( 1 ) HEARD Mr. Pophaly. learned counsel, for the appellant and Mr. A. V. Bhide, learned counsel, for respondents 1 to 3 finally. This appeal takes an exception to the judgment and Award dated 28-07-2004 passed by the learned Member, Motor Accident Claims tribunal, Yavatmal, in Claim Petition No. 221 of 1994 whereby the appellant/insurance company is also held liable along with other respondents jointly and severally to pay the amount of compensation to the legal representatives of the deceased.

( 2 ) MR. Pophaly. learned counsel, for the appellant contended that the accident occurred on 28-01-1994 and the victim Sharad died as a result of accident arising out of the use of motor vehicle, i. e. Truck bearing registration No. MHG-6852. He contended that the Insurance Company has issued Cover Note on 08-09-1993 after receiving cheque on account of premium from respondent no. 5. He contended that the cheque was dishonoured on 16-09-1993 and therefore the Cover Note was cancelled by issuing letter dated 16-09-1993 addressed to the Regional Transport Officer in view of the provisions of Sub-section (4) of section 147 of the Motor Vehicles Act. He contended that since the cheque was dishonoured the premium remained unpaid and, therefore, there was no valid insurance policy in existence on the date of accident and consequently the Insurance Company is not liable to pay the compensation. In support of these submissions, he relied on the decision of apex court in National Insurance Co. Ltd. Vs. Seema Malhotra, (2001)3 SCC 151 : 2001 (3) ALL MR 521 (S. C.) and also on the decision of Orissa High Court in the case of divisional Manager, National Insurance Co. Ltd. Vs. Tasri Pradhan, 2004 (1) T. A. C. 781 (Ori ).

( 3 ) MR. Bhide, learned counsel, for claimants/respondents 1 to 3 contended that despite the bar created by Section 64-VB, the insurance Company issued the policy to cover the motor vehicle involved in the accident without receiving the premium and by reason of provisions of Section 147 (5) and 149 (1) of the Motor Vehicles Act the Insurance Company became liable to indemnify third parties in respect of the liability. In support of these submissions, he relied on a larger bench decision of the apex court in the case of oriental Insurance Co. Ltd. Vs. Inderjit kaur, 1998 ACJ 123 : 2000 SCC (Cri) 601.

( 4 ) THIS Court has given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. It is not disputed that the Cover Note was issued on 08-09-1993 whereas the accident occurred on 28-01-1994. The risk was covered vide aforesaid Cover Note for the period 08-09-1993 to 07-09-1994. It is also not disputed that the owner of the motor vehicle had issued cheque on account of premium at the time of issuing the Cover Note which was dishonoured on 16- 09-1993 and therefore on the same day a letter cancelling the Cover Note was issued by the insurance Company which was addressed to the Regional Transport Officer.

( 5 ) THE apex court in National insurance Co. Ltd. Vs. Seema Malhotra, cited supra, held that by virtue of Section 64- vb of the Insurance Act, the insurer has no liability to the insured unless and until the premium payable is received by the insurer. As the premium can be paid in cash or by cheque, the Supreme Court also considered what is the position when the cheque issued to the insurer is dishonoured by the drawee bank? The supreme Court held in paras 17. 18. 19 and 20 of the judgment as under: "in a contract of insurance when the insured gives a cheque towards payment of premium or part of the premium, such a contract consists of reciprocal promise. The drawer of the cheque promises the insurer that the cheque, on presentation, would yield the amount in cash. It cannot be forgotten that a cheque is a bill of exchange drawn on a specified banker. A bill of exchange is an instrument in writing containing an unconditional order directing a certain person to pay a certain sum of money