As per the recent Judgment delivered by Hon’ble Madras High Court dated 14th November 2016 it was held that, coverage of policy commences from the time and date mentioned in the Insurance policy as it is being a Special Contract and as such, the appellant/insurance company cannot be mulcted with the liability to pay compensation by indemnifying the owner of the vehicle merely because premium is paid before accident.
Facts – Deceased died in an accident caused due to negligence of driver of IV. Claimant filed claim with MACT Dindigul and Tribunal after considering all the facts and circumstances awarded compensation of Rs. 20 Lacs. The Insurer, questioning the liability to indemnify the insured herein in respect of the accident which took place on 27.10.2010 at about 5.00 p.m. in which the husband of the first respondent died, had filed the appeal.
Insurer vehemently contended that the receipt/cover note was issued at about 02.51 p.m. on 27.10.2010 and that the accident took place at 05.00 p.m. on 27.10.2010, and, however, the policy covers the period from 28.10.2010 to 27.10.2011 and admittedly, on the date of accident, there is no coverage by way of insurance and as such, the Tribunal ought to have exonerated the insurance company. Also that specific time has been mentioned in the insurance policy, coverage starts only at that time and not from the midnight of the date of issuance of the insurance policy and since it is a Special Contract, time of commencement of the policy assumes importance and the said legal position has been completely overlooked by the Tribunal, despite settled decisions of the Hon’ble Supreme Court on the said issue.
The counsel for respondents by placing reliance on various judgments of Hon’ble Apex court contended that premium towards policy was paid much prior to the occurrence of the accident and the said fact was also not in dispute and as such, the Tribunal was right in arriving at the conclusion that the insurer is liable to pay compensation. In view of Section 64-V(b) of the Insurance Act the risk on the part of the insurer commences only on the payment of the premium by the insured.
Issues – The moot question that arises for consideration in this appeal is whether the insurance company is liable to pay compensation, as according to them, there was no coverage in the form of insurance policy on the date and time of the accident.
Decision – Hon’ble Madras High Court paid it’s anxious consideration and best attention to the rival submissions and also perused the materials placed before it and held that coverage commences from the time and date mentioned in the Insurance policy as it is being a Special Contract and admittedly, in the case on hand, the policy came to be issued after the accident and so also the coverage and as such, the appellant/insurance company cannot be mulcted with the liability to pay compensation by indemnifying the owner of the vehicle merely because premium is paid before accident.