ORIENTAL INSURANCE CO LTD Vs. BALWANT SINGH NEGI

JUDGEMENT

(1.) THE question for determination in the Appeal is whether the Oriental Insurance Company Limited had cancelled the policy on account of dishonour of the cheque and therefore could avoid the liability to pay the compensation.

(2.) A compensation of Rs. 1,93,000/- was awarded by a judgment dated 23.12.2009 for the death of a young boy Narain Singh, aged 16 years in an accident which took place on 25.01.1996. The Tribunal while holding that the driver and the owner of the truck number DNG 0515 are liable to pay the compensation which is to be indemnified by the appellant, rejected the Appellant's contention that the Insurance policy had been cancelled on account of dishonour of the cheque. The appellant was fastened with the liability to pay the compensation. The conclusion reached by the Tribunal while making the appellant liable is extracted hereunder:-

(3.) IN the first written statement filed by the appellant a plea was taken that the offending vehicle was insured by policy number 214900/1995/01435 for the period 25.07.1994 to 24.07.1995 and the policy- did not cover the date of the accident i.e. 25.01.1996. The written statement was later amended by the Appellant. It came out with the plea that the vehicle number DNG 0515 was covered by the appellant by cover note No.496272 and policy number 271201/1996/1597. It was averred that the Fourth Respondent Smt. Balvinder Kaur made a proposal dated 04.10.1995 to the appellant for issuance of a Insurance policy in respect of the vehicle number DNG 0515. Instead of making the payment of the premium in cash, she made the payment by a cheque for a sum of Rs. 5985/ - which was dishonoured on presentation. The Appellant immediately intimated the Fourth Respondent about the dishonour of the cheque and cancellation of the policy by way of a registered letter. Since there was no contract of Insurance, due to the issuance of policy being void ab-initio, the Insurance Company was absolved of its liability to indemnify the insured.