JUDGMENT :

(Kishore C. Sant, J.)

1. The insurance company has filed this appeal challenging the judgment and order dated 25.01.2019 passed in MACP No.332 of 2015 by the learned Member, Motor Accident Claims Tribunal, Jalgaon. The learned Member of the Tribunal by way of the impugned judgment and order has allowed the petition. Insurance Company had opposed the claim on the ground of breach of terms and conditions of the policy. The petition in respect of petitioner Nos.2 to 4 came to be dismissed. The owner of the vehicle is held liable to pay compensation of Rs.3,87,000/- including ‘No Fault Liability’ to petitioner No.1. However, while allowing claim only against owner, the Insurance Company is directed to first pay compensation and recover the amount from owner of the vehicle. Present respondent Nos.1 to 4 are original claimants and respondent No.5 is original respondent No.1/owner of the vehicle.

2. The appellant is aggrieved by the direction to first pay and then recover the amount from the owner of the vehicle.

3. The facts in short giving rise to the present appeal are that one Sedabi – deceased was travelling in auto-rickshaw in the direction towards Nashirabad from Jalgaon. A truck bearing No. MH-19-Z-3177 proceeding in the same direction suddenly applied breaks. The rickshaw coming from behind brushed the truck and met with an accident. In the said accident the deceased received fatal injuries and died on 02.04.2015. The claim was, therefore, filed seeking compensation of Rs.25 lakhs against owner of the rickshaw and the insurance company. The claim was opposed on the ground that the claim is false. The truck was not involved in the accident. The cheque that was issued towards insurance premium for amount of Rs.35,430/- was bounced as the account was closed. The insurance company had already issued notice on 12.03.2015 informing the owner about cancellation of insurance policy. After considering evidence the learned Tribunal partly allowed the claim as stated above holding that the policy was not legal and valid.

4. The main question, therefore, to be considered in this case is as to whether the policy in question can be said to be valid and legal, since the cheque issued towards premium was not honoured. Once the policy is not held to be legal and valid, whether the insurance company can still be fastened with the liability to first pay the amount and then to recover the same. The case is based mainly on this legal aspect and other facts are not seriously disputed by any of the parties.

5. The learned Advocate Mr. Deshmukh for the appellant submits that it is clear case that though a cheque was issued towards premium by owner of the vehicle but the said cheque was dishonoured for the reason “account closed”. Only cover note was delivered to the owner. No policy documents were sent. Earlier policy had expired on 22.02.2015. The accident took place on 28.03.2015. Thus on the date of accident earlier policy period had already expired. As the cheque was dishonoured, there was no question of policy being in force thereafter. He submits that this case is accepted by the learned Tribunal in para 26 of the judgment. He further submits that pay and recover order can be passed only in case where policy is found to be in existence. Once it is shown that the policy was not in existence, even direction to pay and recover could not have been issued. He pointed out section 147 of the Motor Vehicles Act. It is his case that even intimation was given to the insured about the cancellation of policy. However, said intimation could not be served upon the addressee as the envelope was returned as address incomplete. He relied upon judgment in the case of United India Insurance Co. Ltd. Vs. Lakshmamma & Ors. reported in (2012) 5 SCC 234. He also relied upon section 64-VB of the Insurance act. He, further, relied upon definition given in section 2(d) and sections 66, 25 and 26 of the Contract Act to submit that in this case, contract itself did