Insurance Co. Ltd. Vs. Dharam Chand and Ors.  INSC 667 (27 August 2010)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5204 OF
2003 Oriental Insurance Co. Ltd. Appellant Versus Dharam Chand & Ors.
This appeal arises from a motor accident claim.
In this case, the premium cheque for the insurance policy was
received by the appellant, the insurance company, on May 7, 1998 at 4.00 pm and
a cover note was issued at the same time. In columns 3 & 4 of the cover
note, however, it was stated that the insurance would commence from May 8, 1998
and expire on May 7, 1999.
The motor accident in regard to which the claim case was filed
took place at 8:30 pm on May 7, 1998.
The insurance company sought to disown its liability on the plea
that the accident took place before the commencement of the insurance as
indicated in the cover note. But, both the Tribunal and the High Court, 2
turned down the plea and held the insurance company liable to pay the
When this appeal was taken up, counsel for the insurance company
very fairly stated that since the cheque for the premium amount was received by
the company at 4:00 pm on May 7, 1998, the insurance must be deemed to have
commenced from that time and four hours later when the vehicle met with the
accident, the owner must be deemed to have been covered by the insurance
policy. We appreciate the fairness shown by the counsel for the insurance
The appeal is dismissed but with no order as to costs.
....................................J. (AFTAB ALAM)
....................................J. (R.M. LODHA)
August 27, 2010.