1. Both these appeals are directed against judgment and award dated 02.06.2004 passed by Motor Accident Claims Tribunal, Akola in M. A. C. P. No.268/1999, which was filed for grant of compensation on account of death of one Kiran occurred in motor vehicular accident involving a Jeep driven by respondent no.1, owned by respondent no.2 (for short the “Insured”) and insured with original respondent no.3 (for short the “Insurer”).

2. After appreciating the evidence adduced by the parties, the learned tribunal held that the accident occurred because of rash and negligent driving of respondent no.1. Since the deceased, while travelling had not held rod/iron bar and secured himself, he was also held to be negligent to the extent of 10%. Owing to the absence of evidence of the income of the deceased, the learned tribunal assumed notional income at Rs.15,000/-per year and after deducting 1/3rd of the amount towards personal expenses of the deceased and considering his contributory negligence to the extent of 10%, arrived at the loss of dependency to Rs.9,000/-. The claimants, being aged about 60 years and 55 years respectively, tribunal applied multiplier of 16 and thus awarded compensation of Rs.1,51,000/-under all the heads. As regards fastening of the liability on the Insurer, the learned tribunal held that the cheque issued by the Insured towards premium of the insurance policy was dishonoured and, therefore, the Insurer cancelled the cover note. Few months thereafter the accident in question occurred. Therefore, according to the tribunal, primary liability to satisfy the award would be that of the Insured. However, directed the Insurer to satisfy award at the first instance and recover the said amount from the Insured.

3. First appeal No.587/2004 is filed by the Insured, questioning the findings recorded by the learned tribunal. It is submitted that because of his own negligence, the deceased has fallen down from the vehicle and as such he solely was responsible for his own death. As regards the choosing of multiplier and the amount of deduction made towards personal expenses of the deceased, it is contended that the approach of the tribunal was totally wrong and against the settled principles of law. The finding of the tribunal that there was no privy of contract between the Insured and the Insurer and hence the primary liability to satisfy the award shall be that of the Insured, is vehemently disputed.

4. First Appeal No. 520/2004 is by the Insurer. Mr. Pophali, learned counsel for the Insurer, contended that the learned tribunal has committed error in relying upon decision of the Supreme Court in the case of Oriental Insurance Co. Ltd. ..vs.. Inderjit Kaur & ors.; 1998 ACJ 123. According to him, following factual events in the matter of issuance of cover note and cancellation of the same may be considered. They are thus:

(i) On 26.10.1998, Cheque was accepted by the Insurer and against that receipt No. 664761 was issued.

(ii) On 27.10.1998, Cover Note was issued.

(iii) On the next day, cheque was presented to the Bank of Baroda, Parbhani branch.

(iv) On 20.11.1998, the Insurer received intimation from the bank that cheque is dishonoured.

(v) On 25.11.1998, letter was dispatched by the Insurer to the Insured about dishonour of the cheque and cancellation of the Cover Note.

(vi) On 13.08.1999, accident occurred.”

He further contended that at no point of time, the policy was issued. In this background, it is contended that the ratio in InderjitKaur's case (supra) is not applicable to the facts and circumstances of the present case and particularly in view of subsequent decision in the case of National Insurance Co. Ltd. ..vs..Seema Malhotra and others; (2001) 3 SCC 151.

5. The points, which arise for my determination are:

(i) Whether the amount of compensation Rs.1,51,000/-awarded by the tribunal to the parents of the deceased, aged about 25 years, warrants any interference?

(ii) Despite non payment of amount of premium b