UNITED INDIA INSURANCE CO LTD Vs. MAHENDRASINGH

JUDGEMENT

(1.) This is an appeal by insurance company. The claimant, R-1, has filed a motor accident claim against Gangaram, R-2, Narsingh, R-3 and the insurance company, the appellant, on being injured in an accident with minibus No. MP 09-S 2855. Gangaram, R-2 and Narsingh, R-3, the owner and driver of the offending vehicle have not contested the claim. They had not filed even their written statements. The Claims Tribunal below has awarded compensation of Rs. 90,000 with interest at the rate of 12 per cent per annum from date of claim, i.e., 4.1.1999 against the respondent Nos. 2, 3 and the appellant.

(2.) As per appellant, a cover note, Exh. D-1, was issued on 31.7.1998 insuring the vehicle for one year. However, cheque issued for Rs. 8,954, Exh. D-6, on record was dishonoured vide Exh. D-5 and was returned to insurance company vide Exh. D-7 whereupon the insurance company had issued a letter Exh. D-8 to Gangaram, R-2, cancelling the insurance policy from the very inception and, thus, the insurance company was not liable to cover the risk of the accident happening on 4.12.1998. Gangaram, R-2, had failed to pay any premium and the insurance company was not liable to cover the risk in view of section 64-VB of the Insurance Act, 1938. The insurance company had examined Govind- prasad Soni, NAW-1, the Senior Assistant to prove these facts before the Tribunal.

(3.) The Tribunal below held that merely because the cheque was dishonoured liability of insurance company to the claim of third party had not come to an end. The Claims Tribunal had relied upon Oriental Insurance Co. Ltd. v. Inderjit Kaur, 1998 ACJ 123 (SC), wherein it was held by the Apex Court: