1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD FIRST APPEAL NO.935 OF 2006 with CA NOS.8306/2006; 2265/2008. M/s New India Assurance Co. Ltd. - APPELLANT VERSUS 1. Smt.Sushilabai w/o Ghanshyam Anerao and Ors. - RESPONDENTS ***** Mr.VN Upadhye, Advocate for Appellant; Mr.DY Nandedkar, Advocate for Resp.Nos.1 & 2; Mr.UB Bilolikar, Advocate for Resp.Nos.4A to 4E; Mr.SV Kulkarni, Advocate for Respondent No.5. ----- CORAM : K.U.CHANDIWAL, J. DATE : 20th April, 2010. PER COURT : 1) Heard. Admit. The matter is finally disposed of at admission stage. 2) The appellant/insurance company 2 questions legality of the Award dated 8.6.2006 recorded by learned District Judge & Chairman, MACT, Nanded MACP No.419/1997. 3) On hearing Mr.Upadhye, following points arise for my consideration : Whether the cash for insurance cover remitted on 3rd May, 1997, Saturday, a holiday, and the Cover note showing the effective date as 5.5.1997, would exonerate the insurance company, if the accident has taken place in the intervening period of 4th May, 1997 ? My answer to the above point is against the insurance company. I hold, since the payment is accepted on 3rd May, 1997, it being a special contract, the insurance/risk will be applicable from that date. 4) The Development Officer of the appellant/insurance company Shri Pradipkumar Mehta, has confirmed, that the Cover Note was issued by him on 3rd May, 1997. He did not dispute the recitals in the Cover Note. He 3 received Rs.1308/- towards premium from the owner of the truck in cash at his house and issued the Cover Note. The accident has taken place on 4.5.1997. According to appellant/insurance company, the applicability of the insurance was from 5th May, 1997 and hence, it could not be fastened with the liability. This is virtually negatived by the Development Officer, as he informs the Court, he did not communicate in writing to the truck owner about the policy to be effective from 5th May, 1997. 5) Learned counsel representing the claimants has taken recourse to the Judgment in the matter of Balbir Kaur and Ors. Vs. New India Assurance Company Ltd. - (2009) 13 SCC 370. Their Lordships of the Apex Court in para 11 of the said judgment has observed as under : “11. For the purpose of this case, we would assume that an insurance policy, in law, could be issued from a future date. A policy, however, which is issued from a future date must be with the consent of the holder of the policy. The 4 insurance company cannot issue a policy unilaterally from a future date without the consent of the holder of a policy. Even the said circular letter had not been produced and/or no material was placed as to why the policy was issued from a later date. It is, however, not necessary for us to delve deep into the matter in view of the limited notice issued by this Court. Respondent No.3, the owner of the vehicle, however, has not questioned that part of the order passed by the High Court. He, therefore, accepted the judgment of the High Court. Accordingly, liability to pay the awarded amount by him is not in question.” 6) The contract for insurance company naturally will be applicable from the date of payment received in cash on 3rd May, 1997 by the insurance company. Even if it was a Saturday, it will not obliterate the effect of enforcement of the policy and consequently indemnification. Any incorporation unilaterally made in the Cover Note as to its effective date, will not have adverse impact on the contract of insurance effected between the insured and the company. 7) It is a matter of record, at Exhibit-79, 5 there is earlier policy between the truck owner and the insurance company for the period from 16.4.1996 to 15.4.1997. This indicate, that reasonably the owner of the truck approached the Development Officer on 3rd May, 1997. He could not apprehend and contemplate that there could be an accident on 4th May, 1997. The precaution taken in advance has turned as a boon for the truck owner, it need not be doubted as tried to be canvassed. 8) Mr. Upadhye has placed reliance to the following judgments. New India Assurance Co.Ltd. Vs. Ramdayal – 1990 ACJ(I) 545 (SC); Oriental Insurance Co.Ltd. Vs. Sunita Rathi – 1998 (I) 121 (SC); National Insurance Co.Ltd. Vs. Jikubhai Nathuji Dabji – 1997 ACJ 351 (SC); and V.Ravi Vs. New India Ass.Co.Ltd. - 1998 ACJ 598 (Calcutta). 9) In the matter of Sunita Rathi – (1998 ACJ 121), cover note was obtained by insured after the accident. But on the same day, the Cover note contained express mentioning effective 6 date and time of commencement of insurance as 2.55 p.m. on the date of accident. The Apex Court held that since the Cover note gave effective time as 2.55 p.m., the accident having already taken place, the insurance company is not liable. In the matter of Ramdayal – 1990 ACJ 545, policy was obtained on the date of accident. The insurance company repudiated its liability on the ground that policy had been taken after the accident. The Apex Court observed - “ When the policy taken during any part of the day, it becomes operative from the commencement of that day.” In the matter of V.Ravi Vs. New India Assurance – (1998 ACJ 598), the Calcutta High Court observed, the commencement of the policy would come into force from the payment. In the said case, premium was paid on 18.2.1992. The accident has taken place between 6.00 – 7.00 p.m. The Insurance company disputed its liability on 7 the ground that the premium was received on 19.2.1992 and stated, the risk commences from that date and not as per the date of certificate of insurance which was inadvertently typed . The Division Bench of the Calcutta High Court held, if the certificate was wrongly granted either by reason of any mistake or fraud, remedy for the insurance company would be to initiate a separate proceeding against the owner for recovery of amount paid. But, third party should not suffer for any dispute between the owner and the insurance company. In the matter of Jikubhai – 1997 ACJ 351, the Apex Court has observed, in view of special contract mentioned in the insurance policy, namely, it would be operative from 4.00 p.m. on 25.10.1983 and the accident had occurred earlier thereto, the insurance coverage would not enable the claimant to seek recovery of the amount from the appellant company. No such situation has emerged in the present case. The 8 insurance company received the amount well in advance prior to the accident. There is no case of fraud by the insured with the insurance company. The amount having been accepted on 3rd May, 1997, naturally the contract to indemnify would operate with immediate effect. 10) I do not find that the above referred judgments could be accelerated for the purpose of insurance company, in the fact situation, narrated herein above. 11) In the result, the First Appeal is sans merit, it is dismissed with CA No.8306/2006. Ad interim stay vacated. CA 2265/2008 disposed of as above. sd/- (K.U.CHANDIWAL) JUDGE bdv/fa935.06 Authenticated copy (BD VADNERE,PS)