Case: National Insurance Co. Ltd Vs. Abhaysing Pratapsing Waghela

3. First respondent was driving a moped on 27.1.1995. An accident took place on the said date as the said vehicle was hit by a truck bearing registration No.GJ 6T 7000 which was allegedly being driven in a rash and negligent manner. The said truck first dashed against an Ambassador car and then hit the moped which was being driven by the respondent as a result whereof he suffered severe injuries4. For the purpose of getting the said truck insured, a cheque was tendered to the officers of the appellant company on 23.1.1995. As noticed hereinbefore the accident took place on 27.1.1995. The cheque when presented to the bank for clearance was allegedly dishonoured. On 30.1.1995, however, the amount of premium was paid in cash and received5. The Motor Vehicle Accident Claims Tribunal as also the High Court, however, opined that having regard to the fact that a cover note had been issued by the appellant, it was legally obligated to reimburse the claim of a third party.

Court's reasoning:
we are of the opinion, that the judgment of the High Court cannot be faulted. No doubt, a contract of insurance is to be governed by the terms thereof, but a distinction must be borne in mind between a contract of insurance which has been entered into for the purpose of giving effect to the object and purport of the statute and one which provides for reimbursement of the liability of the owner of the vehicle strictly in terms thereof. In that limited sense, a contract of insurance entered into for the purpose of covering a third party risk would not be purely contractual. We may place on record that an ordinary contract of insurance does not have a statutory flavour. The Act merely imposes an obligation on the part of the insurance company to reimburse the claimant both in terms of the Act as also the Contract. So far as the liability of the insurance company which comes within the purview of Sections 146 and 147 is concerned, the same subserves a constitutional goal, namely, social justice. A contract of insurance covering the third party risk must, therefore, be viewed differently vis-à-vis a contract of insurance qua contractWe, therefore, in the facts and circumstances of the case, are unable to agree with the contention of the learned counsel for the appellant. In any event, this is a case where this Court should not exercise its discretionary jurisdiction under Article 136 of the Constitution of India as only a sum of Rs.46,000/- is awarded in favour of respondent No.1In our opinion, the impugned judgment does not warrant any interference.