NEW INDIA ASSURANCE CO LTD Vs. SHAMSED

JUDGEMENT

(1.) This appeal has been filed by the third respondent, M/s. New India Assurance Company Ltd., in O. P. (M.V.) No. 610/89 of the M. A. C. Tribunal, Kozhikode. The main point arises for decision in this appeal relates to the liability of the appellant to indemnify the owner of the offending vehicle for the compensation awarded by the Tribunal.

(2.) The claimant filed the above application claiming a total compensation of Rs. 75,000/- for the personal injuries sustained by him in the accident occurred on 27.2.1989. The offending vehicle involved in the accident was bus No. KRZ 664 owned by the first respondent and the accident was caused due to the rash and negligent driving of the bus by the second respondent. The respondents 1 and 2 contested the claim petition denying negligence as alleged. They also objected to the quantum of compensation claimed. The appellant denied the liability to indemnify the owner of the vehicle on the ground that at the time of accident there was no valid insurance inasmuch as the cheque issued by the owner towards the premium on obtaining policy was dishonoured. Subsequently the policy was cancelled on 21.10.1988. The Tribunal after the enquiry awarded a sum of Rs. 19,950/- with 12% interest as compensation payable to the claimant. On the question of liability, the Tribunal found that the appellant was liable to indemnify the owner though the policy of insurance was cancelled. Being dissatisfied with the above finding, this appeal has been preferred by the insurer.

(3.) Sub-s.(1) and (2) of S.64VB of the Insurance Act, 1938 are as follows: