KARAM VIR SINGH Vs. ORIENTAL INSURANCE CO LTD

JUDGEMENT

(1.) A short point requires consideration in this Appeal preferred by Karam Vir Singh, owner of a Jeep bearing No.HR-20-F-6167 which caused an accident on 05.03.2001 resulting in serious injuries to the Second Respondent (the Claimant); the Claims Tribunal while awarding a compensation of Rs. 6,65,336/- granted recovery rights to the First Respondent.

(2.) THE facts of the case are not in dispute. A cover note covering the risk of the above stated vehicle was issued on 16.10.2000 and was valid upto 15.10.2001. THE plea of the First Respondent (Insurer) was that since the cheque issued by the Appellant was dishonoured, the First Respondent was not liable to indemnify the insured as under Section 64 VB of the Insurance Act, 1938, the insurance cover could be made only on receipt of the premium in advance.

(3.) IT goes without saying that the Insurer was at liberty to cancel the policy of insurance in case of dishonour of the cheque. However, in the instant case, the Insurer kept quiet for more than three years after the alleged dishonour of the cheque and also of the accident. As the first Respondent failed to intimate the owner as well as the transport authority regarding cancellation of the insurance policy on account of dishonouring of the cheque the Insurance Company cannot avoid its liability. I am supported in this view by a judgment of this Court in National Insurance Company Ltd. v. P.V. Lonan & Ors. 2008 (10) AD (Delhi) 850. In Para 10 of the report it was held as under:-