The judgment establishes the principle that the liability of the insurance company for third party risks under the Motor Vehicles Act, 1939 cannot be overridden by the terms of the insurance contract, and the rights of third parties to recover compensation are protected irrespective of the premium payment status.

H.R. Panwar, J.-This appeal is directed against the Judgment and award dated 25.1992 passed by the Motor Accidents Claims Tribunal, Balotra (hereinafter to be referred as ‘the Tribunal’), whereby the Claims Tribunal awarded compensation of Rs. 2,83,900 in favour of the respondents-claimants (hereinafter referred to as ‘the claimants’) and against respondent Nos. 10 and 11 and the insurance company.

2. Aggrieved by the award impugned, appellant insurance company, the insurer has filed this appeal on two grounds; first the accident in question took place on 18.1988 and cover note was obtained by the respondent No. 11, the owner of the vehicle by concealing material fact that the bus No. 4665 met with an accident prior to the obtaining of the cover note. The second ground on which the present appeal is filed by the appellant is regarding limits of liability. According to Section 95(2)(b)(i) of Motor Vehicles Act, 1939 as then it was applicable statutory liability of insurance company was Rs. 50,000. Learned Counsel for the appellant submits that the vehicle in which the passengers were carried for hire and reward met with an accident.

3. I have heard learned Counsel for the parties. Perused the Judgment and award impugned.

4. Learned Counsel for the appellant contended that though the cover note is dated 18.1988 but in fact it was obtained on 18.1988 after the happening of the accident. Cover note is said to be valid from 18.1988 to 18.1989 covering third party risk. It is further contended that on behalf of the appellant, DW 3 Ramswaroop Pareek, Investigator was examined by the Claims Tribunal. He stated that the cover note Exh. 44 was issued on 18.1988 and the accident took place on 18.1988 and in between 18.1988 and 18.1988, no other cover note was issued. He proved the report as Exh. 1 prepared by him. He stated that agent of insurance company deposited the premium amount of the insurance which he collected on 18.1988 and on the basis of the cover note, policy Exh. A-2 was issued showing the covering of risk for the period from 18.1988 to 18.1989. It was alleged that the agent of the insurance company was also the employee of the insured.

5. Learned Counsel for the respondents contended that the insurance cover note Exh. 44 and policy Exh. A-2 clearly go to show that the insurance company undertook the risk of third party for the period commencing from 18.1988 to 18.1989 and the accident in question took place on 18.1988 as such, on the relevant date of accident, bus was validly insured with the appellant insurance company and, therefore, the appellant is liable to pay compensation to the claimants.

6. Learned Counsel for the appellant relied on a Judgment of this Court in United India Insurance Co. Ltd. vs. Pema Ram 1997(2) WLC (Raj) 647. In this case, the insurance policy was taken on 28.3.1988 to be effective a

2.15 p.m. and as such it was effective from 2.15 p.m. On 28.3.1988 the accident took place at 9 a.m. on the very day, i.e., 28.3.1988 and the policy clearly specified its commencement from 2.15 p.m. on 28.3.1988 and the accident had taken place much earlier than the time of issuance of the policy and, therefore, this Court held that the insurer is not liable to pay the compensation for the accident occurring before the commencement of the policy. In the instant case, the cover note Exh. 19 as also the policy of insurance issued by the appellant Exh. A-2 clearly go to show that the policy covers the risk of third party for the period commencing from 18.1988 to 18.1989 and the accident had taken place after four days of issuance of the policy, i.e., on 18.1988 and thus, it cannot be said that the policy came in force after the accident has taken place. Thus, the authority cited by the learned Counsel for the appellant is of no help and distinguishable on facts.

7. In Oriental Insurance Co. Ltd. vs. Inderjit Kaur 1998 ACJ 123 (SC), the Hon’ble Supreme Court held as under: Despite the bar created by Section 64-