Oriental Insurance Co. Ltd. Vs. Mailupelli Aremah and ors. - Court Judgment

Excerpt:
- labour & services pay scale:[tarun chatterjee & r.m. lodha,jj] fixation - orissa service code (1939), rule 74(b) promotion - government servant, by virtue of rule 74(b), gets higher pay than what he was getting immediately before his promotion - circular dated 19.3.1983 modifying earlier circular dated 18.6.1982 resulting in reduction of pay of employee on promotion held, it is not legal. statutory rules cannot be altered or amended by such executive orders or circulars or instructions nor can they replace statutory rules. - it is the insurer's case that as they could not trace out the policy in spite of their best efforts to do, there was no insurance and hence it was not liable. ramakrishna das 1993 acj 668 (orissa), is clearly distinguishable. it was in such a situation that this court held that as the claimant had failed to mention the policy particulars and in absence thereof the insurance company could neither deny nor confirm having insured the vehicle, the tribunal was in error in holding the insurer liable. this sub-section clearly lays down that if issuance of a cover note is not followed by a policy of insurance, it is the duty of the insurer to notify this fact, i. to hold otherwise would be to give the appellant insurance company a benefit for its failure to fulfil its statutory duty imposed by sub-section (4) of section 147 of the act. the failure to do so is sufficient to reject the suggestion that payment had not been made and that the cover note was not valid. while false claims should not be countenanced, care should be taken to act that genuine claims are not defeated purely on technical grounds and niceties of law.p.c. naik, j.1. the award of rs. 1,35,000/- with interest thereon having been passed against it, the insurer has preferred this appeal.2. the facts in brief are:respondent nos. 1 and 2, the wife and son of late mailupelli palleya (hereinafter referred to as 'the deceased') had filed a petition claiming rs. 5,61,000/- as compensation from the owner and insurer of passenger bus bearing registration no. osp 2999 which was involved in the accident resulting in the death of deceased. it is the case of the claimants, that as the accident was due to rashness and negligence of the driver of the offending vehicle, its owner and the insurer were liable to pay compensation. in para 16 of the claim petition it is specifically stated that the vehicle in question was insured with the insurer, oriental insurance co. ltd. representing through its divisional manager, ipicol house, saheednagar, bhubaneswar, orissa, as per the cover note a-3/033145.3. the owner and the insurer filed separate written statements denying the liability. the owner, while admitting that the vehicle in question was insured with the oriental insurance co. ltd., denied the liability on the ground that the accident was solely due to the negligence of the deceased and not because of any negligence on the part of the bus driver. the insurer filed a lengthy written statement mostly taking defences which are not available to it under the motor vehicles act. it is the insurer's case that as they could not trace out the policy in spite of their best efforts to do, there was no insurance and hence it was not liable.apart from herself, the claimant no. 1 examined three other witnesses in support of her case. certified copy of the f.i.r. and seizure lists and a certificate from the orissa cifoods and a xerox copy of the cover note bearing no. a-3/033145 were filed and exhibited. though the owner did not participate in the proceedings, the insurer did not take any step for obtaining permission from the tribunal to contest the claim on merits.4. the tribunal placing reliance on the unrebutted evidence adduced by the claimants, held that as the accident was solely due to the rashness and negligence of the bus driver, the owner and the insurer were liable to pay the compensation. assessing the monthly income of the deceased at rs. 1.000/- and by adopting a multiplier of 10, compensation was determined at rs. 1,20,000/-. to this was added a sum of rs. 15,000/- towards loss of consortium and funeral expenses, thus, a total sum of rs. 1,35,000/- was awarded as compensation which is impugned in this appeal.5. in the absence of any evidence to the contrary, the tribunal cannot be faulted in arriving at the finding that the accident was due to the rashness and negligence of the bus driver. the said finding is accordingly affirmed. likewise, on the basis of the material on record, the tribunal was justified in assessing the compensation at rs. 1,35,000/- and i see no reason to interfere with the assessment made by the tribunal. even otherwise, these findings cannot be assailed by an insurer in view of the limited statutory defences that are available to it in terms of sub-section (2) of section 96 of the motor vehicles act, 1939 (old) corresponding to section 149 of the motor vehicles act, 1988. the only contention that remains to be considered is whether the tribunal was in error in saddling the liability on the appellant being the insurer of the bus in question.6. it is the contention of mr. a.k. mohanty, learned counsel for the appellant, that the tribunal was not justified in arriving at the finding that the appellant was the insurer by placing reliance on the xerox copy of the cover note, exh-5 which, according to him, was wrongly marked as an exhibit. the submission is that this is not a genuine document and that an opportunity ought to have been given to the insurer to challenge its authenticity. by placing reliance on the decision reported in new india assurance co. ltd. v. ramani bewa, 75 (1993) clt 787; divisional manager, national insurance co. ltd. v. ramakrishna das 1993 acj 668 (orissa); oriental insurance co. ltd. v. rukmini bai 1994 acj 811 (karnataka); and oriental insurance co. ltd. v. harapriya nayak 1994 (i) olr 88, it is submitted that in the absence of insurance particulars, the liability could not be saddled on the appellant merely on the basis of the cover note which does not indicate the insurance particulars.7. the case in divisional manager, national insurance co. ltd. v. ramakrishna das 1993 acj 668 (orissa), is clearly distinguishable. in that case, as is clear from the report, no particulars of insurance were mentioned in the claim petition and even though time asked for had been granted, the particulars were not forthcoming. it was in such a situation that this court held that as the claimant had failed to mention the policy particulars and in absence thereof the insurance company could neither deny nor confirm having insured the vehicle, the tribunal was in error in holding the insurer liable. however, the case was remanded to the tribunal for affording an opportunity to the claimant to furnish the particulars of insurance.8. in new india assurance co. ltd. v. ramani bewa 75 (1993) clt 787, the insurer was made liable on the basis of an entry in the register of motor vehicles of sambalpur district which read 'new india co., sambalpur'. the tribunal, in that case, held that 'new india company' could only relate to 'new india assurance co. ltd.', and as such saddled it with liability. in an appeal by the new india assurance co. ltd., this court held that the tribunal was in error in holding that 'new india co.' would mean 'new india assurance co. ltd.' and that in the absence of any policy particulars, was not right in concluding that the new india assurance co. ltd. was the insurer. by making a reference to section 151 of the motor vehicles act, 1988 and section 98 of the motor vehicles act, 1939, it was held that this provision enables the claimant to obtain insurance particulars from the insurer and as such, aid of this provision ought to have been taken for obtaining insurance particulars. the matter was accordingly remitted for a determination of the case as to who is the insurer in question and whether or not the new india assurance co. ltd. was in fact the insurer.9. oriental insurance co. ltd. v. harapriya nayak 1994 (i) olr 88, has been cited to show that the insurance policy is issued in continuation of the cover note which can be issued only after receipt of premium. it is further held in that case that cover note and the policy are to be read together and not in isolation, otherwise it becomes incongruous.oriental insurance co. ltd. v. rukmini bai 1994 acj 811 (karnataka), is a case where oil the basis of the evidence adduced in the enquiry, the court came to the conclusion that the cover note was issued by the agents without receiving the premium amount and also that it had been issued without mentioning the date, place of issue and without completing the necessary formalities. it is observed therein:.it is not possible to come to a conclusion that in the instant case there has been a complete contract so as to enable the court to fasten the liability on the insurer, inasmuch as the requirement of section 64vb has not been complied with. that means, no premium was paid in advance and the proposal was not duly completed. the issuance of the cover note by rw 2, agent of the appellant, without receiving the premium amount and issuing a receipt thereon, itself is improper....in the absence of a conclusive contract...cover note is of no assistance as it has no binding character....10. the above observations are not to be read in isolation but should be read in the context of the facts and circumstances existing in that case, though it cannot be denied that unless premium is paid in advance, and indeed it is so provided in section 64vb of insurance act, 1938, risk is not assumed by the insurance company. reverting to the case at hand, there is no pleading that the cover note was issued fraudulently by the agent without payment of premium. on the contrary, on the left side bottom corner of the cover note, exh-6, there is a detailed calculation of premium which works out to rs. 7,781/-. the cover note contains the following:the insured described in form '2' referred to below having proposed for insurance in respect of the motor vehicle (s) described therein and having paid the sum of rs. 7,781/- as premium, the risk is hereby held covered under the terms of the company's usual form of 'b'....on the right hand (top) of the cover note, there is affixed a rubber stamp which reads:city branch office-ii, 2nd floor 75, budhanagar, bhubaneswar-751014.the description/details of the vehicle and the name and address of the owner have also been mentioned therein against the relevant columns. in the column of effective date and time of commencement of insurance for the purpose of the act, it is mentioned: time 10.30 a.m., dated 1.10.90, against the column date of expiry of insurance, it is mentioned, midnight on 30.9.91. at the bottom of the cover note, there is affixed a round seal of oriental insurance co. ltd., bhubaneswar. this cover note, exh-6, bears the number a-3/033145. reference may be made to the seizure list, exh.-4 which amongst others, shows seizure of insurance certificate cover note no. a-3/033145 valid up to 30.9.1991 issued by the oriental insurance co. ltd., city branch office-ii, 2nd floor, 75 budhanagar, bhubaneswar-751014. the name and description of the insurer and the number of the cover note are mentioned in para 16 of the claim petition which has been referred to in the earlier part of the judgment.11. it is not the case of the appellant that the cover note was fraudulently obtained or that it was issued without payment of premium. the denial of insurance is also not on the ground that the premium having not been paid, that did not come in existence by a contract of insurance between the owner and the insurance company. denial of insurance is for the reason that the appellant, despite efforts, has not been able to trace out the policy. it is not explained as to why, when the number, date and office of issue of cover note was disclosed in the claim petition, the appellant was unable to trace out the cover note in its office. the fact that a cover note was seized along with the vehicle after the accident dispels any doubt that it is a manufactured document. in the facts and circumstances of the case, its authenticity cannot be doubted.12. at this stage and before considering whether or not appellant could be saddled with the liability on the basis of the cover note, a reference to a few relevant provisions of the motor vehicles act, 1988, would be necessary.13. clause (b) of section 145 reads:'certificate of insurance' means a certificate issued by an authorised insurer in pursuance of sub-section (3) of section 147 and includes a cover note complying with such requirements as may be prescribed, and where more than one certificate has been issued in connection with a policy, or where a copy of a certificate has been issued, all those certificates or that copy, as the case may be;under clause (d) thereof 'policy of insurance' includes 'certificate of insurance'.sub-section (4) of section 147 provides: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.sub-section (1) of section 149 provides:if, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147 (being a liability covered by the terms of the policy) or under the provisions of section 163a is obtained against any person insured by the policy then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.14. reference may now be made to some provisions contained in the motor vehicles rules, 1989, namely, rules 141, 142 and 143, which read thus:141. certificates of insurance: an authorised insurer shall issue to every holder of a policy of insurance, a certificate of insurance in form 51 in respect of each such vehicle.142. cover notes: (1) every cover note issued by an authorised insurer shall be in form 52.(2) a cover note referred to in sub-rule (1) shall be valid for a period of sixty days from the date of its issue and the insurer shall issue a policy of insurance before the date of expiry of the cover note.143. issue of certificates and cover notes. every certificate of insurance or cover note issued by an insurer in compliance with the provisions of this chapter shall be duly authenticated by such person as may be authorised by the insurer.15. from the above, we observe that the word 'certificate of insurance' which is issued under sub-section (3) of section 147 includes a cover note complying with such requirement as may be prescribed.16. in view of the definition of 'certificate of insurance' contained in clause (b) of section 145 and sub-section (3) of section 147, it cannot be denied that for the purpose of section 149 a cover note would also be taken as a certificate of insurance for the purpose of determining the liability. this is so because of the definition of 'certificate of insurance'. thus, the contention of the learned counsel for the appellant that the insurance company could not be held liable merely on the basis of a cover note, cannot be accepted.17. the provisions contained in sub-section (4) of section 147 have also to be given an effect. this sub-section clearly lays down that if issuance of a cover note is not followed by a policy of insurance, it is the duty of the insurer to notify this fact, i.e., non-issuance of a policy, to the registering authority in whose records the vehicle was registered within a period of seven days. in the case at hand a cover note was issued on 1.10.1990 and if it was not followed by a policy, it was the statutory duty of the insurance company to have informed this fact to the concerned registering authority. in absence thereof, it has to be presumed that a policy followed the issuance of the cover note though it may not have been communicated to the owner of the vehicle. to hold otherwise would be to give the appellant insurance company a benefit for its failure to fulfil its statutory duty imposed by sub-section (4) of section 147 of the act. this cannot be permitted.18. in none of the decisions cited by the learned counsel for the appellant and i say so with respect, the aforesaid provisions, viz., clauses (b) and (d) of section 145, sub-sections (3) & (4) of section 147 and sub-section (1) of section 149 and rules 141, 142 and 143 (quoted above) have been referred to while considering the liability of the insurer vis-a-vis the cover note. therefore, in my view, the said decisions cannot be of any assistance to the appellant.19. the contention of the learned counsel for the appellant that no opportunity was given to the appellant, also cannot be accepted. order sheet dated 17.12.1993 indicates that opposite party no. 2, i.e., the appellant had filed a petition for time which was rejected as no one appeared to press the same. the matter was called, but as no one appeared in spite of repeated calls, hearing was closed and the case was posted to 9.1.1994 for judgment on which date judgment was pronounced. earlier, it appears that opposite party no. 2 was proceeded ex pane but the said order was set aside on 31.8.1992. thereafter, the case was fixed on 13.1.1993 on which day the remaining witnesses for the claimants were examined and their case was closed. the matter was fixed for the evidence of opposite parties on 5.10.1993 but it did not care to adduce any evidence on that date. under the circumstances, the tribunal was justified in not granting any further time and in closing the case. the above negatives the contention of the counsel for the appellant that it was deprived of proper opportunity to adduce any evidence. further, the documents in question were admitted in evidence and marked as exhibits on 30.8.93 without objection. hence it cannot now be contended that it cannot be looked into. had the insurer been serious in contesting the proceedings and had the grounds to contest, it ought to have taken prompt steps and adduced evidence in support of its contentions. this was not done. to me it seems that the proceedings were contested in a routine manner for which the appellant has to thank itself.20. before concluding, i may in the light of the circumstances of the case, observe that care is not being taken in insuring the vehicles as required by the statute. it seems that after collecting premium and issuance of the cover note, all interest is lost in promptly complying with the other obligations consequent to issuance of the cover note. if premium was not recovered by the concerned branch office, nothing prevented it from producing the daily receipt register which could have clinched the issue one way or the other for it is not disputed that premium collected has to be credited/despatched to the concerned branch office promptly. the failure to do so is sufficient to reject the suggestion that payment had not been made and that the cover note was not valid. i may also observe, considering the fact that provision relating to grant of compensation to victims of road accidents is a measure of social legislation, it is the duty of the insurance companies to assist the tribunals/courts in arriving at the correct conclusion. while false claims should not be countenanced, care should be taken to act that genuine claims are not defeated purely on technical grounds and niceties of law. i do not for a moment mean to suggest that claims should be mechanically allowed. indeed i do not. but what is meant is that very strict rules of pleadings and evidence and technicalities should not come in the way of dispensing justice to the victims or dependants of victims of road accidents, as that would frustrate the object and intention of the legislature.in the result, the appeal stands dismissed with costs.