FAO No.3600 of 2011 (O&M) -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.3600 of 2011 (O&M) Date of Decision. 13.05.2011 Surjit Singh son of Sh. Piara Singh resident of village Patti Nillowal, Bilgha, District Jalandhar ......Appellant Versus Jasbir Kaur wife of late Sh. Ujaggar Singh and others .....Respondents Present: Mr. Harmanjit Singh Jugait, Advocate for the appellant. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? No. 2. To be referred to the Reporters or not ? Yes. 3. Whether the judgment should be reported in the Digest? Yes. -.- K. KANNAN J.(ORAL) 1. The appeal by the owner of the vehicle, which admittedly had been involved in the accident, is on the ground that the liability had been wrongly fastened on the appellant although there had been a valid insurance of policy on that relevant date. It is admitted that the accident had taken place on 30.12.2007 at about 4.15 pm but the policy of insurance covered the risk for the insured only effective from 31.12.2007. The contention of the learned counsel appearing for the insured was that he had paid the premium for the policy on 28.12.2007 itself and the assumption of risk must, therefore, be immediately from the date when the payment had been made and not from the date when the policy cover had provided for the risk. Learned counsel refers to a FAO No.3600 of 2011 (O&M) -2- judgment of a Division Bench of the Karnataka High Court in National Insurance Company Ltd. Vs. Bhadramma and others 2010 ACJ 1687 to say that when insured had paid the premium on 13.07.1994 and the insurance company had issued the policy effective from zero hour on 14.07.1994 to midnight of 13.07.1995 and the accident had taken place at 11.15 a.m. on 13.07.1994. The Division Bench raised the question whether the insurance company could dispute the liability on the ground that there was no insurance at the time of accident. The High Court had held that the insurance company cannot postpone the assumption of risk after receipt of premium otherwise it would be guilty of abetting use of vehicle in a public place without policy which is prohibited by Section 146 of the Motor Vehicles Act. The High Court was actually dealing with the situation where the receipt did not mention the time of payment of the premium and the office of the insurance company was opened at 10 a.m. and the insurance company failed to establish that premium was paid subsequent to the accident. The Court, therefore, held that it had to be inferred that policy was effective from midnight of 13.07.1994 and the Tribunal was, therefore, justified in concluding that insurance company was liable. I do not think that I should be detained by any reference to the above judgment, for it has clearly come through a decision of the Hon'ble Supreme Court that when a policy was not renewal of premium within time of expiry but it had been taken as a fresh policy or after a lapse, the insurance company is entitled to assume risk from a particular date. This has also a reason that insurer in such a case is entitled to make an inspection of the vehicle and then assume the risk from a particular date. A policy of FAO No.3600 of 2011 (O&M) -3- insurance is invariably a contract, which will be binding between the parties and if an assumption of risk is taken on a particular date, it will be effective only from that date and not from the time when the payment of premium was made as held by the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Sobina Iakai, 2007 (7) SCC 786(see paragraphs 14, 18 and 19), the Hon'ble Supreme Court held in J. Kalaivami Vs. K. Sivashankar (2007) 7 SCC 792 that the Court has to look into the contract of insurance to discern whether a particular time is specified in the terms of the policy and stich to it. 2. Learned counsel also refers to a judgment of the Madras High Court in National Insurance Co. Ltd. Vs. Deivanai and others 2010 ACJ 1841 that held that when insurance company disputed a liability on the ground that an accident had taken place on 3.3.1992 but it received the banker's cheque and prepared the policy after the date of accident on 4.3.1992, the insurance company would become still liable, for cheque towards renewal premium was drawn by bank on 2.3.1992 and despatched on the same date. The cases of renewal of premium within time are governed by different principles than the cases where the renewal takes place after a lapse of time. I have already explained as to why there was requirement for insurer to make inspection of the property from the date when the policy is provided for. The contention by the insured that it was entitled to be covered for risk by the insurance company right from the date when he paid the premium, therefore, is not tenable in law and the contention is rejected. 3. It is also contended by the learned counsel that the person who died was driving a three wheeler with more than two persons FAO No.3600 of 2011 (O&M) -4- sitting on the front seat, which was against the capacity of the vehicle. We are examining a situation of accident caused by the insured vehicle by an impact with the three wheeler where on account of such impact, the three wheeler capsized and the person, who was driving also died. It is irrelevant that the driver who was driving the three wheeler had a valid driving licence or not. The issue in proof of negligence of a person, who was found to have caused the accident that resulted in another vehicle capsizing. Such a person cannot contend that the other driver did not have a valid driving licence and therefore, the liability cannot be cast on the owner. There is no presumption that a person who did not have a driving licence is always negligent nor does it absolve a person who was himself guilty of negligence to plead for shifting of liability on the ground that the other person involved in the accident had no licence. Absence of licence has relevance only for determining the issue of negligence. (Please see Mohinder Singh Sohal Vs. Ramesh Kumar AIR 1981 P&H 199). The point of having valid or invalid licence by the person who died in accident, is not a point which may be urged by the owner of a vehicle whose driver had caused the collision that resulted in the death of yet another driver. The contention that the liability cannot be cast on the owner is also without any justification and that contention is also rejected. 4. The award is confirmed and the appeal is dismissed. (K. KANNAN) JUDGE May 13, 2011 Pankaj*