FAO No.3776 of 2007 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.3776 of 2007 Date of Decision. 30.07.2010 United India Insurance Company Limited having its Regional Office in SCO No.123-24, Sector 17-B, Chandigarh through its duly constituted attorney .........Appellant Versus Krishan Kumar son of Balbir son of Bhagwan alias Bhagwan minor through his father Sh. Balbir and others .......Respondents 2. FAO No.3777 of 2007 United India Insurance Company Limited having its Regional Office in SCO No.123-24, Sector 17-B, Chandigarh through its duly constituted attorney .........Appellant Versus Anguri widow of Jiwan residents of village Dabodha Khurd, District Jhajjar, Haryana and others .......Respondents 3. FAO No.3778 of 2007 United India Insurance Company Limited having its Regional Office in SCO No.123-24, Sector 17-B, Chandigarh through its duly constituted attorney .........Appellant Versus Ajit son of Jiwan Singh, resident of village Dabodha Khurd, District Jhajjar, Haryana and others .......Respondents Present: Mr. Ravinder Arora, Advocate for for the appellant. None for the respondents. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? -.- K. KANNAN J. (ORAL) FAO No.3776 of 2007 -2- 1. All the three cases arise out of the same accident. The two of the claim petitions namely MACT Case No.183 of 2004 and MACT Case No.185 of 2004 were for the injury sustained in the accident while MACT Case No.184 of 2004 was at the instance of legal representatives of a deceased person. Appeals in FAO No.3776 of 2007 and FAO No.3778 of 2007 are at the instance of insurance company against awards for injuries while FAO no.3777 of 2007 is the appeal against the award passed for death of a person. In all the cases, the insurance company denied liability on the ground that the policy had been effective only subsequent to the accident and the insurance company was not liable at all. There was also a dispute with reference to the factum of the accident itself but the Tribunal held that the driver, who was the best witness to speak about the same had not been examined, although the owner was available in Court and drew an adverse inference for his non-examination to prove their non-involvement in the accident. It was a case of collision between a bullock cart and the tata 704 truck insured with the appellant. The accident was reported to have taken place when the deceased and the injured persons were pushing the cart to carry the cadaver of she calf that had died, while it was being taken for burial. The reasoning of the Tribunal as regards the negligence is well founded on the basis of evidence given by the eye-witnesses and the liability of the insured is clearly seen as being involved in the motor accident. 2. As regards the issue of quantum, the insured contested the case and it is not urged anywhere even in the grounds of appeal that there was any collusion between the claimants and the insured's FAO No.3776 of 2007 -3- vehicle and that there had been permission granted to the insurer for defending the case under Section 170 and therefore, it shall not be possible for the insurer to challenge the quantum when the insurer is not in appeal regarding the quantum. However, I have to satisfy myself that the awards relating to compensation for injuries and death have been on sound legal basis. As regards the claim in MACT Case No.183 of 2004, the injured had claimed that he lost all the fingers of both his hands. He was a boy of 13 years of age studying in 8th standard. There was medical evidence adduced for his treatment and disability. PW-7, the injured gave evidence of the grievous injuries in both of his hands and left leg and forehead. The injuries ultimately appeared to have resulted in amputation of two fingres in the right hand and one finger in the left hand. He had a brief admission at PGIMS, Rohtak immediately after the accident and discharged the next day. Thereafer, he remained under treatment of Dr. S.K. Tandon child specialist, Bahadurgarh and the treatment slips have been filed as Ex.P-8 to P-21. Dr. D.S. Nandal had been examined as PW-1 and PW-8 to speak about the disability that he had assessed both for Krishan and yet another person Ajit whose claim was adjudicated in MACT Case No.185 of 2004. The injured himself given evidence that he was a good cricket player and due to his injuries in both hands he could not play cricket. He had also given evidence to the efefct that he wanted to join military service but due to disability arising out of amputation of fingers of both hands, he would not be in a position to join the defence services. There was evidence to the effect that the disability worked out to 17%. There were medical bills to the effect that Rs.24,440/- had FAO No.3776 of 2007 -4- been spent on him. He ought ot have been taken every day from house to the hospital in another town at Rohtak first and later to Bahadurgarh and transport allowance must have also been incurred. For pain and suffering, disability, medical expenses and loss of amenities of life and future prospects, the Tribunal assessed the compensation at Rs.2,25,000/- and I am of the view that the amount is correct. 3. As regards the claim relating to MACT Case No.185 of 2004, the claimant was 22 years of age and he had given evidence to the effect that there were grievous injuries on his hand, head, left leg and on the back. He was reported to be a driver earning Rs.4,000/- to Rs.5,000/- and after the accident he was unable to drive the vehicle. The Doctor PW-8 gave evidence to the effect that he had old compression fracture of L1 and L2 vertebrae with painful spinal movements and he had assessed the disability at 5% and evidenced through certificate Ex.P-37. The Tribunal held that the painful spinal movements would definitely hamper his future earning prosepcts. Taking into account the medical expenses that he had incurred evidenced through bills of Rs.9495/- although the claimant gave evidence that he had incurred Rs.25,000/- as expenses, the Tribunal had fixed the compensation at Rs.60,000/-, which I beleive is appropriate under the circumstances. 4. As regards the MACT Case No.184 of 2004, the claimants were widow, a major son, a minor son and two daughters. All of whom were totally dependent on deceased. The deceased was said to be 43 years of age but the post-mortem certificate showed that he was 50 years of age whereas in MLR Ex.P-7, he has been recorded FAO No.3776 of 2007 -5- to be of 70 years. The Tribunal took note of the fact that the claimant Anguri, PW-4, claimed herself to be 35 years of age and stated that eldest son Ajit PW-3 was 22 years of age. Having regard to the inconsistent version of witnesses and the certificates which gave different ages, the Tribunal assessed the age to be between 55 to 60 years. There was evidence that the deceased was doing dairy farming and used to run a grocery shop and engaged in agriculture pursuits. Taking into account the fact that the deceased was maintaining a large family, the Tribunal held that his earning would have been at least Rs.3,000/- per month providing for deduction of 1/3rd and took the contribution to the family as Rs.1,000/- per month, adopted a multiplier of 7 and determined the compensation of Rs.1,68,000/-. There was evidence to the effect that the claimants spent as Rs.70,000/- to Rs.80,000/- towards medicines from 24.01.2004 when he was first admitted in PGIMS, Rohtak till he died on 03.02.2004. On the actual bills produced, the Tribunal took the medical expenses to be Rs.55,200/-. The Tribunal awarded R.30,000/- as special diet, attendant charges etc. for his hospitalization and awarded a total compensation of Rs.2,62,700/-. I am of the view of the award is very moderate and would require no intervention. 5. As regards the crucial issue of liability of the insurance company, the Tribunal was taken note of the fact that admittedly the third premium had been paid a day earlier to the accident namely on 23.01.2004 at 5:15 P.M. A cover note had also been issued. When the policy was issued on 27.01.2004, it was stated to be effective only from 27.01.2004. The Tribunal reasoned that when FAO No.3776 of 2007 -6- the premium amount had been accepted and a cover note was also issued to the 2nd respondent, it must only be taken that the policy was effective from the date when the cover note itself is issued and not from the date and time, which was spelt out in the policy. The fact of payment of premium was spoken by the 2nd respondent himself as RW-1. The Tribunal held that when the amount was received and the cover note was also issued on the same day, it must also be taken that policy commenced from that time and found the insurer wholly liable. 6. As regards the contract of insurance, it is a specie of contract and therefore, the law of contract shall always apply. Therefore, when a person seeks for a policy of insurance and offers to pay the premium, the insurer can receive it in acceptance of the offer and a contract will be effected immediately on acceptance, unless the acceptance is conditional to be effective from any particular time. The concept of 'cover note' itself is a provisional acceptance, which could be a prelude to a concluded contract secured through insurance of policy incorporating all the terms and conditions. It was defined by the Hon'ble Supreme Court in General Assurance Society Vs. Chan Mull AIR 1966 SC 1644 as a "temporary and limited agreement. It may be self contained or it may incorporate by reference to the terms and conditions of future policy." It may not always be that the time mentioned in the cover note is conclusive. It is invariably a question of fact, as held by the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Chintu Devi (2000) 7 SCC 50 . The insurance Company that conceded to the receipt of premium one day earlier to the accident has given no FAO No.3776 of 2007 -7- explanation as to why the cover note issued a day after the accident. With no clean evidence from the insurer, I hold that on 23.01.2004 constituted the commencement of the policy. 7. I am in full agreement with the reasoning of the Tribunal and the exclusion of liability sought on the ground that the policy was issued to be effective from a subsequent date is not tenable. It is more a matter of appreciation of fact as to when the policy must be taken to be effective. When there was evidence to the effect that the premium had been paid on a day earlier to the date on which cover note was issued, unless assumption of risk from the subsequent date was justified for any reason such as non-realization of premium by bouncing of cheque or any other justifiable causes, it must only be taken that the contract of insurance commenced when the premium was paid. 6. The awards of the Tribunal in all the three cases are sustained and the appeals filed by the insurance company are dismissed. (K. KANNAN) JUDGE July 30, 2010 Pankaj*