Oriental Insurance Co. Ltd vs Dharam Chand And Ors
- SCC(2010) 15 SCC 141
Ratio decidendi
The rule this decision rests on
Where a premium cheque for a motor insurance policy is received by the insurance company, the insurance cover is deemed to commence from the time of receipt of the cheque, not from any later date stated in the cover note issued simultaneously, and accordingly an accident occurring within a few hours of cheque receipt but before the date noted in the cover note as the commencement date is covered by the policy.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Oriental Insurance Co. Ltd. Appellant
Versus
Dharam Chand & Ors. Respondents
JUDGMENT
AFTAB ALAM, J.
1. This appeal arises from a motor accident claim.
2. 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.
3. The motor accident in regard to which the claim case was filed took
place at 8:30 pm on May 7, 1998.
4. 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
compensation amount.
4. 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 company.
5. The appeal is dismissed but with no order as to costs.
....................................J. (AFTAB ALAM)
....................................J. (R.M. LODHA)
New Delhi August 27, 2010.
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