The issuance of a cover note brings about an insurance coverage, and the insurer is liable for the compensation awarded even though it claims that the premium was not paid.

P. C. NAIK, J.

( 1 ) AGGRIEVED by the award of Rs. 30,000/- and interest thereon at the rate of 12 per cent per annum passed in favour of claimant-respondents 1, 2, and 3, the insurer has preferred this appeal. Briefly stated, the facts are that on 23-3-1989, one Khetra Sahu died due to fatal injuries received in an accident caused by a truck bearing registration number ORR 1991. Accordingly, his widow, son and daughter moved the Second Motor Accident Claims Tribunal, Barhampur for compensation amounting to Rs. 90,000/ -. It was pleaded that since the accident was due to rashness and negligence of the driver of the truck, the claimant-respondents 1, 2 and 3 are entitled to compensation from the owner and insurer of the vehicle. In Column 16 of the Claim Petition, it was specifically averred that the vehicle was insured with the United India Insurance Company Ltd. , vide Cover Note bearing No. 329807. As the owner, after filing the written statement denying his liability did not enter appearance, he was proceeded ex parte. It may, however, be mentioned that in paragraph 11 of his written statement the owner had clearly stated that the truck in question was insured under Comprehensive Insurance Policy, for which, the authorised agent Sri P. K. Pradhan of the insurer i. e. United India Insurance Company Ltd. , (respondent No. 2 before the Tribunal ) had taken the premium and issued Cover Note No. 329807 on 22-3-1989 which was valid for a period of one year.

( 2 ) THE insurer filed a separate written statement and as usual took up defences which are not available to it under the law. The fact that the vehicle was insured with it, was denied. Though oral and documentary evidence was adduced on behalf of the claimants, no evidence in rebuttal was adduced by the Insurance Company. It may be stated that though the owner was set ex parte, no effort was made by the insurer to obtain permission of the Tribunal to contest the case on merits, as has to be done by moving an application under Section 110-C (2-A) of the Motor Vehicles Act, 1939. A Xerox copy of Cover Note No. 329807 for the period 22-3-89 to 21-3-90 was filed and marked as Ext. 3. Ext. 7 is a copy of the Seizure List which indicates that Xerox copy of the Insurance Certificate bearing Cover Note No. 329807 of United India Insurance Company Ltd. , in respect of truck ORR-1991 valid up to 21-3-90 was seized on 10-5-89.

( 3 ) ON a finding that the accident was due to rashness and negligence of the driver, the Tribunal held that the claimants are entitled to compensation of Rs. 30,000/- and being of the view that the vehicle was duly insured by Cover Note (Ext. 7 ). Respondent No. 2 (the present appellant) was directed to satisfy the award. Hence the appeal.

( 4 ) LEARNED Counsel for the appellant during course of hearing has strenuously urged that though the learned Tribunal has passed the award specifically holding the driver of the offending vehicle, guilty of rashness and negligence, the liability cannot be fastened on the insurer-appellant, who, from the very beginning, has been denying to be the insurer of the vehicle. He has further submitted that the appellant had not accepted any premium and as such there was non-compliance of the provisions of Section 64-VB of the Insurance Act, for which it cannot be held liable and at any rate the compensation awarded is excessive, hence needs to be reduced.

( 5 ) LONG back, a Full Bench of this Court in the case of National Insurance Co. v. Magikhaia Das (after him) Mst. Laxmi Dibya, reported in AIR 1976 Ori 175, has held that insurer cannot challenge the award on merits and its challenge is to be confined to the statutory defences available to it under the Act. In the present case, as permission of the Tribunal to contest the claim on merits had not been obtained as per the requirement of Section 110-C (2-A) of the Act, the insurer cannot be permitted to challenge the award on merits (see Shankarayya v. United India Insurance C