U.S. Tripathi, J.
1. This appeal has been directed against the judgment and award dated 26.4.2002 passed by Motor Accidents Claims Tribunal/XIIth Additional District Judge, Ghaziabad, in Motor Accident Claim Petition No. 596 of 1999, awarding a sum of Rs. 55,000 to the claimant/respondent No. 1 on account of injuries sustained by him in a motor accident.
2. The claimant/respondent No. 1 filed Claim Petition No. 596 of 1999 against the appellant and respondents No. 2 and 3 for award of Rs. 15 lac as compensation with the allegations that on 15.4.1999 at about 5 p.m., he was standing near bus stand at village Batt on Garh-Delhi Road to cross the road. In the meantime, car No. DL 4C-4379, owned by respondent No. 2 and driven by respondent No. 3, came there and by rash and negligent driving of its driver, dashed against the claimant due to which he sustained head injury as well as injuries on jaw resulting in breaking of teeth. The report of the occurrence was lodged by his uncle. He had to take treatment for above injuries and on account of above injuries, his working capacity was reduced and he had also to close his business of barber during the period he was under treatment.
3. The respondent Nos. 2 and 3, owner and driver of the vehicle, did not contest the petition.
4. The petition was contested only by the appellant/National Insurance Company Ltd. on the ground that the Maruti van involved in the accident was not insured with it and, therefore, it was not liable to indemnify the amount of compensation.
5. The Tribunal framed following issues :
(1) Whether on the date of accident, i.e., 15.4.1999 at about 5 p.m. the accident took place due to rash and negligent driving of the driver of Maruti Van No. DL 4C-4379?
(2) Whether Maruti Van was not insured?
(3) Whether claimant was entitled to receive any compensation? If so, to what amount and against which of the opposite party?
6. The claimant-respondent No. 1 examined himself and Mohd. Hanif (P.W. 2) and also filed report of the occurrence lodged by Mohd. Hanif. As mentioned above, owner and driver of the vehicle had not appeared to contest the petition. The Insurance Company had also not led any evidence on issue No. 1. The Tribunal on considering the evidence of claimant held that accident in question took place due to rash and negligent driving of the driver of Maruti Van. On issue No. 2, the Tribunal held that the contention of the Insurance Company was that cheque in lieu of payment of premium was issued by owner on 27.2.1999 and on the basis of it, it issued cover note on same day and policy was issued subsequently. But the cheque given by the owner/insured, was dishonoured and the Insurance Company cancelled the policy, vide endorsement dated 24.3.1999. But in view of Apex Court decision in Oriental Insurance Co. Ltd. v. Indrajit Kaur and Ors., 1998 ACJ 123, dishonour of the cheque and subsequent cancellation of policy would not absolve the liability of the Insurance Company to pay compensation to a third party. Regarding quantum of damages, the Tribunal held that considering the papers regarding expenses incurred in treatment, which could not be rebutted by the Insurance Company, the claimant was entitled to Rs. 55,000 as compensation. With these findings, the Tribunal awarded a sum of Rs. 55,000 as compensation along with interest at the rate of Rs. 9% per annum.
7. The above award of the Tribunal has been challenged by the Insurance Company in this appeal.
8. Heard Sri V. K. Birla, learned counsel for the appellant.
9. The finding of the Tribunal that accident took place due to rash and negligent driving of the driver of Maruti Van No. DL 4C-4379 was based on evidence of the claimant and his witness. The owner and driver of the vehicle had not contested the petition and the Insurance Company, which alone contested the petition, had also not led any evidence on this point. Thus, there is no challenge of the evidence of the claimant in this regard and, therefore, there is no perversity in the above finding of fact. The learned counsel for the appellant could not show anything against the above finding.
10. The main contention of the learned counsel for the appellant was that the cheque in lieu of payment of premium issued by insured (owner of the vehicle) was dishonoured and, therefore, the Insurance Company cancelled the policy issued on the basis of cheque and therefore, it was not liable to indemnify the payment of compensation. In support of above contention, reliance was placed on Apex Court decision in National Insurance Co. Ltd. v. Seema Malhotra and Ors.. 2001 (2) AWC 1007 (SC).
11. I have gone through the above decision in detail and find that above decision is not applicable to the facts of the present case.
12. In the case of Oriental Insurance Co. Ltd. v. Indrajit Kaur and Ors., 1998 ACJ 123, a bus met with an accident. Its policy of insurance was issued by the appellant on 30.11.1989. The premium for the policy was paid by cheque. The cheque was dishonoured. A letter stating that it had been dishonoured was sent by the appellant to the insured on 23.1.1990. The letter claimed that, as the cheque had not been encashed, the premium of the policy had not been received and that, therefore, the appellant was not at risk. The premium was paid in cash on 2.5.1990. In the meantime, on 9.4.1990, the accident took place, the bus collided with a truck, whose driver died. The truck driver's widow and minor sons filed claim petition. The appellant denied the claim asserting that under the terms of Section 64VB of the Insurance Act, 1938, no risk was assumed by an insurer unless the premium thereon had been received in advance. The Motor Accidents Claims Tribunal rejected the appellant's contention and awarded claimants compensation in the sum of Rs. 96,000 with interest at the rate of Rs. 12 per cent per annum from the date of the petition, to be paid by the insured and the appellant jointly and severally. The appeal filed by the appellant before the High Court of Punjab and Haryana was summarily dismissed. The above order of the High Court was challenged before the Apex Court.
13. The Apex Court, on considering the provisions of Section 64VB of the Insurance Act as well as Chapter 11 of Motor Vehicles Act, 1988, held as below :
'We have, therefore, this position. Despite the bar created by Section 64VB of the Insurance Act, the appellant, an authorised insurer, Issued a policy of insurance to cover the bus without receiving the premium therefor. By reason of the provisions of Sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to Indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured.
The policy of insurance that the appellant issued was a representation upon which the authorities and third parties were entitled to act. The appellant was not absolved of its obligations to third parties under the policy because it did not receive the premium. Its remedies in this behalf lay against the insured.'
14. In the case of New India Assurance Co. Ltd. v. Rula and Ors., 2000 ACJ 630, the appellant had insured Truck No. CH 7928 on 8.11.1991 and issued an insurance policy in terms of requirements of the Motor Vehicles Act, 1988. The same day at midnight, the truck met with an accident, in which three occupants, namely, Tetia alias Ramlal (cleaner) and two labourers died. Their dependants filed three claim cases before the Motor Accidents Claims Tribunal, which were contested by the Insurance Co. on the ground, inter alia that the truck was not covered by any insurance policy, inasmuch as the truck owner had obtained the insurance policy on the basis of a cheque dated 8.11.1991 towards payment of premium, but this cheque was dishonoured on 16.11.1991 with the result that the insurance policy itself was cancelled. The contention of the appellant was not accepted by the Tribunal. It decreed all the three claims by its award. The above awards were challenged by means of three appeals filed In the High Court, which dismissed the appeal. The matter came before the Apex Court in S.L.P. The Apex Court, on considering the various provisions of Insurance Act and Motor Vehicles Act as well as relying on the decisions in the case of Oriental Insurance Co, Ltd. v. Indrajit Kaur (supra), held as follows :
'This decision Oriental Insurance Co. Ltd. v. Indrajit Kaur (supra), which is a three-Judge Bench decision, squarely covers the present case also. The subsequent cancellation of the insurance policy in the instant case on the ground that the cheque through which premium was paid was dishonoured, would not affect the rights of the third party, which had accrued on the issuance of the policy on the date on which the accident took place. If on the date of accident, there was a policy of insurance in respect of the vehicle in question, the third party would have a claim against the Insurance Company and the owner of the vehicle would have to be indemnified in respect of the claim of that party. Subsequent cancellation of insurance policy on the ground of non-payment of premium would not affect the rights already accrued in favour of the third party.'
15. In the case of National Insurance Co. Ltd. v. Seema Malhotra and Ors., 2001 (2) AWC 1007 (SC), relied on by the learned counsel for the appellant, the insured was one Yash Paul Malhotra. He and the appellant Insurance Company, entered into an insurance contract on 21.12.1993 by insuring a Maruti car for Rs. one lakh and fifty thousand. On the same day, the insured gave a cheque for Rs. 4,492 towards the first instalment of the premium and the insurance company issued a cover note as contemplated in Section 149 of the Motor Vehicles Act. But on the last day in the year 1993, i. e.,31.12.1993, an accident took place in which insured died and the car was completely damaged. On 10.1.1994, the bank on which the cheque was drawn by the insured sent an intimation to the insurance company that the cheque was dishonoured as there was no fund in the account of insured. On 20.1.1994, the insurance company intimated the business concern of the insured cancelling the above said policy with immediate effect and that the company was not at risk. The respondents, who were the widow and children of the insured, who died in the accident, filed a claim for the loss of the vehicle. When the claim was repudiated, the respondents moved the State Consumer Protection Commission, which rejected the claim on the ground that in the absence of any consideration, there can be no contract and that is all what is recognised by Section 64VB of the Insurance Act, and, therefore, the insurer was justified in repudiating the contract. The matter was raised before High Court of Jammu and Kashmir. The High Court allowed the appeal on the ground that the Insurance Company instead of cancelling the policy due to dishonour of the cheque of the premium from the date it was Issued, i.e., 21.12.1993, chose to cancel it 'with immediate effect'. This clearly indicated that till the Issuance of this communication, respondent-insurance company itself treated the policy subsisting. The matter ultimately came up before Apex Court. The question before the Apex Court was whether the insurer was liable in such a situation to honour the contract of Insurance. The Apex Court held that three-Judge Bench in Oriental Insurance Co. Ltd. v. Indrajit Kaur (supra), left the point, i.e., liability of insurer against the insured when the cheque issued for payment of premium was dishonoured, unconsidered. The three-Judge Bench refrained from expressing any opinion on the question of Insurer's entitlement to avoid or cancel the policy as against the insured, when the cheque was Issued for payment of premium was dishonoured. In subsequent decision by two Judge Bench in New India Assurance Co. Ltd. v. Rula and Ors. (supra), the question of insurer's right to repudiate the claim of respondent as against insured in a similar situation did not arise therein and hence the Bench parried the question. The Apex Court held on the point of liability of insurer against the insured in such a situation as below :
'Thus, when the insured fails to pay the premium promised, or when the cheque issued by him towards the premium is returned dishonoured by the bank concerned, the insurer need not perform his part of the promise. The corollary is that the insured cannot claim performance from the insurer in such a situation.
Under Section 25 of the Contract Act, an agreement made without consideration is void........
However, if the insured makes up the premium even after the cheque was dishonoured but before the date of accident, it would be a different case as payment of consideration can be treated as paid in the order in which the nature of transaction required it. As such, an event did not happen in this case the insurance company is legally justified in refusing to pay the amount claimed by the respondents.'
In the light of above legal position the contention of the appellant-insurance company was upheld.
16. As mentioned above, the facts of the case under hand are completely distinguishable from the facts of the case cited above in Seema Malhotra's case. In the case under hand, admittedly the insured issued cheque towards payment of premium on 27.2.1999 and the Branch Office of the appellant insurer issued cover note No. 197209, dated 27.2.1999 and the Branch subsequently issued policy No. 6701341 of 1999. The cheque issued by the insured bounced back. The Branch Office of the insurer, therefore, cancelled the policy on 24.3.1999. However, the accident in question took place on 15.4.1999. The policy issued earlier was valid for one year, i.e., upto 26.2.2000. Therefore, the facts of the present case are squarely covered by the facts of the case of Oriental Insurance Co. Ltd. v. Indrajit Kaur (supra) and New India Assurance Co. Ltd. v. Rula and Ors. (supra), in which claim was preferred by a third party and not by the insured or his legal representative. In Seema Malhotra's case, claim was preferred by legal representative of the insured and not by a third party. The Apex Court had not changed the proposition of law laid down in the above two earlier decisions of New India Insurance Co. Ltd. v. Indrajit Kaur and New India Assurance Co. Ltd. v. Rula and Ors., regarding the liability of third party in the subsequent case of Seema Malhotra. Therefore, the appellant is liable to indemnify the award given in favour of third party, i.e., respondent No. 1. The appeal, therefore, has no force and is liable to be dismissed at the stage of admission.
17. The appeal is, accordingly, dismissed under Order XLI Rule 11, C.P.C.
18. Statutory deposit made in this Court shall be remitted to the Tribunal concerned for due adjustment.