A.N. Divecha, J.
1. The judgment and the award passed by the Motor Accidents Claims Tribunal (Auxiliary) of Aimed-bad Rural at Narol ('the Tribunal' for convenience) on 15.1.1987 in M.A.C. Case No. 232 of 1985 is under challenge in this first appeal at the instance of the original owner of the vehicle involved in the accident giving rise to the claim petition by and on behalf of respondent No. 1 herein.
2. The facts giving rise to this petition move in a narrow compass. One matador bearing R.T.O. registration No. GRR 4862 ('the offending vehicle' for convenience) dashed against respondent No. 1 herein at about 3.15 p.m. on 8.8.1984. He sustained serious injuries as a result of the accident. Respondent No. 3 herein was on the steering-wheel at the relevant time and the appellant herein was its owner. Respondent No. 1 herein was a minor at the relevant time. His father as the guardian of the minor filed a claim petition before the Tribunal for claiming compensation in the sum of Rs. 1,00,000/-. It came to be registered as M.A.C. Case No. 232 of 1985. The driver of the offending vehicle did not contest the claim petition. He did not file any reply thereto. The appellant herein as the owner filed his reply at Exh. 16 on the record of the case and contested the claim petition. Respondent No. 2 herein as the insurer also filed its reply at Exh. 11 on the record of the case and disputed its liability to answer the award. After framing the necessary issues and after recording evidence and hearing the parties, by its judgment and award passed on 15.1.1987 in the aforesaid claim petition, the Tribunal partly accepted the claim petition and awarded to respondent No. 1 a sum of Rs. 62,800/- with running interest at the rate of 12 per cent per annum from the date of the claim application till realisation and also with proportionate costs. The insurer (respondent No. 2 herein) was, however, absolved from its liability to answer the award and liability to answer the award was fastened to the driver and the owner of the offending vehicle, that is, respondent No. 3 and the appellant respectively herein. That aggrieved the owner and he has, therefore, approached this court by way of this appeal under Section 110-D of the Motor Vehicles Act, 1939, for questioning the correctness of the impugned judgment passed by the Tribunal.
3. The learned counsel appearing for the appellant has taken me through the evidence on record in support of his submission that there was no negligence on the part of the driver with respect to the accident in question and that the amount awarded is quite on the higher side. The learned counsel for the appellant has further urged that, in any case, the Tribunal was in error in not fastening the liability to the insurer for answering the award in view of the clear-cut evidence on record. As against this, Mr. M.A. Parikh appearing for the claimant has submitted that the material on record is a clear pointer to the negligence of the driver in driving the offending vehicle and the finding to that effect recorded by the Tribunal calls for no interference in this appeal. Mr. Parikh for respondent No. 1 has further urged that by no stretch of imagination the amount awarded can be said to be on the higher side. It is unfortunate, runs the submission of Mr. Parikh for respondent No. 1, that the cross-objections against the award filed by and on behalf of respondent No. 1 came to be dismissed on the ground of delay in preferring such cross-objections. According to Mr. Parikh for respondent No. 1, the very fact that cross-objections were raised in this appeal would go to show that the awarded amount cannot be said to be on the higher side. So far as the fastening of the liability to answer the award is concerned, Mr. Parikh has urged that it is for the court to decide and he does not want to make any submission on that score. He has, however, urged in all fairness that on interpretation of the relevant provisions of law the liability to answer the award should be fastened to the insurance company rather than to the owner of the offending vehicle. It is unfortunate that the insurance company impleaded as respondent No. 2 in this appeal, though served with the notice of this appeal, has chosen to remain ex pane by not appearing in person or through any advocate. The driver is impleaded as respondent No. 3 in this appeal and he has also chosen to remain ex parte.
4. I think Mr. Parikh for respondent No. 1 is right in his submission to the effect that the evidence on record is a clear-pointer to the negligence on the part of the driver of the offending vehicle with respect to the accident in question resulting in serious injuries to the victim thereof, that is, the respondent No. 1 herein. The Tribunal has carefully scanned and scrutinised the evidence on record and has found the driver to be negligent in that regard. In view of the cogent and convincing evidence on record, the learned counsel for the appellant has not been able to make any headway in questioning the correctness of the finding recorded by the Tribunal in that regard.
5. So far as the quantum of compensation awarded is concerned, I think the Tribunal has correctly applied principles for award of compensation to the victim in a motor accident case. The material on record clearly goes to show that the awarded amount is quite just and proper. Speaking for myself, I have found it slightly on the lower side. However, since the cross-objections have not been accepted on the ground of delay, no variation in the awarded amount is permissible in favour of respondent No. 1 herein.
6. The insurance company (respondent No. 2 herein) is absolved from the liability to answer the award only on the ground that, though the proposal for insurance coverage was made on 7.8.1984 and though that proposal accompanied a bank draft for the amount of premium drawn on that very day and handed over to the authorised agent of the insurance company, the coverage of insurance began from 13.8.1984 as transpiring from the policy of insurance on the record of the case. It is an admitted position on record that the appellant herein made a proposal for renewal of the insurance coverage on 7.8.1984 along with the bank draft for the amount of premium through the authorised agent of the insurance company. The witness examined on behalf of the insurance company at Exh. 40 on the record of the case makes it unequivocally clear that the proposal form together with the bank draft for the amount of premium was received by the authorised agent of the insurance company on 7.8.1984. It, however, transpires from his evidence that the proposal together with the bank draft was received by the insurance company on 13.8.1984 and that was the reason why the insurance coverage was made for the period of one year from 13.8.1984. According to Mr. Adeshara for the appellant, the insurance coverage ought to have been from 7.8.1984 and not from 13.8.1984.
7. It may be noted that soon on receipt of the insurance policy the appellant by its letter of 13.2.1985 (at Exh. 36 on the record of the case) wrote to the insurance company that the coverage ought to have been from 7.8.1984 in view of the fact that the bank draft for the amount of premium was handed over to its authorised agent along with the proposal form on that day itself, that is, on 7.8.1984. It appears that the insurance company caused no reply thereto. It repudiated its liability in that regard only by its letter of 5.8.1986 at Exh. 37 on the record of the case.
8. It would be quite proper to look at Section 64-VB of the Insurance Act, 1938, in that regard. It reads:
64-VB. 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.
(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 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 of insurance policies.
It becomes clear from bare reading of the aforesaid statutory provision that the insurance coverage should start from the date of advance payment of the amount of premium whether in cash or by cheque or by money order. The Explanation to Sub-section (2) makes that position quite clear. The accepter of the amount of premium if it is paid by postal money order would be the postal department and it would be accepting the money as an agent of the insurance company as it will be deemed to have been received by the postal department on behalf of the insurance company on the date the money order is booked. Sub-section (4) requires the authorised agent to send the proposal form together with the amount received from the proposer to the insurance company within 24 hours from the date of such receipt. It would clearly mean that an authorised agent is authorised to accept the payment of advance premium together with the proposal form from the insured. So far as Sub-section (4) is concerned, it is a transaction between the insurer and the agent; the insured (as a third party to the said transaction) is not vitally concerned with it. Once the authorised agent accepts the proposal form with advance premium either in cash or by cheque or by a bank draft, he receives that money as the agent of the insurance company. So far as the insured is concerned, payment is complete, of course, subject to realisation of the negotiable instrument in question. It would be more so if the payment is made in cash or by a bank draft. It cannot be gainsaid that a bank draft is issued by a bank only on receipt of money from the person taking out such bank draft. Payment by a bank draft would be as good as payment in cash subject to the rider that the amount of a bank draft would be realised a day or two later because of clearing agency. The sum and substance of this discussion is that, once the authorised agent of the insurer has accepted the proposal form with advance payment of premium in whatever mode available, the insurance company is bound to give insurance coverage from the date of such payment in view of the combined reading of Sub-section (2) together with its Explanation and Sub-section (4) of the aforesaid statutory provision.
9. As pointed out hereinabove, the appellant handed over the proposal form together with the advance payment of premium by means of a bank draft on 7.8.1984. The insurance coverage under the policy ought to have been from 7.8.1984. In that view of the matter, the insurance company would be answerable to the award with respect to the accident that occurred on 8.8.1984, during the currency of the insurance coverage. No other conclusion in that regard is possible.
10. In view of my aforesaid discussion, I am of the opinion that this appeal deserves to be accepted only on the limited ground that the liability to answer the award should be fastened to the insurance company, that is, respondent No. 2 herein. To that extent, the judgment and the award of the Tribunal under challenge in this petition deserves to be modified.
11. In the result, this appeal is accepted to the aforesaid extent. The judgment and the award of the Tribunal under challenge in this appeal is maintained qua the negligence on the part of the driver of the offending vehicle and qua the amount of compensation awarded. It is, however, modified by holding respondent No. 2 herein as the insurer of the offending vehicle to be also answerable to the award in question. The appellant shall bear his own costs. The costs of respondent No. 1 (the original claimant) shall be borne by the insurance company, that is, respondent No. 2 herein though it has not chosen to contest this appeal. The amount lying in deposit pursuant to the award of the Tribunal in question should be paid by means of an account payee cheque to respondent No. 1 on its maturity since respondent No. 1 has already attained majority long back. It is hoped that the insurance company would discharge its liability without driving the parties to execution proceedings.