An insurance company cannot absolve itself from liability for a motor vehicle accident unless it proves the insured's failure to pay premium through substantial evidence, regardless of policy issues at hand.

B.S. BHANUMATHI, J.

1. This appeal is filed under section 173 of the MOTOR VEHICLES ACT , 1988, against the award and the decree, dated 01.02.2005, in O.P.No.88 of 2000 on the file of the Court of the Motor Accidents Claims Tribunal-cum-II Additional District Judge, Madanapalle (for short, ‘the Tribunal’). The parties are arrayed as before the Tribunal. The 1^st to 5^th respondents herein are the claimants. The respondent No.6 herein is the 1^st respondent and the 7^th and 8^th respondents herein are the 3^rd and 4^th respondents before the Tribunal. The appellant is the 2^nd respondent before the Tribunal.

2. The case of the claimants, is briefly, as follows:

The claimants are the legal representatives of V.S. Venkatramana (hereinafter referred to as ‘the deceased’). They sought compensation of Rs.20,00,000/- on the ground that the deceased died in a motor vehicle accident on 29.08.1999 due to the rash and negligent driving of the driver of the jeep bearing No.AP 03 D 5996, insured with the 4^th respondent and owned by the 3^rd respondent, as the jeep dashed against a maxi cab van bearing registration No.KA 01 3265, owned by the 1^st respondent and insured with the 2^nd respondent which was driven by its driver also in a rash and negligent manner. The owners of both vehicles did not contest the case. Both the insurance companies contested the case by filing separate written statements. The 2^nd respondent pleaded that policy issued in favour of the 1^st respondent was cancelled as the cheque issued by him relating to the premium amount was dishonoured, and therefore, it is not liable to pay compensation. That apart, both the insurance companies denied their liability to pay the compensation etc.

3. On behalf of the claimants, the 1^st claimant was examined as PW1, the 4^th claimant was examined as PW2 and Sk. Mahaboob Basha was examined as PW3. Further Exs.A1 to A31 were marked. On behalf of the 2^nd respondent, RW1, Y.C. Varakumar, was examined and exhibits B1 to B8 were marked, out of which exhibit B1 is the same as exhibit B5 and exhibit B4 is the same as exhibit B6. The 4^th respondent did not lead oral evidence but filed exhibit B8.

For claimants:

Ex.A1 : Certified copy of F.I.R. in Cr.No.143 of 1999 of Nandagudi P.S.

Ex.A2 : (English) translated copy of Ex.A1

Ex.A3 : Certified copy of charge sheet in C.C.No.99 of 1999 of J.F.C.M., Hoskote

Ex.A4 : English translated copy of Ex.A3

Ex.A5 : Certified copy of post mortem report

Ex.A6 : Certified copy of M.V.I’s report

Ex.A7 : Date of birth certificate, standing in the name of the deceased

Ex.A8 : Attested copy of S.S.C. marks list of PW1

Ex.A9 : Date of birth certificate issued by Madanapalle Municipality

Ex.A10 : Date of birth certificate of PW3 issued by Madanapalle Municipality

Ex.A11 : Original licence bearing No.54 for the year 1988-89 issued by Assistant Excise Superintendent, Chittoor

Ex.A12 : Renewed licence for the year 1996-97

Ex.A13 : original licence bearing No.113 for the year 1997-98

Ex.A14 : original assessment order, dt. 29.4.1994 together with the demand notice

Ex.A15 : Balance sheet for the year ended by 31-3-98

Ex.A16 : Certificate issued by the Manager, Vysya Bank, Punganur

Ex.A17 : Notice issued by the Income Tax Officer, Chittoor

Ex.A18 : Income tax payment in the year 1993

Ex.A19 : Income tax returns for the assessment year 1998-1999

Ex.A20 : Income tax returns for the assessment year 1999-2000

Ex.A21 : Bank passbook issued by Corporation Bank, Somala

Ex.A22 : Assessment order relating to Radhakrishna Wine shop

Ex.A23 : Order issued by the C.T.O., Madanapalle, dt. 24.06.1998 standing in the name of Venkatramana

Ex.A24 : Original assessing