Mehatabulla K@ Mehatab S/o Munirsab Saikalgar Vs. Samilulla S/o Sayed Mohiddinsab Killedar - Court Judgment

Excerpt:
1 r in the high court of karnataka, dharwad bench dated this the22d day of february, 2023 present the hon’ble mr. justice k.somashekar and the hon’ble mr. justice umesh m adiga mfa crob.100086/2019 (mv) c/w mfa no.101312/2019 in mfa crlb.100086/2019 between:1. . samilulla s/o sayed mohiddinsab killedar age:60. years, occ: employee, r/o: banashankari nagar, tq: hirekerur, dist: haveri, pin code:58110. .2. ashrafunisa w/o samiulla killedar age:56. years, occ: employee, r/o: banashankari nagar, tq: hirekerur, dist: haveri, pin code:58110. . ...cross objectors (by sri.dinesh m.kulkarni, advocate) 2 and1. mehatabulla @ mehatab s/o munirsab satkalgar age:34. years, occ: business, r/o: tippu nagar, rattihalli, tq: hirekerur, dist: haveri, pin code:58110. . 2 . the divisional manager united.....

Judgment:

1 R IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE22D DAY OF FEBRUARY, 2023 PRESENT THE HON’BLE MR. JUSTICE K.SOMASHEKAR AND THE HON’BLE MR. JUSTICE UMESH M ADIGA MFA CROB.100086/2019 (MV) C/W MFA NO.101312/2019 IN MFA CRLB.100086/2019 BETWEEN:

1. . SAMILULLA S/O SAYED MOHIDDINSAB KILLEDAR AGE:

60. YEARS, OCC: EMPLOYEE, R/O: BANASHANKARI NAGAR, TQ: HIREKERUR, DIST: HAVERI, PIN CODE:

58110. .

2. ASHRAFUNISA W/O SAMIULLA KILLEDAR AGE:

56. YEARS, OCC: EMPLOYEE, R/O: BANASHANKARI NAGAR, TQ: HIREKERUR, DIST: HAVERI, PIN CODE:

58110. . ...CROSS OBJECTORS (BY SRI.DINESH M.KULKARNI, ADVOCATE) 2 AND1. MEHATABULLA @ MEHATAB S/O MUNIRSAB SATKALGAR AGE:

34. YEARS, OCC: BUSINESS, R/O: TIPPU NAGAR, RATTIHALLI, TQ: HIREKERUR, DIST: HAVERI, PIN CODE:

58110. . 2 . THE DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD. DIVISIONAL OFFICE, NO.2, 1ST FLOOR, ENKAY COMPLEX, KESHWAPUR, HUBBALLI-23. ...RESPONDENTS (BY SRI.SANTOSH NARAGUND, ADV. FOR R1, SRI.S.S.KOLIWAD, ADV. FOR R2) THIS MFA CROB IS FILED UNDER

ORDER

41RULE22OF CPC PRAYING TO MODIFY THE

JUDGMENT

AND AWARD PASSED BY THE SENIOR CIVIL JUGE AND AMACT, HIREKERUR IN MVC NO.28/2015 DATED0202.2019 AND ENHANCE THE COMPENSATION. IN MFA NO.101312/2019 BETWEEN: MEHATABULLA K@ MEHATAB S/O MUNIRSAB SAIKALGAR AGE:

34. YEARS, OCC: BUSINESS, R/O: TIPPU NAGAR, RATTIHIALLI, TQ: HIREKERUR, DIST: HAVERI-581101. ...APPELLANT (BY SRI.SANTOSH NARAGUND, ADVOCATE) 3 AND1. SAMILULLA S/O SAYED MOHIDDINSAB KILLEDAR AGE:

60. YEARS, OCC: EMPLOYEE, R/O: BANASHANKARI NAGAR, TQ: HIREKERUR, DIST: HAVERI581101. 2 . ASHRAFUNNISA W/O SAMIULLA KILLEDAR AGE:

56. YEARS, OCC: EMPLOYEE, R/O: BANASHANKARI NAGAR, TQ: HIREKERUR, DIST: HAVERI-581101. 3 . THE DIVISIONAL MANAGER UNITED INDIA INSURANCE CO. LTD., DIVISIONAL OFFICE, NO.2, 1ST FLOOR, ENKAY COMPLEX, KESHWAPUR, HUBBALLI-23. ...RESPONDENTS (BY SRI. DINESH M.KULKARNI, ADV. FOR R1 & R2, SRI.S.S.KOLIWAD, ADV. FOR R3) THIS MFA IS FILED U/S.173(1) OF MOTOR VEHICLES ACT, 1988, AGAINST THE

JUDGMENT

AND AWARD DATED0202.2019 PASSED IN MVC NO.28/2015 ON THE FILE OF THE SENIOR CIVIL JUDGE AND ADDITIONAL MOTOR ACCIDENT CLAIMS TRIBUNAL, HIREKERUR, AWARDING COMPENSATION OF Rs.15,47,000/- WITH INTEREST AT7% P.A. FROM THE DATE OF PETITION TILL ITS REALISATION. THIS MFA CROB AND MFA HAVING BEEN HEARD AND RESERVED FOR

JUDGMENT

ON2501.2023 COMING ON FOR PRONOUNCEMENT OF

JUDGMENT

THIS DAY, UMESH M ADIGA J., DELIVERED THE FOLLOWING:

4. JUDGEMENT Both the appeal and cross-objections are directed against the judgment and award dated 02.02.2019 passed by the Senior Civil Judge and AMACT, Hirekerur in MVC No.28/2015.

2. MFA No.101312/2019 is filed by owner of vehicle challenging the award fastening the liability on the owner of the vehicle, to pay compensation and exonerating the insurance company to indemnify the appellant-owner. MFA Crob.100086/2019 is filed by claimants seeking enhancement of compensation.

3. We refer the parties as per their ranking before the Tribunal.

4. It was the case of the petitioners in MVC No.28/2015 that on 21.05.2015 at about 9.15 p.m. the deceased Sayed Sadatulla s/o Samiulla Killedar had met with an accident while going as pillion rider in motorcycle bearing No.KA-27/X-1939, rode by respondent No.1, in 5 rash and negligent manner near Bhagatsingh Circle of Rattihalli in Haveri District. Due to the same, he sustained severe injuries and while shifting him to the hospital at Davanagere, he succumbed to the injuries. It was further contention of the claimants/petitioners that deceased was aged about 20 years at the time of the accident and he was a student and also doing private work and earning Rs.20,000/- p.m. The petitioners were depending upon his earnings. With these reasons, they prayed to award compensation of Rs.30,00,000/-.

5. The appellant in MFA No.101312/2019 is the owner of the said vehicle and respondent No.1 before the Tribunal. He had contended that he insured the said motorcycle with respondent No.2 and he had valid driving licence to ride motorcycle. Therefore, respondent No.2 was liable to pay the compensation. He has not denied other averments stated in the petition and prayed to dismiss the petition against him. 6

6. Respondent No.2-insurance company had contended before the Tribunal that alleged accident had taken place on 21.05.2015 at 9.15 p.m. However, the FIR was registered on 22.05.2015 at 8.15 p.m. The police did not inform about the said accident to respondent No.2. Petitioners have fabricated the case to claim compensation by colluding with respondent No.1 and Police. Therefore, claimants are not entitled for compensation. It further contended that at the time of accident, policy of insurance was not in force. The insurance policy was issued by respondent No.2 on the said motorcycle, was valid from 00-00 hours on 22.05.2015 to midnight of 21.05.2016. Therefore, before issuance of policy of insurance, the accident had taken place. Therefore, respondent No.2 was not liable to pay compensation or indemnify respondent No.1. Respondent No.2 denied all other averments made in the petition and prayed for dismissal of the petition.

7. From the rival contentions of the parties, the Tribunal had framed relevant issues. 7

8. Petitioners on their behalf have examined P.Ws.1 and 2 and got marked Exs.P1 to P9. Respondents on their behalf have examined R.Ws.1 to 3 and got marked Exs.R1 to R7.

9. The Tribunal on appreciation of pleadings and evidence on record, by the impugned judgment, held that accident was taken place due to negligence of respondent No.1 and policy of insurance was not in force at the time of the accident and awarded compensation of Rs.15,47,000/- under following heads and directed respondent No.1 to pay the said amount of compensation. Sl. Heads Amount No.(Rs.) 1. Loss of dependency 15,12,000 2. Loss of love & affection 20,000 3. Transportation of dead body 5,000 4. Funeral expenses 10,000 Total 15,47,000 10. We have heard the arguments of the learned counsel for the parties. 8

11. Following points emerge for our determination:

1. Whether the Tribunal was justified in fastening the liability on respondent No.1- owner of the vehicle though he had paid premium before the occurrence of the accident in question?.

2) Whether the quantum of compensation awarded by the Tribunal call for any modification?.

12. Learned counsel for the appellant in MFA No.101312/2019 has submitted that the Tribunal has assessed the income of deceased as Rs.10,000/- p.m. which is on the higher side. The amount of compensation awarded under other heads is also on higher side, which calls for interference. He has further contended that as on the date of the accident, the said vehicle was insured and the appellant had paid premium before 4.00 p.m. on that day and even the vehicle was inspected by the authorized officer of the respondent-insurance company. However, at 9 the time of issue of policy of insurance, the Company had stated that period of policy as “22.05.2015 from 00.00 hours to 21.05.2016”. Since the Insurer had already received the premium, it was liable to pay the compensation and indemnify the appellant. Therefore, prayed to fasten the liability on the insurer of the said motorcycle, to pay compensation.

13. Learned counsel for the cross objectors submitted that deceased was educated and holder of ITI certificate. He was dealing with electrical items. He used to purchase electrical items and doing the electrical work at home and used to earn Rs.20,000/- p.m. The Tribunal has not considered the same. Therefore, prayed to consider the income of the deceased as Rs.20,000/- p.m. He has further contended that, considering the other factors. reasonable amount of compensation be awarded to the claimants. He has further contended that as on the date and time of the accident, the owner of the motorcycle had already paid premium to the insurance company, it was 10 liable to pay compensation, and prayed to fasten the liability on the insurer of the said motorcycle.

14. Learned counsel for the insurer has contended that the offending motorcycle was not insured at the time of accident. According to Exs.R4 to R6, the liability starts from 00.00 hours of 22.05.2015. The accident was taken place prior to the commencement of the period of policy of insurance. Hence, the insurer was not liable to pay the compensation and Tribunal rightly held that owner of vehicle shall pay compensation and it does not call for interference.

15. Learned counsel for the insurance company has further contended that as per Ex.R1, the victim was taken to hospital at 9.10 a.m. on 21.05.2015. However, the said case was totally fabricated and time was changed as 9.15 p.m. on 21.05.2015, only to claim compensation from the insurer of the vehicle. Therefore, prayed to dismiss the petition. 11

16. As per the findings of the Tribunal, it has considered the income of the deceased as Rs.10,000/- p.m. and added 40% of the said income towards future prospects and multiplied it by the multiplier ‘18’ and awarded compensation under the head loss of dependency. Admittedly, there is no material on record to show that deceased was dealing with electrical items or working as Electrician. Under these circumstances, the Tribunal had to assess the income of the deceased on the basis of guess work. While settling the disputes in the Lok Adalaths, for the accident taken place during the year 2015, the income of the victim or deceased in an accident, is taken as Rs.8,000/- p.m. Same has to be considered in the present case. As rightly held by the Tribunal, 40% of the income has to be added towards future prospects. Deceased was unmarried and left behind him his parents. Therefore, 50% of the said income is to be deducted towards personal expenses. Therefore, the compensation to be awarded under the head loss of dependency is Rs.5,600/- x 12 x 18 Rs.12,09,600/-. 12

17. Deceased left behind him his parents who are petitioner Nos.1 and 2. As per the law laid down in the case of 1National Insurance Company Limited vs. Pranay Sethi and others and in the case of 2Magma General Insurance Co. Ltd., Vs. Nanu Ram Alias Chuhru Ram and 3N.Jayasree and Others vs. Cholamandalam Ms General Insurance Company Ltd. Reported in AIR2021SC5218 each dependents are entitled for compensation of Rs.44,000/- under the head loss of consortium. Accordingly, Rs.88,000/- is awarded under the head loss of filial consortium.

18. As held in the case of Pranay Sethi (supra) & Jayashree (supra), Rs.16,500/- each is awarded towards loss of estate as well as funeral expenses. Hence, claimants are entitled for compensation of Rs.13,30,600/- under following heads:

1. (2017) 16 Supreme Court Cases 680 2 (2018 SCC Online SC1546 3 AIR2021SC521813 Sl. Heads Amount No.(Rs.) 1. Loss of dependency 12,09,600 2. Loss of consortium 88,000 3. Loss of estate 16,500 4. Funeral expenses 16,500 Total 13,30,600 19. According to the contentions of the petitioners as well as respondent No.1, respondent No.2 is liable to pay the compensation as the said vehicle was insured with respondent No.2 and premium was paid before the accident. But the contention of respondent No.2 is that as per the terms and conditions of the policy of insurance, the liability commences only after midnight 12.00 hours of 22.05.2015 and not prior to that. Hence, respondent No.2 is not liable to pay the compensation.

20. Respondent No.1 has produced proposal form of insuring of his vehicle at Ex.R4. It was submitted on 21.05.2015. Time of submission of said proposal is not indicated on the said document. However, in the column, “for office use only”, it is mentioned that the vehicle was 14 inspected on 21.05.2015 at 4.10 p.m. It is also pertinent to note that in Ex.R4 itself, it is mentioned that the period of insurance was from 22.05.2015 to 21.05.2016. Ex.R4 is not in dispute. The contents of the said proposal form itself clearly reveals that liability of insurer commences from 22.05.2015 at 00.00 hours and ends on 21.05.2016. Respondent No.1 knew the period of risk while receiving Ex.R4 and now he cannot contend that respondent No.2 had played fraud on him and commenced the period of policy from 22.05.2015. Said contention is not tenable.

21. Certificate of insurance is produced at Ex.R5 and policy of insurance is produced at Ex.P6. Both these documents also supports the contention of respondent No.2 that coverage of risk of said offended vehicle was commencing from 00.00 hours on 22.05.2015 till 21.05.2016. Therefore, it is very clear that at the time of accident, insurance policy was not in force. Respondent No.1, now cannot contend that he had paid premium 15 before occurrence of the accident, therefore, respondent No.2 is liable to pay compensation.

22. Learned counsel for claimants as well as respondent No.1 have relied on the judgments of Hon’ble Supreme Court in the case of 4New India Assurance Co.Ltd. Vs. Ram Dayal and Others and judgment of Co- ordinate Bench of this Court in the case of 5Sudharshan s/o Hnmanth vs Sri.Subhas s/o Bakkappa Mathanshetty and Another and submitted that in view of law laid down in the above said judgments, the liability of insurance company i.e., insurer commenced immediately after receipt of the premium by the insurer.

23. To consider the contention of the owner as well as claimants, it just and necessary to refer the legal position of insurer as well as the insured. 4 (1990) 2 SCC6805 MFA No.31894/2012 16 Normally, the insurance is a contract between the insurer and insured that determines rights and liabilities between the parties. The owner of vehicle submits his proposal of insurance to the Insurer-Company and pays premium required to consider his proposal to cover the risks. On accepting of said proposal by Insurer, both enter into a contract, agreeing to certain terms and conditions and issues policy of insurance. The insurer thereafter promises to pay for loss caused by perils, covered under the policy of insurance. Since it is a contract between insurer and insured, the provisions of the Indian Contract Act is applicable to them along with Motor Vehicles Act.

24. To discuss the same, it is necessary to mention the relevant sections of Indian Contract Act. Section 2(a), (b) and (c) reads under: “2(a) When one person signifies to another his willingness to do orto abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal; 17 2(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise; 2(c) The person making the proposal is called the “promisor”, and the person accepting the proposal is called the “promisee”;” Section 4 reads as under: “4.Communication when complete.—The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete,—as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer. The communication of a revocation is complete,—as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge.

25. In this case, as per Ex.R4, the insured had made a proposal by submitting prescribed form with paying premium in advance at about 4.00 p.m. and made a proposal to insure his vehicle for a period of one year 18 from 22.05.2015 till 21.05.2016. The said proposal was accepted by Insurer. According to the evidence of R.Ws.2 and 3, both the parties to the said agreement or contract, knew that the liability of insurer commences from 00.00 hours on 22.05.2015. Respondent No.1 did not request respondent No.2 to commence the liability immediately after acceptance of the policy or proposal given by respondent No.1. Therefore, when by clear terms both the parties, i.e., respondent No.1 and respondent No.2 agreed that the liability of respondent No.2 shall commences from 00.00 hours of 22.05.2015, now he cannot claim that he paid the premium at about 4.10 p.m. therefore, liability of respondent No.2 i.e., insurer commences immediately after receipt of Ex.R4 and it is not legally sustainable.

26. Looking to the history of development of Insurance Act during the year 1925 there was remarkable increase in the volume of life insurance business and the development of other form of insurance business in British India. Therefore, it was suggested that more 19 comprehensive legislation was needed to monitor and administer the insurance business in British India. Therefore, the object behind enactment of Insurance Act, 1938 is to monitor and supervise insurance business in British India. Part II C of Insurance Act, 1938, deals with solvency, margin advance payment of premium and restrictions on the opening of a new place of business by insurance company. Section 64VB pertaining to recovery of the premium for the sale of policy of insurance and it directs the insurance companies that unless premium is issued in advance, it cannot take risk and issue the policy.

27. Section 64VB reads as under: “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 20 until deposit of such amount as may be prescribed, is made in advance in the prescribed manner. (2) For the purposes of this section, inthe 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 dispatch by post to, the insurer, the premium so collected in full without deduction ofhis commission within twenty-four hours of the collection excluding bank and postal holidays. 21 (5) The Central Government may, by rules, relax the requirements of sub-section (1)in respect of particular categories in insurance policies. 1[(6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer.].

28. Reading entire Section 64VB of the Insurance Act, 1938 deals with receiving of premium amount before issue of the policy of insurance and not more than that. Therefore, respondent No.1 or claimants cannot contend that in view of provisions of Section 64VB, insurance company is liable to pay compensation since they have received premium in advance. The facts of the present case as already stated above, clearly reveals that even in Ex.R4 and Ex.R2, it is mentioned that policy of insurance commences from 22.05.2015 to 21.05.2016. Therefore, we cannot find fault with findings of Tribunal fastening liability on Respondent No.1.

29. In the case of Ram Dayal (supra), the facts of that case were different. Therefore, principle of law laid 22 down in the above said judgment is not applicable to the facts of the present case.

30. In the case of Sudharshan (supra), the Coordinate Bench of this court relying on various judgments directed the insurer to pay the compensation to the claimant. But the facts of the said case were different. In all the cases, relied in the said judgment were pertaining to the cases wherein there was no reference about date of commencement of the risk in the receipt/proposal. But in this case, as per Ex.R4, date of commencement of risk was mentioned as, from 22.05.2015”. The said terms of contract prevails and this court cannot direct the insurer to pay the compensation when there was no policy of insurance at the time of accident.

31. Section 147(3) to (5) of the Motor Vehicles Act, 1988 reads as under: (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the 23 insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases. (4) Notwithstanding anything contained in this Act, a policy of Insurance issued before the commencement of the Motor Vehicles (Amendment) Act, 2019 shall be continued on the existing terms under the contract and the provisions of his Act shall apply as if this Act had not been amended by the said Act. (5) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe.

32. In the case of United India Insurance Co.Ltd. Vs Kalamani and others in CMA No.3291/2017 and CMP No.20764/2017 dated 03.03.2022 of High Court 24 of Judicature at Madras in paragraph 16 to 20 held as under: “16. The effect of payment of premium is an offer made by the owner of a vehicle seeking upon the Insurance Company to insure the vehicle so that the owner may be indemnified for any loss which the vehicle suffers or for any claim made against the vehicle owing to an accident. It remains an offer till its accepted by the Insurance Company.

17. The acceptance is done into two ways. Under Section 145(1)(b) of the Motor Vehicles Act 1988, the Insurance Company can issue what is called a cover note. This is issued for new vehicles since prior to registration taking up an insurance policy is a prerequisite and precondition for registration of the vehicle. Therefore, a cover note is immediately issued as the vehicle is physically available and seen.

18. In the case of a vehicle which is already on the road, before a policy is issued and before the premium is accepted by the Insurance Company, there is also a procedure where the Insurance Company will have to verify whether the vehicle is actually available or not. Only thereafter is the premium accepted. The significance of such acceptance is the issuance of a certificate of insurance. That is the first document which indicates that the premium has been accepted and a binding contract had been entered into between the insured and the insurer with respect to the vehicle under question. Till that time, the premium paid does not bring about a contract between the two parties. Thereafter, the insurance policy is issued which gives the terms and conditions under which the insurer would be held liable, if at all a claim is made either for damages to the vehicle or a claim is made for an accident which occurred owing to the driving of the vehicle.

19. The persons, who are covered under the policy would be reflected in the policy itself. It is also to be noted that the insurance contract is a contract of utmost good faith and there must be truthful CMA No.3291 of 2017 disclosure by the insured and the 25 insurers liability is restricted to the terms and conditions of the policy.

20. These are all factors which are inbuilt in any contract of insurance. Such a contract of insurance has to be interpreted in stricto senso and there cannot be any implied interpretation applied to a contract of insurance.

33. In the said judgment, the learned Judge of High Court of Judicature at Madras considered the proposal of owner of vehicle, its acceptance by Insurer and liability of both the parties and discussed them in detail by considering the judgments of the Hon’ble Supreme Court pertaining to the said law. It supports the contention of respondent No.2-insurer to show that it was not liable since there was no policy of insurance at the time of the accident.

34. It was also not the case of respondent No.1 that he had insured said vehicle with Respondent No.3 and proposal was submitted for renewal and previous policy of insurance was in force till renewal of the policy of insurance with respondent No.2. In the cross-examination these facts were suggested to R.W.3 and he gave evasive 26 answer. He did not produce said policy of insurance to show that till 21.05.2015 the previous policy was in force. Since no such case is made out, it is not necessary to go into the said fact in detail.

35. To clarify the disputed point, we may rely on the law laid down by the Hon’ble Supreme Court in the following cases: (a) 6New India Assurance Co.Ltd. Vs. Bhagwati Devi and Others in paragraph No.2, it was observed that: “2. The facts giving rise to the appeal are minimal. The appellant-insurance company sold a policy at about 4 p.m. on 17-2-1989. Undeniably, it had been bought at a time when an accident pertaining to the vehicle insured had already taken place at about 9 a.m. the same day. The fatal accident occurring thereby gave rise to a claim for damages before the Motor Accident Claims Tribunal. The same was allowed on the strength of the decision of this Court aforementioned, correctness of which has been challenged. The said decision proceeded on the legal fiction that when a policy is taken on a particular date, its effectiveness would start from the commencement of that date which is from the previous midnight. The accident taking place at any time during the day would be covered by the policy. Later a three-member Bench of this Court in National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi ((1997) 1 SCC66 has taken the 6 1999 ACJ53427 view that when there is a special contract mentioning in the policy the time when it was bought, it would be operative from that time and not fictionally from the previous midnight. In the said case, the policy had been bought at about 4 p.m. on the day of the accident and, thus, was not allowed to be operative from midnight; the accident having occurred around 11 a.m. on that date. The principle deduced is thus clear that should there be no contract to the contrary, an insurance policy becomes operative from the previous midnight, when bought during the day following. However, in case there is mention of a specific time for its purchase then a special contract to the contrary comes into being and the policy would be effective from the mentioned time. The law on this aspect has been put to rest by this Court. There is, thus, nothing further for us to deliberate upon.” (b) 7Oriental Insurance Company Limited Vs Porselvi and Another in paragraph No.5, it was observed that: “A three Judge Bench of this Court in New India Assurance Co. Ltd. Vs. Sita Bai (Smt.) and Ors. [(1999) 7 SCC575 inter alia observed as follows :

"6. The correctness and applicability of the judgment in Ram Dayal case [(1990) 2 SCC680 came up for consideration before this Court subsequently in a number of cases. In New India Assurance Co. vs. Bhagwati Devi [(1998) 6 SCC534 a three-Judge Bench of this Court relied upon the view taken in National Insurance Co. Ltd. vs. Jikubhai Nathuji Dabhi [(1997) 1 SCC66 wherein it had been held that if there is a special contract, mentioning in the policy the time when it was bought, the insurance policy would be 7 (2009) 15 SCC11628 operative from that time and not from the previous midnight as was the case in Ram Dayal case where no time from which the insurance policy was to become effective had been mentioned. It was held that should there be no contract to the contrary, an insurance policy becomes operative from the previous midnight, when bought during the day following, but in cases where there is a mention of the specific time for the purchase of the policy, then a special contract comes into being and the policy becomes effective from the time mentioned in the cover note/the policy itself. The judgment in Jikubhai case has been subsequently followed in Oriental Insurance Co. Ltd. vs. Sunita Rathi [(1998) 1 SCC365 by a three-Judge Bench of this Court also.” (c) 8Oriental Insurance Co.Ltd., Vs Sunita Rathi and Others in paragraph No.3, it was observed that: “It follows that the insurer cannot be held liable on the basis of the above policy in the present case and, therefore, the liability has to be of the owner of the vehicle. However, we find that the High Court, without assigning any reason, has simply assumed that the owner of the vehicle was not liable and that the insurer alone was liable in the present case. This conclusion, reached by the High Court, is clearly erroneous. The liability of the insurer arises only when the liability of the insured has been upheld for the purpose of indemnifying the insured under the contract of insurance. There is, thus, a basis fallacy in the conclusion reached by the High Court on this point.” 8 1998 ACJ12129 (d) 9National Insurance C.Ltd., Vs Sobina Iakai and others in paragraph Nos.13, 14 and 19, it was observed that: “13. The insurance policy and the motor renewal endorsement were on record. Both these documents were produced and proved by the appellant company. The Tribunal and the High Court have seriously erred in ignoring these basic and vital documents and deciding the case against the appellant company on the ground of non-production of the Cashier and Development Officer. This manifestly erroneous approach of the High Court has led to serious miscarriage of justice.

14. This Court had an occasion to examine the similar controversy in the case of New India Insurance Company v. Ram Dayal (1990) 2 SCR570 In this case, this Court held that in absence of any specific time mentioned in the policy, the contract would be operative from the mid- night of the day by operations of the provisions of the General Clauses Act but in view of the special contract mentioned in the insurance policy, the effectiveness of the policy would start from the time and date indicated in the policy.

19. In order to curb this widespread mischief of getting insurance policies after the accidents, it is absolutely imperative to clearly hold that the effectiveness of the insurance policy would start from the time and date specifically incorporated in the policy and not from an earlier point of time.” 9 2007 ACJ204330 36. In this case, as per Ex.R4, proposal period of risk commences from 22.05.2015. Accident had taken place on 21.05.2015 at 9.15 p.m. At that time, policy of insurance was not in force. Hence, Respondent No.2 – Insurer cannot be directed to indemnify the Respondent- Owner of vehicle or direct the Respondent No.2 to pay the compensation amount to claimants and recover from the owner. Hence, said contention of appellant and claimant is not tenable. The finding of Tribunal in this regard cannot be interfered. Accordingly, we pass the following:

ORDER

MFA No.101312/2019 is partly allowed. No costs. MFA Crob.100086/2019 is dismissed. The impugned judgment and award is modified. The claimants are entitled for compensation of Rs.13,30,600/- as against Rs.15,47,000/- awarded by the Tribunal with interest at the rate of 6% p.a. from the date of petition till payment of entire award amount. 31 Respondent No.1 shall pay the said amount within a period of two months from the date of receipt of copy of this judgment. Claim against respondent No.2 is rejected. The remaining portion of the impugned judgment and award is kept intact. Sd/- JUDGE Sd/- JUDGE MBS