ORIENTAL INSURANCE CO. LTD. versus PORSELVI & ANR

Citation: [2009] 6 S.C.R. 289 · Decided: 02-04-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009] 6 S.C.R. 289 
\ 
-'r 
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] 
New India Assurance Co.Ltd. v. Sita Bai (Smt.) and Ors. 
G 
~· 
(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 
E impugned judgment held as follows: 
"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: 
H 
"Effective date of commencement of insurance for the 
I 'f• 
• 
ORIENTAL INSURANCE CO.LTD. v. PORSELVI & 
291 
ANR. [DR. ARIJIT PASAYAT, J.] 
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: 
"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 
B 
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 pu

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