JUDGMENT [ENTITY], J.
1. This is an appeal by the appellant [ENTITY] (hereinafter referred to as 'the insurance company') filed against the award dated 27.8.2003, passed by Fourth Additional Motor Accidents Claims Tribunal, Sagar in [CASE NUMBER] whereby the Tribunal had awarded compensation of Rs. 3,87,000 payable to claimants. However, the insurance company disputed the same stating that the accident had occurred prior to the insurance policy becoming effective and hence, the Tribunal had erred in fastening the liability on the insurance company and awarding compensation of Rs. 3,87,000 to the claimants.
2. The brief facts of the case are that [ENTITY] died an accidental death on 2.5.1996 at 6 p.m. when he was riding the motor cycle driven by his friend [ENTITY] and it collided with the tractor bearing registration No. CIQ 2871 coming from opposite direction when they were going towards Sagar. The tractor was going from Banda to Sagar and was rashly and negligently driven by [ENTITY], respondent No. 4. Claimants claimed that deceased [ENTITY] was 50 years of age and was an Assistant Sub-Inspector earning Rs. 4,282 per month and on various grounds claimed compensation of Rs. 9,32,000.
3. The Tribunal on considering the evidence came to a conclusion that [ENTITY], respondent No. 4, the driver was negligent and had caused the accident. [ENTITY], respondent No. 5, was owner of the vehicle. Whereas insurance company, non-applicant No. 3, had resisted the claim stating that since the accident had occurred on 2.5.1996, the tractor was insured with the insurance company only from 4.5.1996 to 3.5.1997 according to the insurance policy issued and hence insurance company was not liable for the same.
4. The Claims Tribunal, however, held otherwise and on the basis of the cover note issued on the date of payment of premium, i.e., 2.5.1996, the insurance company was liable to pay the compensation and awarded Rs. 3,87,000 to the claimants after consideration of the evidence. The Tribunal had relied on [SECTION] of the [ACT] by which the provision was that the time would begin to run on the date that the premium was paid irrespective of the fact that the date was not mentioned on the cover note.
5. Insurance company had also filed a revision bearing [CASE NUMBER], which was dismissed by this Hon'ble court and hence the insurance company was held to be liable and none of the other grounds have been challenged by the insurance company before me. The sole controversy that requires to be resolved rests on the moot question as to what would be the effective date and time for fastening of the liability on the insurance company.
6. Counsel for the appellant insurance company relied on [PRECEDENT] , whereby a Bench of this Court held that in the matters of motor insurance policy, the commencement of the policy and payment of premium to the agent vis-a-vis the liability of insurance company was considered. The court held that the owner of the offending vehicle had submitted the proposal form along with premium to the agent of the insurance company at 11 a.m. on 2.12.1992 and accident had occurred at 4 p.m. on 2.12.1992 and the insurance policy mentioned the effective time and date of insurance at 5.30 p.m. on 2.12.1992 and considering the question whether the policy commenced from the time of handing over the premium amount to the agent and the insurance company is liable to pay the compensation. It held that 'No'. When the time of commencement is mentioned in the policy, it shall become effective from the time onwards as mentioned in the insurance policy. The court had relied on [PRECEDENT] , that the risk under the insurance policy shall come into force from the time and date mentioned in the cover note or in the policy as the case may be and in no case prior to that.
7. Counsel for the appellant insurance company also relied on [ENTITY] v. Sunita Rathi , whereby Apex Court while dealing with [SECTION] and [SECTION] of the [ACT], where the question of commencement of policy and the liability of the insurance company were negatived since the cover note contained an express mention that the effective date and time of commencement of insurance was 2.55 p.m. on the particular day of accident whereas the accident had occurred at 2.20 p.m. The Apex Court had held that when there was an express mention in the cover note that the effective date and time of commencement of insurance for the purpose under the Act is mentioned then the effective time of coverage has to be calculated from that time alone.
8. Counsel for respondents, on the other hand, has contradicted the stand taken by the counsel for appellant insurance company stating that the accident had occurred after payment of premium and issuance of cover note on 2.5.1996. Relying on a judgment of this Court passed in the matter of [PRECEDENT] , whereby the High Court had held that cover note was an adequate documentary proof that the offending vehicle was duly insured on the date of accident and that the insurance company was liable to pay the compensation on the basis of the cover note. The negligence or error of the agent would not affect the liability of the insurer. Relied on [PRECEDENT] and [ENTITY] v. White Rose .
9. Counsel for respondents has stated that on the basis of [PRECEDENT] and in the case of [ENTITY] v. White Rose , Allahabad High Court had correctly held that insurance company could not escape its liability to pay the amount once a cover note was issued. The insurance company is liable to pay the compensation on the basis of the cover note issued by its agent and negligence or error of agent does not affect the liability of the insurer.
10. On perusal of the impugned award and the judgments placed on record, it is necessary to examine [SECTION] of the [ACT]. The section reads thus:
64-VB (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.
11. Hence, the coverage of insurance is said to commence from the time of handing over of the proposal form and premium to the agent of the insurance company.
12. In the instant case, on perusal of the cover note issued by the insurance company, it demonstrates that the cover note was issued on 2.5.1996 and the premium was also obtained in cash on 2.5.1996 then in view of the provisions of [SECTION] of the [ACT], the Tribunal has rightly fastened the liability on the insurance company and the judgments cited by the counsel for the appellant insurance company are of no help to the appellant insurance company and the appeal must fail.
13. In view of above, the appeal is dismissed as sans merit. No order as to costs.