the insurance policy is
cancelled by intimating to the concerned. After the accident has happened, the
repudiation of the contract of insurance cannot be permitted in view of the
provisions of section 147 and 150 of the Act of 1988. In this regard, reference
may be made to the judgement of the Supreme Court in the case of Deddappa
(supra) at paragraph no. 24 which is quoted here in below:-
"24. We are not oblivious of the distinction between the statutory liability of the
insurance company vis-à-vis a third party in the context of Sections 147 and 149 of the
Act and its liabilities in other cases. But the same liabilities arising under a contract of
insurance would have to be met if the contract is valid. If the contract of insurance has
been cancelled and all concerned have been intimated thereabout, we are of the
opinion, the insurance company would not be liable to satisfy the claim."
40. The submissions made by Mr. R. Goswami, the learned counsel for the
respondent Insurance Company to the effect that at being a technical error, the
concept of human probabilities ought to be applied is misconceived inasmuch as
the issuance of the Insurance Policy amounts to a representation given by a
certified insurer not only to the insured but also to authorities and third parties.
It would have been understandable had the respondent Insurance Company
taken steps for corrections or causing amendment to the Insurance Policy or
had clarified by way of a communication before the accident that the period
Page No.# 21/22
pertaining to commencement and expiry should be read as month, date and
year and not date, month and year. But the same having not done, the
Insurance Company cannot escape the liability on the basis of the said
submission.
41. The submissions made by Mr. Goswami, the learned counsel for the
respondent-Insurance Company to the effect that the Proposal Form as well as
the Premium Computation Table should also be taken into account while
construing or interpreting the Insurance Policy. It is relevant to take note that
the Insurance Proposal Form is a proposal submitted for the purpose of getting
a policy. The said proposal is an offer which requires to be accepted and
thereupon the policy would come into existence. Exhibit C is the computation of
the premium. The same does not show as to when the policy commenced and
expired. Apart from that, the Insurance Policy being a representation to the
third party and the authorities the said representation is bound to be honoured
by the Insurance Company in so far as the third parties are concerned. The
Insurance Company after the accident cannot repudiate the contract of
Insurance on account of a mistake committed by them in inserting the date of
commencement and expiry.
42. In view of the above, all the impugned awards are interfered with in so far
as imposition of liability against the appellants and the respondent Insurance
Company is directed to deposit the claim amounts in respect of MAC Appeal No.
106/2014, MAC Appeal No. 124/2014 and MAC Appeal No. 125/2020 before the
Tribunals below within a period of 6 weeks from today. If any payment has been
made, the same shall be adjusted. The claim amount as already directed by the
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claims Tribunal shall carry an interest @ 9 percent from the date of filing of the
claim petition.
43. With the above observations, the instant appeals stand allowed.
JUDGE
Comparing Assistant
