ORIENTAL INSURANCE CO LTD Vs. JOHN VARGHESE

JUDGEMENT

(1.) THESE appeals by the insurer arise from two claim resulting out of an accident in respect of vehicle No. KRO-9100 occurred on 28-6-1990. The vehicle was owned by the third respondent herein. The policy also was one issued on 28-6-1990 , the date of the accident. The premium was paid by a cheque drawn on Gatholic Syrian bank, Kayamkulam. It was sent for collection. It was revealed on 7-7-1990 that the cheque was dishonoured by the drawer's bank. With an endorsement"refer to drawer". On 9-7-1990 , smelling something improper, the owner of the vehicle approached the insurer and gave a pay order for the premium amount and the same was accepted by the appellant. Later, it was revealed that there was an accident on 28-6-1990. The insurer/appellant contended that it did have a liability to indemnify the insured only from the date of payment of premium as on 28-6-1990. No premium was paid as on 28-6-1990 , as the cheque received had been dishonoured. So, liability arises only from 9-7-1990 when a pay order was given by the insured. Thus, there was no policy of insurance covering the vehicle as on the date of the accident. So, the appellant did not have the liability to indemnify the third respondent. In such circumstances, the Tribunal court to have enabled the insurer/appellant to realize the amount paid to the injured to the claimants from the insured.

(2.) THE aforesaid details are not disputed. It can easily be seen that there was no valid policy as on 28-6-1990 as there was no consideration for the insurance contract as on 28-6-1990. Consideration was paid only on 9-7-1990. THErefore, the contract could have been enforced only from that date. As on 28-6-1990 there was no valid contract of insurance between insured and insurer. Necessarily, the compensation payable in respect of the accident on 28-6-1990 shall have to be recouped from the owner of the vehicle. Accordingly, appeals are allowed and award is modified making it clear that the appellant will be entitled to realize the award amount from the insured. . .