NEW INDIA ASSURANCE CO. LTD.versusSMT. SITA BAI AND ORS

A                       NEW INDIA ASSURANCE CO. LTD.
                                             v.
                             SMT. SITA BAI AND ORS ..

                                SEPTEMBER l 0, 1999

B     [DR. A.S. ANAND, CJ., M. SRINIVASAN AND R.C. LAHOTI, JJ.]


            Motor Vehicles Act, 1939:

          S. 92-A-Motor accident claim-Liability of Insurer-Accident took
C   place at 10:00 hours on 16.4.1987 and policy commenced thereafter at 21:00
    hours on the same date-Held, Tribunal and High Court were wrong in
    burdening the Insurance Company with the liability.

          New India Assurance Co. Ltd. v. Ram Dayal and Ors., [1990) 2 SCC
    680, held not applicable.
D
          National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhai (Smt.) and
    Ors., (1997) 1 SCC 66 and Oriental Insurance Co. Ltd. v. Sunita Rathi &
    Ors., [1998] 1 SCC 365, relied on.

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5005 of
E   1999.

         From the Judgment and Order dated 11.3.91. of the Madhya Pradesh
    High Court in M.A. No. 7 of 1991.

            S.K. Paul, (Salil Paul) for MIS. Janendra Lal & Co. P.K. Seth, Ms. Sheetal
F Sharma, Somnath Chakrabarty, Sudhir Kumar Gupta, Ms. K. Sarada Devi,
    Pramod Swarup, Ms. Pareena Swarup and PraYeen Swarup for the appearing
    parties.

            The following Order of the Court was delivered :

G           S.L.P. (C) NO. 12511/91. Leave granted.                                      .
         Respondents 1 to 4 filed a claim petition before the Motor Accident
    Claims Tribunal, Khandwa against respondents 5,6 and the appellant herein
    - New India Assurance Co. Ltd. The claim petition arose out of an accident
    which took place at 10.00 AM on 16.4.1987. Bus No. CP0-9104, owned by
H                                           304
                  NEW INDIA ASSURANCE CO. LTD. v. SIT A BAI                     305

    respondent No.5 and driven by respondent No.6 was involved in that accident        A
    in which one Smt. Salta Bai suffered fatal injuries. The Motor Accident Claims
    Tribunal vide order dated 22.9.1990 opined that the bus in question was
    insured with the appellant-insurance Company for the period 16.4.1987 to
     15 .4.1988 (both days inclusive) and, thus, the owner (respondent No.5) as well
    as the Insurance Company (appellant herein) were liable under the provisions       B
    of Section 92-A of the Motor Vehicles Act (hereinafter the Act). An amount
    of Rs. 15,000, was accordingly directed to be paid as ad-interim compensation
    to respondents 1 to 4 under Section 92- A of the Act. The order of the Motor
    Accident Claims Tribunal was put in issue and a first appeal was filed in the
    High Court of M.P. at Jabalpur. On I Ith March. 1991, a learned Single Judge
    of the High Court relying upon the law laid down by this Court in New India        C
    Assurance Co. Ltd. v. Ram Dayal and Ors., [1990] 2 SCC 680, held that the
    appeal had no merits and dismissed the same summarily. Aggrieved, the
    appellant-insurance Company is before us by special leave.

          A brief notice of some of the admitted facts would be advantageous at
    this stage.                                                                        D
           The proposal for insuring the vehicle in question was made by the
    owner of the vehicle on 16.4.1987 at 21:00 hours. The cover note was issued
    by the appellant in respect of that vehicle, being No. P/703802 on 16.4.1987
    at 21 :00 hours. The Insurance Policy (Exh. P/5) was later on issued in which
    also the date of commencement of the insurance policy was recorded as              E
    16.4.1987 (21:00 hours). The accident, in question, in which Smt. Salta Bai
    received fatal injuries had admittedly occurred at 10.00 A.M. on 16.4.1987 i.e.,
    much before the commencement of the insurance policy.

          The High Court opined that the insurance policy dated 16.4.1987 covered      F
    the period of the accident also because the policy would be deemed to have
    commenced at midnight of 15.4.1987 and !6.4.1987. The High Court in taking
    this view relied upon the judgment in Ram Dayal's· case (supra).



-          The correctness and applicability of the judgment in Ram Dayal 's case
    (supra} came up for consideration before this Court subsequently in a number G ·
    of cases. In New India· Assurance Co. Ltd. v. Bhagwati Devi and Ors. - Civil
    Appeal No. 1550 of 1994, decided on 10.2.1998, a three-Judge Bench of this
    Court relied upon the view taken in National Insurance Co. Ltd. v. Jikubhai
    Nathuji Dabhai (Smt) and Ors., [1997] I SCC 66, wherein it had been held
    that if there is a special contract, mentioning in the policy the time when it
    was bought, the insurance policy would be operative from that time and not H
        306                       SUPREME COURT REPORTS [1999) SUPP. 2 S.C.R.

    A from the previous midnight as was the case in Ram Dayal 's case, where no
        time from which the insurance policy was to become effective had been
        mentioned. It was held that should there be no contract to the contrary, an
        insurance policy becomes operative from the previous midnight; when bought
        during the day following; but, in cases where there is a mention of the specific



-
        time for the purchase of the policy, then a special contract comes into being
    B   and the policy becomes effective from the time mentioned in the cover note/
        the policy itself. The judgment in Jikubhai 's case (supra) has been
        subsequently followed in Oriental. Insurance Co. Ltd v. Sunita Rathi &
        Ors., [1998) 1 SCC 365, by a three-Judge Bench of this Cotirt also.

    C          In the fact situation of this case since the commencement of the policy
        at 21 :00 hours on 16.4.1987 was after th.e accident which had occurred at 10:00   ,,.
        hours on 16.4.1987, the Tribunal as well as the High Cotirt were wrong in
        burdening the appellant-insurance Company, with any liability- under Section
        92-A of the Motor Vehicles Act by applying the law- laid down in Ram
        Dayal 's case which, on facts, had no application to this case. This case is
    D . squarely covered by the judgment in Jikhubhai 's case and the other judgments
        following it as noticed above. The impugned order against the appellant
        cannot thus be sustained. The same is hereby set aside. The appeal
        consequently succeeds and is allowed insofar as the appellant is concerned.
        No costs.

    E   RP.                                                           Appeal allowed.




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