UNITED INDIA INSURANCE COMPANY LIMITED Vs. SHESHRAO

JUDGEMENT

(1.) SINCE common issues of law and facts arise for determination in these first appeals, they are heard together and are decided by this common judgment.

(2.) UNITED India Insurance Company is the appellant in both these first appeals. The respondents in First Appeal No.432/1994 are the claimants in Claim Petition No.44/1984. The claimants in Claim Petition No.44/1984 had filed a claim petition for grant of compensation due to the death of Shahabrao, who was driving the motorcycle on 12.05.1984 on Warud - Nagpur road. Similarly, the respondents in First Appeal No.454/1994 are the claimants in Claim Petition No.43/1984, who are the legal heirs of deceased Ramdas, who was the pillion rider on the motorcycle which was driven by Shahabrao on 12.05.1984. Both Shahabrao, the driver, and Ramdas, the pillion rider, died in the accident which occurred on Warud - Nagpur road due to the head on collision of the offending truck and the motorcycle.

(3.) SHRI Thakur, the learned counsel for the appellant, submitted that on the date of accident i.e. On 12.05.1984, there was no concluded contract between the truck owner and the insurance company and, hence, in view of the absence of the concluded contract between the parties, the insurance company was not liable to pay compensation to the claimants. The learned counsel for the appellants submitted that the truck owner had issued a cheque dated 11.05.1984 to the insurance company for a premium of Rs.304/- and a cover note was issued by the insurance company in favour of the truck owner. According to the learned counsel for the appellant, since the cheque was dishonoured on 29.05.1984, the insurance company informed the truck owner about the cancellation of the cover note on 01.06.1984 and in these circumstances, it cannot be said that there was a concluded contract between the parties and the insurance company was jointly and severally liable to pay the compensation to the claimants. The learned counsel for the appellant, however, fairly conceded that a similar case came up before the Hon'ble Supreme Court in the case of New India Assurance Company Ltd. Versus Rula & others and the Hon'ble Supreme Court was pleased to hold that the rights accrued in favour of third parties prior to the cancellation of the policy or the cover note would remain unaffected by the cancellation. The learned counsel for the appellant brought the judgment reported in 2000 (3) SCC 195 to the notice of this Court.