# NEW INDIA ASSURANCE CO. LTD v. SMT. SITA BAI AND ORS

- **Citation:** [1999] Supp. 2 S.C.R. 304
- **Court:** Supreme Court of India
- **Decided:** 1998-02-10
- **Case number:** Civil Appeal No. 5005 of 1999
- **Bench:** Dr. A.S. Anand, M. Srinivasan, R.C. Lahoti
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/new-india-assurance-co-ltd-v-smt-sita-bai-and-ors-16825
- **Pages:** 3

## Headnote

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.

## Text

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
..
-
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 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 there is a mention of the specific
time for the purchase of the policy, then a special contract comes into being
B and the policy becomes effective from the time mentioned in the cover note/
the policy itself. The judgment in Jikubhai 's case (supra) has been
subsequently followed in Oriental. Insurance Co. Ltd v. Sunita Rathi &
Ors., [1998) 1 SCC 365, by a three-Judge Bench of this Cotirt also.
C
In the fact situation of this case since the commencement of the policy
at 21 :00 hours on 16.4.1987 was after th.e accident which had occurred at 10:00
hours on 16.4.1987, the Tribunal as well as the High Cotirt were wrong in
burdening the appellant-insurance Company, with any liability- under Section
92-A of the Motor Vehicles Act by applying the law- laid down in Ram
Dayal 's case which, on facts, had no application to this case. This case is
D . squarely covered by the judgment in Jikhubhai 's case and the other judgments
following it as noticed above. The impugned order against the appellant
cannot thus be sustained. The same is hereby set aside. The appeal
consequently succeeds and is allowed insofar as the appellant is concerned.
No costs.
E RP.
Appeal allowed.
,,.
.._