NEW INDIA ASSURANCE COMPANY LIMITED Vs. SUGUMAR (DIED)

JUDGEMENT

(1.) The appellant M/s New India Assurance Company Limited has filed the present appeal questioning their liability to pay compensation to the first respondent/claimant (since deceased) on the ground that the cheque issued by the insurer for payment of premium was dishonoured and the policy of insurance was also cancelled.

(2.) The first respondent/Claimant (since deceased) filed a claim petition under Section 166 of the Motor Vehicle Act in MCOP No.189 2007 before the Additional District Judge, Fast Track Court No.2, Motor Vehicle Accidents Claims Tribunal, Ranipet seeking compensation of Rs.2,00,000/- for the damage of his building on account of the rash and negligent driving of a trailer bearing registration No. TN-47-J-3954, owned by the 2nd respondent. According to the claimant, the driver of the trailer lorry drove the vehicle rashly and negligently and hit the building belonging to the 2nd respondent and caused damage to the the tune of Rs.2,00,000/-. The said vehicle was insured with the present appellant and the policy Ex.R1 covers the period from 06.04.2004 to 05.04.2005. The 2nd respondent, owner of the vehicle issued a cheque bearing No.032267 dated 06.04.2004 for Rs.4,876/- drawn on Tamilnad Mercantile Bank Limited (Ex.R2) in favour of the appellant for payment of premium. However, the said cheque was dishonoured for the reason" insufficient funds ", as evidenced by the return memo Ex.R4 dated 06.04.2004. The appellant /insurance company issued a notice dated 26.04.2004 to the second respondent directing him to surrender the policy immediately and subsequently cancelled the policy on 08.05.2004 as evidenced by Ex.R7.

(3.) Mr.M.Krishnamoorthy, learned counsel appearing for the appellant would contend that since the policy was cancelled as evidenced by the cancellation of policy Ex.R7 and the same was also intimated to the owner of the vehicle, there was no contract of insurance between the appellant and the owner of the vehicle and no liability can be fastened upon the appellant/insurance company. His further contention is that the tribunal was wrong in directing the appellant/ insurance company to pay compensation to the first respondent/claimant.