( 1 ) THIS appeal is directed against judgement and award dated 27th February, 2006 passed by the Motor Accident Claims Tribunal (Aux.), Vadodara, in Motor Accident Claims Petition No. 334 of 1995 by which the Tribunal awarded a sum of Rs. 46,600/- in favour of the original claimant and holding all the opponents including opponent No. 3 Insurance Company (the appellant herein) with the liability to pay the said sum of compensation together with interest at the rate of 9% per annum from the date of application and proportionate costs for the injuries caused to original claimant respondent No. 1 herein who sustained injuries in a motor vehicle accident caused by the rash and negligent driving of the truck owned by opponent No. 2 which is insured by the present appellant.

( 2 ) THE defence of the Insurance Company was that on the date of the accident i. e. 27. 1. 1995 the vehicle was not insured with the appellant Company because the cheque dated 20. 1. 1995 which the owner had given to the Insurance Company was dishonoured and the owner of the vehicle paid premium in cash on 30. 1. 1995 and therefore the appellant Insurance Company issued the policy effective for the period from 30. 1. 1995 to 29. 01. 1996. The Tribunal relied on the decision of the Apex Court in the case reported in 1998 ACJ 123 (SC) and also on the decision of this Court reported in 2005 (1) GLH 330 (Guj)for the purpose of holding that since the Insurance Company had not avoided its liability by following the provisions of Section 147 (4) of the Motor Vehicles Act, the Insurance Company could not be exonerated from its liability to satisfy the award.

( 3 ) MS. Megha Jani, learned advocate for the appellant Insurance Company has submitted that the liability of the Insurance Company would arise only upon issuance of the policy or issuance of a cover note but in the instant case the Insurance Company had issued on 23. 1. 1995 Motor Input Advice-Cum-Receipt which also clearly stipulated ?cheques are subject to realisation?. It is further submitted that Section 145 (b) defines ?certificate of insurance? as a certificate issued by the Insurance Company in pursuance of Section 147 (3) and includes a cover note. It is submitted that since the Insurance Company had not issued any cover note, the Tribunal was not justified in relying on the provisions of sub-Section (4) of Section 147.

( 4 ) IN Oriental Insurance Company Ltd. Vs. Inderjit Kaur reported in 1998 (1) SCC 371, the Apex Court held that if the Insurance Company issues a policy of insurance to cover the vehicle without receiving the premium therefor, the Insurance Company is liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured. The said decision was followed in the case of NEW INDIA ASSURANCE CO. LTD. VS. RULA AND OTHERS reported in (2000) 3 SCC 195 where the Apex Court held that where on the date of accident, there was a policy of insurance in respect of the vehicle in question, the third party would have a claim against the Insurance Company and the owner of the vehicle would have to be indemnified in respect of the claim of that party. Subsequent cancellation of the insurance policy on the ground of non-payment of premium would not affect the rights already accrued in favour of the third party. The Apex Court also explained that the manifest object of the provision of Section 146 (1) of the Act prohibiting the use of motor vehicle without an insurance policy is to ensure that the third party who suffers injuries due to the use of the motor vehicle, may be able to get damages from the owner of the vehicle and recoverability of the damages may not depend on the financial condition or solvency of the driver of the vehicle who had caused the injuries. A