The central legal point established in the judgment is that the communication of the cancellation of the insurance policy to the insured prior to the accident is crucial in determining the insurer's liability to indemnify the third party.

1. This appeal is preferred by Insurance Company/ori. respondent no.2 hereafter referred as appellant, against the impugned judgment and award dated 7th November, 2008 passed by the Member, Motor Accident Claims Tribunal, Akola in M.A.C.P.No.27 of 2007. By partly allowing the petition, though owner of the offending vehicle, ori. respondent no.1, is directed to pay amount of compensation to the extent of Rs.1,95,000/- with interest at the rate of 7% P.A. upon it from the date of petition till its realization, inclusive amount of no fault liability of Rs.50,000/-, looking to the peculiar circumstance, appellant is directed to pay said amount to claimants in the first place, and is granted liberty to recover the same from, the owner of the vehicle with interest. In that view of the matter, limited challenge in this appeal is to order of Tribunal directing appellant to pay first and then to recover from the owner.

2. Learned Counsel Shri Limaye appearing for the appellant, has contended that in fact no such direction can be issued as cheque issued by owner dated 21st August, 2006 towards premium of insurance policy was dishonoured for want of sufficient funds and the bank intimated said fact to appellant on 28th September, 2006 and on receipt of said information, the appellant on 4th October, 2006 had intimated the owner of cancellation of Cover Note for dishonour of cheque. It is thus the case of appellant that much prior to incident which took place on 22nd December, 2006, appellant on 4th October, 2006 itself had, by giving intimation of cancellation of Cover Note cancelled the Insurance Coverage and as such, no liability can be fasten upon appellant much less than to direct the appellant to pay the amount of compensation first to claimants and then to recover the same from owner.

3. Learned Counsel has further contended that to substantiate above case of dishonour of cheque and intimation, appellant has also examined their witness, however, his evidence is not considered by Tribunal in its true spirit and therefore, contended that appeal be allowed setting aside impugned judgment and Award.

4. Learned Advocate Mrs. Jyoti Dharmadhikari appearing for respondent nos.1 to 3/ori.claimants has on the other hand submitted that in fact, no such notice as alleged to have been sent by the appellant by registered post on 4th October, 2006 at any point of time is received by owner, inasmuch as said notice was never sent to the owner on the address which is stated on Cover note and has therefore, submitted that since there is nothing on record to establish fact of cancellation of insurance coverage by the appellant, Tribunal has rightly fastened liability on the Insurance Company. It is further submitted that Chapter XI of M.V. Act of 1988 providing compulsory Insurance of vehicle against third party risk, is a social welfare Legislation to extend relief of compensation to victim of accident caused by use of motor vehicle and has contended that since from the evidence and documents on record it can amply be established that on the day of accident there was no intimation to owner of the vehicle involved in the accident of cancellation of policy for nonpayment of premium since cheque issued for same came to be dishonoured that by itself can be no ground to disallow the claim of claimants and therefore, contended that the appeal be dismissed.

5. In the background of submissions advanced as aforesaid, facts involved in the appeal needs to be considered which can briefly be submitted to the effect that respondents/claimants had filed petition for grant of compensation to the extent of Rs.3,00,000/- due to death of deceased Ramchandra Shivram Kale who on 22nd December, 2006 met with an accident involving Car bearing registration No. MH 19 Q 3813 owned by respondent No.4 since it gave dash to the deceased by coming from opposite direction. Owner of the vehicle chose to remain absent before the Tribunal inspite of service and was thus procee