Judgment:
G.B. Patnaik, J.
1. The insurer of the vehicle is the appellant in both these appeals challenging the award of the Tribunal on the ground that the policy of insurance having been obtained by practising fraud with effect from 2.5.1986 though the premium amount was actually paid on 7.5.1986, the insurer should not be held liable for the compensation amount in question in respect of the accident that occurred on 4.5.1986.
2. The claimants in M.A. No. 125 of 1991 are the father and mother of the deceased aged about 25 years and the amount of compensation determined therein was Rs. 57,000/- out of which the insurer's liability is to the extent of Rs. 50,000/- as provided under the statute. The injured himself is the claimant in other Misc. Appeal and the insurer's liability is to the extent of Rs. 15,000/- as provided under the statute. I am not concerned with the findings of the Tribunal that the vehicle bearing registration No. TML 9097 met with an accident on 4.5.1986 while it was being driven rashly and negligently and in course of the said accident the deceased died whose dependants are the claimants in M.A. No. 125 of 1991 and similarly the injured sustained injury who is the claimant in M.A. No. 129 of 1991.
3. The stand of the insurer before the Tribunal was that since the vehicle was not duly insured on 4.5.1986, the insurer is not liable to pay the compensation. The Tribunal on consideration of the said question came to the conclusion that no doubt there has been some interpolation on the document showing deposit of the premium amount but it was not known as to who had made the interpolation in question. He further held that since the claimants will not suffer for such interpolation and the policy in question admittedly having been issued making it effective from 2.5.1986, the insurer is liable to pay the compensation.
4. Mr. Basu appearing for the insurer in both these appeals contends that under the provisions of the Insurance Act, 1938, the insurer is not liable to assume risk unless and until necessary deposit of the premium amount is made in advance in the prescribed manner as contained in Section 64-VB of the Act and since admittedly the premium amount in the present case appears to have been deposited on 7.5.1986 there was no liability on the insurer to take risk with effect from any anterior point of time. In support of this contention reliance has been placed on a Bench decision of the Karnataka High Court in Asma Begum v. Nisar Ahmed 1990 ACS 832 (Karnataka), where the question of renewal of an insurance policy was under consideration. After noticing the provisions of Section 110-A of the Motor Vehicles Act and Section 64-VB of the Insurance Act, the learned Judges took the view that the policy in question would be effective only on and with effect from the date of payment of premium and not from any anterior point of time and, therefore, the policy did not cover the risk arising out of an accident which took place prior to the point of time when the premium was paid.
5. Admittedly, in the case in hand a policy of insurance has been issued by the insurer which has been exhibited as Exh. B and the said policy clearly mentions that the effective date of commencement is 2.5.1986 and it is valid from 2.5.1986 till 1.5.1987. The sole contention of the learned counsel for the appellant is that no doubt the policy that was issued clearly stipulates that it is effective from 2.5.1986 but such date of effective commencement was given on the basis of a receipt which was produced by the owner of the vehicle indicating that the premium amount of Rs. 2,564/- was deposited in United Bank of India, Puri, on 2.5.1986. The said receipt has been exhibited as Exh. G and since the authorities were misled to give the policy effective from 2.5.1986 on the basis of such interpolated document the insurer should not be held liable with effect from the date mentioned in the policy of insurance. In support of the stand that the money was actually paid on 7.5.1986 and not on 2.5.1986 the statement of the United Bank of India has been exhibited which is Exh. E and the said document indicates that there was no deposit on 2.5.1986 and, on the other hand, Rs. 2,564/-was deposited only on 7.5.1986. The officer of the insurance company has led evidence indicating the aforesaid state of affairs. Therefore, on the basis of materials produced there is ample force in the contention of the learned counsel for the appellant that a policy of insurance was issued making it effective from 2.5.1986 on the basis of an interpolation showing that the premium was deposited on 2.5.1986. But the question that arises for consideration is whether the policy of insurance which is a contract between the parties having been issued making it effective from 2.5.1986 can the insurer claim that the contract is void or invalid and will be absolved of its liability by pleading that it was misled on the basis of an interpolated document that was produced indicating that the premium was paid on 2.5.1986. In my considered opinion, the insurer cannot be absolved of its liability once it issues a policy indicating therein that the effective date of commencement is 2.5.1986. The provision of Section 64-VB of the Insurance Act no doubt is an embargo on the power of the insurer to assume any risk unless and until the prescribed amount is deposited in the prescribed manner. But notwithstanding the same if the insurer enters into a contract with the insured then the contract cannot be said to be void. In somewhat similar circumstances, a question had come up for consideration before me in the case of New India Assurance Co. Ltd. v. Prafulla Kumar Das 1989 ACJ 852 (Orissa). Analysing the provisions of Section 96 of the Motor Vehicles Act, it was held that the provision under the Motor Vehicles Act making the insurance company liable being a beneficial one and having purposely been engrafted into the statute for providing an efficacious remedy to the claimant so that an award passed by the Tribunal can easily be satisfied, the insurer cannot be absolved of its liability even if it cancels a policy issued by it. The remedy available to the insurer in such a case is to sue the insured for realising the amount in question. In that case it was also contended on behalf of the insurer that the insured had fraudulently obtained the policy in question but it was observed by this court that the court cannot protect the insurer from such fraudulent action of the insured and the remedy, if any, is available to sue the insured for damages. In this view of the matter, even though I find ample materials on record for coming to a conclusion that the premium in question was paid only on 7.5.1986 but on that score alone it is difficult for me to hold that the insurer was not liable on the date of accident, namely, 4.5.1986 in view of the fact that the policy of insurance that was issued categorically mentions that the effective date of commencement of policy is 2.5.1986. Accordingly, I am unable to persuade myself to agree with the sub-missions made by the learned counsel for the appellant that the insurer is not liable to pay the amount in question. As observed earlier the insurer will be at liberty to sue the insured, namely, the owner of the vehicle, for damages as available under law for having indulged in such fraudulent act and having persuaded the insurer to issue a policy on the basis of such fraudulent transaction. The appeals are accordingly dismissed. No costs.