JUDGMENT
H.S., Bedi, J.
1. This matter has been pending in this Court since 1990 and has arisen out of an accident, which happened on 23.12.1987, in which one Sudarshan Kutnar Prabhakar, the husband/father of the claimants was killed. The bus involved in the accident belonged to respondent No.6 in the appeal and was insured with the appellant-the United India Insurance Company Ltd.
2. Sudharashan Kuraar Prabhakar’s heirs filed an application under Section 110-A of the Motor Vehicles Act, 1939 (hereinafter referred as the Act) before the Motor Accident Claims Tribunal. The Tribunal in its award dated 10.10.1939 held that the accident had taken place due to rash and negligent driving of the bus by its driver, Mohan Singh respondent No.7 and that as the bus had been insured with the Insurance Company for an enhanced amount on the basis of a higher premium having been paid vide cheque dated 22.12.1987 the third claim was liable to be enhanced to Rs.3 lacs from Rs,50,000/- by the Insurance Company and that the claimants were entitled to a sum of Rs.2,16,000/- on account of the loss suffered by them. The present appeal has been filed by the Insurance Company. The appeal was admitted for hearing on 28.3.1990 and the recovery of the amount beyond Rs.50,000/- was stayed. The case came up for final arguments before the learned Single Judge on 20.10.1992, on which date the following directions were made by the learned Single Judge:-
“Learned counsel for the insurance company appellant submitted that the liability of the company is limited to Rs.50,000/- in view of the provisions of the policy read with Section 95(1)(b) of the Motor Vehicles Act. This point is of considerable importance and is arising in large number of cases. It would be appropriate if this case is heard and decided by Division Bench. The papers of the case be laid before My Lord the Acting Chief Justice for constitution of a larger Bench. The case is ordered to be listed for hearing, at an very early date preferably in the month of January, 1993.”
3. The matter finally came before another Division Bench on 24.9.1996 and the Bench held that the Insurance Company was liable to pay a sum of Rs.50,000/- only as it was not liable to pay any further amount on account of enhanced liability. Liberty was, however, left to the claimants to recover the balance amount from the owner ordriver of the bus.
4. An application was thereafter moved by respondent Nos.6 and 7 in the appeal saying that the aforesaid judgment of the Division Bench had been passed in their absence inasmuch as they had not been served. Vide order dated 24.5.1999, the judgment dated 24,9.1996 was recalled and the appeal was restored to its original number. It is in this situation that the matter has come up before this Division Bench today.
5. Mr. Puri the learned counsel for the Insurance Company has stated that the judgment of the Division Bench dated 24.9.1996 had been inter parties, the Insurance Company and most of the respondents and as it had been accepted by those present before the Court, the judgment must inevitably be followed by this Bench. He has also stated that in view of the judgment of the Hon’ble Supreme Court in “Life Insurance Corporation of India v. Raja Vasireddy Komalavatti Kamba and Ors, A.l.R. 1984 Supreme Court 1014 that the enhanced liability of the Insurance Company from Rs.50,000/- to Rs. 3 lacs would be applicable only from 24.12.1987 the date on which the cheque with regard to the enhanced liability had been accepted by the Insurance Company, and the endorsement made effective. Reliance has also been placed by the learned counsel on the judgment of the Hon’ble Supreme Court reported in “Oriental insurance Co. Ltd v. Cheruvakka Nafeesu and Ors.,(2001-1)127 P.L.R. 422 SC, wherein it was observed that the Insurance Company was liable to pay only a sum of Rs.50,000/- and no further amount on account of enhanced liability.
6. On merits, Mr. Puri argued that the deceased was 53 years of age at the time of the accident and the Tribunal was in error in applying a multiplier of 12 in determining the quantum of compensation. The learned counsel for the claimants, owner and driver of the bus have argued that a categoric finding had been recorded by the Tribunal that the cheque in fact had been issued and accepted on 22.12.1987 and the argument to the effect that the cheque had been accepted on 24.12.1987 was, therefore, erroneous. In the alternative it has been argued that in any case even if the cheque issued has been encashed on 24.12.1987 it would relate back to the date of issue.
7. We have heard the learned counsel for the parties and have gone through the record with their assistance.
8. We are of the opinion that the judgment of the Division Bench dated 24.9.1996 having been reviewed and recalled cannot form a precedent which this Bench must inevitably follow, it can at best have persuasive value. We, however, with respect, differ with its reasoning. It is the case of the appellant before us that the cheque in question had been handed over to the Insurance Company on 22.12.1987 and admittedly the accident took place on the next day. Mr. Puri has, however, argued relying on the evidence of some of the witnesses, that the cheque had been accepted on 24.12.1987. The Tribunal has given a finding on facts against the Insurance Company on this question and we too endorse that view. We are further of the opinion that the cheque must in these circumstances relate back to the date of its issue irrespective of when it was encashed. This has been so held by a Division Bench of the Bombay High Court in “Kirloskar Bros, Ltd v. Commr. of Income-Tax A.l.R. 1952 Bombay 306, wherein it has been observed that ” a payment under a cheque relates back to the date of the cheque. So it is immaterial when a cheque is encashed; what is material is when the cheque was given, and the payment is made when the cheque was given and not when the cheque was cashed at the instance of the creditor. Therefore, the position in law seems to be that even when a cheque is accepted by a creditor as a conditional payment, the preference by the creditor of accepting a cheque rather than cash operates as a payment to the creditor when the cheque is given, although the liability of the debtor may revive in the event of the cheque not being ultimately cashed.”
9. The observations cover the matter fully in the appellant’s favour. The judgment cited by Mr. Puri is based on a set of facts which have no relevance to the present case.
10. Mr. Puri has also challenged the quantum of compensation awarded by the Tri
bunal by applying a multiplier of 12. We are of the opinion that on the facts and cir
cumstances of the present case, no interference is called for. The accident happened in
the year 1987. The Tribunal rendered its award in the year 1989 and the appeal was
filed in 1990 and the disbursement of the amount beyond Rs.50,000/- was stayed by this
Court and continues to be stayed till today. The agony of a widow with three sons-one
of them a minor- to be: brought up can well in imagined. The claimant have not been
able to use the compensation for almost 12 years on account of the huge delays in this
Court.
The appeal is accordingly dismissed.
Ashutosh Mohanta, J.