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Motor Vehicles Act, 1988 S. 166 – Insurance – Cancellation of – Cheque bounce – Liability of Insurance Company gets cancelled only when all concerned have been intimated about the cancellation of the insurance policy – That did not occur in the instant case – Insurance Company is liable to pay the compensation to the appellant, though it may recover the same from the owner driver .
Policy of Insurance Company that the Insurance Company issues is a representation upon which the Authorities and third party are entitled to act. Therefore, even if the cheque given by the insurer is bounced, insofar as Insurance Company is concerned, it has not absolved its obligation to third party under the policy. The remedy which is provided to the Insurance Company is to recover the said liability from the insurer, but it has to discharge its liability towards the third party
