IMPORTANT POINT
An insurance company is not liable for compensation if the policy was cancelled prior to the accident due to non-payment of premium.

ORDER :

1. Appellants/claimants have filed this appeal under section 173(1) of Motor Vehicles Act assailing the impugned award dated 13-9-2021 passed by First Motor Accident Claims Tribunal, Gwalior in MACC No. 346/2019; whereby, appellants/claimants were held entitled to receive a compensation of Rs. 11,92,778/- for the death of Bhagwant Singh, husband of appellant No. 1, father of appellants No. 2 to 5 and son of appellant No. 6 and liability of payment of compensation amount was fastened over driver and owner of the offending vehicle.

2. Briefly stated facts of the case are that on 27-10-2018 at about 11.30 am when deceased Bhagwant Singh Dhanuk was coming back to his village from the house of his sister at Morar, Siddeswar Nagar on a motorcycle, it is alleged that as soon as he reached Tania Hotel, Badagaon, District Gwalior, truck coming from Dabra being driven rashly and negligently by its driver, dashed the motorcycle of deceased, due to which he sustained grievous hurts in his head and other parts of body, and succumbed to the same on spot, which gave rise to filing of claim case by the claimants (wife, children and father of deceased) before the Claims Tribunal claiming total compensation of Rs. 27,00,000/-. Respondents No. 1 and 2 remained ex parte before the Claims Tribunal; however, respondent No. 3-Insurance Company filed the reply denying its liability for payment of compensation amount. After hearing both the parties and appreciating of evidence brought by respective parties, learned Claims Tribunal partly allowed the claim case and awarded compensation amount as stated hereinabove. As regards liability, Claims Tribunal found that on the that of accident no insurance policy was in existence and therefore, fastened the liability for payment of compensation amount over driver and owner of the offending vehicle.

3. This appeal is filed by appellants/claimants seeking relief of quashment of findings as arrived at by the Claims Tribunal regarding liability part is concerned with further direction to Insurance Company to make the payment of compensation amount first to the claimants and thereafter recover the same from owner and driver of the offending vehicles.

4. It is the submission of learned counsel for the appellants that learned Claims Tribunal erred in completely exonerating the Insurance Company from the liability because admittedly policy of insurance was issued; and since payment was made through cheque which got bounced; however, as intimation regarding dishonour of cheque and cancellation of policy to RTO has not been given as per catena of decisions of Apex Court, Insurance company is liable to pay compensation amount; however, with liberty to recover the same from the owner and driver of the offending vehicle. In support of his contentions he relied upon the decision of Apex Court in the matter of Ranjana Prakash and Ors. vs. Divisional Manager and Ors. (2011) 14 SCC 639 and decision of Orissa High Court in the matter of New India Assurance Co. Ltd. vs. Sukun Munda and Ors. 2013 ACJ 2247.

5. On the other hand, learned counsel for the respondent No. 3 Insurance Company opposed the prayer while submitting that in the light of decisions of Apex Court as well as this High Court in the matter of Deddappa and Ors. vs. Brnach Manager, National Insurance Co. Ltd. (2008) 2 SCC 595, United India Insurance Co. Ltd. vs. Laxmamma and Ors. (2012) 5 SCC 234 and Ravi Prakash Gupta vs. Jagdeesh and Ors. M.A. No. 1324/2006 decided on 13-9-2022, appeal is liable to be dismissed.

6. None appeared on behalf of respondents No. 1 and 2 though served and represented through counsel.

7. Heard learned counsel for the parties at length and perused the record.

8. Appellants/claimants are before this Court against exoneration of Insurance Company from the liability of payment of compensation amount on the ground that the policy was cancelled due to non-payment of premium amount as cheque was dishonoured.

9. Owner and driver of the offending