[2009] 6 S.C.R. 327 ... .,

BALBIR KAUR & ORS.

A v.

NEW INDIA ASSURANCE COMPANY LTD. & ORS.

(Civil Appeal No.1838 of 2009)

APRIL 15, 2009

[S.B. SINHA AND P. SATHASIVAM, JJ.]

-· Constitution of India, 1950 - Article 142 - Fatal accident

- Tribunal awarded compensation holding insurer liable - High Court set aside the award opining that accident took c place a day before when policy to take effect, hence insurer was not liable - Meanwhile claimants withdrew the amount deposited by insurer - Held: In view of peculiar facts and circumstances of the case, interest of justice would be subserved if in exercise of discretionary jurisdiction under Article 142 of Constitution, insurer is directed not to recover D .., . . the amount from claimants - Motor Vehicles Act, 1988 - s.166 - Insurance Act, 1948 - s.64VB

The deceased was riding on a two wheeler scooter which was hit by a bus. As a result, he died. The Tribunal E awarded compensation of Rs.7.96 lacs to the claimants.

High Court allowed the appeal of Insurance Company and set aside the award of tribunal opining that the cover note of the insurance was issued on 15.03.1996 but the same was to take effect from 19.03.1996 and the accident took place on 18.03.1996, the insurer was not liable F therefor. The High Court, in its impugned judgment, directed refund of the said amount to the Insurance . Company. Hence the appeal.

A limited notice was issued to this Court, confining

... ..J to the question as to whether in the peculiar facts and G circumstances of the case and, particularly, in view of the fact that the appellants already withdrew the amount deposited by the Insurance Company, this Court can issue a direction to the Insurance Company to recover

327 H

A the amount from the owner and the driver in the same proceedings.

Partly allowing the appeal, the 1Court

HELD: 1. Section 64 VB of the Insurance Act, 1938

8 merely provides that 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

I guaranteed to be paid by such persons in such manner and within such time as may be prescribed or unless and C until deposit of such amount as may be prescribed, is made in advance in the prescribed manner. [Para 12)

[332-A-B]

2. A policy which is issued from a future date must be with the consent of the holder of the policy. The D insurance company cannot issue a policy unilaterally

from a future date without the consent of the holder of a policy. Even the circular letter was not produced and/ or no material was placed as to why the policy was issued from a later date. Keeping in view the peculiar facts and E circumstances of the case and in particular having regard to the fact that the appellants have already withdrawn the amount, the interest of justice would be subserved if this Court in-exercise of its discretionary jurisdiction under Article 142 of the Constitution of India direct the insurance company not to recover the amount from the F appellants subject of course to its right of recovery from the owner and the driver of the vehicle. [Paras 13 and 15)

[332-C-G]

National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhi (SMT) and Ors. (1997) 1 sec 66 and J. Kalaiveni and Ors.

G v. K. Sivshankar and Anr. JT (2001) 10 SC 396, referred to.

Case Law Reference:

(1997) 1 sec 66 referred to

JT (2001) 10 SC 396 referred to

Para 10

Para 10

BALBIR KAUR & ORS. v. NEW INDIA ASSURANCE 329 ...

COMPANY LTD. & ORS .

CIVIL APPELLATE JURISDICTION : Civil Appeal No. A 1838 of 2009.

From the Judgment & Order dated 21.03.2007 of the High Court of Delhi in MAC Appl. No. 64 of 2004.

Santosh Chaurihaa, Hari Shankar K, Vikas Singh Jangra B and Pramod Kharwar for the Appellant. - Salil Paul (for Manjeet Chawla) for the Respondents. -.j

The Judgment of the Court was delivered by

5.8. SINHA, J. 1. Baljit Singh, deceased was riding on a c two-wheeler (scooter) bearing Registration No. DAB 6529. The said scooter was hit by a bus driven by one Ramesh Singh Rawat. He suffered multiple grievous injuries in the said accident. He was taken to Deen Dayal Upadhya, Hospital, New Delhi where he was declared 'brought dead'.

41(

2. Appellants filed an application before the Motor Accident Claim Tribunal, Deihi (Tribunal) under Section 166 of the Motor Vehicles Act, 1988 (for short "the Act") claiming a sum of Rs. 20,00,000/- towards compensation for death f Baljit Singh inter alia on the premise that the accident was caused E by reason of rash and negligent driving of the said bus by its driver Shri Ramesh Singh Rawat.

3. In the said claim petition, the income of the deceased

-'. was stated to be Rs. 4,000/- per month. He was aged 34 years on the date of accident. Indisputably, in relation to the said accident, a criminal proceeding was also initiated under F Sections 279 and 304A of the Indian Penal Code.

4. The Tribunal upon considering the materials brought on record by the parties awarded a sum of Rs. 7,96,000/- to the appellants. Respondent No. 1 preferred an appeal thereagainst

' G ., -; before the High Court. By reason of the impugned judgment, the High Court set aside the award passed by the Tribunal opining that as the cover note of the insurance had been issued on 15.03.1996 but the same was to take effect from 19.03.1996 and the accident having taken place on 18.03.1996, the insurer was not liable therefor.

_..

5. Appellants are, thus, before us. "'

6. By an order dated 13.08.2007, this Court issued a limited notice to the following effect:

"Issue notice confined to the question as to whether in the B peculiar facts and circumstances of the case and, particularly, in view of the fact that the petitioners have already withdrawn the amount deposited by the Insurance Company, this Court can issue a direction as to whether the Insurance Company may recover the amount from the

...

c owner and the driver in the same proceedings."

7. Before adverting to the contentions raised before us, we may notice that the High Court while issuing notice to the appellants directed the respondent No. 1 herein to deposit the awarded amount pursuant whereto the said amount has been

D deposited. Appellants have also withdrawn the same.

However, the High Court, in its impugned judgment, "'" directed refund of the said amount to the respondent No. 1.

8. The Tribunal in the said claim petition inter a/ia

formulated the following issues:

"1. Whether the insurance cover in the present case was effectively only from 19.3.96 to 10.3.97, replaced on behalf of R-3 in their W070PR3.

2. Whether premium insurance policy referred to in above F issue No. 1 was paid on 15.3.96 and if so to what effect?"

9. On the first issue, the Tribunal noticed that in the cover note the policy was shown to have been issued with effect from 18.03.1996 in view of a circular issued by the insurance

G company but it had not been given effect to. Having regard to the fact that a photocopy thereof had been produced, it was held:

:. '9

" ... Besides the proposal form relating to the impugned insurance policy has also not been produced to show as

H to what were the terms and conditions on which the

BALBIR KAUR & ORS. v. NEW INDIA ASSURANCE 331

COMPANY LTD. & ORS. [S.B. SINHA, J.]

insurance policy was to be executed with regard to the A offending vehicle. There is no material on record to show that the insured was made aware of the office circular Ex- R3W1 /B that if there was no other insurance policy in operation with regard to the offending vehicle immediately preceding 15.3.96 in these circumstances the insurance policy covering third party interest would be issued three days after the receipt of the proposal. The material on record placed by both the petitioner as well as respondent

No. 3 in clear terms shows that the injured had made the payment of the premium on 15.3.96 and there was no reason for the insurance company to have issued the c insurance policy covering third party interest w.e.f. 18.3.96 ... "

10. The High Court, on the other hand, having regard to the decisions of this Court in National Insurance Co. Ltd. v.

Jikubhai Nathuji Dabhi (SMT) and Ors. [(1997) 1 SCC 66] D and J. Kalaiveni and Ors. v, K. Sivshankar and Anr. [JT 2001

(10) SC 396], held:

"9. In view of the clear cut position of law explained by the Supreme Court, it is clear that policy of insurance commences risk coverage only in terms of the policy of E insurance and if certificate of insurance has not been issued, on the terms of the cover note."

11. Chapter XI of the Act provides for insurance of motor vehicles against third party risks. Indisputably, the deceased was a third party. In terms of Section 146 of the Act, an owner F

of a motor vehicle must take out an insurance in respect of a third party risk. Section 147 of the Act provides that a policy of insurance referred to in Section 146 thereof must be a policy which satisfies the conditions under Clauses (a) and (b) of Subsection (1) thereof. Sub-section (5) of Section 147 reads as G under:

"(5) Notwithstanding anything contained in any law for tile time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of H

....

A . any liability which the policy purports to cover in the case " of that person or those classes of persons."

12. Section 64 VB of the Insurance Act, 1938 merely provides that no insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily B payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such persons 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. c

13. For the purpose of this case, we would assume that an insurance policy, in law, could be issued from a future date.

A policy, however, which is issued from a future date must be with the consent of the holder of the policy. The insurance company cannot issue a policy unilaterally from a future date D without the consent of the holder of a policy. Even the said circular letter had not been produced and/ or no material was ... placed as to why the policy was issued from a later date. It is, however, not necessary for us to delve deep into the matter in view of the limited notice issued by this Court.

14. Respondent No. 3, however, owner of the vehicle has not questioned that part of the order passed by the High Court.

He, therefore, accepted the judgment of the High Court.

Accordingly, liability to pay the awarded amount by him is not in question. ).

15. Keeping in view the peculiar facts and circumstances of the case and in particular having regard to the fact that the appellants have already withdrawn the amount, the interest of justice would be subserved if this Court in exercise of its discretionary jurisdiction under Article 142 of the Constitution

G of India direct the insurance company not to recover the amount from the appellants herein, subject of course to its right of • recovery-from the owner and the driver of the vehicle .

~ ...

.. 16. The appeal is allowed to the aforementioned extent.

No costs.

H D.G.

Appeal partly allowed.