The National Insurance Company Limited, Ongole-2nd respondent before the Motor Accidents Claims Tribunal-cum-Additional District Judge, Ongole preferred the present appeal against the award dated 31.07.2000 passed by the Tribunal in O.P.No.26 of 1997.

I have heard the learned counsel appearing for the appellant and the respondents. The question involved in the present appeal is as to when the cheque issued by the insured to the insurer towards payment of premium under the policy was dishonoured and in consequence thereof, the insurer cancels the insurance policy, whether the insurer is still liable to pay compensation to the claimants. It is the contention of the appellant-insurance company that the 3rd respondent-owner of the offending vehicle issued a cheque on 09.02.1996 towards premium amount and when it was presented it was dishonoured on 27.02.1996 and thereafter they informed the same to the owner under a letter by registered post on 04.03.1996, the letter was returned from the concerned with the endorsement that ‘the addressee was not found’, thereafter they issued another letter to the address given by the insured and subsequently on 27.02.1996 the cover note was canceled and therefore, the appellant-insurance company is not liable to indemnify the owner since the accident took place on 01.12.1996 i.e. 10 months after the cancellation of the cover note. On the other hand, the learned counsel appearing for the respondent would submit that since the owner of the offending vehicle had not received the information allegedly conveyed by the appellant-insurance company about the dishonour of the cheque and also cancellation of cover note is not informed to the R.T.A., the appellant-insurance company cannot disown its liability and therefore, it is liable to pay compensation to the claimants by indemnifying the owner of the vehicle. The learned Tribunal below however held that despite the bar created under Section 64VB of the Insurance Act by reason of the provision of Section 147(5) and 149(1) of the Motor Vehicles Act, the insurance company is liable to indemnify the owner of the vehicle towards third party risk. In support of his contention, the learned counsel appearing for the respondent-owner of the vehicle relied upon the following decisions:

(i) NATIONAL INSURANCE COMPANY LTD. v. SEEMA MALHOTRA AND OTHERS 2001 ACJ 638

(ii) ORIENTAL INSRUANCE COMPANY LTD. v. INDERJIT KAUR AND OTHERS 1998 ACJ 123

(iii) DADDAPPA AND OTHES v. BRANCH MANAGER, NATIONAL INSURANCE CO.LTD. 2008 ACJ 581

iv) NEW INDIA ASSURANCE COMPANY LTD. v. RULA AND OTHERS AIR 2000 SC 1082

(v) NATIONAL INSURANCE COMPANY LTD. v. SK. AHMEDUNNISA AND OTHERS 2009 ACJ 2556

(vi) NATIONAL INSURANCE COMPANY LTD. v. ABHAYSING PRATAPSING WAGHELA AND OTHERS 2008 ACJ 2697

(vii) UNITED INDIA INSURANCE CO.LTD. v. SANDHYA DEVI AND OTHERS 2009 ACJ 1867

viii) NEW INDIA ASSURANCE CO.LTD. v. SONA DEVI AND OTHERS 2008 ACJ 284

(ix) ORIENTAL INSURANCE CO.LTD. v. KASHAMMA AND OTHERS 2008 ACJ 222 x) ORIENTAL INSRUANCE CO.LTD. v. NEELU DEVI AND OTHERS 2009 ACJ 2262

(xi) NATIONAL INSURANCE CO.LTD. v. YELLAMMA AND ANOTHER (2008) 7 SCC 526.

and contended that since the appellant insurance company failed to establish that the notice regarding the dishonour of cheque and cancellation of cover note was received by the insured and in view of the fact that no opportunity was given to the insured to remit the premium, after the alleged dishonour of cheque, the appellant is still liable to pay the compensation to the third parties.

I have gone through the judgments relied upon by the learned counsel appearing for the respondents. The facts of the cases covered by the said decisions were altogether different from the facts of the present case and moreover, the learned counsel in my view does not appear to have properly understood the settled legal position on this aspect as on today. In the present case, the appellant insurance company could be able to demonstrate before the learned T