GADE LAXMI Vs. YELLISHETTI KRISHNA

JUDGEMENT

(1.) These two appeals arise out of two awards dated 16.03.1994 passed by the Motor Accident Claims Tribunal, Warangal in O.P. Nos. 219 of 1988 and 70 of 1989 respectively awarding compensation of Rs. 52,500/- and Rs. 62,500/- respectively to the claimants in two death cases arising out of the same accident which took place on 11.04.1988. The lower Tribunal found that driver of the accident vehicle was at fault and was responsible for this accident due to rash and negligent driving of the said vehicle. The lower Tribunal awarded compensation amounts as against driver and owner only and disallowed the claim as against the injurer of the accident vehicle.

(2.) Facts relating to the insurance are not in dispute. The insured gave cheque towards premium to the agent by name Srinivasulu who issued cover note on 09.04.1988 on behalf of the insurance company. Though the insurance company did not file documents relating to these facts, R.W-1 who is an employee of the insurance company speaks to these facts. But on 29.04.1988 dishonour memo of the cheque was received by the insurance company and on the same date, cover note was cancelled. On 04.05.1988, the insurance company dispatched letter of cancellation of cover note to the insured. On 11.05.1988 cancellation advice was also sent by the insurance company to the Road Transport authorities. In those circumstances, the lower Tribunal held that the insurance company is not liable to pay the award amount to the claimants by way of indemnifying the insured.

(3.) The Appellants' counsel contended on behalf of the claimants that on the date of accident when cause of action arose to the claimants to file petition before the lower Tribunal, the policy/cover note was in force and that subsequent cancellation of the cover note by the insurance company due to dishonour of cheque issued by the insured towards premium, cannot have any relevance in relation to claims made by third parties to the insurance policy.