The main legal point established is that the Insurance Company cannot evade liability for a claim by issuing an invalid insurance policy and subsequently cancelling it without proper notice to the owner of the offending vehicle.

JUDGMENT :

Kumari Sanju Panda, J.

The appellant-Insurance Company has filed this appeal challenging the award dated 27-10-1998 passed by the Second MACT, Northern Division, Sambalpur in Misc. (A) Case No. 122 of 1993 (S).

2. The facts of the case as narrated are as follows :

The respondent-claimants being the legal heirs of the deceased filed an application claiming compensation of Rs. 1,50,000/- due to death of Dubraj Munda in a vehicular accident. The accident took place on 4-4-1993 at 4.00 a.m. while the deceased was returning to his house by riding a bicycle. The offending bus bearing registration number OSS 2411 came in a high speed from the Jharsuguda side and near Pipalpada Chhak dashed the deceased from his backside. He sustained injuries on his head, spinal cord and bleeding injuries on right side of the body. He was taken to the District Headquarters Hospital, Sambalpur, where he succumbed to the injuries on 7-4-1993. On being noticed, the owner of the offending vehicle being the insured and the Insurance Company being the insurer appeared and filed their written statements separately. The owner of the offending vehicle admitting the accident stated that the vehicle was validly insured with the Insurance Company. Since the policy was valid upto 21-3-1994, the Insurance Company is liable to indemnify him. The present appellant-Insurance Company had taken a plea in the written statement that there was no valid insurance policy on the date of the accident, i.e. on 4-4-1993. It had also taken a plea that the vehicle was sold by the so-called owner to one Uttam Das who issued a cheque bearing No.1194356 dated 22-3-1993 for Rs. 7075/-drawn on United Bank of India, Sambalpur towards the premium of the insurance policy of the vehicle but the said cheque was dishonoured due to lack of fund in the Bank. Therefore, the cover note No. 024644 dated 22-3-1993 issued was void. In the absence of actual acceptance of consideration money towards premium. the cover note was invalid and there was no contract of insurance from 22-3-1993 when the said cheque was dishonoured by the Bank. Accordingly, policy was cancelled and the said fact was intimated to the owner of the vehicle and the RTO, Sambalpur. As such, the insurance company is not liable to pay any compensation in the absence of valid insurance policy. On the above pleadings, the Tribunal framed two issues, i.e. (i) Whether the accident took place on 4-4-1993 due to rash and negligent driving of the offending vehicle resulting in the death of Duhraj Munda; and (ii) whether the applicants are entitled to get any compensation? If so, to what extent and from whom?

3. The parties adduced evidence in respect of their respective pleas. The claimants examined two witnesses. The Insurance Company examined five witnesses. The FIR, post-mortem report and R.C. book were exhibited on behalf of the claimants. The Insurance Company exhibited the documents, i.e. proposal form, letter of U. Das addressed to opposite party No. 1, cheque, cover note intimation regarding dishonour of cheque. office copy and letter addressed to opposite party No. 2. office copy of the letter sent to RTO. receipt of courier service, etc. On analyzing the evidence adduced by the parties, the Tribunal came to the finding that the accident took place due to rash and negligent driving of the driver of the offending vehicle bearing registration OSS 2411 resulting in the death of Dubraj Munda. The cover note, Ex.D stands in the name of opposite party No.1 which was issued on 22-3-1993. The opposite party No. 2 being the insurer of the offending vehicle is liable to pay the compensation and the Tribunal assessed the quantum of compensation at Rs. 1,24,000/-.

4. Learned counsel for the appellant-Insurance Company submitted that the appellant duly intimated the fact to the owner that the policy was cancelled due to dishonour of the cheque and the appellant proved the intimation of cancellation of policy to the owner as well as RTO