Oriental
Insurance Co. Ltd. Vs. Sunita Rathi & Ors [1997] INSC 896 (4 December 1997)
S.P.
BHARUCHA, A.P. MISRA
ACT:
HEADNOTE:
THE
4TH DAY OF DECEMBER, 1997 Present:
Hon'ble
the Chief Justice Hon'ble Mr. Justice S.P. Bharucha Hon'ble Mr. Justice A.P. Misra
Jitender Sharma, Sr. Adv., and B.K. Pal, Adv. with him for the appellant Ashok
K. Mahajan, Adv. (NP) for the Respondents.
The
following Judgment of the Court was delivered:
Verma
C.J.I This appeal by the insurer involves for decision only a short point relating
to its liability under the policy of insurance issued subsequent to the
accident even though it was issued some time later on the same day. The
Tribunal as well as the High Court have held against the insurer placing
reliance on a two-Judge Bench decision of this Court in New 570. The question
is whether that decision has been correctly applied in the facts of the present
case.
The
motor accident occurred on 10th December, 1991 at 2.20 PM It was only thereafter the same day
at 2.55 PM that the insurance policy and the
cover note were obtained by the insured, owner of the motor vehicle involved in
the accident. There is express mention in the cover note that the effective
date and time of commencement of the insurance for the purpose of the Act was 10th December, 1991 at 2.55 PM. The applicability of the decision in Ram Dayal's case
(supra) has to be considered on these facts. In our opinion the decision in Ram
Dayal's case (supra) is distinguishable and has no application to the facts of
this case. The facts of that decision show that the time of issuance of the
policy was not mentioned therein and the question, therefore, was of
presumption when the date alone was mentioned and not the time at which the
insurance was to become effective on that date. In such a situation, it was
held in Ram Dayal's case (supra) that in the absence of any specific time being
mentioned, the logical inference to draw was that the insurance became
effective from the previous mid-night and, therefore, for an accident, which took
place on the date of the policy, the insurer became liable. There is no such
difficulty in the present case in view of the clear finding based on undisputed
facts that the accident occurred at 2.20 PM and the cover note was obtained
only thereafter at 2.55 PM in which it was expressly mentioned that the
effective date and time of commencement of the insurance for the purpose of the
Act was 10.12.1991 at 2.55 PM. The reliance on Ram Dayal's case (supra) by the
Tribunal and the High Court was, therefore, mis-placed, we find that in a
similar situation, the same view which we have taken, was also the view in M/s.
National Insurance Co. Ltd. vs. Smt. Jikubhai Nathuji Dabhi & Ors. 1996 (8)
SCALE 695, wherein Ram Dayal's case (supra) was distinguished on the same
basis.
It
follows that the insurer cannot be held liable on the basis of the above policy
in the present case and, therefore, the liability has to be of the owner of the
vehicle. However, we find that the High Court, without assigning any reason,
has simply assumed that the owner of the vehicle was not liable and that the
insurer alone was liable in the present case. This conclusion, reached by the
High Court, is clearly erroneous. The liability of the insurer arises only when
the liability of the insured has been upheld for the purpose of indemnifying
the insured under the contract of insurance. There is, thus, a basic fallacy in
the conclusion reached by the High Court on this point.
The
question now s of the final order to make in the present case. We find that the
insurer has made the payment to the claimants in tee present case in
satisfaction of the entire claim and it has been fairly stated by the insurer
that this appear was filled only for getting a decision on this point
pertaining to its case, we deem it fit to say that the amount already paid by
the insurer to the claimants is not required to be refunded by the claimants to
the insurer.
For
the aforesaid reasons, the appeal is allowed. The judgment of the High Court
and Tribunal are set aside.
However,
as indicated earlier, the claimants are not required to refund the amount
already paid to them by the insurer.
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