Oriental Insurance Co.Ltd vs Inderjit Kaur & Ors on 8 December, 1997
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.