JUDGMENT
M.M. Kumar, J.
1. This order shall dispose of F.A.O. Nos. 3719 of 2005 and 3720 of 2005 as both the appeals have raised common question of facts and law; and are directed against the same award dated 14.6.2005, passed by the Motor Accident Claims Tribunal, Chandigarh (for brevity ‘the Tribunal’). Both the appeals are result of one accident which occurred on 19.9.2003. The Tribunal has recorded categorical findings based on cogent evidence in para 8 of the award that the accident was caused by rash and negligent driving of truck No. HP-11-3692, which was being driven by one Padam Singh, driver and owner, respondent No. 3. The gross salary of the deceased Bant Singh has been proved to be Rs. 5,750. It is also proved that he was working as a Wireman and was posted in C.P.W.D., Chandigarh. The net salary of Rs. 4,468 has been assessed by rounding off the same to Rs. 4,400. The age of the deceased at the time of accident was 40 years 5 months. He had left behind his old parents, widow and a minor son. A multiplier of 15, in the facts and circumstances of the case, was applied. Placing reliance on the judgment of the Supreme Court in the case of Sarla Dixit and Anr. v. Balwant Yadav and Ors. (Paras 6 and 7), the augmented/notional income of the deceased was deemed to be Rs. 6,600 and deduction of 1/3rd was applied. Accordingly, a sum of Rs. 7,92,000 (4400 x 12 x 15) has been awarded. Further, Rs. 15,000 to widow for loss of consortium and Rs. 10,000 to Mr. Kartar Singh and Bhajan Kaur, parents of deceased, as funeral expenses have been awarded. It was further held that the appellant-Insurance Company was liable to pay the compensation because it has issued the policy for the period from 19.12.2002 to 18.12.2003. A total sum of Rs. 8,17,000 was awarded by apportioning the same between widow and minor son on the one hand and the old parents on the other hand, who had filed separate claim petition. The claimant-respondents were also awarded interest @ 9% per annum from the date of filing respective claim petitions till realisation.
2. However, the main controversy has been raised with regard to cancellation of insurance policy of the ill fated truck on account of bouncing of cheque issued by the owner of the truck. It is admitted position that insurance policy was issued in favour of Padam Singh, who is driver and owner of the ill fated truck, to cover the period from 19.12.2002 to 18.12.2003. It has been found that the cheque, by which the premium was paid, was dishonoured due to insufficiency of funds. A copy of the cover note, a photocopy of the cheque and a copy of the Memo issued by the bank have been placed on record as Exs. R-1, R-2 and R-3 respectively. It has also been shown that the policy was cancelled and information in that regard was sent to Padam Singh, owner and driver, respondent No. 3 by registered letter and letter to that effect was written to the Regional Transport Officer, Bilaspur. The Tribunal rejected the argument that the cancellation of policy on account of bouncing of cheque would result into defeating the rights of third party and on this issue reliance has been placed on a judgment of the Hon’ble Supreme Court in the case of Oriental Insurance Co. Ltd. v. Inderjit Kaur and Ors. . The view of the Tribunal in this regard reads as under:
….In this case cheque which was issued by respondent No. 1 to respondent No. 2 towards the premium of the insurance policy was dishonoured but despite that, since the insurance policy had already been issued for the period from 19.12.2002 to 18.12.2003 by respondent No. 2, the respondent No. 2 shall be liable to pay the compensation regarding the accident in question. In support of this view, I draw support from the authority in case Oriental Insurance Co. Ltd. v. Inderjit Kaiir and Ors. which has been referred to by the learned Counsel for the claimants….
3. After hearing learned Counsel for the parties, we are of the view that the question which would arise for determination is ‘whether the insurer is liable to pay compensation to the injured in a motor vehicle accident even if it has cancelled the policy issued in respect of an offending vehicle on account of dishonouring of cheque for payment of premium, when the accident has taken place within the period covered by the policy?’ The aforementioned question has been answered by the judgment of the Hon’ble Supreme Court in Inderjit Kaiir’s case (supra), holding that the appellant-Insurance Company was not absolved of its obligation to third parties under the policy merely because it did not receive the premium. It has further been held that the Insurance Company is to be blamed because it had issued the policy upon receipt of only a cheque towards the premium in contravention of the provisions of Section 64VB of the Insurance Act, 1938 and the public interest which is served by a policy of insurance must prevail over the interest of the Insurance Company. The aforementioned view has been followed by the Hon’ble Supreme Court in the case of New India Assurance Co. Ltd. v. Rula .The view of Their Lordships in Inderjit Kaur ‘s case (supra) are discernible from paras 9 and 10 of the judgment and the same reads as under:
9. 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, therefore. 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.
10. 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.
4. In view of above, there is no room to interfere in the award passed by the learned Tribunal. The appeal is wholly without merit and is, thus, liable to be dismissed.
5. For the reasons aforementioned, these appeals fails and the same are dismissed.