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Insurance co held liable

The Supreme Court has ruled that the insurance company is liable to pay compensation to a road accident victim when it informed the insured that his cheque was dishonoured after the mishap. In this appeal, National Insurance Company vs Balkar Ram, the motor accident tribunal had ordered compensation to the victim. The company appealed against it, arguing that the cover note for the policy was issued against a cheque which was dishonoured even before the accident.

 On the other hand, the victim argued that the intimation regarding the dishonour of the cheque and cancellation of the policy was communicated to him after the date of the accident. The cheque bounced on April 17, the accident took place two days later and the intimation of the dishonour was conveyed on April 26. The court ruled that till then the insured was holding a valid policy and therefore the insurer must pay compensation.

 Article referred:http://www.business-standard.com/article/opinion/hc-cannot-cancel-auction-sale-113090200004_1.html

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