Insurance Co. Ltd. Vs. M/S. Payarelal Niranjan Lal  INSC 448 (27 February
IN THE SUPREME COURT
OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 1329 OF 2009
(Arising out of S.L.P. (Crl.) No.15947 of 2006) United India Insurance Co. Ltd.
...Appellant M/s Payarelal Nirnajan Lal ...Respondent
DR. ARIJIT PASAYAT,
in this appeal is to the order passed by the National Consumer Disputes
Redressal Commission, New Delhi, (in short `National Commission') refusing to
accept the prayer made by the present appellant to set aside the ex parte order
facts, as projected by the appellant, are as follows:
(hereinafter referred to as the `insured') gave a cheque for Rs.1451/- dated
8.10.86 to one Development Officer of the appellant-Company for obtaining
Marine (Inland Transit Policy) for Rs.5,00,000/- for incoming goods from
various States. On 9.10.1986 an oil tanker of the respondent-insured bearing
No.RND-9259 coming from District Mehsana, Gujarat, met with an accident near
Pali, Rajasthan. On 11.10.1986 the insured informed the appellant about the
accident of its oil tanker. The cheque in question was received in the
Divisional Office of the appellant on 13.10.1986 without any cover note. On
19.1.1987 respondent submitted claim bill to the appellant claiming certain
amount in respect of the accident of its oil tanker. On 23.3.1993 the claim was
rejected by the appellant informing the respondent as follows:
"1. Your cheque
dated 8.10.96 Rs.1451/- against the premium of the policy of insurance proposed
to be issued reached our office on 13.10.86 without a cover note in absence
where of any risk arising out of an accident was 2 neither covered nor could
that be said to have been covered as also for want of a concluded contract.
2. Besides that right
from 8.10.86 till 13.10.86 the balance in your account in the concerned bank
was only a sum of Rs.1259.21 only, wholly insufficient for clearance of your
above cheque without which, mere issuance of the said cheque did not result
into a contract worth of being honoured.
3. Your alleged
accident took place at about 2 p.m.
on 9.10.86, i.e. much
prior to our even accepting the contract to cover the said risk for reasons
given in para No.1 & 2 of this letter and hence we are not liable for the
made between us on your initiation is also refuted as entirely irrelevant and
off the subject and truth no further correspondence on this subject from you
will be taken cognizance of by us as the chapter for vacuum is closed hereby
once for all.
The respondent filed
a complaint before the State Consumer Disputes Redressal Commission, Rajasthan
(hereinafter referred to as the `State Commission') claiming compensation of
Rs.4,30,350/-. The complaint was dismissed by the State Commission by order
dated 23.9.1996 holding that no concluded contract of insurance came into
existence on 8.10.1993 as there was no acceptance of the proposal by the
insurer since no cover note or any other customary note of contract had been
An appeal was filed
by the respondent before the National Commission which was numbered as First
Appeal No.666/96. The matter was decided on 30.11.2005 ex parte partially
allowing the claim of the respondent and directing the appellant to pay
Rs.1,41,794.45 along with interest @ 12% p.a. from 1.1.1987 till date of
payment and cost of Rs.10,000/- was awarded.
Appellant filed an
application before the National Commission with the prayer to set aside the ex
parte order by explaining the reason as to why there was no appearance on behalf
of the appellant when the matter was called. It was specifically pointed out
that Mr. S.C. Sharda who was the earlier counsel had returned all the briefs.
The notice was handed over to Mr. Sharda who had not appeared. As no
information was given by Mr. Sharda, there was no appearance on behalf of the
present respondent before the National Commission when the matter was taken up.
By the impugned judgment the application was rejected. It was observed that if
there was any change in counsel, the appellant should have been more vigilant.
counsel for the appellant submitted that the reason why there was no appearance
was clearly indicated and there was no dispute as to the factual assertions
and, therefore, the National Commission should have set aside the ex parte
order and heard the appeal on merits. Learned counsel for the respondent
supported the order.
view of the undisputed factual position that earlier Mr. Sharda was appearing
and notice had been served on him, obviously Mr. Sharda was to appear when the
matter was taken up by National Commission. But the briefs had been returned by
Mr. Sharda to the appellant-company.
appellant had no knowledge about the listing of the case. It is not in dispute
that Mr. Sharda had not informed the appellant-company about the date of
hearing because he had returned the briefs.
the peculiar circumstances, we set aside the impugned order of the National
Commission and restore First Appeal No.666/96 for disposal on merits afresh. To
avoid unnecessary delay, let the parties appear before the National Commission
without further notice on 16.3.2009 so that a date of hearing can be fixed by
the National Commission. As the matter is pending since long, we request the
National Commission to explore the possibility of early disposal of the appeal.
We make it clear that we have not expressed any opinion on the merits of the
appeal is allowed to the aforesaid extent.
(Dr. ARIJIT PASAYAT)