IMPORTANT POINT
A valid insurance policy exists even if subsequent payments are dishonored, and the insurance company remains liable for compensation in motor accident claims.

JUDGMENT :

(Nupur Bhati, J.) :

1. These two misc. appeals have been filed by the appellants/claimants being SBCMA No.533/2022 for enhancement of the compensation and the connected appeal has been filed by appellant/non-claimant No.3 being SBCMA No.844/2002 assailing the validity of the judgment and award dated 29.04.2002 passed by learned Judge, Motor Accident Claims Tribunal, Udaipur (‘the Tribunal’) in MAC Case No.505/1996, whereby the learned Tribunal has awarded compensation of Rs.3,24,000/-along with interest @ 9% p.a. from the date of filing the claim petition.

2. Facts of the case are that the claimants filed claim petition claiming compensation of Rs.9,96,680/-on account of death of Sh. Nalin Chobisa, who lost his life while he was travelling in a Bus DL-1P-7143 and the said bus met with an accident. In the claim petition, it was inter-alia alleged that on 20.04.1996 Sh. Nalin Chhobisa (deceased) was travelling in the bus DL 1P 7143 (hereinafter referred to as ‘the offending vehicle’). At about 6.35 am near Minir Bus Stand, Uttam Nagar, Delhi, as he was getting down from the bus, the driver of the above bus started the bus, thereby he fell down and came under wheel and died on spot. The claimants further alleged in the claim petition that the deceased was 28 years of age at the time of accident. It was further alleged that the deceased was employed as Senior Accountant in M/s Peacock Industries and he was earning Rs.3045/- per month.

3. On receipt of the summons of the claim petition, the non-claimants No.1 and 2 filed their reply jointly, whereas non-claimant No.3 i.e. insurance company filed its separate reply while denying the facts averred in the claim petition and prayer for rejection of claim petition was made. The non-claimant No.3-insurance company alleged before the learned Tribunal that the owner of the bus (respondent No.5 herein), was known to the Branch Manager of the insurance company-Dr. Gajendra Singh and on 20.03.1996 the former contacted the latter for insurance of his bus. The owner asked Branch Manager to give the cover note to one Surendra Kumar. Thereafter, the Cover Note No. 543675 (hereinafter referred to as “Cover note-1”), exhibited as NA-1 and of amount Rs.12604/-, was issued at 10:00 AM and was handed over to Surendra Kumar at 10:15 AM. However, as the payment was not received till evening the said Cover note was cancelled. Subsequently, someone came to deliver the Cheque No.319566 dated 20.03.1996 for payment of premium of Rs.13546/-and another Cover note bearing no. 543680 (hereinafter referred to as “Cover note-2”) carbon copy of which is exhibited as NA-3 for an amount Rs.13,546, was issued at 06.30 PM on the same day.

4. The non-claimant No.3 insurance company further contended before the learned tribunal that it received a Memorandum of Dishonour dated 06.04.1996 from Punjab National Bank for the cheque received as consideration for Cover note-2. Thereafter, a letter dated 25.04.1996 regarding dishonour of cheque and cancellation of Cover note-2 was sent to the owner of the bus. It was contended by the appellant-insurance company before the learned tribunal that the owner came on 24.04.1996 and requested for issuance of a Cover note from backdate of 4-5 days. As the said request of respondent no. 5 was refused he went to a different branch and took an insurance policy no. 030335 (Exhibited as NA-5) dated 26.04.1996 and also the Cover note No.0603086 (hereinafter referred to as ‘Cover note-3’), exhibited as NA-4 for an amount of Rs. 12,028/-, and a policy was issued at 10 AM on 26.04.1996. Thus, it was contended by the appellant-insurance company before the learned tribunal that the said vehicle was not insured at the time of the accident hence, appellant-insurance company was not liable.

5. On the contrary, it was submitted by the non-claimant No.2 (respondent No.5 in CMA No.844/2002