( 1 ) THIS appeal is directed against the judgment and award made by the additional Civil Judge, Bidar in mvc. No. 153/2001 on the file of the Addl. Civil Judge (Sr. Dn.) and Motor Accident claims Tribunal-Ill, Bidar, whereby the Member of the Claims tribunal directed the appellant-Insurance Company to pay a global compensation of rs. 2,05,200/- together with interest @ 8% p. a. from the date of petition till the date of deposit, to the respondent-claimants.

( 2 ) ASSAILING the said judgment and award the Insurance Company has come up with this appeal mainly urging on the ground that the court below committed an error in making the appellant liable to satisfy the award, even after the appellant proved the cancellation of the insurance policy by producing Exs, R-1 to R-8 and that it is not justified in adopting the negative approach to make the appellant liable to pay the compensation even in the absence of subsisting policy. It is the case ef the appellant that the policy came to be cancelled much prior to the date of accident and the cancellation of policy was intimated to the 7th respondent by registered post. Therefore the appellant is not liable to indemnify the owner of the vehicle and the evidence recorded by the trial Court is liable to be dismissed.

( 3 ) HEARD the arguments of the learned counsel for the appellant and the learned counsel for the respondents 1 to 7.

( 4 ) THE admitted facts are that Manik-hus-band of respondent No. 1, father of the minor children-respondents 2 to 5 and son of chinnamma-respondent No. 6, died in the motor vehicle accident. Respondent No. 7 is the owner of the lorry bearing No. MH-13 B-527. The deceased Manik was a pedestrian, on that day i. e. on 19-3-2001 at about 7. 45 a. m. the deceased was returning to his village mangalgi on NH. 9, when the driver of the lorry came in a rash and negligent manner and dashed against the deceased, as a resust he succumbed to the injuries, while undergoing treatment in Osmania Hospital. Incidentally the death of late Manik is not being disputed by either party. The appellant herein has taken a contention that respondent No. 7 being the owner of the vehicle issued a cheque towards the premium and the same came to be dishonoured, the dishonoured cheque is marked as Ex. R-1. Of course immediately after the receipt of cheque, a policy came to be issued covering the risk of the 7th respondent which was in force from 29-11-2000 to 28-11-2001 and when the cheque was presented for encashment it was dishonoured with an endorsement as per Ex. R-3 stating that the funds are insufficient.

( 5 ) THEREFORE, the appellant cancelled the policy as per Ex. R-6 issued in anticipation of the encashment of the cheque, which was received towards payment of premium. So immediately after the dishonour of the cheque insurance company sent a letter Ex. R-5 dated 1-1-2001 under a registered post and the cancelled policy is marked as Ex. R 6 and copy of the cancelled receipt as Ex. R-7; that the accident in question occurred on 19-3-2001 by the time the accident occurred, the insurance policy is said to have been cancelled by the appellant. The Tribunal fixed the liability on the insurance company, against which the insurance company has come up with this appeal.

( 6 ) DURING the course of the argument, Sri. Seetharama Rao-learned counsel for the appellant submitted that the usual practice adopted by the insurance company is that either immediately on receipt of the cash or cheque the policy was being issued. In the instant case immediately on receipt of the cheque Ex. R-1 the policy came to be issued covering the risk of the owner w. e. f. 29-11-2000 to 28-11-2001 but the cheque issued by the owner of the vehicle towards the premium came to be dishonoured when it was presented for encashment, therefore, appellant cancelled the policy. Hence it is clear that before the accident took place, the policy issued was cancelled and the same was intimated to the owner by sending a l

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