The main legal point established in the judgment is that the Insurance Company cannot be absolved of its liability to pay compensation under Section 147 of the Motor Vehicles Act if it fails to prove due service of intimation regarding the cancellation of the Insurance Policy to the owner of the vehicle.

A.S. Chandurkar, J.

This appeal filed under Section 173 of the Motor Vehicles Act, 1988 (for short, the said Act) at the instance of the Insurance Company takes exception to the Judgment of the Motor Accident Claims Tribunal, Amravati by which the claim for compensation filed by respondent Nos. 1 to 5 has been allowed.

2. It is the case of the respondent Nos. 1 to 5 that on 07/04/2007, the four year old child of respondent Nos. 1 and 2 met with an accident in front of their house while answering nature's call. Said child was hit by a truck owned by respondent No. 7 and driven by respondent No. 6. Appellants therefore claimed compensation of an amount of Rs. 1,50,000/-.

3. The owner and driver of the offending vehicle remained ex-parte. The appellant filed its written statement and took a plea that it was not liable to pay any compensation as claimed on the ground that the offending vehicle was not insured with it. It was further denied that the driver of the vehicle had driven the vehicle in a rash and negligent manner.

4. Before the Claims Tribunal, the respondent No. 1 examined himself. The appellant also examined one witness for the purposes of denying its liability. By the impugned judgment, the Claims Tribunal held the appellant as well as the respondent Nos. 6 and 7 liable to pay compensation of Rs. 1,65,000/- to the respondent Nos. 1 to 5. Hence this appeal.

5. Shri D.N. Kukday, learned counsel for the appellant submitted that the Insurance Company could not have been saddled with the liability to pay compensation. It was submitted that though the owner of the vehicle had issued a cheque dated 21/06/2006 towards premium for the insurance policy, said cheque was dishonoured on 23/06/2006. Therefore the cover-note that was issued for the period from 22/06/2006 to 21/06/2007 was void. The accident having taken place on 07/04/2007, the Insurance Company could not have been held liable. It was further submitted that the fact that the amount of premium had not been received and that the policy had been cancelled had been duly informed to the owner of the vehicle as well as to the Regional Transport Authority. These communications were issued by registered post and therefore even if there was no acknowledgment of its receipt, in view of the presumption under Section 27 of the General Clauses Act, 1897 (for short, the Act of 1897), it was deemed that aforesaid communications had been received by the concerned parties. It was therefore submitted that in absence of any liability of the Insurance Company, there could not be even a direction to the appellant to first pay the amount of compensation and then recover the same from the owner of the vehicle. It was then submitted that even if an order directing the Insurance Company to pay the compensation and then recover the same was to be passed, then the owner of the vehicle should be first called upon to furnish security to protect the interest of the appellant. It was also submitted that the deceased being a child aged four years, the quantum of compensation awarded was on a higher side. Same therefore deserved to be reduced. In support of his submissions the learned counsel placed reliance on the judgments in :

(i) V. Raja Kumari Vs. P. Subbarama Naidu and Another.

(ii) Daddappa & Ors. v. National Insurance Co. Ltd. 2008(1) ACC 1.

(iii) Usha Rajesh Thapa Vs. Kalpana Arun Hankar.

(iv) New India Assurance Company Ltd., Branch at Chandrapur Vs. Sau. Anjanabai Jadhav and Others, and

(v) The Oriental Insurance Company Ltd. Vs. Smt. Drakshayanamma.

6. On the other hand Shri P.R. Agrawal, learned counsel for the respondent Nos. 1 to 5 supported the impugned judgment. It was submitted that the claimants being third party, the Insurance Company could not be absolved of its liability to pay compensation. It was submitted that in the written statement filed by the Insurance Company, there was no specific plea regarding dishonour of the cheque that was issued towards the amount of premium. It