IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN MONDAY, THE 9TH NOVEMBER 2009 / 18TH KARTHIKA 1931 MACA.No. 871 of 2009() ---------------------- OPMV.2962/2000 of MOTOR ACCIDENT CLAIMS TRIBUNAL, THRISSUR .................... APPELLANT(S): 3RD RESPONDENT ---------------------------- THE ORIENTAL INSURANCE CO.LTD.,TRISSUR, REPRESENTED BY ITS ASSISTANT MANAGER, REGIONAL OFFICE, ERNAKULAM NORTH, KOCHI-18. BY ADV. SRI.GEORGE CHERIAN (THIRUVALLA) RESPONDENT(S): CLAIMANT/RESPONDENTS 1 & 2 ----------------------------------------- 1. SHAKEER, S/O.MOIDEEN, PALATH HOUSE, PALLAM P.O., CHERUTHURUTHY, THRISSUR DISTRICT. 2. A.R.RAGHAVAN, S/O.RAVUNNY, ATTASSERY HOUSE, VIYYUR P.O., THRISSUR DISTRICT. 3. ANTO, S/O.VARGHESE, CHITTILAPILLY HOUSE, PAMBOOR, KUTTUR P.O., THRISSUR DISTRICT. ADV. SRI.P.V.CHANDRA MOHAN FOR R2 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 09/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.N. KRISHNAN, J. ........................................... M.A.C.A.No.871OF 2009 ............................................. Dated this the 9th day of November, 2009 J U D G M E N T This is an appeal preferred against the award of the Claims Tribunal, Thrissur in OP(MV)No.2962/2000. An interesting situation has arisen which requires consideration by this Court regarding the liability of the insurance company. The vehicle was insured with the company and the policy expired on 5.2.2000. On 7.2.2000 at about 10.30 a.m an accident had taken place. It is contended by the owner of the vehicle that premium was paid at 10.15 a.m on that day and therefore, by virtue of Section 64VB of the Insurance Act, the liability of the insurance company commences from the receipt of the premium. 2. On the contra, the insurance company would contend that the premium was paid only at 1 p.m subsequent to the accident and therefore, the receipt of premium will not save the insured. It is further contended that the policy had been issued only on 8.2.2000, which means it has only commenced from the mid night on 7.2.2000 and as the accident had : 2 : M.A.C.A.No.871OF 2009 taken at 10.30 a.m, the insurance company is not liable to be ordered to pay the amount. The learned counsel also contends before me that an insurance contract was entered into between the insurer and the insured and therefore the terms of the contract cannot be varied by anybody. 3. Let me first consider about the factual aspect. Admittedly the accident took place on 7.2.2000. Fortunately or unfortunately it is the only admitted fact in the case. The owner would submit that the premium was paid and receipt was issued on 7.2.2000. Ext.B3 receipt produced before this Court would show that its one side covers the policy i.e., it commences from the mid night on 7.2.2000 and the other side shows that the premium received on 7.2.2000. The covering note does not stipulate any time regarding the receipt of the premium. 4. In the decision reported in United India Insurance Co. Ltd.v. Ullash Chandra Jena (1992 ACJ 1041), the covering note was issued 15 hours after the accident but on the same date. The fact of the accident was not disclosed by the owner at the time of the proposal. The insurance : 3 : M.A.C.A.No.871OF 2009 company repudiated its liability on the ground of non disclosure of material facts. The High Court held that the cover note would make the insurance company liable for an accident which occurred earlier to the proposal. It is worthy quoting Section 64VB of the insurance company, which reads as follows: “64VB. No risk to be assumed unless premium is received in advance:- (1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner. (2) For the purpose 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. (3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alternation in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money : 4 : M.A.C.A.No.871OF 2009 order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent. (4) Where an insurance agent collects a premum on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty four hours of the collection excluding bank and postal holidays. (5) The Central Government may, by rules, relax the requirements of sub-section (1) in respect of particular categories in insurance policies. (6). The Authority may, from time to time specify, by the regulations made by it, the manner of receipt of premium by the insurer'. 5. So, the law very clearly and manifestly makes one thing that it is the premium which holds the field and when the premium is tendered and accepted or it is sent by post by cheque or by money order, from the date of posting some liability starts for the insurance company unless there is any other stipulation. The learned counsel for the insurance company very strongly contends before me that by virtue of the subsequent decisions of the Hon'ble Apex Court, the position has changed and therefore unless the premium is received at that time it will not bind the insurance company. : 5 : M.A.C.A.No.871OF 2009 6. In New India Assurance Co. Ltd.v. Bhagwati Devi (1999 ACJ 534) it was a case where the policy obtained on the date of the accident but after the accident. The special contract mentioned in the policy is that it would be operative from 4 p.m and the accident had occurred at about 9 a.m. It was held that the policy comes into being and the policy would be effective from the mentioned time. Now the question to be resolved is that if the premium is paid and the policy makes a special mention at what time the policy will commence. The Supreme Court in the decision reported in National Insurance Co. Ltd. v. Jikubhai Nathaui Dabhi (1997 ACJ 351) held that when there is a special contract mentioned in the policy that it would be operative from a particular time, then the insurance company will not be liable. New India Assurance Co. Ltd.v. Bhagwati Devi (1999 ACJ 534) was a case where the accident occurred at 9 a.m but it was mentioned in the policy that the policy will be operative from 4 p.m. The Supreme Court held that when the policy mentions a specific condition, the special contract being effective from the : 6 : M.A.C.A.No.871OF 2009 mentioned time. 7. Ext.B3 policy on a meticulous perusal would show that the premium was collected on 7.2.2000 without mentioning the time of receipt of the premium. The policy issued would reveal that it commenced from 00 hours on 8.2.2000 and ends on the mid night on 7.2.2001. So in a case where the premium is paid a little earlier and when there is a contract entered into between the insurer and the insured specifically stipulating the time of commencement of the policy, by virtue of the two decisions referred to by me, it has to be held that the policy will come into force as agreed between the parties namely the insured and the insurer. When it is so, the payment of premium even if it is little earlier does not matter much. There may be cases where the time of commencement of the policy is not properly stated. Then the courts have held that it will start commencement from the mid night of the previous day so as to make it in line with the coverage of that particular date. 8. But, in our case, when the policy very specifically reiterates the time of the commencement of the policy, I feel : 7 : M.A.C.A.No.871OF 2009 that any different view would be against the decisions given by the Apex Court and the receipt of premium will fall into insignificance in the light of the special contract to the contrary. Therefore, I hold that the Tribunal was not correct in making the insurance company liable and the owner was not covered by a policy at the time of the accident and therefore the appeal succeeds. 9. The MACA is allowed and the insurance company is exonerated from the liability and the claimant is entitled to realise the amount from respondents 1 and 2 in the claim petition jointly and severally. If the insurance company by virtue of the order of this Court has paid any amount, it is entitled to get it reimbursed from the owner. Disposed of accordingly. M.N. KRISHNAN, JUDGE cl : 8 : M.A.C.A.No.871OF 2009