This Civil Miscellaneous Appeal has been preferred by the 3rd respondent- insurance company against the award dated 24-3-2003 passed in O.P.No.1975 of 1999 on the file of the Motor Accidents Claims Tribunal-cum-I Additional District Judge, Visakhapatnam.

2. The respondents-claimants filed the above O.P. under Section 166 of the Motor Vehicles Act, 1988 claiming compensation of Rs.21,93,000/- due to death of Sk. Anwar Basha, who died in the motor accident that occurred on 12-4-1999.

3. On 12-4-1999 while the deceased was proceeding in a jeep bearing No.OR-06 B-9111 from his work place to Visakhapatnam a lorry bearing No.AHH 2125 belonging to the 2nd respondent and driven by its driver (R.1) in a rash and negligent manner dashed the jeep, on account of which, the deceased and three others traveling in the jeep, died on the spot.

4. The Tribunal, on consideration of the evidence on record, held that the accident occurred due to rash and negligent driving of the driver of the lorry. With regard to quantum of compensation, the Tribunal took Rs.9,333/-, as contribution to the deceased's family per month, after deducting 1/3rd towards personal expenses of the deceased, quantified the loss of dependency at Rs.16,79,940/- by applying appropriate multiplier. In addition to that amount an amount of Rs.15,000/- was awarded towards loss of consortium and Rs.15,000/- towards loss of estate, in all granted compensation of Rs.17,14,940/- holding that the accident occurred due to rash and negligent driving of the driver of the lorry driven by R.1.

5. Hence, this appeal by the 3rd respondent-insurance company mainly contending that in the absence of premium received in advance, the insurance company is not liable to pay any compensation.

6. Sri K. Subba Rao, learned Standing Counsel appearing on behalf of the appellant-insurance company vehemently contends that the owner has not denied about the cancellation of policy and that there was no valid insurance coverage as on the date of the accident. The learned Standing Counsel elaborating his contention submits that as the owner of the vehicle issued a cheque towards premium for the policy and the cheque was bounced, thus, the amount to be paid towards premium remained unpaid. Therefore, it is contended, as the accident occurred after cancellation of policy and in the absence of payment of premium, there is no contract as such to pay any compensation by the appellant-insurance company. In support of his contentions, learned Standing Counsel has relied on the following decisions reported in NATIONAL INSURANCE CO., LTD v. SEEMA MALHOTRA ( (1) 2001 ACJ 638 ), UNITED INDIA INSURANCE CO. LTD v. AYED MOHAMMED ( (2) 1991 ALT 650), DADDAPPA v. BRANCH MANAGER, NATIONAL INSURANCE CO. LTD ( (3) 2008 ACJ 581), NATIONAL INSURANCE CO. LTD v. NARESH KUMAR ( (4) 2008 ACJ 869).

7. On the other hand, Sri K. Subramanya Reddy, learned Senior Counsel appearing for the respondents-claimants would contend that the cheque was issued to renew the policy and that no communication has been received by the owner as to dishonour of the cheque, therefore, the insurance company is not exonerated to pay the compensation. In support of his contention the learned Senior Counsel relied on the following decisions reported in NEW INDIA ASSURANCE CO. LTD v. RAM DAYAL AND OTHERS ( (5) 1990 (2) Supreme Court Cases 680), MANAGER, UNITED INDIAN INSURANCE CO. LTD v. ABBISETTI VENKATARAO ( (6) 2008 (1) ALT 471), M. NAGESWARA RAO v. NEW INDIA ASSURANCE CO. LTD., VISAKHAPATNAM ( (7) 2003(3) ALD 379 ) (DB), NEW INDIA ASSURANCE CO. LTD v. SHAMSED AND OTHERS ( (8) 2001 ACJ 585), NEW INDIA ASSURANCE CO. LTD v. RULA ( (9) 2000 (3) Supreme Court Cases 195), ORIENTAL INSURANCE CO. LTD v. INDERJIT KAUR ( (10) AIR 1998 SUPREME COURT 588).

8. In Seema Malhotra's case ( 1 supra ), it was held by the Apex Court as follows. "

19. Under section 25 of the Contract Act an agreement made without consideration is void. Section 65 of t