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M.V. insurance effective only from time given in policy

Legal Correspondent

“Courts must look into contract”

New Delhi: The motor vehicle insurance policy will be effective from the time and date specifically incorporated therein and not from an earlier point of time, the Supreme Court has held.

“In the absence of any specific time and date, the policy becomes operative from the previous midnight. But when the specific time and date are mentioned, then the policy becomes effective from that point of time” said a Bench consisting of Justices A.K. Mathur and Dalveer Bhandari.

In the instant case, a transport company in Assam insured its bus with the National Insurance Co. for the period till June 29, 1994. The policy was renewed 21 days later at 2 p.m. on July 20, 1994. The vehicle met with an accident at 9.15 a.m. earlier in the day.

The Motor Accident Claims Tribunal, Jowai, allowed the transport firm’s claim petition and awarded a compensation of Rs. 1,06,000 with 12 per cent interest.

The Guwahati High Court rejected the appeal filed by the insurance company.

Allowing its appeal against that judgment, the Bench said that admittedly at the time of the accident the vehicle did not have insurance cover.

The policy was obtained at 2 p.m. on July 20, 1004, clearly evident from the renewal endorsement made in the policy.

The Bench said, “It is the obligation of the court to look into the contract of insurance to discern whether any particular time has been specified for commencement or expiry of the policy. A very large number of cases have come to our notice where insurance policies are taken immediately after accidents to get compensation in a clandestine manner. In order to curb this widespread mischief, it is absolutely imperative to clearly hold that the effectiveness of the insurance policy would start from the time and date specifically incorporated in the policy and not from an earlier point of time.”

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M.V. insurance effective only from time given in policy

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