BILAL NAZKI, J. ( 1 ) THIS is an appeal filed by the defendants in O. S-No. 414 of 1987 against the judgment and decree dt. 30-3-1995 passed by the addl. Subordinate Judge, Guntur. The trial court decreed the suit in favour of the plaintiffs and directed the defendants to pay an amount of Rs. 54,39,207/- with subsequent interest @ 18% per annum on the principal amount of Rs. 37,96,555/- from the date of suit till the date of decree and thereafter @ 6% per annum from the date of i decree till the date of realization. The defendants were also directed to pay a sum of Rs. 2,07,394/- towards costs. ( 2 ) THE suit was laid by the plaintiffs contending therein that the 1st plaintiff was a partnership firm registered under the indian Partnership Act and was carrying on business in cotton and cottonseeds with a ginning and oil mill at Nagulapadu, pedanandipadu Mandal, Ponnur DMC. 2nd plaintiff is a Bank of Baroda carrying on business at its branches at Pedanandipadu and Guntur. 1st plaintiff has account with the 2nd plaintiff at its branches at pedanandipadu and Guntur. The amounts due and payable by the 1st plaintiff are credited to its account with the 2nd plaintiff at its branches either at Pedanandipadu or at guntur. It has been the practice and customary for all business men, either firms or companies, availing limits with banks to take insurance of their stocks and business premises or other buildings and machinery in the joint names of themselves and their bankers. 1st plaintiff had taken insurance policies from the defendants 1 and 2 and also was obtaining cover notes from time to time in the joint names of both the plaintiffs. The amounts due thereunder in case of liability are payable either to the 1st plaintiff or to the 2nd plaintiff. Therefore, 2nd plaintiff also joined in filing the suit. 1st plaintiff was constituted as a firm in the year 1973 and from 1974 onwards it was carrying on business in cotton at Nagulapadu and availing limits with the 2nd plaintiff. For about ten years it was covering its ginning mill as well as its stocks under insurance policies issued by the defendants in favour of both the plaintiffs by paying annually an average premium of about Rs. 2,00,000/ -. For ten years there was never an occasion for claiming any compensation. For about ten years it was covering its ginning mill as well as its stocks under insurance policies issued by the defendants in favour of both the plaintiffs by paying annually an average premium of about Rs. 2,00,000/ -. For ten years there was never an occasion for claiming any compensation. In the year 1982 1st plaintiff started construction of a cotton seed oil mill on its premises and completed the same in the year 1984. It also obtained necessary electricity connection in May, 1984. For the year 1983-84 also plaintiffs obtained necessary insurance cover notes for ginning mill and stocks under seven different policies between 23-12-1983 and 21-7-1984 of a total value of rs. 1,13,50,000/ -. Policy for Rs. 3,50,000/- was last taken on 21-7-1984 which was in respect of ginning mill and machinery. Depending upon the location of the stocks as well as the extent of the total value of the stocks, the plaintiffs were seeking transfer of policies and additional policies for further amounts. Any transfer sought by the plaintiffs was always acceded to by the defendants with effect from the date of such request, although the communication thereof was sent on a later date. It has been an invariable practice of the defendants and other insurance companies to treat the transfers to be complete and effective from the date of request of customers. In respect of two transfers of policies i. e. , F/1898/83/ 28-12-83 for Rs. 15,00,000/- and F/152/84/ 10-1-84 for Rs. 10,00,000/- transfers were asked for by the plaintiffs by a letter of request given to the defendants Inspectors as usual and were treated to be effective accordingly. It was further contended that the oil mill was completed and production had started. Because of the value of the stocks held by the 1st plaintiff had gone up than the value, which was available to it under insurance coverage and since 2nd plaintiff was always requiring the 1st plaintiff to cover all the properties inclusive of buildings and machinery and stocks, 1st plaintiff sought a policy of Rs. 15,00,000/- in respect of the stocks and another policy of rs. 50,00,000/- in respect of the buildings and machinery of the oil mill from the defendants. The defendants Inspector stationed at Pedanandipadu informed the plaintiffs about the premium amounts of insurance policies for such coverage. 15,00,000/- in respect of the stocks and another policy of rs. 50,00,000/- in respect of the buildings and machinery of the oil mill from the defendants. The defendants Inspector stationed at Pedanandipadu informed the plaintiffs about the premium amounts of insurance policies for such coverage. Thereafter on 14-8-1984 1st plaintiff issued two cheques in favour of defendants company for Rs. 5,201/- and Rs. 18,406/- towards premiums of the insurance policies. The cheques were accepted and two cover notes being cover note No. 91009/84 dated 14-8-1984 for Rs. 15,00,000/- in respect of stocks and cover note No. 91062/84 dated 14-8-1984 for Rs. 50,00,000/- in respect of buildings and machinery of cotton seed oil mill were issued in favour of the plaintiffs and 2 on behalf of defendants company. The cover notes had to be followed by insurance policies in due course. The, insurance was thus full and complete and was effective after the cover notes were issued. Plaintiffs further contended that they had learnt that defendants had realized from the bankers the cheques, which were issued towards premium of the insurance. On 15-8-1984 fire broke out in the premises of 1st plaintiff which resulted in destruction of valuable stocks of cotton as well as buildings and machinery of ginning mill and also cotton seed oil mill. Stocks of cotton affected and destroyed in the fire accident included kappas, cotton lint, as well as fully pressed bales etc. Besides, super structure of cotton seed oil mill as well as machinery therein including oil section, decorticating section, deliberating section as also lathe room and godowns used for storage and expellers and motors were all affected and destroyed. All these items were duly covered under both the cover notes. All of them were pledged with 2nd plaintiff in whose favour also 1st plaintiff had taken cover notes. By then the total coverage for stocks under insurance with the defendants was to the tune of rs. 1,25,00,000/- under various insurance polices and cover notes. Such coverage for buildings and machinery was to the tune of rs. 53,50,000/-, in respect of buildings and machinery for ginning under one policy, and buildings and machinery of oil mill under another cover note covering all risks of fire, riot, strike and malicious damage. According to the plaintiffs, the policies were in force as on 15-8-1984. Such coverage for buildings and machinery was to the tune of rs. 53,50,000/-, in respect of buildings and machinery for ginning under one policy, and buildings and machinery of oil mill under another cover note covering all risks of fire, riot, strike and malicious damage. According to the plaintiffs, the policies were in force as on 15-8-1984. The fire accident was immediately reported to the police and also to the defendants on the same day. Police investigated the cause of fire and found that the fire was due to accident and was not result of any foul play. A certificate to this effect was also issued by superintendent of Police on 26-10-1984. Fire officer, Guntur and his team who came to control the fire could not prevent the destruction. He also informed 2nd plaintiff that the fire was result of an accident and the damage caused to goods was of about rs. 1,80,00,000/ -. According to the plaintiffs information, the defendants were also informed that the fire was result of accident only and it resulted in the loss to the plaintiffs. Defendants officers also visited the place of fire accident on the said day and succeeding days. The defendant Insurance company also appointed its surveyors, sri Purnachandra Rao in the first instance and later M/s. Mehta and Padamse surveyors Pvt. Ltd. , Madras to survey and assess the loss caused to the plaintiffs. Plaintiffs submitted to the defendants claim forms with all particulars in time and also furnished all necessary record and information from time to time. The surveyors assessed the value of damage to the buildings and machinery of cotton seed oil mill at Rs. 22,96,655/ -. They also assessed the damage to the buildings and machinery of ginning at Rs. 1,46,875/- and also to the stocks of the plaintiffs at Rs. 1,19,92,396-15 ps. It was further contended that although the loss suffered by 1st plaintiff was more than what was estimated by defendants, but to avoid delay in settlement of claim, plaintiffs agreed to the assessment of the defendants. Therefore, they signed a joint memo of assessment of loss. According to the plaintiffs, in view of the loss admittedly suffered by them, they were entitled to be paid with those amounts by defendants, but they did not settle the claim and delayed the settlement unreasonably for a long time. Therefore, they signed a joint memo of assessment of loss. According to the plaintiffs, in view of the loss admittedly suffered by them, they were entitled to be paid with those amounts by defendants, but they did not settle the claim and delayed the settlement unreasonably for a long time. I The fire accident had taken place on 15-8-1984 which had also engulfed adjacent buildings and stocks of adjoining premises of M/s. Pedanandipadu Cotton Press which were covered by other policies issued by the defendant company and the claims had been settled and paid. Stocks of third parties in both the premises were also engulfed and destroyed. Defendants without any reason also got an enquiry by C. B. I, who conducted investigation. This further delayed the settlement. According to the plaintiffs, there was no cause or room for any suspicion about the fire accident and the insurance coverage. When the matter was not settled for a long time, 1st plaintiff filed a writ petition before the High Court against the insurance Company for a direction to settle the claim. The High Court had directed the defendant company to settle all the claims within two months. Subsequent to the directions of the High Court defendant company chose to settle the claims partially. On 12-8-1986 it issued a cheque in favour of 2nd plaintiff to the credit of 1st plaintiff for an amount of Rs. 90,29,784/- only. The plaintiffs received the cheque under protest and without prejudice to their rights and claims for the balance of claim and interest. Defendants similarly paid to the plaintiffs another amount of Rs. 6,86,110/- on 10-3-1987 which was also received under protest. According to the plaintiffs, there was an outstanding balance of rs. 24,04,286/- payable to the plaintiffs with interest at 18% p. a. which was the minimum commercial rate of interest charged by banks and other financial institutions. Plaintiffs further contended that defendants had not cared to specify the details of settled policies and the amounts paid thereunder. However, they had sent two letters dt. 29-8-1986 under letter reference No. HRO/fire/40/86 wherein the defendants had chosen to repudiate its liability in respect of cover note no. 91009 which was for an amount of rs. 15,00,000/- stating that it was obtained on breach of utmost good faith. However, they had sent two letters dt. 29-8-1986 under letter reference No. HRO/fire/40/86 wherein the defendants had chosen to repudiate its liability in respect of cover note no. 91009 which was for an amount of rs. 15,00,000/- stating that it was obtained on breach of utmost good faith. Another letter bearing reference No. HRO/fire/40/ 86 was also sent by the defendants company by which they repudiated the claim under cover note No. 91062 for Rs. 50,00,000/- on the same ground. It was false to say that there was lack of good faith in obtaining cover notes. Insurance coverage was duly made by the defendants company in a bona fide manner and the aforesaid two cover notes issued by the defendants-company in favour of the plaintiffs were valid and binding on them. Defendants-company was bound to honour the claim and settle the claim of the plaintiffs. Since the plaintiffs and the defendants had mutually agreed to the assessment made by the surveyors in respect of the loss of buildings and machinery of cottonseed oil mill to the tune of Rs. 22,96,655/-, the defendants had to pay the said amount in settlement of its liability under cover note No. 91062. They further contended that out of the total agreed loss of stocks coming to Rs. 1,19,92,396-15 ps. the amount received under protest towards such loss was only Rs. 95,88,000/ -. Therefore, there was a balance of rs. 24,04,000/- and the defendants-company was liable to pay the said amount. They claimed interest. The following amounts were claimed. Amount of compensation payable under cover note No. 91062 towards loss of buildings and machinery of ( 3 ) IN the written statement 1st defendant company stated that 2nd defendant was not a necessary party to the suit. 1st plaintiff had also no cause of action against the 1st defendant and the suit had been filed only to resort to chance litigation. It was further contended that mere issuance of a cover note by the local inspector and issuance of a cheque for the premium by 1st plaintiff would not complete the contract in respect of the insurance coverage. Issuance of policy would alone complete the contract and fix the liability. It was further contended that mere issuance of a cover note by the local inspector and issuance of a cheque for the premium by 1st plaintiff would not complete the contract in respect of the insurance coverage. Issuance of policy would alone complete the contract and fix the liability. It was further contended that the Inspector Sri Kotha Hanumantha Rao was a relative of Sri Sakala Veerabhadraiah representing 1st plaintiff firm and for their mutual benefit they brought into existence two cover notes bearing Nos. 91062 and 91009 with ante-date of 14-8-1984. There was no enforceable contract and the cover notes were issued with mala fide intention. The cheques issued for premium were also antedated. 15th August, 1984 was a public holiday and 16th August, 1984 was also a public holiday. The cover notes and the relative cheques were received by 1st defendant at Guntur only on 17-8-1984. Even before they were received by 1st defendant at Guntur, fire accident was reported to have occurred on 15-8-1984. Message had been received by the 1st defendant about the fire accident even before he received the cover notes and the cheques. Enquiries of the 1st defendant had revealed that the cover notes and the cheques were brought into existence after the fire accident occurred on 15-8-1984 with the help of Inspector Hanumantha Rao. It was further contended, "the scored out cover notes bearing the same date and word for word, letter for letter, syllable for syllable now pressed into service except in respect of quantum of sum insured. These facts and the relative documents bear eloquent, unquestionable testimony of the fraud deliberately played by the plaintiffs and inspector, otherwise 10 lakhs would not jump to 40 lakhs and then to 50 lakhs at the very moment. Similarly 3 lakhs would not jump into 15 lakhs at the same moment. The parties concerned are educated, experienced and therefore their documents themselves would and did show their fraudulent intentions and machinations and illegal greed to have undue enrichment. " It was further contended that 1st defendant kept the Inspector under suspension and reported the matter for due investigation by the C. B. I, for necessary action. Apprehending that the investigation might expose the fraud played by the plaintiffs and inspector Hanumantharao in respect of the suit claim, the plaintiffs rushed to the Court with the suit. " It was further contended that 1st defendant kept the Inspector under suspension and reported the matter for due investigation by the C. B. I, for necessary action. Apprehending that the investigation might expose the fraud played by the plaintiffs and inspector Hanumantharao in respect of the suit claim, the plaintiffs rushed to the Court with the suit. The suit was untenable and lack of good faith. The plaintiffs could not enrich themselves by playing fraud on the defendant by projecting antedate cover notes in respect of the value of goods and building. The relative cover notes do not present the correct position of the insurance coverage and they were deliberately brought into existence to have illegal gain at the expense of the defendant. It was further contended, "cover note No. 91008 was prepared for 3 lakhs with dt. 14-8-1984 and it is scored out and cancelled without any obvious reason or tenable ground and for the same subject matter cover note 91009 with date 14-8-1984 for a sum of Rs. 15 lakhs was prepared. Similarly cover note no. 91061 with dt. 14-8-1984 in respect of the building for Rs. 10 lakhs written in letters and put in also figures and the 1st figure 1 was altered into 4 making it into 40 lakhs, but the amount written in words continue to remain as 10 lakhs and greed knows no bounds. The plaintiff and the concerned inspector brought into existence the cover note No. 91062 with dt. 14-8-1984 for 50 lakhs in respect of cover note No. 91009 and 10 lakhs to 50 lakhs in respect of cover note No. 91062 would bear ample testimony to the fraud played by the plaintiff in collusion with the Inspector locally stationed who is the relative of the 1st plaintiff, who is the Managing partner of the 1st plaintiff. firm". It was further contended that plaintiffs had not chosen to mention any document showing the quantum of stock existing in the godown by the time of accident. Similarly in respect of the building also the plaintiffs did not file any valuation certificate or extracts of the property demand register of the local authority. Therefore, the defendant had repudiated the plaintiffs claim. Similarly in respect of the building also the plaintiffs did not file any valuation certificate or extracts of the property demand register of the local authority. Therefore, the defendant had repudiated the plaintiffs claim. The defendant further contended that it was incorrect to say that the premium paid in respect of the said two cover notes was accepted, but relative receipts were issued specifically mentioning that the defendant received the premium without prejudice to the rights and contentions in the matter. The matter had stood only at the proposal stage and the proposals were also made mala fide after the fire accident ante-dating the cover notes and relative cheques. Coverage was not accepted and the polices were not issued because the cover notes and the cheques were received by the defendant two days after the fire accident and therefore the defendant was not liable pay any amounts to the plaintiffs. ( 4 ) ON the basis of these pleadings, the following issues were framed by the trial court. (1) Whether the suit is bad for misjoinder of parties? (2) Whether the suit amount claimed is correct? (3) Whether there was a concluded contract? (4) Whether the plaintiff is entitled for the suit amount? (5) To what relief? ( 5 ) ON behalf of the plaintiffs three witnesses were examined and 20 documents were exhibited. On behalf of the defendants d. W. I was examined and 13 documents were exhibited. ( 6 ) THERE was no evidence led on issue no. 1 and the issue No. 1 was accordingly decided in favour of the plaintiffs. Issue no. 3 was decided in favour of the plaintiffs as against the defendants. Issues 2 and 4 were taken together by the trial Court and they were also decided in favour of the plaintiffs as against the defendants. Eventually a decree as prayed for was passed. ( 7 ) DURING the hearing of this appeal, this court felt that K. Hanumantha Rao, inspector of Oriental Insurance Company at the relevant point of time was a material witness. Neither of the parties had chosen to examine him. Perhaps for obvious reasons the plaintiffs might have felt that he might make a statement which may go against them. The defendants might have felt in the same way. Neither of the parties had chosen to examine him. Perhaps for obvious reasons the plaintiffs might have felt that he might make a statement which may go against them. The defendants might have felt in the same way. Therefore, in exercise of powers under Order XLI Rule 27 (l) (b) of the Code of Civil Procedure, we summoned k. Hanumantha Rao, Inspector of Oriental insurance Company at the relevant point of time. He was examined on 5-11-2001 and 12-11-2001. Though 1st defendant in his written statement had categorically stated that the suit was result of collusion between k. Hanumantha Rao and the plaintiffs, there was no issue framed by the trial Court with respect to that contention. It was also specifically pleaded that the cover notes were ante-dated and were issued after the fire accident. There was no specific issue on this also. But we feel that the parties knew the respective claims of their opponents and the trial Court has also dealt with such matters while deciding the issues 2 and 4. Therefore, we do not think that it would be necessary to remand the matter back to the trial Court. In addition, the statement of k. Hanumantha Rao has been recorded by this Court. Therefore, if the issue relating to the alleged collusion between k. Hanumantha Rao and the plaintiffs and the issue relating to ante-dating of cover notes are settled in this Court, it would not be prejudicial to either of the parties. In any case, these issues without having been framed have been considered by the trial court as well. For instance, the trial Court in its judgment while deciding the issue No. 3 had specifically noted. "the defendants alleged that there is collusion between the first plaintiff and the Insurance Inspector because he is a distant relative. Distant relative is not a prohibition to issue cover notes. The same Inspector covered for 1st plaintiff several years and covered others so for crores without remark till then. The alleged charges, enquiry report against insurance Inspector and dismissal was long after repudiation of claim in August, 1986 and filing of suit in 1987. No specific evidence oral or documentary adduced regarding fraud and collusion as alleged by 1st defendant-company against the first plaintiff and the insurance inspector. The alleged charges, enquiry report against insurance Inspector and dismissal was long after repudiation of claim in August, 1986 and filing of suit in 1987. No specific evidence oral or documentary adduced regarding fraud and collusion as alleged by 1st defendant-company against the first plaintiff and the insurance inspector. " So in these circumstances, two points which this court wants to frame to decide the appeal are (1) Whether there was collusion between the plaintiffs and k. Hanumantha Rao, Insurance Inspector; (2) Whether the cover notes were issued after the fire accident; ( 8 ) BOTH these points are taken together. The facts relating to filing of the suit and the issuance of the insurance coverage have been dealt with while referring to the pleadings of the parties. P. W. I (Sakala veerabhadraiah-1st plaintiff), stated in his cross-examination, "the concerned Inspector hanumantha Rao who issued cover note in this matter was stationed at Pedanandipadu since some years. He is a distant relative of mine. " When this Inspector K. Hanumantha rao was examined by this Court, he stated in his examination-in-chief that he had distant relationship with S. Veerabhadraiah, but in his cross-examination by the appellants he admitted that he was married to the daughter of Mrs. S. Veerabhadraiah s sister. In the Indian social structure one sister s son-in-law is not a distant relation by any stretch of imagination. Since s. Veerabhadraiah denied his close relationship with K. Hanumantha Rao, as also K. Hanumantha Rao himself also tried to deny his close relationship with s. Veerabhdraiah in the first instance, therefore this is one of the suspicions, which has to go against the plaintiffs-respondents. ( 9 ) NOW coming to the main case, before issuing cover notes for which a claim has been preferred in the suit, the Inspector issued number of cover notes of which a reference has been given while the pleadings were being mentioned. In his statement also k. Hanumantha Rao accepted that he issued cover notes and then cancelled them. He stated that first he prepared a cover note, the sum assured being Rs. 10. 00 lakhs. Therefore he advised the plaintiff that common policy had also to be taken for the premises. He was informed that godown was worth rs. 10. 00 lakhs and the other buildings and plant and machinery were worth Rs. 40. 00 lakhs. Ex. B-5 was in his handwriting. 10. 00 lakhs. Therefore he advised the plaintiff that common policy had also to be taken for the premises. He was informed that godown was worth rs. 10. 00 lakhs and the other buildings and plant and machinery were worth Rs. 40. 00 lakhs. Ex. B-5 was in his handwriting. He stated that the amount shown is Rs. 10. 00 lakhs. The description of risk is, "super structure of the buildings (double godown) and oil mill, buildings and plant and machinery, decorticating section of cotton seed, crushing unit belonging to the insured s premises of Nagulapadu near pedanandipadu, Guntur and occupied. . . . . . . . . " He stated, "in Ex. B-5 I have overwritten Rs. 10,00 lakhs and made it rs. 40. 00 lakhs Ex. B-3 in O. S. No. 414 of 1987 is also in my handwriting. The sum assured is shown as Rs. 40. 00 lakhs. The description of the risk is identical with the description of the risk in Ex. B-5. In Exs. B-3 and B-5 the sum assured in words reads. "ten lakhs", the same is not altered. Ex. B-1 in O. S. No. 414 of 1987 is the final cover note issued with respect to super structure cottonseed oil mill, decorticating oil mill etc. The risk covered in cancelled cover notes Exs. B-3 and b-5 and the final cover note Ex. B-1 in O. S. No. 414 of 1987 is one and the same. The description is given with more clarity in ex. B-1. " One fails to understand as to why three cover notes had to be prepared for the same cover of insurance. The description of the risk and the property is the same in all the three cover notes, but only the assured amounts were changed. In one of the cover notes the assured amount written in words remains the same, whereas only the figures were changed from Rs. 10. 00 lakhs to rs. 40,00 lakhs, the 1st figure 1 was changed into 4 . The alleged fire accident took place during the night of 14/15th August, 1984. The cover notes were taken, according to the witness K. Hanumantha Rao, somewhere after 4. 00 p. m. on 14-8-1984. 10. 00 lakhs to rs. 40,00 lakhs, the 1st figure 1 was changed into 4 . The alleged fire accident took place during the night of 14/15th August, 1984. The cover notes were taken, according to the witness K. Hanumantha Rao, somewhere after 4. 00 p. m. on 14-8-1984. Because of the suppression that the 1st plaintiff was closely related to this witness and because of having prepared three cover notes on the same and cancelled two cover notes and also because of the fact that there was no proposal in writing as has been admitted by the witness from the party concerned, we are not convinced that these cover notes were taken in good faith. We are fortified in our view by the judgment of the Supreme Court reported in Life Insurance Corporation of India v. G. M. Channabasemma and the repudiation of the contract by the defendants could not be validated. The Supreme Court held, "it is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. " ( 10 ) THERE is added circumstance also which weighs in favour of the defendants-appellants that there was no material shown to us as to what was the proof before the insurance Inspector about the value of the building and machinery and the stocks. The value of the building and machinery and stocks was changed in the three cover notes almost around the same time by the plaintiff. Therefore, the plaintiff himself was not sure as to the value of the property that he was seeking insurance for. The plaintiffs-respondents have referred to the following judgments. ( 11 ) INDIAN Trade and General Ins. Co. v. Bhailal, Svenska Handelsbanken v. M/s. Indian charge Chrome, General Assur. Therefore, the plaintiff himself was not sure as to the value of the property that he was seeking insurance for. The plaintiffs-respondents have referred to the following judgments. ( 11 ) INDIAN Trade and General Ins. Co. v. Bhailal, Svenska Handelsbanken v. M/s. Indian charge Chrome, General Assur. Society v. Chandmull Jain, P. Packer v. V. Khalid and mina Kumari v. Bijoy Singh, but in view of our finding that there was strong probability towards the fact that the cover notes were prepared after the occurrence of fire accident, we do not intend to go to these decisions. However, the learned counsel for the plaintiffs-respondents submitted that since the premium had been accepted by the defendants-appellants, therefore it should be presumed that they had accepted their liability. The premium admittedly was received by the defendants-company on 17-8-1984 and the fire accident had taken place between 14/15th August, 1984. The cover notes were not at all in existence ,at the time the premium was received by the defendants-company. Therefore, in our view, the acceptance of premium by the defendants-company would not bind them in a policy which was result of collusion and fraud. The defendants had further stated that they had sent receipts to the plaintiffs in which they had stated that they were accepting the premium without prejudice to their rights. The plaintiffs did not produce the receipts before the Court. ( 12 ) FOR the reasons given hereinabove, the appeal is allowed and the judgment and decree passed by the trial Court are set aside. The plaintiffs suit is dismissed. No order as to costs.