The dishonouring of a cheque after the issuance of a certificate of insurance does not affect the right of a third party to claim compensation from the insurance company.

SHAMBHOO SINGH, J.

( 1 ) HIS judgment shall govern the disposal of M. A. Nos. 297 of 1998, Ishwar Singh v. Ashok Kumar and 289 of 1998, Ashok Kumar Garg v. Ishwarchand Agrawal, as they arise out of the award dated 23. 9. 1997 passed in Claim case No. 42 of 1994 by Additional Motor accidents Claims Tribunal, Mandsaur, whereby compensation of Rs. 1,51,761 was awarded to the appellant-claimant (M. A. No. 297 of 1998) against the appellants/ non-applicants (M. A. No. 289 of 1998)ashok Kumar Garg and Babulal, the owner and the driver of jeep No. MKU 7745.

( 2 ) THE claimant's case in brief was that on 22. 6. 1997 at about 8. 30 p. m. , when he was driving his motor cycle No. CIN 7602 with his brother Yogesh Gupta as pillion rider on Mhow-Neemuch road, came in front of Hero Honda showroom, the non-appellant No. 2 Babulal came from opposite direction driving jeep No. MKU 7745 belonging to non-applicant No. 1 Ashok kumar and insured with non-applicant No. 3 National Insurance Co. Ltd. in rash and negligent manner and dashed against the motor cycle, as a result of which, he sustained fracture of 9 left side ribs and left tibia and fibula. He was taken to District hospital, Mandsaur and therefrom to T. Choithram Hospital, Indore, where he was operated twice. He also went to Bombay and spent huge amount on his treatment. He suffered permanent disability in his left hand. He filed claim case seeking compensation of Rs. 18,92,500. The non-applicants resisted the claim and averred that the accident was not caused by jeep No. MKU 7745. Non-applicant No. 3, inter alia, pleaded that the offending vehicle was not insured with it as the cheque issued by non-applicant No. 1 was not encashed by the bank and, therefore, the cover note and receipt issued by it had become ineffective. It was further averred that the accident occurred due to rash and negligent driving of the motor cycle by the claimant himself. It was also pleaded that non-applicant No. 2 had no valid driving licence. The learned tribunal held that the accident occurred due to rash and negligent driving of the offending jeep by non-applicant No. 2. However, it held that there was no payment of premium by non-applicant No. 1 and, therefore, the contract of insurance was not complete and consequently it exonerated non-applicant No. 3 from paying compensation. It awarded compensation of rs. 1,51,761 to the claimant against non-applicant Nos. 1 and 2 with interest at the rate of 12 per cent per annum. The claimant filed M. A. No. 297 of 1998 for enhancement of compensation amount and non-applicant No. 1 the owner, filed M. A. No. 289 of 1998 for reduction of compensation amount and against the finding whereby the insurance company was exonerated from paying compensation amount.

( 3 ) MR. Y. I. Mehta, learned counsel for non-applicant No. 1, Ashok Kumar Garg and Mr. Samwatsar, learned counsel for the claimant, submitted that the Tribunal committed error in exonerating the insurance company from paying compensation. They argued that the non-applicant No. 1 had paid amount of premium to Radhe-shyam, the agent of the insurance company and cover note was issued. If the cheque issued by Radheshyam, the agent of insurance company was dishonoured, it could not make the cover note ineffective and the non-applicant No. 3 was liable to indemnify the non-applicant No. 1. On the other hand, Mr. Dandwate, learned counsel for the non-applicant No. 3, submitted that the non-applicant No. 1 did not pay the premium to Radheshyam. As they are real brothers, therefore, after the accident, radheshyam issued antedated receipt and cover note to the non-applicant No. 1. The cheque of premium was dishonoured by the bank, therefore, there was no payment of premium and resultantly the cover note issued by non-applicant No. 3 became ineffective in view of section 64-VB, therefore, the Tribunal rightly exonerated the insurance company from paying compensation amount.

( 4 ) MR. Samwatsar, learned counsel for the claim

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