An insurance company is not liable to pay compensation under the Workmen's Compensation Act if the policy has been cancelled before the accident and the insured has been informed about the cancellation.

1. - This appeal under Section 30 of the Workmen's Compensation Act, 1923 (the Act) has been filed by the Insurance Company against the judgment and award passed by the Workman Compensation Commissioner, District Udaipur dated 26.8.1995 awarding a sum of Rs. 86,764/- as compensation with interest @ 6% p.a. from the date of accident and has further imposed a penalty of Rs. 21,691/- i.e. 25% of the compensation and held the employer and the Insurance Company jointly and severally liable for payment of the amount of compensation, interest and penalty.

2. The brief facts of the case are that Smt. Mohan Kanwar respondent No.1-Claimant aged 22 years filed an application under the provisions of the Act before the Compensation Commissioner on 22.6.1986 against respondent No.2 Mubarik Khan and the appellant Insurance Company. It was inter-alia stated in the application that her husband Shankar Singh was employed on the Truck No. RRY-8238 as driver on 4.4.1986 and was being paid Rs. 1,000/- per month as salary. At the time of accident, deceased Shankar Singh was aged 25 years. When the truck was going from Ahemdabad to Zawar Mines it fell into a ditch and driver Shakar Singh during the course of employment died. The claimant claimed a sum of Rs. 86,764/- from the employer and as the truck was insured with the insurance company it was claimed that the said Insurance Company was also responsible.

3. The learned Compensation Commissioner issued notices of the application to the non-claimants - employer and Insurance Company. Employer refused to accept the notices and, therefore, he was ordered to be proceeded ex-parte. The Insurance Company filed its reply and denied that the Truck No.RRY-8328 was insured with it on the date of accident i.e. 4.4.1986 and, therefore, it was not liable to pay the compensation. It was further stated that the Insurance Company has not received the amount of premium from the employer. It was stated that the employer had issued a cheque No.0432554 dated 13.3.1986 for Rs. 6,957/- drawn on Bank of Baroda for the insurance of Truck No. RRY-8238, receipt of the cheque was issued which was subject to realisation of cheque. When the cheque was sent to the bank for encashing it, the same was returned with a remark `refer to drawer', as soon as the same was received back, the insurance company wrote a letter to the employer to immediately sent the premium so that risk can be covered, however, no steps were taken to deposit the premium. The Insurance Company informed the RTO, Udaipur also about cancellation of insurance cover. Once, the premium was not deposited then the Insurance Company is not liable, insurance cover so issued was void ab initio, because of non-receipt of premium amount and, therefore, the application be dismissed.

4. The application filed by the claimant for payment of interim compensation under the provisions of the Motor Vehicles Act was allowed by the Compensation Commissioner and a sum of Rs. 15,000/- was ordered to be deposited.

5. the pleadings of the parties, five issues were framed by the learned Commissioner. The material issue for the purpose of present appeal was as to whether the truck which met with the accident on 4.4.1986 was insured with the Insurance Company. The other issues related to the fact of death during the course of employment, income and age of the deceased and the amount of compensation payable to the claimant.

6. The issues relating to death during the course of employment, income and age of the deceased and compensation payable to the claimants were decided in favour of the claimant as claimed by her and the issue relating to the fact about the vehicle being insured with the Insurance Company was also decided in favour of the claimant and award as noticed hereinbefore was passed by the learned Compensation Commissioner.

7. On behalf of the claimant Smt. Mohan Kanwar appeared in the witness-box alongwith Jodh Singh. On behalf of the Insurance Company, Daulat Ram Dayma,