ORIENTAL INSURANCE COMPANY LIMITED Vs. INDERJIT KAUR

JUDGEMENT

(1.) Leave granted.

(2.) This appeal is heard by a Bench of 3 Judges because learned counsel for the appellant, the Oriental Insurance Co. Ltd., had submitted that the decision of this Court in United India Insurance Co. Ltd. v. Ayeb Mohammed, 1991 (2) Acc CJ 650, had been misread by the Motor Accident Claims Tribunal and the High Court and that, while the appellant would pay the amount of compensation awarded in this matter, it desired, in view of the general importance of the question, an authoritative pronouncement. For the purposes of the appeal, therefore, very few facts are relevant. A bus met with an accident. Its policy of insurance was issued by the appellant on 30th November, 1989. The premium for the policy was paid by cheque. The cheque was dishonoured. A letter stating that it had been dishonoured was sent by the appellant to the insured on 23rd January, 1990. The letter claimed that, as the cheque had not been encashed, the premium on the policy had not been received and that, therefore, the appellant was not at risk. The premium was paid in cash on 2nd May, 1990. In the meantime, on 19th April, 1990, the accident took place:the bus collided with a truck, whose driver died. The truck driver's widow and minor sons filed the claim petition. The appellant denied the claim asserting that under the terms of S. 64-VB of the Insurance Act, 1938, no risk was assumed by an insurer unless the premium thereon had been received in advance. The Motor Accident Claims Tribunal rejected the appellant's contention and awarded the claimants compensation in the sum of Rs. 96,000/- with interest at the rate of 12 per cent per annum from the date of the petition, to be paid by the insured and the appellant jointly and severally. The appeal filed by the appellant before the High Court of Punjab and Haryana was summarily dismissed, and it is that order which is now under challenge.

(3.) Mr. Jitender Sharma, learned counsel for the appellant, relied upon S. 64-VB of the Insurance Act. It reads thus: