Case: Chimajirao Kanhojirao Shirke  Vs. Oriental Fire &amp; Genl. Insurance Co.Ltd

The short facts are that the appellant filed a suit for recovery of Rs. 6, 03, 000 from the defendant-respondent Insurance Company. The appellants are the parents of the deceased Mahendra Shirke, who died in the accident on 8-1-1980. The said deceased obtained loan from Maharashtra Finance Corporation and Bank of Baroda under "Educated Unemployment Scheme" for purchasing goods truck in the year 1977. He obtained the said loan under the condition that he will drive personally the said truck. According to the appellants case, deceased Mahendra insured his truck with the respondents to the tune of Rs. 10 lakhs, which is a comprehensive insurance covering risks for unlimited personal injury and property. The said truck was also insured as per the policy to the tune of Rs. 1, 27, 000 for the damage to the property. It is not in dispute that on the date of the accident the said truck was covered with the said insurance policy. In fact, the question which we have to decide is the interpretation of the policy itselfOn these facts, the trial court decreed the suit in favour of the appellants for the aforesaid amount along with interest @ 12% per annum. The trial court while considering Issues 1 and 9 after considering the submissions of both the parties concludes that the payment of Rs. 134 as premium was for unlimited personal injury to the life of the insured as well as to property to the tune of Rs. 10 lakhs and finally recorded its finding to the following effect"Moreover, there is no iota of evidence to prove that the contents as against premium at Rs. 134 as unlimited personal injury and damages to be Rs. 10 lakhs has been wrongly or mistakenly shown in that policy." *This finding is recorded in view of the stand taken by the Insurance Company before the trial court, namely, that the recording of the words "unlimited personal injury" was wrongly recorded therein. In support of this, reference is made by learned counsel for the appellants to the written statement filed by the Insurance Company, which is to the following effect"The noting of unlimited personal injury is redundant, the premium is accepted either to cover property damage or personal injury. It is due to oversight/mistake, the wording unlimited personal injury is typed against the additional premium of Rs. 134. ...." *Being aggrieved by the order of the trial court, the Insurance Company filed an appeal before the High Court and by means of the impugned order the High Court set aside the judgment of the trial court and allowed the appealThe High Court holds that the Insurance Company is not liable to pay any compensation to the plaintiffs (appellants herein) on account of death of the insured, Mahendra under the terms of the said policy. This conclusion is drawn in view of the following findings"Therefore, ultimately what we have to see in this case is the object of the payment of Rs. 134 paid by the late Mahendra and accepted by the Insurance Company. As we read between the lines of the decisions referred to, we are of the view that the amount has been paid for covering the risk in excess of statutory liability in regard to the third-party risks and not the personal injury or death of the insured."

Court's reasoning:
we have no hesitation to hold that the High Court committed an error in setting aside the finding given by the trial court, specially in view of the said specific plea taken in the written statement. The High Court felt that since it is a legal matter, it could be adjudicated notwithstanding a different stand in its pleading. This approach was not proper. Once a stand in fact is taken, that fact could not be controverted by any legal proposition. In the present case, the Insurance Company has not led any evidence to dissolve the stand taken in the written statement that it was done by mistake nor was there any application to amend such pleadings. In view of this, the High Court was not correct to decide the issue through legal inferences dehors of and without adverting to the glaring facts on the record.