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Issues: Liability of insurer under a policy of insurance issued after an accident.
The Supreme Court analyzed the case where an insurer appealed against its liability under an insurance policy issued after an accident on the same day. The key point was the effective date and time of the insurance policy in relation to the accident. The Court distinguished a previous judgment where the time of policy issuance was not mentioned, leading to a presumption that insurance became effective from the previous midnight. However, in this case, the accident occurred before the policy was obtained, and the cover note explicitly stated the effective date and time of insurance commencement. The Court held that the insurer could not be held liable based on this policy due to the clear timeline of events. The Court also highlighted a similar decision where the same view was taken, emphasizing the distinction from the previous judgment. Furthermore, the Court addressed the High Court's error in assuming the owner of the vehicle was not liable and holding only the insurer accountable. The Court clarified that the insurer's liability arises only after the insured's liability is established for indemnification under the insurance contract. The High Court's conclusion solely holding the insurer liable was deemed erroneous due to this fundamental principle. Lastly, the Court considered the final order in the case. Despite the insurer having already paid the claimants in full, the appeal was pursued to determine the insurer's liability. The Court decided that the amount paid by the insurer need not be refunded by the claimants, given the circumstances. Consequently, the Court allowed the appeal, setting aside the judgments of the High Court and Tribunal, but maintained that the claimants were not obligated to return the amount already received from the insurer.
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