ORIENTAL INSURANCE CO LTD Vs. GOWRAMMA

JUDGEMENT

(1.) The first contention urged for the insurer, the common appellant in these appeals, was that the Motor Accidents Claims Tribunal could not have made the Insurer liable on its policy effected by a 'Cover Note' subsequent to the omission of the words 'or a Cover Note' in Sub-section (4) of Section 95 of the Motor Vehicles Act, 1939, by Central Act 100 of 1956. This contention is devoid of merit for the reason to be stated presently.

(2.) The material portion of Sub-section (4), after the omission of the words 'or a Cover Note' found therein, reads thus: "A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the Insurer in favour of the person by whom the policy is effected a certificate of insurance....." From a reading of the above sub-section in isolation, one would get an impression that a policy shall have no effect for the purposes of Chapter relating to 'Insurance of Motor Vehicles against Third Party Risks' unless and until there is issued by the Insurer in favour of the person by whom the policy is effected, a certificate of insurance. Probably, such impression has given rise to the contention now urged. But, when it is noticed that the very Central Act 100 of 1956, which omitted the words 'or a Cover Note' in Sub-section (4) of Section 95, has brought within the fold of 'Certificate of Insurance' therein 'a Cover Note' by amending definition Clause (b) in Section 93 relating to 'Certificate of Insurance', it becomes obvious that a policy issued by way of a 'Cover Note' will be as effective as a 'Certificate of Insurance' for purposes of Chapter relating to 'Insurance of Motor Vehicles against Third Party Risks' in the Motor Vehicles Act, 1939. Hence, the first contention urged for the Insurer is rejected.

(3.) The second contention urged for the insurer was that the cheque issued for payment of premium towards 'Cover Note' concerned, having been issued by a third party, the same was not encashed by the Insurer and that hence the Insurer was not liable under that 'Cover Note'. This contention is again devoid of merit as the reason now put-forth for non-encashment of the cheque is different from the reason put-forth by the Officer of the Insurer examined in the case as R.W.2. The reason for non-encashment of the cheque as stated by R.W.2 in his evidence, reads: 'The cheque is not encashed by D-3 (Insurance Company), namely on the ground that after a month they got information that the bus had met with an accident." Even otherwise, when the cheque was obtained from the Insured as valid payment towards premium for the Cover Note issued, non-presentment of the cheque by the Insurer for encashment cannot have the effect of absolving the Insurer of the liability under the Cover Note issued pursuant to the receipt of such cheque. Hence, the second contention urged for the Insurer is also rejected.