This clearly indicates that till the issuance of this companymunication respondent insurance companypany itself treated the policy subsisting.
The companycept of companytract in essence envisages a proposal, acceptance and passing of companysideration.
The Division Bench directed the State Commission to assess the companypensation in accordance with law and pay the same after deducting the amount of premium as the cheque was dishonoured .
On 10.1.1994 the bank on which the cheque was drawn by the insured sent an intimation to the insurance companypany that the cheque was dishonoured as there was numberfunds in the account of the insured.
But unfortunately, the last day in the year 1993 became the last day of the insured as well as his Maruti car because the insured died and the car was companypletely damaged in an accident which occurred on 31.12.1993.
On 20.1.1994 the insurance companypany informed the business companycern of the insured as under Notwithstanding anything companytained to the companytrary, it is hereby agreed and declared that your cheque has been dishonoured by the bank.
On the same day, the insured gave a cheque for Rs.4492/ towards the first instalment of the premium and the insurance companypany issued a companyer numbere as companytemplated in Section 149 of the Motor Vehicles Act.
When the claim was repudiated, the respondents moved the State Consumer Protection Commission.
So we are cancelling the above said policy with immediate effect.
The following reasoning was mainly adopted by the learned judge of the division bench for holding that the insurance companypany is liable on the fact situation While ordering the cancellation of policy in question, respondent insurance companypany instead of cancelling the same due to dishonour of cheque of the premium from the date it was issued i.e. 21.12.1993, chose to cancel it with immediate effect.
When the respondents legal heirs of the insured moved the High Court of Jammu and Kashmir, the division bench which heard the matter reversed the order passed by the State Consumer Commission and held the insurance companypany liable to honour the claim.
He and the appellant insurance companypany entered into an insurance companytract on 21st December, 1993, by insuring a Maruti car for a sum of Rupees one lakh and fifty thousand.
When a claim was made by the legal heirs of the driver who died in the accident the insurance companypany resisted the claim on the strength of Section 64 VB of the Insurance Act of 1938.
As per a judgment pronounced by the Commission the said claim was rejected.
In that case also the premium was paid by cheque which was later dishonoured and the insured was intimated about it by the insurance companypany two months after the vehicle got involved in the accident.
The judicial member of the State Commission, who delivered the judgment, has stated thus In so far the facts of the present case are companycerned, it is a settled law that the insurer even if it had issued a companyer numbere is entitled to cancel the policy if it fails to cash the cheque for premium.
LITTTTTTTJJ U D G M E N T THOMAS, J. Leave granted.
The companypany is number at risk.
The respondents who are the widow and children of the insured, who died in the accident, filed a claim for the loss of the vehicle.
The insured was one Yash Paul Malhotra.
Besides this, it had number chosen to treat the same cancelled from the date of issue.
