M/S. New India Assurance Co vs Suri Venkat Krushna Rao & on 12 March, 2026

Author: R.K. Pattanaik

Bench: R.K. Pattanaik

                 IN THE HIGH COURT OF ORISSA AT CUTTACK
                            MACA No.591 of 2005
            M/s. New India Assurance Co.         ....           Appellant
            Ltd.
                                                Mr. G.P. Dutta, Advocate
                                     -Versus-
            Suri Venkat Krushna Rao &            ....        Respondents
            others
                                                 Mr. S.K. Das, Advocate

                            MACA No.592 of 2005
            M/s. New India Assurance Co.         ....           Appellant
            Ltd.
                                                Mr. G.P. Dutta, Advocate
                                     -Versus-
            Surendranath Mishra & another        ....        Respondents
                                                 Mr. S.K. Das, Advocate

                                      AND
                            MACA No.593 of 2005
            M/s. New India Assurance Co.         ....           Appellant
            Ltd.
                                                Mr. G.P. Dutta, Advocate
                                     -Versus-
            Gupto Prasad Sabat & another         ....        Respondents
                                                 Mr. S.K. Das, Advocate
                     CORAM:
                     MR. JUSTICE R.K. PATTANAIK
                                    ORDER

12.03.2026 Order No.

22. 1. All the MACAs are taken up together and disposed of by the following common order.

2. The LCR has not been received, however, with the consent of learned counsels for both the sides and as a question of law is involved, the same is dispensed with.

3. Heard Mr. Dutta, learned counsel for the Insurance Company and Mr. Das, learned counsel for the respondents.

4. Instant appeals are filed by the Insurance Company challenging the impugned judgment in Miscellaneous Judicial Case No.105, 106 and 145 of 1998 of learned District Judge- cum-1st Motor Accident Claims Tribunal, Koraput at Jeypore on the grounds inter alia that the decision is not legally tenable and hence, liable to be interfered with and set aside.

5. The MJCs were disposed of by a direction to the Insurance Company to pay compensation to the respondents with interest within the period stipulated and to carry a penal interest at the rate of 9% per annum thereafter.

6. The contention of Mr. Dutta, learned counsel for the Insurance Company is that the insurance cover commenced on and from 00.00 hours of 7th November, 1997 till mid night of 6th November, 1998, to which, the respondents are to abide by and therefore, the accident having been taken place on 6th November, 1997 at 10.30 P.M. prior to the commencement of the insurance are not entitled to the compensation and therefore, the learned Tribunal committed a serious error and hence, the impugned judgment in MJCs is liable to be set aside. In support of the contention as above, Mr. Dutta, learned counsel relies on the following decisions, such as, Oriental Insurance Co. Ltd. Vrs. Sunita Rathi AIR 1998 SC 257;

Malkiat Singh Vrs. Joginder Singh AIR 1998 SC 258; New India Insurance Co. Ltd. Vrs. Bhagwati Devi 1999 AIR SCW 4690; New India Assurance Co. Ltd. Vrs. Smt. Sita Bai AIR 1999 SC 3577; R.S. Saini Vrs. State of Punjab AIR 1999 SC 3579; Reliance Life Insurance Company Ltd Vrs. Jaya Wadhwani AIR ONLINE 2024 SC 1 and Reliance General Insurance Company Ltd., Bhubaneswar Vrs. Mrs. Lili Pradhan in W.P.(C) No.9233 of 2022 with the submission that there is a contract in place and the parties are guided by it and in so far as the insurance coverage is concerned, it was to commence on and from midnight of 6th November, 1997.

7. On the other hand, Mr. Das, learned counsel for the respondents cited a judgment of Co-ordinate Bench of this Court in Smt. Renuka Sethi and others Vrs. Babu Sahu and another in FAO No.480 of 2012 to contend that the case laws cited by the other side are not applicable. The further submission is that the respondents are entitled to compensation since are covered by the policy of insurance as the cover note and the premium was paid for the same. It is contended that such entitlement is by virtue of Section 64-VB of the Insurance Act (hereinafter referred to as 'the Act'), which has been taken judicial notice of by this Court in Smt. Renuka Sethi (supra) based on a judgment of the Apex Court in Oriental Insurance Co. Ltd. Vrs. Dharam Chand and others AIR ONLINE 2010 SC 346. The contention is that the cover note having been issued upon acceptance of the premium, the Insurance Company cannot absolve itself from the liability and hence, the learned Tribunal did not commit any error or illegality in directing compensation with interest. In reply and response to

the above, Mr. Dutta, learned counsel for the appellant submits that an official of the Insurance Company was examined to prove the policy in question and therefore, the insurance cover is to commence from 00.00 hours of 7th November, 1997 and not from any anterior date and time.

8. Issuance of the cover note and acceptance of premium is not in dispute. The only question is, whether, the respondents are eligible and entitle to compensation for the alleged incident dated 6th November, 1997 at 10.30 PM. In Dharam Chand (supra), the Apex Court held and observed that the cheque for the premium amount since received by the Insurance Company, the insurance must be deemed to have commenced from that time. The above decision has been referred to in Smt. Renuka Sethi case by a Co-ordinate Bench of this Court. A reference has been made in Dharam Chand (supra) to Section 64-VB of the Act to hold that the insurance cover is to commence on receipt of payment of premium from the insured.

9. Mr. Dutta, learned counsel for the Insurance Company is, however, reiterates the plea referring to the decision in Jaya Wadhwani (supra) to contend that the policy is to commence on and from the date, it has been indicated and not prior to that but considering the decision in Smt. Renuka Sethi case, which is based on Dharam Chand (supra) case, the Court is of the considered view that the cover note having been issued with the acceptance of premium, the Insurance Company has to indemnify, even though, the date of its commencement is mentioned in policy. It would be profitable to refer to Section 64-VB of the Act and sub-section (2) thereof, which stipulates

that in case of risks, for which the 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 with an Explanation, such as, 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 and on a plain reading of the same, as it is understood, the insurance cover is to begin after the premium is paid and received. In the case at hand, a cover note was issued and there is not denial to the fact that the premium was paid prior to 7th November, 1997 and therefore, in view of Section 64-VB of the Act, it has to be held that the Insurance Company cannot be deny the liability and thus, the learned Tribunal did not commit any error in directing compensation in favour of the respondents.

10. In so far as the decision in Jaya Wadhwani (supra) is concerned, there has been no reference of Section 64-VB of the Act. Mr. Das, learned counsel for the respondents would submit that the above decision is per in curium and in the other case laws cited by Mr. Dutta, learned counsel for the Insurance Company, there has been no any discussion with reference to Section 64-VB of the Act. Considering the decision in Dharam Chand (supra) referred to in Smt. Renuka Sethi case by a Co- ordinate Bench of this Court, it has to be concluded that the accident having taken place one and half hours before the insurance cover, the Insurance Company is liable to be indemnify the owner of the vehicle since the cover note was issued and the premium had been received prior to it. In other words, the Court reaches at a conclusion that there is no wrong

or any error has been committed by the learned Tribunal directing compensation in favour of the respondents. The Court is, however, of the view that no penal interest should be imposed against the Insurance Company and to that extent the impugned decision is required to be modified. The Court is also of the view that the award as has been directed while disposing of the MJCs is proper and reasonable and needs no revisit.

11. Accordingly, it is ordered.

12. In the result, the appeals are dismissed. As a necessary corollary, the impugned judgment dated 25th January, 2005 of learned District Judge-cum-1st Motor Accident Claims Tribunal, Koraput at Jeypore in Miscellaneous Judicial Case No.105, 106 and 145 of 1998 is hereby affirmed with the direction that the compensation with interest shall be paid to the respondents by the Insurance Company at the earliest preferably within a period of eight weeks from the date of receipt of a certified copy of this order. The statutory deposit, as a result, shall be refunded to the Insurance Company soon after receipt of a request from the appellants with a requisition submitted.

13. Issue urgent certified copy of this order as per rules.

14. A copy of this order be handed over to Mr. Dutta, learned counsel for the Insurance Company for its onward intimation and early compliance.

(R.K. Pattanaik) Judge Balaram

Designation: PERSONAL ASSISTANT

Date: 16-Mar-2026 12:17:14