NEW INDIA ASSURANCE CO. LTD. versus SMT. SITA BAI AND ORS

Citation: [1999] SUPP. 2 S.C.R. 304 · Decided: 10-09-1999 · Supreme Court of India · Bench: A.S. ANAND, M. SRINIVASAN, R.C. LAHOTI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
NEW INDIA ASSURANCE CO. LTD. 
v. 
SMT. SITA BAI AND ORS .. 
SEPTEMBER l 0, 1999 
B 
[DR. A.S. ANAND, CJ., M. SRINIVASAN AND R.C. LAHOTI, JJ.] 
Motor Vehicles Act, 1939: 
S. 92-A-Motor accident claim-Liability of Insurer-Accident took 
C place at 10:00 hours on 16.4.1987 and policy commenced thereafter at 21:00 
hours on the same date-Held, Tribunal and High Court were wrong in 
burdening the Insurance Company with the liability. 
D 
E 
New India Assurance Co. Ltd. v. Ram Dayal and Ors., [1990) 2 SCC 
680, held not applicable. 
National Insurance Co. Ltd. v. Jikubhai Nathuji Dabhai (Smt.) and 
Ors., (1997) 1 SCC 66 and Oriental Insurance Co. Ltd. v. Sunita Rathi & 
Ors., [1998] 1 SCC 365, relied on. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5005 of 
1999. 
From the Judgment and Order dated 11.3.91. of the Madhya Pradesh 
High Court in M.A. No. 7 of 1991. 
S.K. Paul, (Salil Paul) for MIS. Janendra Lal & Co. P.K. Seth, Ms. Sheetal 
F 
Sharma, Somnath Chakrabarty, Sudhir Kumar Gupta, Ms. K. Sarada Devi, 
Pramod Swarup, Ms. Pareena Swarup and PraYeen Swarup for the appearing 
parties. 
G 
H 
The following Order of the Court was delivered : 
S.L.P. (C) NO. 12511/91. Leave granted. 
Respondents 1 to 4 filed a claim petition before the Motor Accident 
Claims Tribunal, Khandwa against respondents 5,6 and the appellant herein 
- New India Assurance Co. Ltd. The claim petition arose out of an accident 
which took place at 10.00 AM on 16.4.1987. Bus No. CP0-9104, owned by 
304 
.. 
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NEW INDIA ASSURANCE CO. LTD. v. SIT A BAI 
305 
respondent No.5 and driven by respondent No.6 was involved in that accident A 
in which one Smt. Salta Bai suffered fatal injuries. The Motor Accident Claims 
Tribunal vide order dated 22.9.1990 opined that the bus in question was 
insured with the appellant-insurance Company for the period 16.4.1987 to 
15 .4.1988 (both days inclusive) and, thus, the owner (respondent No.5) as well 
as the Insurance Company (appellant herein) were liable under the provisions B 
of Section 92-A of the Motor Vehicles Act (hereinafter the Act). An amount 
of Rs. 15,000, was accordingly directed to be paid as ad-interim compensation 
to respondents 1 to 4 under Section 92- A of the Act. The order of the Motor 
Accident Claims Tribunal was put in issue and a first appeal was filed in the 
High Court of M.P. at Jabalpur. On I Ith March. 1991, a learned Single Judge 
of the High Court relying upon the law laid down by this Court in New India C 
Assurance Co. Ltd. v. Ram Dayal and Ors., [1990] 2 SCC 680, held that the 
appeal had no merits and dismissed the same summarily. Aggrieved, the 
appellant-insurance Company is before us by special leave. 
A brief notice of some of the admitted facts would be advantageous at 
this stage. 
The proposal for insuring the vehicle in question was made by the 
owner of the vehicle on 16.4.1987 at 21:00 hours. The cover note was issued 
by the appellant in respect of that vehicle, being No. P/703802 on 16.4.1987 
D 
at 21 :00 hours. The Insurance Policy (Exh. P/5) was later on issued in which 
also the date of commencement of the insurance policy was recorded as E 
16.4.1987 (21:00 hours). The accident, in question, in which Smt. Salta Bai 
received fatal injuries had admittedly occurred at 10.00 A.M. on 16.4.1987 i.e., 
much before the commencement of the insurance policy. 
The High Court opined that the insurance policy dated 16.4.1987 covered F 
the period of the accident also because the policy would be deemed to have 
commenced at midnight of 15.4.1987 and !6.4.1987. The High Court in taking 
this view relied upon the judgment in Ram Dayal's· case (supra). 
The correctness and applicability of the judgment in Ram Dayal 's case 
(supra} came up for consideration before this Court subsequently in a number G · 
of cases. In New India· Assurance Co. Ltd. v. Bhagwati Devi and Ors. - Civil 
Appeal No. 1550 of 1994, decided on 10.2.1998, a three-Judge Bench of this 
Court relied upon the view taken in National Insurance Co. Ltd. v. Jikubhai 
Nathuji Dabhai (Smt) and Ors., [1997] I SCC 66, wherein it had 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 H 
-
306 
SUPREME COURT REPORTS [1999) SUPP. 2 S.C.R. 
A from the previous midnight as was the case in Ram Dayal 's case, where no 
time from which the insurance policy was to become effective had been 
mentioned. It was
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