This appeal has been preferred by way of
special leave against the judgment and order
passed by the High Court of Punjab and Haryana in
F.A.O. No. 2941 of 2004 dated 28.09.2004 wherein
the appeal filed by the Appellant-insurance
company was dismissed holding therein that the intimation JUDGMENTby the Appellant-Insurance Company regarding dishonour of the cheque towards the
issuance of policy was communicated to the policy-
holder after the accident. Hence, it was liable
to pay the compensation to the claimants/
Respondents and it could not recover the same from
the owner.
To clarify the position, it may be stated
that the vehicle which was insured with the
appellant met with an accident and a compensation
of Rs.1,24,035/- was ordered to be paid to the
respondents-claimants along with interest and the
owner as also the insurance company were jointly
and severally held liable by the Motor Accidents
Claims Tribunal ('Tribunal' for short)to pay the
amount of compensation to the claimants.
The Appellant/Insurance Company assailed the
award passed by the Tribunal essentially on the
ground that the cover note for the policy of
insurance was issued on 7.04.2000 for which a
cheque was submitted by the owner. However, the
cheque was dishonoured by the bank on 17.04.2000.
Subsequently, the vehicle which was insured with
the appellant-insurance company met with an
accident on 19.04.2000. The appellant-insurance
company, therefore, contended that as the policy JUDGMENT of insurance could not be held to be a valid
document in view of the fact that the cheque
towards the policy had been dishonoured even
before the accident had taken place, the insurance
company was not liable to indemnify the claimants
by paying the amount which fell into its share as
per the Tribunal's award and it is the owner which
is liable to pay the entire amount of compensation
to the respondents/ claimants.
However, we compliment Ms. Kiran Suri,
learned counsel for the appellant for cutting
short the controversy by fairly pointing out the
ratio of the judgment (2012) 5 SCC 234 titled
United India Insurance Co. Ltd. Vs. Laxmamma &
Ors. wherein it has been held that the insurance
company is liable to satisfy the award if the
intimation regarding the dishonour of the cheque
and cancellation of policy is communicated to the
policy-holder after the date of the accident.
Thus, the defence of the insurance company that
the policy of insurance was not valid since the
cheque had been dishonoured prior to the accident
would not exonerate them from making the payment
of compensation. In this matter, admittedly the JUDGMENT accident had taken place on 19.04.2000 and the
cheque although had been dishonoured prior to the
accident on 17.04.2000, the intimation to the
policy-holder had been given by the insurance
company on 26.04.2000, in view of which the
insurance company cannot be allowed to contend
that the policy-holder was not holding a valid
policy of insurance in regard to the vehicle which
met with an accident. Admittedly, the policy-
holder had already issued another cheque
substituting the cheque which had earlier been
dishonoured.
In that view of the matter and following the
ratio of the judgment referred to hereinbefore,
this appeal has no substance and accordingly it is
dismissed. No order as to costs.