Chhattisgarh High Court made it clear in one of its decisions that an insurance company cannot be held responsible for the accident merely because it had received the premium before the accident. The court said that the insurance contract is considered as the date and time which is written on the policy.
Besides, the court also canceled the decision of the tribunal in which only Aadhaar card was relied upon to determine the age of the accident victim. In its decision, the court increased the amount of compensation in all three cases related to the accident.
What was the dispute?
The incident took place on the night of 19 April 2019. Govind Sahni’s Tata Sumo, which was being driven by his brother Gopi Sahni, suddenly hit three people riding on a bike. Two people riding the bike (Panchram Bhunjia and Bisnath Bhunjia) died. While the third person, Ranjit Bhunjia, survived the accident, but his leg had to be amputated above the knee.
The relatives of the deceased and the injured person filed a claim for compensation in the Motor Accident Claims Tribunal. The tribunal awarded them compensation, but held the driver and owner personally responsible for paying it and absolved the insurance company of any responsibility.
The accident happened 6 hours after paying the premium.
Whereas the owner of the vehicle argued that he had made arrangements to pay the premium of the vehicle through an agent at 4 pm on the day of the accident, and this amount was deposited in the insurance company’s account by 4.35 pm, which is about 6 hours before the accident. Their argument was that since the insurance company had received the money, it could not escape responsibility merely because the formal policy document was issued a day later, on April 20, to come into force.
Moreover, in the case of injured rider Ranjit Bhunjia, the tribunal decided his compensation on the basis of his Aadhaar card, based on which his age was fixed at 68 years. This advanced age reduced the multiplier used to calculate loss of future earnings, even though his own claim petition, medical records and disability certificate all stated his age to be around 58 to 60 years.
Both the driver and the car owner as well as the claimants appealed in the High Court. The claimants also filed cross-objections demanding higher compensation.
‘Company is not responsible for premium deposited’
Justice Sachin Singh Rajput said that just because the premium is deposited, the insurance company does not become responsible from that moment. Citing the old decisions of the Supreme Court, the court said that “For all purposes, the date of issue of the insurance policy will be considered the correct date and not the date of issue of proposal or receipt.”
The Court also noted that the agent who deposited the premium was not even an authorized agent of the insurance company (as he himself admitted in his statement). The court said that the insurance company cannot be held responsible for any work of the agent, because he had no authority to act on behalf of the company. The court concluded that “the contract of insurance commenced when the insurance policy was issued,” which in this case was at 12:01 am on April 20, about 2 hours after the accident occurred.
‘It is wrong to decide age based on Aadhaar for claim’
On the age issue, the High Court found that the tribunal’s reliance on the Aadhaar card was wrong because Ranjit Bhunjia had stated his age as 58 years in his claim petition, whereas his age in his disability certificate and treatment related documents was 60 years. The court said that the tribunal’s conclusion of 68 years “does not seem correct” in view of the Supreme Court’s decision of 2024, and instead fixed his age at 61-65 years.
The court also increased his disability capacity from 35 percent to 60 percent because his work as a carpenter requires “physical strength and skill,” which would be adversely affected by amputation of his leg. The court also rejected the argument of Contributory Negligence of the appellants, because mere breaking of traffic rules does not prove fault unless it is shown that the accident occurred due to the same reason.
Dismissing the appeals of the driver and the owner, the court partially accepted the claimants’ cross-objections and increased the compensation. The death penalty for Ranjit Bhunjia was increased from Rs 96,400 to Rs 3,90,800, for the death of Bisnath Bhunjia it was increased from Rs 2,18,200 to Rs 4,26,400, and for the death of Pancharam Bhunjia it was increased from Rs 10,73,900 to Rs 21,57,800. Besides, an order was given to pay 6 percent annual interest from February 9, 2022.
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