New India Assurance Co. Ltd. Vs. Madan Sahu and ors. - Court Judgment

P.C. Misra, J.

1.Both these appeals arise out of an accident claim made before the Motor Accidents Claims Tribunal, Cuttack. On 8.10.1981, a girl aged 8 years died in motor accident alleged to have been caused by the negligent driving of a truck bearing registration No. OSC 4873. The parents of the girl claimed a compensation of Rs. 28,000/- before the Accidents Claims Tribunal in Misc. Case No. 37 of 1982. The Accidents Claims Tribunal (hereinafter referred to as 'the Tribunal') allowed a compensation of Rs. 10,000/- against the owner of the vehicle and the vehicle having been insured with the New India Assurance Co. Ltd. (hereinafter referred to as 'the assurance company'), it was directed that the assurance company is to pay the compensation to the claimants.

2. Against the aforesaid award of the Tribunal the claimants have preferred M.A. No. 389 of 1991 challenging the quantum of compensation awarded and praying for enhancement thereof. The assurance company has also challenged the award on the ground that the liability cannot be transmitted to it as the vehicle was not covered by any insurance policy. Both the appeals were analogously taken up for hearing and final disposal.

3. Mr. Sinha, learned counsel appearing for the assurance company, urged that no reasonable opportunity was given to the company to defend the case before the Tribunal and, therefore, the award should be set aside. He also urged that on a verification of the records after the award was passed by the Tribunal, it was revealed that the insurance policy that was issued to the owner of the vehicle covering the risks thereunder did not subsist by the date of the accident. It has been stated in the memorandum of appeal that the premium for the issuance of policy was deposited on 24.6.1980 and it was received by the assurance company on 12.8.1980. Taking either of the dates to be the date of commencement of the risks under the policy, it 11.8.1981. The accident having taken place on 8.10.1981 it was beyond the period covered by the policy and, therefore, the assurance company had no liability thereunder. It has been further argued that assuming that there was a valid policy issued by the assurance company the same was not produced by the owner of the vehicle in the court without which the Tribunal could not saddle the liability upon the assurance company. It was next argued that assuming that there was a valid policy, it is of no effect unless and until the certificate of insurance is issued in the prescribed form as per the provision contained in Section 95, Sub-section (4) of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the Act'), and the same having not been produced, the award is liable to be set aside.

4. None of these aforesaid contentions is acceptable in law for the reasons hereinafter stated. In the claim case the assurance company was not originally impleaded. The owner of the offending truck, who alone was impleaded in the original application, filed his written statement disclosing that the vehicle was insured with the assurance company and also gave the policy number. The claimants thereafter filed an application to implead the assurance company as a party. That application being allowed, notice was issued against the assurance company, who was described as O.P. No. 2 in the Misc. Case. Opposite party No. 2 entered appearance in court on 31.10.1983 and after repeated adjournments the written statement was ultimately filed on 22.7.1985. In the written statement it was stated that except disclosing the name of the assurance company, no further details have been disclosed for which reason it is unable to trace out the validity or otherwise of the policy. It generally denied its liability to pay the compensation to the claimants. Once the case was dismissed for non-appearance of the applicant and the claimants preferred M.A. No. 72 of 1987 in this court praying for being given an opportunity of adducing evidence in support of their claim. The same having been allowed, the case was remanded back to the Claims Tribunal for fresh disposal in accordance with law. Both the opposite parties were again noticed and the case was proceeded afresh from the stage of hearing. The case was taken up for hearing on 7.1.1991 and 3 witnesses on behalf of the petitioners were examined and cross-examined. The counsel for the petitioners filed an application under Order 11, Rule 12, Civil Procedure Code, praying for discovery of the insurance policy and the case was adjourned to 4.2.1991 directing opposite party No. 2 to make the discovery. Opposite party No. 2 did not produce the insurance policy and, therefore, the court adjourned the matter to 22.2.1991 for evidence to be recorded on behalf of the opposite party No. 2. Since no evidence was tendered on behalf of opposite party No. 2, the hearing of the case was closed and it was then adjourned for hearing of arguments. Thus, there cannot be any scope for entertaining a grievance that due opportunity was not given to opposite party No. 2 to contest the proceeding in the trial court.

5. The next contention of Mr. Sinha on behalf of the assurance company was that the policy having not been produced before the Tribunal by the claimants, the liability to pay compensation would not pass on to the assurance company. The number of policy was disclosed in the written statement of opposite party No. 1 as already stated. Even then in the written statement filed by the assurance company it was alleged that no particulars of the policy having been stated, it is unable to trace out the same. This defence ignores the fact that the policy number had already been disclosed in the written statement of opposite party No. 1. That apart, when an application was made for discovery of insurance policy no answer was given as required under law. Mr. Sinha, learned counsel for the appellant, has relied upon the last 3 lines in the order passed on 4.2.1991 which reads as follows:.The true copy of the insurance policy is taken to evidence as Exh. 1. Put up on 22.2.1991 for evidence of O.P. No. 2.

His argument is, since the insurance policy was marked on that day no exception can be taken for the silence on the part of opposite party No. 2 by not making the discovery of the insurance policy. On a verification of the record, I find that true copy of the F.I.R. was marked as Exh. 1 and not that of any insurance policy. Evidently the mention of insurance policy in the above order was a mistake on the part of the court. The counsel for opposite party No. 2 being present in court that day, there was no occasion to be misled by such mistaken statement made in the order-sheet. Thus, for non-production of the insurance policy it is the opposite party No. 2 who was responsible and not the applicant. The insurance policy must have been issued in favour of the owner of the vehicle and not in favour of the applicant. It was opposite party No. 1, who was to produce the policy and if not produced, the assurance company could produce the copy of the policy which could be taken in as a secondary evidence before the Tribunal. In the circumstances, the argument that the applicants are to be blamed for the non-production of the policy and that the opposite party No. 2 had no liability whatsoever for non-production of the policy is not entertainable.

6. The next argument of Mr. Sinha was on the basis of an interpretation of Section 95, Sub-section (4), of the Act which is in the following lines. His submission is that even if the insurance policy would have been produced or it is permissible for the court to draw adverse inference against opposite party No. 2 for non-production thereof, still then it would have no effect in law unless and until the certificate of the assurance company in the prescribed form is produced and in the absence of production of the certificate, the court must find against the applicants. This argument of Mr. Sinha, in my opinion, is wholly untenable. As already stated, assuming that a policy is of no legal effect unless a certificate is issued by the insurer in favour of the person by whom the policy is effected, no such defence was ever taken either in the written statement or before the Tribunal at any stage. Once it is proved that policy was issued covering the risks of the insured, the law shall presume by applying Section 114 of Evidence Act that all other acts for effectiveness of the policy must have been done in accordance with law. Mr. Mohanty appearing for the claimants invited my attention to Sub-section (5) of Section 95 of the Act which provides that:

Notwithstanding anything elsewhere contained in any law, a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.

I do not want to go into further details as to the scope of Sub-sections (4) and (5) as it is unwarranted in the facts of this case for the reason that in the absence of any material to the contrary I would presume that all follow-up actions incidental to the issuance of the policy must have been done for covering the risks undertaken by the terms of the policy. I, therefore, do not find any merits whatsoever in the appeal preferred by the assurance company.

7. Coming to the merits of the appeal preferred by the claimants, Mr. Mohanty, learned counsel for the appellants in M.A. No. 389 of 1991, contends that the minimum compensation that should have been granted by the Tribunal is Rs. 15,000/- as per the amendment of law in the year 1982 introducing Section 92-A in the Act. By the aforesaid amendment a provision was introduced that in case of death in a motor accident, a compensation commonly known as 'no fault compensation' of Rs. 15,000/-is payable to the claimants. Mr. Mohanty relying on a decision reported in Raghunath Kar v. Shasikala Devi 1991 ACJ 347 (Orissa), contended that even though Section 92-A which was introduced in 1982 was subsequent to the date of accident, a minimum sum of Rs. 15,000/- should have been awarded to the claimants. The aforesaid case decided by this court relies on a decision of the Andhra Pradesh High Court reported in T. Srinivasulu Reddy v. C. Govardhana Naidu 1990 ACJ 66 (AP). The learned Judge dealing with the point did not lay down that Section 92-A would have retrospective application to the accidents which occurred prior to the date of amendment, but his Lordship was of the view that legislature has brought that provision into the statute book with the intent of benefiting the claimants and there is no reason as to why the said provision should not apply in awarding compensation in cases arising out of accidents prior to the amendment. All that I understand from the manner in which the point has been dealt with by the learned Judge is that while fixing compensation the court must have due regard to the fact that the legislature introduced a provision fixing the minimum compensation in the case of death to be Rs. 15,000/- irrespective of death being caused on account of the negligence of the party against whom the compensation has been claimed. His Lordship did not decide that Section 92-A introduced in the statute book would have retrospective operation.

8. In my opinion, the legislative intention behind introducing Section 92-A was to benefit the claimants in a motor accident by giving them some compensation irrespective of the fault of anybody so that immediate relief reaches the aggrieved party without going through the process of adjudication. The quantum of 'no fault compensation' has now been raised to Rs. 25,000/- in case of death by a subsequent change of law, which, in my opinion, is of no relevance in awarding compensation in cases pending prior to amendment. I am, therefore, of the view that minimum compensation of Rs. 15,000/- was payable in this case. No other materials have been placed before me to support the argument that the amount of compensation awarded was inadequate. Hence, this appeal has also no merits.

9. It is submitted by the learned counsel for both parties that a sum of Rs. 5,000/- has been deposited by the assurance company in the name of Registrar of this court in M.A. No. 63 of 1992 which may be released in favour of the claimants who are appellants in M.A. No. 389 of 1991 to withdraw the same. The assurance company shall deposit the balance compensation within two months from today. I so direct.

In the result, both the appeals are dismissed, but without any costs.