Gill FJ:

Karam Singh, the defendant/respondent, was the owner of a motor vehicle bearing registration No JB 37. He had his car insured with the New India Assurance Co. Ltd, the plaintiffs/appellants, for the period 12 September 1964 to 11 September 1965. The policy of insurance provided for the plaintiffs to indemnify the defendant, subject to a maximum of $3,000, in respect of any damage to the car arising out of any accident in which it might be involved. One of the terms of the contract of insurance was that the plaintiff company was not to be liable if at the time of the accident the car was being driven by any person other than the insured or Mohinder Singh or a uniformed driver of the Automobile Association, or by any person whilst under the influence of intoxicating liquor or drugs.

The defendant's car was extensively damaged as a result of it being involved in a road accident on 13 September 1964 at about 7.30 p.m. On his submitting a claim to the plaintiffs on or about 16 December 1964, the defendant was paid a sum of $1,522.67 in respect of such damage.

On 23 June 1966 the plaintiffs wrote to the defendant demanding the return of the said sum of $1,522.67 on th