The National Insurance Company Limited, Ongole-2nd respondent before the Motor Accidents Claims Tribunal-cum-Additional District Judge, Ongole preferred the present appeal against the award dated 31.07.2000 passed by the Tribunal in O.P.No.26 of 1997.

I have heard the learned counsel appearing for the appellant and the respondents. The question involved in the present appeal is as to when the cheque issued by the insured to the insurer towards payment of premium under the policy was dishonoured and in consequence thereof, the insurer cancels the insurance policy, whether the insurer is still liable to pay compensation to the claimants. It is the contention of the appellant-insurance company that the 3rd respondent-owner of the offending vehicle issued a cheque on 09.02.1996 towards premium amount and when it was presented it was dishonoured on 27.02.1996 and thereafter they informed the same to the owner under a letter by registered post on 04.03.1996, the letter was returned from the concerned with the endorsement that ‘the addressee was not found’, thereafter they issued another letter to the address given by the insured and subsequently on 27.02.1996 the cover note was