FAO No.2472 of 2003 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.2472 of 2003 Date of Decision. 21.09.2010 United India Insurance Company Limited through its Assistant Manager, Regional Office, Ludhiana ......Appellant Versus Smt. Bhupinder Kaur wife of Sh. Amrik Singh resident of House No.C- 65, Markfed Chowk, Preet Nagar, Kapurthala and others ......Respondents Present: Mr. S.P. Jain, Advocate for Mr. Amit Rawal, Advocate for the appellant. None for the respondents. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? -.- K. KANNAN J.(ORAL) 1. The insurance company is on appeal challenging the liability on the ground that the amount paid as premium through cheque could not be encashed in view of the fact that the bank had dishonoured the cheque for want of sufficiency of funds on 08.01.999 and a notice was also issued informing the insured about the cancellation of the policy. The accident had taken place six months later on 5.7.1999. It appears that at the time when the appeal as admitted no stay was granted and the amount has also been claimed by the third party. 2. If the policy is cancelled by dishonour of cheque, the FAO No.2472 of 2003 -2- liability of the third party even if it exists in the light of the decision of the Hon'ble Supreme Court in Oriental Insurance Company Ltd. Vs. Inderjit Kaur 1998(1) SCC 371, the insurance company will be entitled to deny liability to indemnify the insured. The effect of bouncing of cheque and the provisions of the Insurance Act under Section 164(5)(bb) have been dealt with by the Hon'ble Supreme Court in Deddappa and others Vs. B.M. National (2008) 2 SCC 595. The insurance company shall be entitled to recover the amount of liability incurred for satisfaction of the award by applying for execution in the same proceedings against the insured. 3. The award of the Tribunal is modified to provide for such a right and the appeal is allowed. (K. KANNAN) JUDGE September 21, 2010 Pankaj*