IN THE HIGH COURT OF JUDICATURE OF ANDHRAPRADESH AT HYDERABAD HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU M.A.C.M.A.No.193 of 2007 DATE:08.12.2010 Between: K.Durga Goud …… Appellant And Perumandla Sumithra and others …..Respondents HONOURABLE SRI JUSTICE SAMUDRALA GOVINDARAJULU M.A.C.M.A.No.193 of 2007 JUDGMENT: Aggrieved by award dated 27.04.2006 passed by the Motor Accidents Claims Tribunal-cum-III Additional District Judge (Fast Track Court), Medak, this appeal is filed by owner of the accident vehicle contending that the insurance company/5th respondent is liable to indemnify him in terms of Ex.B-3 copy of insurance policy. 2) There is no dispute about factum of road accident which took place on 07.10.1998 at about 10.30 A.M in which the deceased Perumandla Sudershanam @ Darshan riding a cycle was hit by tractor and trailer bearing No.APB 2463 and 2464 in opposite direction in rash and negligent manner and about the tractor and trailer running over his body causing his instantaneous death. Having regard to Ex.A-1 F.I.R, Ex.A-2 inquest panchanama, Ex.A-5 Motor Vehicle Inspector’s report and Ex.A-3 charge sheet and also evidence of P.W-2 who is an eye witness to the occurrence, the lower Tribunal rightly found that driver of the accident tractor and trailer was responsible in this accident due to his rash and negligent driving of the same. The respondents 1 to 4 who are wife, minor sons and mother of the deceased are dependant claimants herein for death of the deceased. 3) The lower Tribunal awarded total compensation of Rs.2,37,000/- to the claimants as against the appellant who is owner of the accident tractor and trailer. The lower Tribunal found that since Ex.B-4 was obtained subsequent to the accident taking place, the insurance company is not liable to indemnify the appellant/insured. It is contended by the appellant’s counsel that in the absence of mentioning of time of taking the insurance policy in the policy, the policy is operative in law from the previous midnight onwards and that therefore, the insurance company cannot avoid its liability. 4) Ex.B-4 is proposal form for insurance relating to the accident vehicle combination. It reads that period of insurance for the proposed policy was from 07.10.1998 to 06.10.1999. Ex.B-3 is insurance policy schedule for the accident vehicle. It also reads that policy was issued from 07.10.1998 to 06.10.1999. Even though in Ex.B-3 there is a specific column meant for time of commencement of insurance policy, the said column was not filled up giving time of commencement, but it was filled up with a hyphen. In Ex.B-4 proposal form for insurance though the insured did not fill up column relating to time in 1st page thereof, in 2nd page while signing the form as proposer, mentioned place, date and time as Sangareddy, 7.10.98 and 3.00 P.M. Ex.B-5 is additional questionnaire for motor proposals with break in coverage signed by the insured. Item 3 of declaration of the insured contained therein reads as follows: “3. I/WE confirm that I/WE have remitted the premium to your office on 7/10/98 through Sri K.Tulasidas, Agent, Agent Code No.30336 for the insurance of the above vehicle with you. It is understood and agreed that you have NO LIABILITY OF WHATSOEVER NATURE for any LOSS/DAMAGE/LIABILITY arising out of any accident earlier to 3-00 P.M on 07-10-98.” Ex.B-6 is rectification endorsement issued by the insurance company and it is dated 27.11.1998. It reads as follows: “The policy comes into force from 3.00 PM on 07.10.1998 and not at Zero hours as stated under the Policy, since the proposal and cash premium paid by the representative of the Insured through Agent Mr.K.Tulasidas vide Commercial Vehicle proposal form and additional questionnaire at 3.00 PM only at our Office. The risk attaches under the Policy only on or after the time of payment of premium as per Section 64v[b] of the Insurance Act 1938. All other terms, conditions and warranties of the policy remain unaltered.” 5) The appellant/insured examined himself as R.W-1 and on behalf of the insurer, Assistant Administrative Officer was examined as R.W-2 during enquiry before the lower Tribunal. Evidence of RW-1 about he going to the insurance office on the previous day when he was informed about expiry of working hours by that time and about he going to the insurance office on 07.10.1998 at 6.00 A.M in the morning and paying premium amount in that office, is wholly untenable as it is not borne out by any record. The question of receiving of premium at the insurance office at Sangareddy at 6.00 A.M can never arise at all, as no office of any public undertaking opens at early hours of the day at 6.00 A.M. R.W-2 who speaks to the record states that insurance premium was received by his branch office on 07.10.1998 at 3.00 P.M at Sangareddy. This evidence of R.W-2 is corroborated by Exs.B-4 to B-6. Though Ex.B-6 rectification endorsement was issued long after the date of issue of original policy, Exs.B-4 and B-5 to which the appellant is a party and in which he signed as well as given undertaking to the affect that no liability whatsoever would arise out of any accident earlier to 3.00 P.M on 07.10.1998, would bind on him. From the above evidence on record, the lower Tribunal rightly came to the conclusion that the insured paid premium at 3.00 P.M on 07.10.1998 and submitted the proposal for insurance and that thereupon the insurance company issued policy in favour of the insured covering the accident vehicle. 6) The appellant’s counsel placed heavy reliance on New India Assurance Co. Ltd., V. Ram Dayal[1] of the Supreme Court and contended that the policy taken during any part of the day becomes operative from the commencement of that day i.e., from previous midnight. 2-Judges bench decision in Ram Dayal(1 supra) was explained and not followed in subsequent 3-Judges bench decision of the Supreme Court in National Insurance Co. Ltd V. Jikubhai Nathuji Dabhi[2]. Relevant portion therein reads: “3. This Court in New India Assurance Co. v. Ram Dayal, (1990) 2 SCR 570, had held that in the absence of any specific time mentioned in that behalf, the contract would be operative from the mid-night of the day by operation of provisions of the General Clauses Act. But in view of the 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.” 7) After considering both Ramdayal (1 supra) and Jikubhai (2 supra), another 3-Judges bench of the Supreme Court in New India Assurance Co. Ltd. V. Bhagwati Devi[3] followed Jikubhai (2 supra) holding that when there is a special contract mentioning in the policy, the time when it was bought it would be operative from that time and not fictionally from the previous midnight. 8) It is contended by the appellant’s counsel that Ex.B-3 policy is silent on time of commencement of insurance policy on 07.10.1998 and that therefore, there is no special contract in this case mentioning time of commencement of the policy and that therefore Ramdayal (1 supra) of the Supreme Court is applicable herein to the affect that Ex.B-3 policy operates from the previous midnight of 07.10.1998. It is further contended that under Section 91 of the Indian Evidence Act, evidence relating to proof of terms of contract can be gathered from the document only and that under Section 92 of the Indian Evidence Act no evidence of any agreement or statement shall be admitted for contradicting or varying or adding to its terms. Section 92 of the Evidence Act only prohibits evidence of any ‘oral’ agreement or ‘oral’ statement and not documentary evidence touching the disputed term. A contract under the Indian Contract Act pre-supposes existence of a proposal by one party to the contract and acceptance thereof by the other party to the contract, and it is only thereafter there would be a concluded contract. Therefore, when period of commencement or operation of the contract is in question, certainly a written proposal like Ex.B-4 becomes relevant to find out the agreed terms between the parties. Ex.B-4 proposal reads that it was given by the appellant/insured to the insurance company at 3.00 P.M on 07.10.1998; and Ex.B-5 additional questionnaire for motor proposals with break in coverage further incorporated confirmation made by the appellant/insured/proposer that no liability whatsoever arises out of any accident earlier to 3.00 P.M on 07.10.1998. Exs.B-4 and B-5 are foundations for Ex.B-3 contract of insurance policy; and without there being Exs.B-4 and B-5, the question of the insurance company entering into contract of insurance with the appellant would not have arisen at all. If Ex.B-3 contract or policy of insurance is read along with Exs.B-4 and B- 5, it follows that the concluded contract between the appellant and the insurance company in this case is a special contract of insurance which operates from 3.00 P.M on 07.10.1998 onwards for one year. It follows that Ramdayal (1 supra) of the Supreme Court is not applicable to this case and that Jikubhai of the Supreme Court is squarely applicable herein. When there is special contract between the parties mentioning time of commencement for operation of the policy in the proposal as well as in the additional questionnaire, it does not lie in the mouth of the appellant to contend that Ex.B-3 operates from the previous midnight of 07.10.1998. The award passed by the lower Tribunal is in accordance with law. 9) In the result, the appeal is dismissed with costs. _______________________________ SAMUDRALA GOVINDARAJULU, J December 08, 2010 ksh [1] (1990)2 Supreme Court Cases 680 [2] 1997 ACJ 351 [3] 1999 ACJ 534