Judgment:
B.J. Shethna, J.
1. This appeal is filed by the appellant-original opponent No. 3, insurance, company, against the judgment and award dated 19.12.1981 passed by the M.A.C. Tribunal (Auxiliary), Mehsana, in M.A.C. Petition No. 160 of 1980 ordering the opponents to pay Rs. 3,750/- to the claimant with proportionate costs thereon and interest at the rate of 6 per cent per annum from the date of application on the amount of Rs. 3,750/- till payment.
2. The claimant had claimed Rs. 9,999/- from the opponents. However, the learned Tribunal has awarded Rs. 3,750/- to the claimant. The claimant has accepted the award. But, the insurance company has challenged the same in this appeal.
3. Mr. P.V. Nanavati, learned advocate appearing for the insurance company, has urged that under the earlier policy, Exh. 46, risk was covered from 9.4.1978 to 8.4.1979 and by policy, Exh. 47, risk was covered from 11.4.1979 to 10.4.1980 for one year. The accident took place on 9.4.1979. On that day admittedly there was no coverage of the risk, therefore, the insurance company is wrongly held liable by the learned Tribunal. In support of his submission he has relied upon Section 64-VB of the Insurance Act, 1938 (for short 'the Act') and has also relied upon Tariff Regulation No. 7 and footnote to regulation 19 (10).
4. Before appreciating the above submissions of Mr. Nanavati few facts are required to be noted, which are as under:
(1) The accident took place on 9.4.1979 at 7.30 a.m.
(2) The date of proposal and declaration of the earlier insurance policy, Exh. 46, was 11.4.1978. But, the period of insurance under that policy was from 9.4.1978 to 8.4.1979, both days inclusive. And, the receipt of premium of Rs. 1,917 was dated 11.4.1978.
(3) The date of proposal and declaration of renewal policy, Exh. 47, was 12.6.1979. But, the period of insurance under that policy was from 11.4.1979 to 10.4.1980, both days inclusive. And, the receipt of the premium of Rs. 1,692/- was dated 12.6.1979.
(4) The receipt of premium dated 12.6.1979 shows that premium was Rs. 1,692/- and excess col. was of Rs. 3/-, in all Rs. 1,695/-. It has been stated in the receipt that 'Received with thanks a sum of Rupees (in words) One Thousand Six Hundred Ninety Five only by cash towards premium & S.D. in respect of policy No. 01/05/15//01/01049/79. Cheque dishonoured R. No. 285408 dated 14.4.1979.
5. According to Mr. Nanavati, reference of R. No. 285408 dated 14.4.1979 in the receipt (Exh. 48) is the number of the receipt issued by the bank. According to Mr. Nanavati, the dishonoured cheque would be only of 11.4.1979, because the period of risk covered by the insurance policy (Exh. 47) was from 11.4.1979 to 10.4.1980 for one year. I am afraid I cannot agree with Mr. Nanavati. First of all it was the duty of the insurance company to place the dishonoured cheque on the record, but the insurance company has failed to do that. There is no material on record which would go to show that the cheque was not prior to the date of the accident, i.e., 9.4.1979. Simply because the insurance company had covered the risk from 11.4.1979, it cannot be inferred that the cheque must be dated 11.4.1979.
6. In this case the court cannot overlook the fact that the receipt (Exh. 48) is dated 12.6.1979, which was issued by Mehsana office of the insurance company. The insured was a resident of Patan. Therefore, it is to be presumed that he must have given the cheque at Patan. From Patan the cheque must have been sent to Mehsana office of the insurance company. On receipt of the said cheque, the insurance company must have deposited the said amount in its bank at Mehsana. The bank of the insurance company at Mehsana must have sent it to the bank of insured at Patan for clearance. Due to some reason the cheque was dishonoured by the bank of insured at Patan. Therefore, that bank must have sent it back to the bank of insurance company at Mehsana. And, as it was dishonoured, the bank of the insurance company at Mehsana must have sent it to the insurance company. The above procedure can never be completed within a period of three days. Clearing of the cheque from one place to other always takes a minimum period of one week. Therefore, it has to be held that the cheque must be prior to the date of accident, i.e., 9.4.1979. If it is so, then it cannot be said that the risk was not covered by the insurance company on that day. In absence of the dishonoured cheque on the record of this case, the court has to come to the conclusion that the cheque must be prior to the date of accident, i.e., 9.4.1979. However, Mr. Nanavati urged that if the cheque was prior to 9.4.1979 then why the company should cover the risk from 11.4.1979 and not from 9.4.1979? As per the insurance policy (Exh. 46) the risk was covered from 9.4.1978 to 8.4.1979; but the policy was dated 11.4.1978. Therefore, it is equally possible that in the renewal policy, which was issued on 12.6.1979 through oversight or by mistake the insurance company must have mentioned the date of 11.4.1979, instead of 9.4.1979, overlooking the fact that the earlier policy (Exh. 46) expired on 8.4.1979. In any case, the insurance company has to blame itself for not producing the dishonoured cheque before the learned Tribunal. In absence of that cheque on the record, the only inference which could be drawn is that the cheque must be prior to 9.4.1979. It must be noted that the policy (Exh. 47) is a renewal policy and, therefore, in absence of any other concrete evidence or material on record, it can be safely presumed that the insured must have applied well in time, i.e, on or before 8.4.1979 or 9.4.1979 for renewal of his policy and he must have paid the cheque to the insurance company prior to 9.4.1979.
7. Mr. Nanavati next contended that the insurance company had committed an error in giving coverage of the risk from 11.4.1979. He submitted that the risk could be covered only from the date on which the insurance company receives the premium. He submitted that as the cheque was dishonoured and the insured had paid the premium amount by cash on 12.6.1979, the period of insurance could start only from 12.6.1979 and not prior to that. Thus, the day on which the accident took place, i.e., 9.4.1979 there was no valid policy or coverage of the risk and, therefore, the insurance company cannot be held liable. In support of his submission he relied upon Section 64-VB of the Act. Section 64-VB(2) of the Act provides that 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. Therefore, according to Mr. Nanavati, the risk can be covered only from the date on which the premium has been received in cash or by cheque by the company. He submitted that even if it is to be assumed that the cheque would be prior to 9.4.1979, even then when the cheque was dishonoured, it means that premium was not received and the insurance company had received the amount of premium by cash only on 12.6.1979 and, therefore, it must be held that the risk was covered only from that date, i.e., from 12.6.1979 and not prior to that.
8. Explanation to Sub-section (2) of Section 64-VB of the Act provides that 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. Thus, mere tendering of premium either by sending it in post by postal money order or cheque is enough for the purpose of covering the risk and it will start from the day on which the premium is sent by postal money order or by cheque. In this case I have come to the conclusion that the cheque was paid by the insured prior to 9.4.1979, therefore, it could be said that the risk was covered from 9.4.1979. The cheque was dishonoured is altogether a different matter. There would have been different consideration if the insurance company had not subsequently accepted the premium by cash on 12.6.1979. But, having accepted the premium in cash subsequently, the insurance company cannot urge that it had covered the risk from 12.6.1979 and not from 9.4.1979.
9. It is important to note that in this case, earlier also as per policy (Exh. 46) the insurance company received the amount on 11.4.1978. But the period of insurance was considered for one year from 9.4.1978, i.e., two days prior to the payment. In this case though the amount of premium in cash was received by the insurance company on 12.6.1979, insurance company has covered the risk from 11.4.1979. If it is a case of renewal of insurance policy, then it could have been only from the date on which the policy expires, i.e., from 9.4. 1979. But, it appears that the insurance company must have received the cheque earlier in point of time but by mistake wrongly given the date of covering the risk from 11.4.1979.
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10. In view of the above discussion there is no merit and substance in this appeal. Therefore, it fails and is dismissed with costs.