2009(6 )  SCR 289  

ORIENTAL INSURANCE CO. LTD. v.

PORSELVI & ANR. (Civil Appeal. 2170 of 2009.)

APRIL 2, 2009 [DR. ARIJIT PASAYAT AND ASOK KUMAR GANGULY, JJ.]

The Judgment of the Court was delivered by

DR. ARIJIT PASAYAT, J. 1. Leave granted.

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.173 of the Motor Vehicle Act, 1988 (in short the ‘Act’).

3. The factual position is almost undisputed and the only dispute relates to the  

date  of  commencement  of  the  policy i.e.  the  date  from which  the policy was in  

operation. The accident took place on 28/5/1996. The policy covers the period from  

29.5.1996 to 28.5.1997. The High Court in para 13 of the impugned judgment held  

as follows:

“As the cover note has already been issued on 28.5.1996 itself, which is  

also entered in Ex. B1, Policy, the finding of the Tribunal fastening liability on  

the appellant cannot be termed as perverse. In view of the above discussion,  

there is no merit in this appeal. The quantum of compensation has not been

disputed  by  the  appellant—Insurance  Company.  In  the  result,  the  Civil  

Miscellaneous Appeal fails and the same is dismissed.”

4. Learned counsel for the appellant brought to our notice the cover note which  

clearly indicates that the policy was valid from 29.5.1996 to 28.5.1997 though it was  

issued on 28.5.1996. A copy of the policy was brought on record. Relevant portion  

thereof reads as follows:

“Effective date of commencement of insurance for the purpose of the Act,  

from 0’clock on (date) 29.5.1996 to 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 SCC 680] came up for consideration before this Court subsequently in  

a number of cases. In  New India Assurance Co. v. Bhagwati  Devi  [(1998) 6  

SCC 534]  a  three-Judge Bench of  this  Court  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 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 there is a mention of  

the specific time for the purchase of the policy, then a special contract comes  

into  being and the policy  becomes effective from the time mentioned in  the

cover  note/the  policy  itself.  The  judgment  in  Jikubhai  case  has  been  

subsequently followed in  Oriental Insurance Co. Ltd. v. Sunita Rathi  [1998) 1  

SCC 365] by a three-Judge Bench of this Court also.

6. Since the effect of the aforesaid factual position has not been considered by  

the High Court we set aside the impugned judgment and remit the matter for fresh  

consideration in accordance with law.

7. The appeal is disposed of.