The main legal point established in the judgment is that the insurance company is liable to meet the risk for third parties involved in a motor accident, even if the policy was cancelled after the accident.

( 1. ) THIS appeal by claimants is directed against award dated 9. 10. 1996 of Motor Accidents Claims Tribunal, Bhopal in Claim Case No. 15 of 1996.

( 2. ) RAMESH Chandra (30) was an engineer with Shrinath Finance Co. (P) Ltd. , Bhopal receiving a salary of Rs. 3,000 per month. He was unmarried and claimants were dependent on him. He was possessing good health at the time of accident which took place on 1. 2. 1990 at about 12 a. m. He was going on his scooter No. MP 04-A 3642 on the left side of the road towards Bharat Talkies, Hamidia Road, Bhopal. Suddenly truck No. MBC 8097 owned by Radhe Lal and driven by Dev Nath Makad rashly and negligently hit Ramesh Chandra, as a result of impact of accident, his scooter went under the truck and the deceased became unconscious. He died on the way to hospital due to injuries sustained in this accident.

( 3. ) MATTER was reported to Magalwara Police Station. Claim petition was filed for compensation of Rs. 14,65,000. The owner and driver of the truck disputed the allegations. Radhe Lal, the registered owner of the truck stated that he had sold it to Dev Nath Makad, driver of the vehicle. It is also stated that liability to pay the compensation was of Oriental Insurance Co. Ltd. , with which the vehicle was insured. Insurance company has denied the liability. It is stated that the accident took place on account of own negligence of the deceased and the insurance policy had been cancelled on the dishonour of the cheque.

( 4. ) AFTER dealing with the matter, Claims Tribunal came to the conclusion that claimants were dependent upon income of the deceased but it was not proved that the deceased was earning Rs. 3,000 per month from the company at Bhopal. It further found that the accident was committed by the driver of the vehicle, owned by Radhe Lal and that the deceased was 30 years old, maintaining the family and could live and earn up to the age of 70 in case he had not died in this accident. Further, Claims Tribunal found that the policy of insurance had been cancelled, however, on merits of the case, compensation of Rs. 1,69,000 with interest at the rate of 12 per cent per annum has been awarded after application of multiplier of 14.

( 5. ) CLAIMANTS are not satisfied with this award, therefore, this appeal. It is submitted by Mr. G. C. Jain, learned Counsel for the claimants that Claims Tribunal has not decided the case correctly. Precisely, submission of learned Counsel is that Claims Tribunal has not awarded just compensation and instead of holding the insurance company liable to pay the compensation, the compensation has been ordered to be paid by owner and driver of the vehicle. This finding, learned Counsel contends, is against law and facts of the case and insurance company is liable to pay the compensation as per decisions of Supreme Court reported in Oriental Insurance Co. Ltd. v. Inderjit Kaur 1998 ACJ 123 (SC); New India Assurance Co. Ltd. v. Rula 2000 ACJ 630 (SC) and National Insurance Co. Ltd. v. Seema Malhotra 2001 ACJ 638 (SC ).

( 6. ) MR. T. C. Naik, the learned senior Counsel appearing for the respondent insurance company submitted that there is no contract of insurance between the parties, therefore, the insurance company is not liable to pay the compensation. Explaining the submission from facts of the case, the learned Counsel submitted that cheque of premium dated 18. 1. 1990 issued by Radhe Lal was bounced on 19. 2. 1990 after taking place of the accident, therefore, the liability cannot be fastened on the insurance company.

( 7. ) AFTER giving careful consideration to the submissions advanced by the learned Counsel for both sides, we may record certain basic features of the case before giving our findings on the issue involved in this case.

( 8. ) THERE is no dispute that owner of vehicle issued the cheque dated 18.

1. 1990 towards insurance premium for truck No. MBC 8097. Sequel to that, cover note was issued. There is also no dispute that accident took place on