ORIENTAL INSURANCE CO. LTD.versusPORSELVI & ANR

                             [2009] 6 S.C.R. 289
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                     ORIENTAL INSURANCE CO. LTD.                         A
                                      v.
                              PORSELVI & ANR.
                        (Civil Appeal. 2170 of 2009.)

                               APRIL 2, 2009
                                                                         B
               [DR. ARIJIT PASAYAT AND ASOK KUMAR
                            GANGULY, JJ.]
--).,


            MOTOR VEHICLES ACT, 19eB:
             Claim for compensation - Liability of insurer - Insurance   c
        cover specifying the date from which it would be operative -
        High Court holding insurer liable as accident took place on
        the date on which cover was issued - Held: High Court having
        not considered the factual position, matter remitted to it for
        consideration afresh in accordance with law.                     0
             In the instant appeal filed by the insurer challenging
        the judgment of the High Court, it was contended for the
        appellant that the High Court erred in holding it liable on
        the ground that the accident took place on the date on
                                                                    E
        which the cover itself was issued i.e. 28.5.1996. It was ·
        submitted that the cover note clearly indicated that the
        policy was valid from 29-5-1996 to 28-5-1997.
            Allowing the appeal and remitting the matter to the
        High Court, the Court                                            F
            HELD: Since the effect of the factual position has not
        been considered by the High Court, the judgment passed
        by it is set aside. The High Court would consider the
        matter afresh in accordance with law. [Para 6] [291-F-G]
                                                                         G
            New India Assurance Co.Ltd. v. Sita Bai (Smt.) and Ors.
~·
        (1999) 7 sec 575, relied on.
                            Case Law Reference :
            (1999) 1 sec 575         relied on               Para 5
                                    289                                  H
    290       SUPREME COURT REPORTS                     [2009] 13 S.C.R.

                                                                               I
A       CIVIL APPELLATE JURISDICTION : Civil Appeal No.                       i-

    2170 of 2009.
        From the Judgment & Order dated 22.12.2006 of the High
    Court of Judicature at Madras in C.M.A. No. 415 of 2001.
8         S. Paul, A. Gupta, K.K. Bhat, S.N. Bundela and M.J. Paul
    for the Appellant.
          The Judgment of the Court was delivered by
                                                                              j, •

          DR. ARIJIT PASAYAT, J. 1. Leave granted.
c        2. Challenge in this appeal is to the order passed by a
    learned single Judge of the Allahabad High Court dismissing
    the appeal filed by the present appellant under Sec.1i3 of the
    Motor Vehicle Act, 1988 (in short the 'Act').

D        3. The factual position is almost undisputed and :he only
    dispute relates to the date of commencement of the policy i.e.
    the date from which the policy was in operation. The <1ccident
    took place on 28/5/1996. The policy covers the period from
    29.5.1996 to 28.5.1997. The High Court in para 1~, of the
    impugned judgment held as follows:
E
                 "As the cover note has already been issued on
          28.5.1996 itself, which is also entered in Ex. 81, Policy,
          the finding of the Tribunal fastening liability on the a1)pellant
          cannot be termed as perverse. In view of the above
F         discussion, there is no merit in this appeal. The q Jantum
          of compensation has not been disputed by the app13llant-
          Insurance Company. In the result, the Civil Miscell:ineous
          Appeal fails and the same is dismissed."
       4. Learned counsel for the appellant brought to oUJ· notice
G the cover note which clearly indicates that the policy was valid
  from 29.5.1996 to 28.5.1997 though it was issLed on                         ~--

  28.5.1996. A copy of the policy was brought on record. Relevant
  portion thereof reads as follows:
                "Effective date of commencement of insurance for the
H
         ORIENTAL INSURANCE CO.LTD. v. PORSELVI &                     291
I               ANR. [DR. ARIJIT PASAYAT, J.]
'f•
             purpose of the Act, from O'clock on (date) 29.5.1996 to          A
             midnight of 28.5.1997."

          5. A three Judge Bench of this Court in New India
      Assurance Co. Ltd. v. Sita Bai (Smt.) and Ors. [(1999) 7 SCC
      575) inter alia observed as follows:
                                                                              B
                     "6. The correctness and applicability of the judgment
              in Ram Dayal case [(1990) 2 sec 680] came up for
              consideration before this Court subsequently in a number
              of cases. In New India Assurance Co. v. Bhagwati Devi
              [(1998) 6 SCC 534] a three-Judge Bench of this Court            C
              relied upon the view taken in National Insurance Co. Ltd.
              v. Jikubhai Nathuji Dabhi [(1997) 1 SCC 66] wherein it
              has 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 from the        D
•            previous midnight as was the case in Ram Dayal 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         E
             there is a mention of the specific time for the purchase of
             the policy, then a special contract comes into being and
             the policy becomes effective from the time mentioned in
             the cover note/the policy itself. The judgment in Jikubhai
             case has been subsequently followed in Oriental Insurance        F
             Co. Ltd. v. Sunita Rathi [1998) 1 SCC 365] by a three-
             Judge Bench of this Court also.
          6. Since the effect of the aforesaid factual position has not
      been considered by the High Court we set aside the impugned             G
      judgment and remit the matter for fresh considerat.ion in
      accordance with law.
             7. The appeal is disposed of.
      R.P.                                              Appeal allowed.
                                                                              H