M/S. NATIONAL INSURANCE CO. LTD.versusSMT. JIKUBHAI NATHUJI DABHI AND ORS.
- Citation
- 1996 INSC 1346
- Decided
- 20 November 1996
- Disposal
- Appeal(s) allowed
Holding
The renewal contract became operative only at 4:00 p.m. on 25 October 1983 as per the policy, so the accident at 11:14 a.m. was not covered and the insurer was not liable.
Summary
The appellant, Mis. National Insurance Co. Ltd., sought to deny liability for an accident that occurred on 25 October 1983 at 11:14 a.m. The motor insurance policy had a renewal premium due on 14 October 1983, which was paid late on 25 October 1983 at 4:00 p.m. The policy expressly stated that coverage was suspended from 14 October 1983 4 p.m. until the renewal premium was paid, and that the renewed contract would become operative at 4:00 p.m. on 25 October 1983. The court held that, because the accident happened before the stipulated operative time, the renewed policy was not in force and the insurer was not liable. The decision relied on New India Assurance Co. v. Ram Dayal, noting that a specific time clause overrides the default rule of midnight commencement under the General Clauses Act. Consequently, the appeal was allowed, dismissing the claim against the insurer while leaving the claim against the vehicle owner open.
Issues considered
- When does a renewed motor insurance policy become operative if the renewal premium is paid after the renewal date?
- What is the effect of a specific time clause in the policy on the commencement of coverage?
- Is the insurer liable for an accident occurring before the renewal becomes effective?
Legislation cited
Subjects
Judgment
MIS. NATIONAL INSURANCE CO. LTD. A
~.
v.
SMT. JIKUBHAI NATHUJI DABHI AND ORS.
NOVEMBER 20, 1996
[K. RAMASWAMY, G.T. NANA VAT! AND B
K. VENKATASWAMI, JJ.]
Insurance :
Insurance policy-Insurance of motor vehicle-Renewal premium-
Not paid within renewal date-Effect of-Renewal premium due to be paid c
on 14. /0.1983-Premium paid at 4 P.M. on 25. I 0.1983-Insurance policy
remained under suspension from 14.10.1983 to 25./0.1983 till 4 P.M-
Contract ofrenewal came into force at 4. 00 P.M on 25.10.1983-Accident
took place at 11.14 A.M on 25. /0.1983-Liability of insurance company-
Held, in view ofspecial contract mentioned in insurance policy, namely it
D
would be operative from 4. 00 P.M on 25. I 0.1983, the insurance coverage
would not enable the claimant to seek recovery of the amount from the
insurance company-Claimant is at liberty to make any claim against owner
of the vehicle.
New India Assurance Co. v.Ram Dayal, 1199012 SCR 570, referred E
to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2671 of
1991.
F
From the Judgment and Order dated 20.12.89 of the Gujarat High
Court in F.A. No. 1366 of 1989.
Jitander Sharma, Mrs. Gunwat Dara, Ms. Minakshi Vij. P. Gaur for
the Appellant.
G
- ; H.A. Raichura for the Respondent in C.A. No. 2671/91.
The following Order of the Court was delivered :
This appeal by special leave is cofined to the question as to whether H
929
930
.
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A the accident had occurred during the operation of the insurance policy in ,.,
controversy. The admitted position is that the renewal of the insurance
was effected as under :
"Address: Jal Apartment, ....... Pd. Vile Parle (N) Bombay. 5.
B It is hereby understood and agreed that the renewal premium
of Rs. 1307 only under this Policy having been paid on
25.10.1983 and not within the renewal date viz.14.10.1983
the Insurance by this Policy is suspended from 14.10.1983
(4." p.m.) to 24.10.1983.
c Further, it is declared and agreed that the cover under this
Policy is reinstated and renewed for a further period of twelve
months from 25.10.1983 to 24.10.1984 at a premium of Rs.
1307." -
The Tribunal also had recorded, as a fact, that on October 25, 1983
D at 4.00 p.m. the contract of renewal had come into force and it would be
operative upto October 24, 1984. The Tribunal also recorded, as a fact,
that the accident had occured on October 25, ! 983 at 11.14 a.m. that is,
before the renewal <if the contract. Under these circumstances, it would
clear that the accident had occurred when the renewal had not taken effect.
E
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
F operative from 4.00 p.m. on October 25, 1983 and the accident had occurred
earlier thereto, the insurance coverage would not enable, and claimant to
seek recovery of the amount from the appellant-Company.
The appeal is accordingly allowed only to the above extent. In respect
G of any claim against the owner, the respondent is at liberty to have it
..
recovered. No costs.
R.P. Appeal allowed.
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