UNITED INDIA INSURANCE CO LTD Vs. LAXMAMMA

JUDGEMENT

(1.) Leave granted. The only question that arises for consideration in this appeal by special leave is: whether the appellant, United India Insurance Company Limited (the insurer) is absolved of its obligations to the third party under the policy of insurance because the cheque given by the owner of the vehicle towards the premium got dishonoured and subsequent to the accident, the insurer cancelled the policy of insurance

(2.) The above question arises in this way. M. Nagaraj (husband of Respondent 1 and father of Respondents 2 and 3) was travelling in a bus bearing Registration No. KA 01 8116 on 11-5-2004. At about 8.50 a.m. on that day due to negligent application of brakes by the bus driver, the back door of the bus suddenly opened and M. Nagaraj standing near the door fell down. He sustained grievous injuries and subsequently died. Respondents 1 to 3 (to be referred to as "the claimants"), filed a claim petition before the Motor Accidents Claims Tribunal, Bangalore (for short "the Tribunal") seeking compensation of Rs 15 lakhs. The present appellant, insurer was impleaded as Respondent 2 while the owner of the bus was impleaded as Respondent 1.

(3.) The owner and the insurer contested the claim petition on diverse grounds. The insurer raised the plea in the written statement that the insurance policy dated 14-4-2004 issued by it covering the said bus for the period 16-4-2004 to 15-4-2005 was not valid as the premium was paid through cheque and the cheque got dishonoured and, therefore, there was no liability on it to cover the third-party risk.