Dishonour of cheque for premium does not absolve insurance company from liability if policy not cancelled.

P. K. SAMANTA, A. BOSE, JJ.

( 1 ) THE present appeal is against an award passed by Motor Accidents Claims Tribunal at alipore, Addl. District Judge, Fifth Court awarding a compensation of Rs. 1,69,500 to claimant whose husband died in a motor accident that took place on 3. 12. 1999. The offending vehicle was a bus operating on route No. 12c/1b. In the memorandum of appeal various grounds have been taken but the counsel appearing for the appellant insurance company has urged before us only one point, which according to him is a pure question of law. His case is that though the policy was issued to the owner of the bus, the cheque through which the premium was paid was subsequently dishonoured and hence insurance company ought to be absolved of its liability arising under the policy. Before the Claims Tribunal in the written statement, this point was not specifically taken at the initial stage but was introduced by way of additional written statement. This additional written statement comprises three paras which we reproduce below: (1) That in the 'written statement' in para 7, the opposite party No. 2 did not admit the coverage of insurance of the alleged vehicle No. WBS 2336, bus of route No. 12c/1b; (2) That on scrutiny of official records, it has been revealed that policy of insurance being No. 00286 from 13. 4. 1999 to 12. 4. 2000 was issued as against the premium cheque, but the said cheque No. 888268 dated 13. 4. 1999 for Rs. 11,520 has been dishonoured by our banker on 23. 4. 1999. The xerox copy of the said document is attached herewith for your kind perusal; (3) That your Honour may be pleased to direct opposite party No. 1, Kabila chopra, owner of the vehicle in question to pay the compensation amount, if any, as per order passed by learned court.

( 2 ) SUBSEQUENTLY, on this particular issue certain documents were made exhibits by the insurance company being photocopy of the cheque, copy of the insurance policy, the intimation of the bank to the insurance company as regards dishonour of cheque, the advise of the bank to that effect and the instruction of the insurance company to the insured intimating him that the receipt of the amount shall stand cancelled. Learned counsel appearing for appellant submitted that on the basis of these documents the tribunal ought to have rejected the claim against the insurance company but in its award the Tribunal did not consider these exhibits or the additional written statement. Learned counsel appearing for claimants-respondents has contested the submissions made on behalf of the insurance company and on the other hand, submitted that the obligation of insurance company continued to subsist as there was valid insurance policy.

( 3 ) WE have considered the rival submissions. From the additional written statement and the exhibit to which we have been referred to above, there only appears that a communication that the cheque for the premium was dishonoured, was made. There is no evidence whatsoever that policy itself was cancelled. Consequently, no one appearing for insurance company had deposed before the Tribunal to that effect.

( 4 ) IN our opinion, for the purpose of fastening the insurance company with its obligation to meet the claim arising out of an accident to third parties, what is relevant is, whether the insurance policy was in subsistence or not. Neither from the additional written statement nor in any of the exhibits we find such a plea was advanced by the insurance company. The claims Tribunal also came to a finding that the subject vehicle was covered by the insurance policy.

( 5 ) IN view of the same, in our opinion, no case has been made out by the appellant insurance company which would exonerate it from its obligation to meet the claim arising from the subject policy, subsistence of which not being in dispute or under challenge before Tribunal. Before us also, there is no material from which we can come to a conclusion that policy was not in existence at the

Click Here to Read the rest of this document