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The General Insurance Society Ltd. Vs. Minalben and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtGujarat High Court
Decided On
Judge
Reported in1(1986)ACC33
AppellantThe General Insurance Society Ltd.
RespondentMinalben and ors.
Cases ReferredShantilal Mohanlal v. Aher Pawanji Malde First Appeal No.
Excerpt:
.....since long and, therefore, the insurance company had handed over two books containing blank cover-notes duly signed by the authorised officers of the insurance company in good faith by way of facility so that at any time the dealers can utilise such blank cover-notes by filling in necessary particulars before the vehicles are taken from the depot of the .according to mr. sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to be any defence which is not specified in it. we do not think that the supreme court intended to lay down such a wide proposition as canvassed by the appellants, we fail to appreciate why the insurer cannot take up a defence that it had not at all entered into any contract of insurance with the person who is said to..........bhanji solanki, manager of the dealers at rajkot, had rushed to the spot. however, neither said shri solanki nor the driver of the said fiat car had produced the cover-note before the police because there was none, and after coming over to rajkot and after getting the engine number and the chassis number from the documents that were lying in the car, they utilised the blank cover-note by antidating the same so as to cover the risk of the said fiat car which was involved in the accident.4. mr. b.j. shethna, learned advocate for respondents nos. 1 and 2, has raised a preliminary objection that the insurance company is permitted only to raise the defences which are enumerated in sub-section (2) of section 96 of the motor vehicles act, 1939 (hereinafter referred to as 'the act'), and the.....
Judgment:

S.A. Shah, J.

1. This appeal is filed by the appellant the General Insurance Society Ltd. Bombay, insurer of Fiat Car No. GJZ 5408 involved in the accident, challenging the judgment and order dated 5-9-1977 passed by the Motor Accidents Claims Tribunal, Valsad at Navsari in Motor Vehicles Claims Petition No. 21 of 1975.

2. The facts leading to this appeal, briefly stated are that a fatal accident took place on 21-11-1973 on National Highway No. 8 within the local limits of village Khadki in Valsad District, between the aforesaid Fiat Car No. GJZ 5408, comimg from Bombay and going to Rajkot, and motor-cycle No. GJL 7463, coming from Pardi and going to Vapi. In the said accident one Sharadchandra Dahyabhai Patel, who was driving the motor-cycle died on the spot. Widow and son (respondents Nos. 1 and 2) of said deceased Sharadchandra thereupon filed the aforesaid petition before the Tribunal claiming an amount of Rs. 1 lakh by way of compensation against driver Shabir Ahmedkhan Mohmedkhan Pathan (respondent No. 3) M/s. P.H. Wadi and Sons (respondent No. 4) owner of the said Fiat Car, and the General Insurance Society Ltd. (appellant) Insurer of the said Fiat Car. The Tribunal raised the necessary issues at exh. 25, and after recording the evidence and hearing the parties, same to the conclusion that Shabir Ahmedkhan driver of the said Fiat Car was negligent, but at the same time deceased Sharadchandra was also found negligent to the extent of 30 per cent, and in that view of the matter, the Tribunal awarded to the claimants an amount of Rs. 70,000/- by way of compensation with proportionate costs with interest at the rate of 6 per cent per annum from the date of application till realisation. The appellant-Insurance Company being aggrieved by the said judgment and order of the Tribunal has filed this appeal.

3. Mr. B.R. Shah, learned advocate for the appellant-Insurance Company, has raised the contention that Cover note exh. 32, was antidated. In other words, he has submitted that the said Cover Note, alleged to be covering the risk of the said Fiat Car, was not in existence on 21-11-1973 when the accident in question took place. In support of his contention, he has drawn our attention to the admitted fact that the Insurance Company had a substantial business with M/s P.H. Wadia and Sona (hereinafter referred to as 'the Dealers') since long and, therefore, the Insurance Company had handed over two books containing blank cover-notes duly signed by the authorised officers of the Insurance Company in good faith by way of facility so that at any time the dealers can utilise such blank cover-notes by filling in necessary particulars before the vehicles are taken from the Depot of the . According to Mr. Shah, after the receipt of the information that the said Fiat Car had met with an accident, Jorsingh Bhanji Solanki, Manager of the dealers at Rajkot, had rushed to the spot. However, neither said Shri Solanki nor the driver of the said Fiat Car had produced the cover-note before the police because there was none, and after coming over to Rajkot and after getting the engine number and the chassis number from the documents that were lying in the car, they utilised the blank cover-note by antidating the same so as to cover the risk of the said Fiat car which was involved in the accident.

4. Mr. B.J. Shethna, learned advocate for respondents Nos. 1 and 2, has raised a preliminary objection that the insurance company is permitted only to raise the defences which are enumerated in Sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 (hereinafter referred to as 'the act'), and the defence that the cover-note was antedated is not one of the defences enumerated in the said Sub-section (2) of Section 96 of the Act and, therefore, this Court should reject the said contention of the appellant.

5. In support of his contention Mr. Shethna has relied upon the decision of the Supreme Court in British India General Insurance Co. Ltd. v. Captain Ithar Singh : [1960]1SCR168 . Therein it has been observed that apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of Section 96 of the Act however gives him the right to be made a party to the suit and to defend it. The right, therefore, is created by statute and its content necessarily depends 6n the provisions of the statute. Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to be any defence which is not specified in it. When the grounds of defence have been specified, they cannot be added to. The only manner of avoiding liability provided for in Sub-section (2) is through the defence therein mentioned. It is. no doubt, true that once it is established that there is a valid policy of insurance, insuring a person or class of persons specified therein, the Insurance Company cannot be permitted to raise any defence except the defences specified in Sub-section (2) of Section 96 of the Act. However, under the insurance policy, the Insurance Company takes the liability to identify the original owner of the vehicle. Therefore, the liability of the Insurance Company is based upon, or dependent upon, the contract of insurance between the Insurance Company and the owner of the motor-vehicle otherwise beneficiary provisions of the Act would not be attracted.

6. Mr. Shah's argument, therefore, that a valid and binding contract of insurance is a conditioned precedent before the liability can arise, has some force, and for that he has relied upon a decision of the Full Bench of this Court in Shantilal Mohanlal v. Aher Pawanji Malde First Appeal No. 139 of 980, decided on 31-1-1985. In the said decision the Full Bench has considered the several decisions of the Supreme Court and other High Courts, and after quoting the observations of the Supreme Court in case of British India General Insurance Co. Ltd. (supra) it has been observed as under:

The above observations were made by the Supreme Court in the context of a subsisting policy between the insurer and the insured. Obviously, so long as the policy subsists, it cannot be permitted to raise defence other than those which are specified in Sub-section (2) of Section 96 of the Act. We do not think that the Supreme Court intended to lay down such a wide proposition as canvassed by the appellants, We fail to appreciate why the insurer cannot take up a defence that it had not at all entered into any contract of insurance with the person who is said to have been insured and that the policy of Insurance is not a genuine one. There can be other defence.

In our opinion, the aforesaid observations of the Full Bench of this Court, no doubt, helps Mr. Shah that an insurer can take the defence in respect of genuineness of the insurance policy. However' this question would only arise if we come to the conclusion that cover-note Ex. 32 produced in the case is proved to be not genuine.

7. In order to show that the cover-note exh. 32 is not genuine, Mr. Shah drawn our attention to the following circumstances, which, according to him, would go to to show that the cover-note was not in existence on the date when the accident occurred, i.e. on 21-11-1973:

(1) When the police had taken the custody of the car, all the relevant documents in respect of the said car were found from the said car itself by the police except cover-note exh. 32.

(2) When driver Shabir gave his explanation at a later stage, he stated that the cover-note ex. 32 was handed over to Manager Solanki on 21-11-1973 when he reported about the accident at Ahmedabad. This has not borne out by the evinence of Manager Shri Solanki. Shri Solanki has stated that the cover-note ex. 32 was not handed-over to him on 21-11-1973 at Ahmedabad by driver Shabir.

(3) According to Manager Shri Solanki, driver Shabir had not handed over to him the cover-note ex. 32 till the investigation was completed by the police on 22-11-1973.

(4) The panchnama shows that some other cover-note was found in the car bearing No. GJZ 5408, which should not have been there unless with a view to dodge the police.

(5) Neither the cover-note copy thereof was sent to the Insurance Company on 21st or 22nd November 1973 or upto 25th or 26th November 1973, as admitted by Manager Shri Solanki though the same was alleged to have been issued on 18-11-1973.

(6) Assuming that cover-note exh. 32 was given to the Branch Manager on 25/26-11-1973 25/26-11-1973 , no information of accident was given by Shri Solanki.

(7) It is proved that cover-notes from the book which contained cover-note exh. 32 have not been issued after March 1973, and the cover-notes from other book were issued during March to November, which would clearly go to show that cover-note exh. 32 was subsequently issued.

8. In order to appreciate the aforesaid circumstances and the contentions of Mr. Shah, it will be necessary to refer to the evidence. According to driver Shabir Pathan he was given cover-note ex. 32 by Manager Shri Solanki on 18-11-1973. He reached Bombay and took delivery of the car on 20-11-1973. Engine number and chassis number were entered in the said cover note by the employee of the Premier Autombiles Ltd. He started with the car. The car met with an accident at about 9.00 a.m. on 21-11-1973 near village Khadmi. On account of fear, instead of reporting the matter to the police, he went to Ahmedabad as the son of the dealer was staying in Ahmedabad. The said son of the dealer made a phone at Rajkot, and Manager Shri Solanki came to Ahmedabad at night. Thereafter, both driver Shabir and Shri Solanki went to Pardi Police Station for giving inforniation to the Police. Driver Shabir has stated that cover-note exh. 32 was not in the car with other documents, but was in his pocket, and he handed over the said cover-note to Shri Solanki at Ahmedabad. Though driver Shabir and Manager Shri Solanki had gone to the Police Station in the morning of 22-11-1973, Cover-note exh. 32 had not been shown or given to the police. The reason given by Shri Solanki was that cover-note exh. 32 was given to him by driver Shabir after they had left the police station and not before that. So, there is, no doubt, some contradiction in respect of the possession of the said cover-note.

9. It also appears from the evidence and the correspondence produced in this case that the Insurance Company was not reported about the accident by sending a communication to that effect. According to Manager Shri Solanki, he had made a telephone from Rajkot on his return on 22-11-1973 to the Insurance Company and that is why no written communication was sent.

10. So far as cover-note exh. 32 is concerned, the case of the Dealer is that on 25/26-11-1973 25/26-11-1973 , Mr. Shah from the Insurance Company had come to the office of Shri Solanki, and Shri Solanki had handed-over the cover-note to him. On that day, and thereafter they both went to meet the dealer. Therefore, according to the dealer, the Insurance Company was given full information on 25/26-11-1973 25/26-11-1973 . Whereas, the contention of the Insurance Company, as also disclosed from the correspondence, was that the said cover-note was delivered to the Insurance Company on 3-12-1983, and the Insurance Company came to know about the incident only on or about 14-12-1973. The material question, therefore, that arises for our consideration is whether the cover-note exh. 32, which bears the date of Insurance as 18-11-1973, and the engine number, chassis number and plate number, alleged to have been entered into on 20-11-1973 by an employee of M/s Premier Automobiles Ltd. was in existence when the incident had taken place.

11. So far as the signature on the cover-note and the genuineness of the cover-note are concerned, the same are not disputed. The only dispute is regarding the date, engine number and chassis number appearing in the cover-note. Once we come to the conclusion that the cover-note exh. 32 bears the signature of the authorised officer of the Insurance Company, and the same was given to the dealer for utilising the same so as to cover the insurance risk of the vehicle purchased by the dealer, prima facie the court shall have to come to the conclusion that, unless otherwise proved, cover-note exh. 32 duly signed by the authorised officer of the Insurance Company is the genuine cover-note issued on the date shown therein and all the columns are filled in on the respective dates, and the burden is on the Insurance Company to prove that though the said cover-note purports to have been issued on 18-11-1973, in fact and in reality it was not issued on the said date and was not in existence on 21-11-1973 when the accident took place. If the Insurance Company discharges that burden, then it can be said that the said cover-note was not in existence on the date of the accident, and hence there was no contract between the parties, and the Insurance Company was not under any obligation to indemnify the dealer.

12. In order to prove that the impugned cover-note exh. 32 was not in existence on the date of the accident. Mr. Shah has relied upon the aforesaid circumstances. In our opinion, though the said circumstances raise some suspicion, they are not sufficient to come to the conclusion that the cover-note exh. 32 was not in existence on the date of the accident. The reasons given by Mr. Shah regarding not disclosing the cover-note before the police at least on 22-11-1973 may at the most raise some suspicion. But assuming for the sake of argument that the cover-note was not in existence on 21-11-1983, if the dealer wanted to create a cover-note with back date, he could have done it at least on 21st or 22nd November 1973. Mr. Shah submits that the dealer had no engine number of chassis number of the vehicle in question with him. This fact is not borne out from the evidence, because no such question has been asked either to driver Shabir or to Manager Shri Solanki. Even assuming that there is some substance in the argument of Mr. Shah, chassis number and engine number could have been easily procured by the dealer directly on phone from the manufacturer on 21-11-1973. Unless such questions are put directly to driver Shabir or to Manager Solanki as to why they had not disclosed the fact of cover-note to the police, one may not be able to know the real reasons. It might be due to over sight or that both of them might be under some tension on account of the accident. The contention of Mr. Shah that the cover-note was not at all issued upto 25/26-11-1973 25/26-11-1973 can only raise suspicion and nothing more. This is more so, because if they wanted to anti-date the cover-note, they could have done it on 21-11-1973, and might not have even waited for a day for delivering the same and giving intimation of the accident also immediately. They delay in giving information regarding the cover-note as well as the accident might be real, because, generally, according to the practice they were sending the cover-note only after the arrival of the vehicle. The dealer might not have any doubt that the Insurance Company would doubt their bonafides and, therefore, they might not be in a hurry on account of their natural trust and relations. This is also a possible circumstance.

13. The third main plank of Mr. Shah's contention is that cover-note exh. 32 is taken from a book which was not used after March 1973, In this respect also no proper question has been asked to, nor any explanation has been sought from Shri Solanki. This might be a mere co-incidence or, the other book might have been completed. We do not know. Unless specific questions are asked and explanation is sought for in this respect, we cannot come to the conclusion that use of this cover-note from the other book can lead to an interference that the same is not genuine.

14. Driver Shabir has stated that the engine number and chassis number were entered into the cover-note exh. 32 by the employee of the Premier Automobiles Ltd. on 20-11-1973. However no question has been asked to him as to who was that person who made the said entries. That was the only person who could have thrown light on the question regarding the genuineness of the cover-note. Unfortunately, said person is not examined by any of the parties. Since the burden is on the insurance company and since any employee from Premier Automobiles Ltd. is not examined, it is not possible to come to the conclusion that the entries in the cover-note exh. 32 were not filled in by the employee of the Premier Automobiles Ltd. In absence of material evidence on record, one cannot jump to the conclusion merely on surmises and conjectures that the impugned cover-note was not in existence on the date of the accident.

15. Mr. Shah has then relied upon the fact that some other policy was found loom the said fiat car and that was done with a view to dodge the police. Though other policy is alleged to have been found from the car, no question in that regard has been asked either to driver Shabir or Manager Shri Solanki. They might have some probable explanation. But even if some other policy was found from the car, that would not help Mr. Shah to prove that cover-note exh. 32 was not in existence on 21-11-1973.

16. In our opinion, none of the aforesaid circumstances, even taken together, will lead to an inference that the date which is entered in the cover-note exh. 32 is not the correct date or that the said cover-note was not in existence on the date of the accident. Insurance Company had given power to fill in the blanks in the cover-notes to the dealer, and the said blank cover-notes duly signed by the responsible officer of the Insurance Company were in advance given to the dealer. Therefore, unless a very strong case is made out, it is not possible for us to come to the conclusion that cover-note exh. 32, which bears the date 18-11-1973 and when the Manager of the dealer has stated that he had entered that date in his own hand-writing on 18-11-1973, and that other particulars were filled in by the employee of Premier Automobiles Ltd. was not in existence on the date of the accident, though there are some suspicious circumstances as pointed out by Mr. Shah in favour of the Insurance Company.

17. In the aforesaid view of the matter, there is no reason for us not to accept the conclusion reached by the Tribunal who had the advantage to see the witnesses in the witness box and to mark their demeanor, and when the Tribunal has believed the evidence of driver Shabir and Manager Shri Solanki and has come to the conclusion that cover-note exh. 32 was in existence at the date of the accident, we hold that the appellant-Insurance Company has failed to prove that the cover-note exh. 32 was not in existence on the date of the accident. Therefore, the appellant-Insurance Company is liable to the claimants for payment of compensation awarded by the Tribunal.

18. The respondents-claimants have filed cross objections, but Mr. Shethna appearing for the claimants, has sought our permission to withdraw the same before effective hearing. Permission is granted and, therefore, the same stands disposed of as withdrawn, and it is not necessary to consider the same.

19. In the result, the appeal fails and the same is dismissed with costs.


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