The timing of premium payment does not affect the validity of the insurance cover, and the cover note creates a binding insurance for the specified period, providing immediate protection.

Mr. Justice C.L. Chaudhry, Member—This appeal is directed against the order of the State Consumer Disputes Redressal Commission, Delhi dated 16th of November, 1994 by which the appellant was directed to pay an amount of Rs. 3,48,000/- with interest calculated @ 15% per annum from 5.3.1992 till the date of payment and also the amount of garage charges paid by the complainant and Rs. 5,000/- as damages. In order to resolve this controversy, it is necessary to narrate the facts briefly :

2. The complainant purchased a Maruti 1000 CC car from M/s. Competent Automobiles & Co. Ltd., New Delhi on 4th March, 1990. The complainant paid a sum of Rs. 3,66,298/- to the Competent Automobiles towards purchase price of the car. They also got it insured with the opposite party i.e. New India Assurance Co. Ltd., the appellant in this case under cover note No. 3593369 on the same date comprehensively and paid an amount of Rs. 11,544/- as premium. The cover note was issued by the opposite party immediately after the purchase of the car i.e. 4.3.1992. Shri Manish Jain, the Director of the company went to Agra on 5th March, 1992 alongwith his wife. The car met with an accident at Farah Town around 2.30 p.m., when it was struck by a truck. The complainant and his wife suffered multiple injuries. The complainant informed the Agra office of the Insurance Company on the same date and FIR was also lodged with the police. The car was brought to Delhi by the complainant in a truck and was stored at the garage of the Competent Automobiles Company at Mehrauli. After a period of about two months of the accident, Surveyor was appointed by the Insurance Company. However, the claim was not settled by the opposite party. In these premises, the complainant filed a complaint before the State Commission claiming an amount of Rs. 4,99,063/-.

3. The complaint was contested by the Insurance Company. They admitted the accident of the car. However, they pleaded that the car would be deemed to have been insured after the premium had been received by them and the same was received on 5.3.1992, after the time of the accident from the Competent Automobiles Company. Thus the risk of the car had not been covered at the time of the accident. It was further pleaded that the opposite party was liable to re-imburse their liability limited to the amount as proposed by the Surveyor in his report dated 24th May, 1992. It was also pleaded that the claim was barred by time. After considering the material placed on record and the contention of the parties, the State Commission allowed the complaint and directed the Insurance Company to pay the amount as stated earlier.

4. Aggrieved by the order of the State Commission, the Insurance Company has preferred this appeal which is under disposal. Mr. S.M. Suri, Advocate appearing on behalf of the appellant contended that the Insurance Company could not assume risk until and unless the premium was received by them in advance. The receipt of having received the premium was issued by the Competent Automobiles on 5th March, 1992 and the premium amount was forwarded by the Competent Automobiles to the appellant on 5th March, 1992 after the accident. Thus the appellant Insurance Company having accepted the premium on 5th March, 1992 could not assume risk on a date prior to that.

5. We have perused the record. The premium was received by M/s. Competent Automobiles on 4.3.1992 by a cheque dated 4.3.1992 for and on behalf of the Insurance Company. Against the said payment, cover note No. 3593369 dated 4.3.1992 was issued. The appellant did not deny having issued the said cover note on 4.3.1992. The cover note clearly states that the insurance cover commenced from 4.3.1992. The cheque dated 4th March, 1992 was given to the Insurance Company on the same date. The State Commission has very carefully examined this aspect. The State Commission observed that it was well-settled that the payment by a cheque, if accepted was a valid payment. The Surveyor,