JUDGMENT :

1. This appeal is preferred by the appellant/Insurance Company questioning the Order and Decree of the Special Judge for Trial of Offences Under SC/ST (POA) Act-cum-V Additional District & Sessions Judge, Medak at Sangareddy (for short, the trial Court) in M.V.O.P.No.22 of 2009, dated 17.11.2011.

2. The brief facts of the case are that on 22.01.2008, while respondent No.1 herein was proceeding on his cycle, and about 12.30 pm., when he reached in front of Edgah at Zaheerabad, car bearing No.MH27H 1839 came from Hyderabad side and dashed him, due to which, he fell down from cycle and received fracture injuries and other grievous injuries. Respondent No.1 herein filed the aforesaid MVOP against the appellant and respondent Nos.2 to 4 herein, claiming compensation of Rs.1,50,000/- for the injuries sustained by him in the said accident.

3. Before the Tribunal, the appellant-Insurance Company filed a counter denying the allegations and contended that as the cheque which was given towards premium of policy was dishnoured and as the policy was cancelled, it has no liability to pay the compensation and prayed to dismiss the claim petition.

4. Before the Tribunal, respondent No.3 filed a separate counter stating that on the date of the accident, he was not the owner of the offending vehicle as he sold the same on 03.04.2007 to respondent No.4 and that though respondent No.4 issued Ex.B.1-cheque dated 12.02.2007, for the premium to the appellant, the appellant without perusing the RC, issued policy in his (respondent No.3) name and sought to dismiss the petition.

5. After considering the oral and documentary evidence on record, the Tribunal came to the conclusion that the accident occurred due to the rash and negligent driving of the driver of the car and awarded total compensation of Rs.26,000/- under various heads, with interest at the rate of 7.5% per annum. Aggrieved by the said order, the appellant/Insurance Company filed the present appeal.

6. Heard.

7. Sri A.Rama Krishna Reddy, learned counsel for the appellant, submitted that the policy issued in respect of the offending vehicle was cancelled due to dishonour of cheuqe and therefore, the appellant is not liable to pay the compensation to the claimant (respondent No.1 herein).

8. It is clear from the record that respondent No.3 was the owner of the offending vehicle and he sold the same to respondent No.4 on 03.04.2007. After purchase, the ownership of the offending vehicle was transferred to respondent No.4 on 03.04.2007. Respondent No.4 issued Ex.B.1-cheque, in favour of the appellant for payment of premium amount and the appellant issued policy in the name of respondent No.3, since by that date, the name of respondent No.3 was reflecting as the owner of the car. When the appellant presented Ex.B.1-cheque, for presentation, it was dishonoured vide Ex.B.2-bank cheque return memo. The appellant sent Ex.B.4-notice to respondent No.3, on whose name policy was issued, and also to Regional Transport Officer, Bandra, intimating about the dishonour of the cheuqe and also cancellation of the policy. Thereafter, the accident occurred on 22.01.2008. But, no evidence was filed on behalf of the appellant to show that Ex.B.4-notice, sent by the appellant was served on respondent No.3 and the RTO, Bandra. Basing on the same, the trial Court came to the conclusion that appellant herein and respondent No.4 are jointly and severally liable to pay the compensation.

9. For the purpose of dealing with payment of premium through cheque and the same is being dishonoured, this Court feels that it is relevant to rely upon the provisions of Section 138 of the Negotiable Act, 1881 and it reads as under:

“138. Dishonour of cheque for insufficiency, etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liabilit