FAO No.1136 of 2006 -: 1 :- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.1136 of 2006 Date of decision: November 25, 2008. National Insurance Co. Ltd. ...Appellant(s) v. Hasina & Others ...Respondent(s) CORAM: HON'BLE MR. JUSTICE SURYA KANT 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present: Shri L.M. Suri, Senior Advocate, with Shri Deepak Suri, Advocate for the appellant. Shri Sandeep Jasuja, Advocate for the claimant-respondents. Shri Paul Singh Saini, Advocate, for respondent No.13. ORDER Surya Kant, J. - (Oral): This order shall dispose of FAO Nos. 1136, 1137, 1138, 1139, 1140, 1141, 1142, 1143, 1144, 1145, 1231 and 1232 of 2006 and Civil Revision No.2638 of 2006 which have been preferred by the National Insurance Co. Ltd. Against a common award dated 2.12.2005 passed by the Motor Accident Claims Tribunal, Gurgaon whereby 13 claim petitions arising out of a motor vehicular accident, which took place on 31.10.2001 at Ferozepur Jhirka to Sohna Road, District Gurgaon, have been decided. For brevity, the facts are being taken from FAO No.1136 of FAO No.1136 of 2006 -: 2 :- 2006. The brief facts culminating into these appeals/revision petition are that on 31.10.2001, Tayab, aged about 35 yeas and employed as a driver on the Tata Sumo bearing registration No. HR-20-G-1514, was driving the said vehicle from Ferozepur Jhirka to Sohna side at a moderate speed and as soon as he crossed the Badela Ki Mor at about 1 p.m., a dumper bearing registration No.HR-47-5738 came from Sohna side allegedly at a very high speed and struck against the Tata Sumo due to which, besides Tayab – the driver of the Tata Sumo, the other occupants also received multiple injuries. While eight occupants of Tata Sumo, including its driver – Tayab, unfortunately died as a result of the injuries, the remaining 5 occupants survived though with multiple injuries. Five injured as also the dependents of seven of the deceased filed 12 claim petitions. The owner of the Tata Sumo also filed a separate claim petition to compensate the damage caused to his vehicle. All the 13 claim petitions have been decided by the Tribunal vide a common award, holding that the accident was caused due to rash and negligent driving by the dumper. It has also been held that the driver of the Tata Sumo was not at fault. As a result of the said finding, the driver, owner and the insurance company of the dumper bearing registration No. HR-47-5738 have been held jointly and severely responsible to pay the compensation to the claimants. The issue which was hotly debated before the Tribunal and is the bone of contention in these appeals also, pertains to the liability of the appellant insurance company to indemnify the awards. While the owner and the driver of the offending dumper have pleaded that at the time of accident, the vehicle was insured with the appellant company, the appellant FAO No.1136 of 2006 -: 3 :- insurance company took the following objection in its written statement dated 8.11.2002:- “1. That the vehicle bearing the registration No.HR-47/5738 was not insured with National Insurance Co. Ltd. at the time and date when alleged accident took place. The prime fact is that respondent No.2 who is the owner of the vehicle bearing registration No.HR-47/5738 has not come before the court with clean hands. Respondent No.2 obtained the insurance cover by concealing the most material fact that the vehicle has already met with an accident. The cover note taken by respondent No.2 from the representative of respondent No.3 was also totally done with mala fide intention to get the insurance cover fraudulently. More so, the same cover note was also forged and furnished to the police after the accident. The same forged cover note has been filed by the petitioner and is a part of the record of this Hon'ble Tribunal. Thus respondent No.2 is wrongfully trying to conceal and shirk off his liability with the help of forged document to save himself from the liability towards the third parties. 2. It is reiterated that the vehicle bearing registration no.HR- 47/5738 was not insured with National Insurance Co. Ltd. at the time and date when alleged accident took place. Under these circumstances answering respondent is not liable for payment of any compensation to the petitioner and as well as to proforma respondent no.4-6. As per the contents of FIR No.290 dated 31/10/2000 lodged with Police Station, Sohna, FAO No.1136 of 2006 -: 4 :- the alleged accident took place at 1.00 p.m. and at that time vehicle bearing registration no. HR-47/5738 was not insured with respondent No.3, National Insurance Co. Ltd. The brief facts are that initially the cover note bearing No.0874077 was issued by representative of respondent No.3 at 5.00 p.m. on 31/10/2001. This cover note was not deposited in the office of respondent no.3 due to its subsequent cancellation for non receipt of premium. However the original cover note was never returned by respondent No.2 to the answering respondent in spite of the best efforts. The same cover note has been used by respondent No.2 after forging the time and issue of the cover note from 5.00 pm to 8.00 am. The cover note register discloses that cover note bearing no.0874076 was issued at 11.00 am on 31/10/2001 which pertain to vehicle Honda City in the name of Radhe Sham. The cover note under dispute bearing the no.0874077 pertaining to the alleged vehicle was issued at 5.00 p.m. on 31/10/2001 in the name of Noor Mohammad. When cover note bearing no.0874076 had been issued at 11.00 am, the next cover note bearing No.0874077 could not have been issued at 8.00 a.m. The carbon copy of cover note 0874077 maintained by respondent no.3 discloses that vehicle bearing registration HR-47/5738 was issued only at 5.00 p.m. on 31/10/2001 after the occurrence of the accident. Since no premium was received by respondent no.3, this cover note was cancelled for non payment of premium. The answering respondent FAO No.1136 of 2006 -: 5 :- never issued any insurance policy of the vehicle to respondent No.2.” The Tribunal accordingly framed issue No.3 as to “whether vehicle HR-47-5738 was not insured with respondent No.3 – National Insurance Co. Ltd. at the time and date of accident?”. The Tribunal has held that there is no over-writing or interpolation of the words “A.M.” in the Cover Note, Ex.P-58 nor some hand-writing expert has been produced by the appellant company to prove such over-writing/interpolation. The Tribunal has further held that the offending vehicle was insured at the time of the accident and the appellant company along with the driver and owner of the offending vehicle is also liable to pay the compensation amount. It may be noticed here that according to the appellant company the subject cover-note (Ex.P-58) was got issued by the owner of the dumper (Noor Mohammad) fraudulently through one Devender Kumar who used to provide business to the concerned agent of the appellant insurance co. The cover note was allgedly got issued at 5 p.m. on 31.10.2001, i.e., after the accident had taken place at about 1 p.m., however, it was tampered with and the timing of '5 p.m.' was interpolated as '8 a.m'. In support of the aforesaid plea, the most crucial witness produced by the appellant company is Manjit Singh (RW2) who is the Field Officer of the company and had issued the disputed cover-note allegedly at 5 p.m. on 31.10.2001 and handed over the same to Devender Kumar – an employee of the Installment Supply Limited, New Delhi who was his corporate client. The witness admits that as soon as he came to know that the insured vehicle “had already met with an accident”, he called Devender FAO No.1136 of 2006 -: 6 :- Kumar and handed over him a letter on 2.11.2001 regarding the cancellation of the cover note. He also claims to have informed the Senior Divisional Manager of the appellant company on 2.11.2001 itself regarding cancellation of the cover note. He also made a complaint on 5.9.2002 to the police station at Connaught Place, New Delhi, i.e., after about one year. In order to substantiate his plea that the cover note was issued at 5 p.m., Manjit Singh has deposed that another cover-note bearing Sr. No.0874076 was issued by him on 31.10.2001 at 11 a.m., therefore, the disputed cover note which bears the next serial number could, in no circumstance, be issued at 8 a.m. In addition to the statement of Manjit Singh, the appellant company has relied upon the certified copies of some statements, affidavits, as also certified copy of the award dated 22.7.2004 passed by the MACT, Delhi in a claim petition titled as “Smt. Prem Lata v. Akbar Hussain & Ors.”, arising out of the same accident. At this stage, a reference to the award dated 22.7.2004 passed by the Tribunal at Delhi (Ex.R-24) may also be made. Therein also, the deceased Nand Kishore was travelling in the ill-fated Tata Sumo No.HR- 20G-1514 and he too lost his life in the same accident. In view of the identical objection raised on behalf of the appellant company that the timing on the insurance cover note was tampered with by converting '5 p.m.' to '8 a.m.', an issue to this effect was framed. Besides Manjit Singh, the appellant company also produced one Amit Chopra, its Administrative Officer as R3W2 as well as Devender Kumar as R3W3 before the MACT, Delhi. The original record pertaining to the refund of the premium amount to Devender Kumar were also produced. Most importantly, the carbon FAO No.1136 of 2006 -: 7 :- copy, namely, the original copy of the insurance cover-note retained by Manjit Singh was also produced. After consideration of the said evidence, the Tribunal in Delhi held as follows:- “24. Shri Anil Chopra, AO, National Insurance Co., who has appeared as R3W2 has further clarified that the Accounts Section shuts at 3.00 p.m. though the agent can receive the payment upto 5.30 pm. It is further deposed by him that there is no mention of serial number in premium register though the collection number is in series and that it is not possible to make any correction subsequently and obtain a new computer sheet. It was further explained by him that any correction in the sheet can be made only by way of endorsement. 25. The cover note Ex.RW1/1 coupled with the premium sheet Ex.R3/W2 thus, sufficiently establish that the cover note in question was issued at 5.00 p.m. and not at 8.00 a.m. 27. In the present case, a perusal of the cover note Ex.RW1/1 shows that there was no mention of the time of commencement of the insurance policy. In the circumstances, the policy would be effective from the midnight to the previous night. In the light of this fact, the time of issue whether it is 8.00 a.m. or 5.00 p.m. becomes immaterial. However, this fact assumes importance to determine if, in fact, there was a fraud played on the insurance company. It has already been observed that the FAO No.1136 of 2006 -: 8 :- accident had taken place at around 1/1.30 p.m. on 31.10.2001. It has also been held that the insurance cover was issued at 5.00 p.m. which implies that the insured i.e., Noor Mohammad had in fact concealed the factum of the involvement of the vehicle in the accident.” As noticed earlier, before the Tribunal at Gurgaon, besides Manjit Singh, Field Officer-cum-insurance agent, who issued the disputed cover note, the appellant insurance company has tendered in evidence the depositions, documents, affidavits, etc. which were produced by it before the Tribunal at Delhi as also the certified copy of the Award passed by the Delhi Tribunal. In addition, the appellant company also moved an application before the Tribunal seeking a direction to the driver and the owner of the offending vehicle to produce the original copy of the cover- note. The aforesaid application was disposed of by the Tribunal on 26.5.2005 in the following terms:- “At this stage, an application filed by Sh. P.R. Grover for directing respondents Akbar and Noor Mohd. to produce the copy of cover note. Sh. R.L. Bhardwaj, counsel for Akbar and Noor Mohd. has made statement that the cover note relating to vehicle HR-47-5738 is not traceable and as such not in possession of Akbar and Noor Mohd. Therefore, there is no need to pass any order on the application.” The crucial question to be determined would, therefore, be as to whether the appellant has led sufficient evidence to discharge its onus against issue No.3 and prove that the cover-note in dispute was interpolated FAO No.1136 of 2006 -: 9 :- or tampered with? The answer to the aforesaid question is firstly traceable in the photo copy of the cover-note (Ex.P-58) when seen with the help of the magnifying glass. The word “8” visibly bears over-writing and originally it was other than “8”. Similarly, in the printed format in the column where the words “AM/PM” are inscribed, while the words “AM” have been tick- marked but the words “PM” have also been struck off. In the normal circumstances, if the words PM were to be struck off, there was no necessity of 'tick-marking' the words “AM” or the vice-versa. It, thus, appears that the entry regarding timing in the disputed cover-note has been interpolated and tampered with. The claimants had no concern with issue No.3. It was for the owner of the dumper and the insurance company to lead their respective evidence in support or against the genuineness of the disputed cover note. The best evidence which the owner of the offending vehicle could have produced was the original cover-note. The fact that the original cover note was not produced by the owner before the Tribunals at Delhi or Gurgaon, is sufficient to draw an adverse inference that had it been produced in original, the interpolation made in respect of the timings of its issuance would have been proved beyond any doubt. The vague and evasive plea taken by the dumper owner/driver that the original insurance cover-note is not traceable, inspires no confidence. The certified copies of the documents produced before the Tribunal at Delhi and the award passed by it, may also be referred at this stage. The statement of Amit Chopra, Administrative Officer of the appellant insurance company (Ex.R-18) dated 23.2.2004 reveals that the FAO No.1136 of 2006 -: 10 :- premium register for the period – 1.10.2001 to 31.10.2001 was brought in order to prove that the cover-note in dispute bearing No.0874007 was issued on 31.10.2001 at 5 p.m. and was later on cancelled on 2.11.2001. It was further proved that till 3.30 p.m. when the Accounts Section is closed, no premium in relation to the above stated cover note was received or deposited with the appellant company. The statement of T.H. Mewar, Senior Divisional Manager of the appellant company dated 1.4.2004 (Ex.R- 19) reveals that the vigilance inquiry into the episode also substantiated the plea taken on behalf of the appellant. From the shrouding suspicious circumstances, there remains no doubt that the disputed cover note was procured by the owner of the offending vehicle after the accident had taken place so as to fasten the liability upon the insurance company. Such an inference is further strengthened by the fact that no previous insurance cover, if any, of the offending vehicle has been brought on record. Had it been a case of incidental expiry of the insurance cover on that very day, it might not have been an unusual recourse for the owner to get the same renewed on the same day. However, no such evidence has been led. The owner of the vehicle has not even opted to enter the witness box. In these circumstances, the finding arrived at by the Tribunal regarding genuineness of the insurance cover-note is totally contrary to the evidence on record. For the reasons afore-stated, the findings returned by the Tribunal against issue No.3 cannot sustain and the same are accordingly set aside. The question, however, arises as to whether or not the appellant is still liable to indemnify the compensation-claims arising out of the FAO No.1136 of 2006 -: 11 :- impugned awards? Learned Counsel for the Respondent-claimants have urged that in the light of the decisions by the Hon'ble Supreme Court in the cases of:- (i) New India Insurance Company v. Darshana Devi & Ors., 2008[2] RCR [Civil] 86; (ii) New India Assurance Co. Shima v. Kamla & Ors., [2001]4 SCC 342; (iii) New India Assurance Co. Ltd. v. Rula & Ors., 2000 ACJ 630; and (iv) Oriental Insurance Co. Ltd. v. Inderjit Kaur, 1998 ACJ 123, even if the insurance policy had been cancelled or was invalid, the third party rights would remain unaffected, therefore, the appellant company is liable to indemnify the award(s) under challenge though recovery rights against the owner and driver of the offending vehicle can be given to it. Having regard to the principles laid down in the cited decisions, the above noticed contention merits acceptance. It appears that the breach of a contractual obligation by a party to the agreement even by adopting fraudulent means would not frustrate the third party rights. That apart, most of the claimants belong to the poorest section of society and it will be too hard for them to recover the compensation amount from the owner or driver of the offending vehicle. The appellant company, on the contrary, has men and means to effect such recoveries. For the reasons afore-stated, the appeals and the revision petition are allowed to the extent that the findings returned by the Tribunal under issue No.3 are set aside and the appellant company is not held jointly or severely liable along with the driver and owner of the offending vehicle to pay the compensation amount. It is, however, directed that the appellant shall firstly indemnify the awards under appeal and shall be at liberty to file FAO No.1136 of 2006 -: 12 :- execution application against the driver and/or owner of the offending vehicle and recover the compensation amount from them. The appellant company shall deposit the balance compensation amount with the Tribunal within a period of two months from the date of receipt of a certified copy of this order and the same shall then be disbursed to the claimants without insisting for any security. No costs. November 25, 2008. [ Surya Kant ] kadyan Judge