SBCMA NO.612/1997– THE NEW INDIA ASSURANCE COMPANY LIMITED V/S SMT. PARMILA BISWAL AND ORS :. JUDGMENT DTD.3.11.2009 1/5 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. S.B. CIVIL MISC. APPEAL NO.612/1997 The New India Assurance Company Limited Versus Smt. Parmila Biswal and ors. PRESENT HON'BLE Dr.JUSTICE VINEET KOTHARI Mr.R.K.Mehta, for the appellant. None present for the respondent despite service. DATE OF JUDGMENT : 3rd November, 2009. JUDGMENT 1. This appeal is of the Insurance Company is directed against the award of the MACT, Sirohi dtd.20.3.1997 – Smt. Parmila Mittal and ors. V/s Shankar and ors. deciding claim petition No.96/1990. 2. In an accident which took place on 23.4.1990 between 11 to 12 a.m. at village Manpur between Sirohi and Abu Road by Car RST 1185 of which the respondent No.2, Sh. Om Prakash is owner and the respondent No.1 was driver and the appellant insurance company was insurer, one Sh. Girdhari Biswal riding on bicycle died and consequently the said claim petition was filed. SBCMA NO.612/1997– THE NEW INDIA ASSURANCE COMPANY LIMITED V/S SMT. PARMILA BISWAL AND ORS :. JUDGMENT DTD.3.11.2009 2/5 3. The learned Tribunal was pleased to award compenastion of Rs.1,82,200/-. The appellant insurance company being aggrieved by the said award has approached this Court by way of present appeal. 4. Mr. R.K. Mehta, learned counsel for the appellant was heard and none appeared for the respondents despite service. 5. Mr. Mehta pointed out that the accident in question took place on 23.4.1990 for which the owner of the vehicle fraudulently obtained the cover note No.012398 in the back date on 20.4.1990 at 5 p.m. to shift the responsibility on the appellant – insurance company, whereas the premium cheque which is said to have been despatched by the Insurance agent Mr. Pradeep Mittal on 20.4.1990 under “Under Postal Certificate” (UPC for short) was received in the office of the Insurance Company at Sirohi on 25.4.1990. He submitted that the car in question was insured with another insurance company known as United India Insurance Company upto 21.4.1990, but this fact was not mentioned in the cover note obtained through the agent of the appellant – insurance Company on 20.4.1990 and the premium was shown to have been sent by the cheque under the “UPC” from the post office whose services on 20.4.1990 i.e. Friday in this regard was operative only upto 4.30 p.m. He submitted that an enquiry into the matter was held by one Mr. Nav Ratan Mehta, retired Dy. S.P. who SBCMA NO.612/1997– THE NEW INDIA ASSURANCE COMPANY LIMITED V/S SMT. PARMILA BISWAL AND ORS :. JUDGMENT DTD.3.11.2009 3/5 upon investigation found that the post could not be really sent on 20.4.1990 and thus, the cover note appeared to be back dated as 21.4.1990 was Saturday and 22.4.1990 was Sunday and the accident in question took place on 23.4.1990. He submitted that as per the provisions of Section 64 VB of the Insurance Act, 1938, the insurance can become operative only upon payment of preminum of insurance which in the present case was received only on 25.4.1990 and therefore, the vehicle in question namely car No. RST 1185 cannot be said to have been insured on 23.4.1990. These contentions were raised before the learned Tribunal also while deciding the issue No.3. However, after noticing all these facts, the learned Tribunal has found still that the cover note was issued on 20.4.1990, therefore, the vehicle in question should be deemed to have been insured on the date of accident on 23.4.1990 and therefore, the appellant insurance company was liable to pay compensation in question. 6. Having heard the learned counsel and after going through the impugned award, particularly findings on issue No.3 and investigation report dtd.3.12.1990 (Ex.A/1) of Mr. Nav Ratan Mehta, retired Dy. S.P., this Court is of the opinion that the learned Tribunal has erred in returning the findings against the appellant – Insurance Company about the cover note having been issued on 20.4.2009 itself. In law, the unless and until the premium is received by the Insurance Company as per Section 64 VB of the Insurance Act, 1938, SBCMA NO.612/1997– THE NEW INDIA ASSURANCE COMPANY LIMITED V/S SMT. PARMILA BISWAL AND ORS :. JUDGMENT DTD.3.11.2009 4/5 the contract of insurance cannot be said to commence. Moreover, when the agent of the Insurance Company is said to have issued the said cover note on 20.4.1990, nothing prevented him from depositing the cheque of the insurance premium with the office of Insurance Company at Sirohi on 23.4.1990, the next working day being Monday. Showing remittance of payment by cheque under UPC which was issued in suspicious circumstances on 20.4.1990, whereas the cover note which is handed over by the insurance agent to the insured owner of the vehicle on 20.4.1990 itself makes entire contract of insurance highly suspicious. It is well settled that the contract of insurance is a contract of utmost faith and therefore, the appellant – Insurance Company appears to have been duped by the owner of the vehicle in the present case by taking a cover note apparently in back date on 20.4.1990. The second fact that the car in question was insured with other Insurance Company upto 21.4.1990 is also significant. The accident in question took place on 23.4.1990. Instead of renewing the said insurance with the same insurance company, the owner of the car appears to have chosen other Insurance Company, namely, the appellant Insurance Company and obtained the cover note from easily pliable insurance agent in back date of 20.4.1990, whereas the premium reaches the Insurance Company at Sirohi from Abu Road on 25.4.19990, which is only 70 kms. away. In these circumstances, the cover note dtd.20.4.1990 appears to be apparently back dated and findings of the learned Tribunal holding the appellant SBCMA NO.612/1997– THE NEW INDIA ASSURANCE COMPANY LIMITED V/S SMT. PARMILA BISWAL AND ORS :. JUDGMENT DTD.3.11.2009 5/5 – Insurance Company liable appears to be perverse. 7. Consequently, this appeal is allowed and the findings of the learned Tribunal on issue No.3 holding the appellant – Insurance Company are liable to be set aside and the same are set aside. The appellant – Insurance Company shall be free to recover the amount already deposited by it as per Section 173 of the Act, namely Rs.25,000/- from the owner of the vehicle in question. No order as to costs. (Dr.VINEET KOTHARI)J. Item No.59. Ss/-