ORIENTIAL INSURANCE COMPANY LTD Vs. SIVAN

JUDGEMENT

(1.) The common question that arises for consideration in these appeals is, whether the insurance policy was effective from 11 AM. on 15-7-1985 as contended for by the appellant or was effective with effect from the midnight of 14-7-1985 as contended for by the claimants as well as the insured.

(2.) The answer to the question depends upon the construction of the provisions contained in Chapter VIII of The Motor Vehicles Act, 1939 read with the relevant rules of the Motor Vehicles (Third Party Insurance) Rules, 1946, for short The third party Insurance Rules. S.94 of The Motor Vehicles Act highlights the need for insurance against third party risk. S.95 provides that in order to comply with the requirements of Chap.8 a policy of insurance must be a policy which satisfies the requirements prescribed thereunder. Particular reference requires to be made to sub-s.4 of S.95. This sub-s.says that a policy shall be of no effect unless and until the insurer issues a certificate of insurance in the prescribed form and containing the prescribed particulars etc., in favour of the person by whom the policy is effected. Equally relevant is the provision contained in sub-s.3 of S.96. This Section provides that where a certificate of insurance has been issued under sub-s.4 of S.95 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of sub-s.(2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-s.(1) of S.95, be of no effect. Alongside we should focus our attention on the relevant rules contained in the Third Party Insurance Rules. R.4 makes it imperative that the insurer shall issue to every holder of a policy a certificate of insurance in Form A set out in the schedule attached to the Rules. Similarly every policy, in the form of a cover note issued by an insurer, shall be in Form B set out in the Schedule. The above in short is the scheme of the relevant provisions pertaining to the issue of insurance policy. Going by this scheme every certificate of Insurance shall contain the following particulars.

(3.) The learned counsel for the appellant submits that the risk under the policy must be held to have commenced with effect from 11 AM. on 15-7-1985. In support of this argument he pressed into service the writings in the policy namely., 'effective date of commencement of insurance for the purpose of the Act 15-7-1985 (11 AM.)' and also relied on a decision of the Court of Appeal in Cornfoot v. Royal Exchange Assurance Corporation (1904 (1) K.B. 40). The learned counsel for the appellant therefore argues that such clauses could be had in a policy and if there is one such clause the parties are bound by the same. This being the position in law, the effective time of the commencement of the risk under the policy, the learned counsel submits, must be held to be 11 AM. on 15-7-1985. The observations of Collins M.R. discernible from the above ruling namely "that the expression '30 days' in the policy meant thirty consecutive periods of twenty four hours, the first of which began to run at 11.30 AM. on August 2; and, therefore, that the insurance had come to an end before the loss occurred" do support the above argument of the learned counsel.