JUDGMENT Honble Amitava Lala, J.—All the aforesaid appeals are analogously heard at the stage of admission on the informal papers as agreed upon by the contesting parties. The sole issue is whether the insurance company/companies is/are liable to pay compensation to the third party claimant/s when respective cheque/s on account of premium to be paid by the owner/s to them is/are dishonoured. 2. In FAFO No. 646 of 2008 it has been contended by the Insurance Company that the cheque of the premium was issued by the owner on 2nd September, 2003 covering the period between 4th September, 2003 to 3rd September, 2004. The cheque was returned by the Bank to the Insurance Company on account of insufficient fund in the Account of the owner. Accident took place on 4th March, 2004. 3. In FAFO No. 924 of 2008 it has been contended by the Insurance Company that the cheque of the premium was issued by the owner on 29th April, 2005 covering the period between 1st May, 2005 to 30th April, 2006. The cheque was returned by the Bank on 11th May, 2005 to the Insurance Company on account of insufficient fund in the Account of the owner. The owner was informed by letter dated 24th May, 2005. The accident occurred on 18th February, 2006. Therefore, the Insurance Company is not liable to pay the compensation. 4. In FAFO No. 1467 of 2008 it has been contended by the Insurance Company that the cheque of the premium was issued by the owner on 31st May,1996 covering the period between 31st May,1996 to 30th May,1997. The cheque was returned by the Bank on 18th June, 1996 to the Insurance Company on account of insufficient fund in the Account of the owner. Accident took place on 14th October, 1996. 5. From the judgments and orders impugned hereunder we find that the Insurance Companies are not fastened with the liability. It has been directed to pay as stop gap arrangement and recover the amount from the owner. The owners in all the appeals did not appear in the proceeding before the Motor Accident Claims Tribunal. 6. The Insurance Companies contended before this Court that since the cheques have been dishonoured, there was no insurance coverage of the owner for the period of accident, therefore, they are not liable to pay the compensation to the claimants even as stop gap arrangement. 7. 6. The Insurance Companies contended before this Court that since the cheques have been dishonoured, there was no insurance coverage of the owner for the period of accident, therefore, they are not liable to pay the compensation to the claimants even as stop gap arrangement. 7. According to us, the Motor Vehicles Act, 1988 (hereinafter referred to as the Act) is a beneficial piece of legislation. Such Act provides requirement of insurance coverage. Sections 146 and 147 of the Act speaks as follows : “146. Necessity for insurance against third party risk.—(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter : [Provided that in the case of a vehicle carrying, or meant to carry, dangerous or hazardous goods, there shall also be a policy of insurance under the Public Liability Insurance Act, 1991 (6 of 1991)]. Explanation.—A person driving a motor vehicle merely as a paid employee, while there is in force in relation to the use of the vehicle no such policy as is required by this sub-section, shall not be deemed to act in contravention of the sub-section unless he knows or has reason to believe that there is no such policy in force. (2) Sub-section (1) shall not apply to any vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise. (3) The appropriate Government may, by order, exempt from the operation of sub-section (1) any vehicle owned by any of the following authorities, namely : (a) the Central Government or a State Government, if the vehicle is used for Government purposes connected with any commercial enterprise; (b) any local authority; (c) any State transport undertaking : Provided that no such order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this Act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to third parties. Explanation.—For the purposes of this sub-section, “appropriate Government” means the Central Government or a State Government, as the case may be, and— (i) in relation to any corporation or company owned by the Central Government or any State Government, means the Central• Government or that State Government; (ii) in relation to any corporation or company owned by the Central Government and one or more State Governments, means the Central Government; (iii) in relation to any other State transport undertaking or any local authority, means that Government which has control over that undertaking or authority.” "147. Requirements of policies and limits of Iiability.—(1) In order’ to comply with the requirements of this Chapter, a policy of insurance must be a policy which— (a) is issued by a person who is an authorised insurer; and (b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)— (i) against any liability which may be incurred by him in respect of the death of or bodily [injury to any person, including owner of the goods or his authorised representative carried in the vehicle] or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place; (ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place : Provided that a policy shall not be required— (i) to cover liability in respect of the death, arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmen’s Compensation Act, 1923 (8 of 1923), in respect of the death of, or bodily injury to, any such employee— (a) engaged in driving the vehicle, or (b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets on the vehicle, or (c) if it is a goods carriage, being carried in the vehicle, or (ii) to cover any contractual liability. Explanation.—For removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place. (2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely : (a) save as provided in clause (b), the amount of liability incurred; (b) in respect of damage to any property of a third party, a limit of rupees six thousand : Provided that any policy of insurance issued with any limited liability and in force, immediately before the commencement of this Act, shall continue to be effective for a period of four months after such commencement or till the date of expiry of such policy whichever is earlier. (3) A policy shall be of no effect for the purposes of this Chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and containing the prescribed particulars of any condition subject to which the policy is issued and of any other prescribed matters; and different forms, particulars and matters may be prescribed in different cases. (4) Where a cover note issued by the insurer under the provisions of this Chapter or the rules made thereunder is not followed by a policy of insurance within the prescribed time, the insurer shall, within seven days of the expiry of the period of the validity of the cover note, notify the fact to the registering authority in whose records the vehicle to which the cover note relates has been registered or to such other authority as the State Government may prescribe. (5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.” 8. Section 149 (1) of the Act speaks about the duty of the insurers to satisfy judgments and awards against persons insured in respect of third party risks which is as follows : “(1) If, after a certificate of insurance has been issued under sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of Section 147 (being a liability covered by the terms of the policy) [or under the provisions of Section 163-A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.” 9. Section 64-VB of the Insurance Act, 1938 (hereinafter called as Act, 1938) as speaks that no risk to be assumed unless premium is received in advance which is as follows : “(1) No insurer shall assume any risk in India in respect of any insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner. (2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium has been paid in cash or by cheque to the insurer. Explanation.—Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be. (3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case be credited to the account of the agent. (4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty-four hours of the collection excluding bank and postal holidays. (5) The Central Government may, by rules, relax the requirements of sub-section (1) in respect of particular categories in insurance policies.] (6) The Authority may, from time to time, specify, by the regulations made by it, the manner of receipt of premium by the insurer.]” 10. From the plain reading of several provisions of the Act, it appears to us that the insurance of the vehicle to run at the public places is mandatory in nature. Therefore, it is implied that the insurance company will inform all concerned inclusive of the Regional Transport Authority and the appropriate police authority dealing with traffic simultaneously with the information of cancellation of the insurance coverage to the owner/insured. Insurance is an assurance. As per the scheme of the Act such assurance is to be given not only to the insured but also to the third parties who sustained injury or succumbed death due to road accident and their legal representatives. They are not aware about the import, period and extent of the contract between the insurer and the insured. They are also not aware about any default. They are not aware about the import, period and extent of the contract between the insurer and the insured. They are also not aware about any default. They presuppose that when a vehicle runs in the public place, it has all valid documents to run. One of such valid documents is contract of insurance between the insurer and insured to cover the third party risk. In that way knowledge or information for not having valid insurance coverage by the insurance company to the Regional Transport Authority and appropriate police authority deals with traffic is mandatory in nature. Insurers cannot be allowed to wait and watch like usual commercial enterprises and take defence of not having insurance coverage only after the accident when the claim will arise. As soon as an insurer enters into a contract with insured under the Act, it becomes statutorily liable to the third parties. On the other hand, the Act itself is a beneficial piece of legislation for the third parties. Therefore, whenever we sit in this jurisdiction, we should not be forgetful about predominant effect of such Act. Interest of the affected persons will be considered at first. Equity follows law by applying the maxim of Acquitas sequitur legem but sometimes law follows equity by the maxim of Lex aliquando sequitur aequitatem particularly when equity emerges into the law relevant for the purpose. Therefore, it is essential for the insurer to take a defence before the tribunal that it had not only cancelled the insurance coverage and informed the insured but also simultaneously intimated all concerned to prevent the vehicle from plying on the road otherwise it cannot avoid the liability to pay compensation to the third parties specially in the form of stop gap arrangement and recover from the owner i.e. insured. When the insurance coverage under the Act is compulsory, it has two fold duties i.e. prevention and compensation. When they have discharged their duty of prevention in absence of coverage by notice to the appropriate authorities, their liability can be extinguished and the authorities will be strictly liable to ensure seizure of such vehicle from the public place for not having insurance coverage. Notice to them means notice to public. In absence of the same an insurance company cannot be discharged from their liability to make payment of compensation to a third party even as a stop gap arrangement. Notice to them means notice to public. In absence of the same an insurance company cannot be discharged from their liability to make payment of compensation to a third party even as a stop gap arrangement. Facilities under the statute cannot be frustrated by means of solitary intimation of the insurer to the insured about cancellation of insurance contract for dishonourment of requisite cheque/s. It is “strict liability” of the insurer under the law. An insurance company is doing business about risk as per its own policy. Therefore, if the insurance company is allowed to avoid the risk, the same will go against their own policy of business particularly when they are entitled to get back their money even by way of land revenue in case the contract does not seem to be in existance for any reason. There is, in general, no duty for the sufferer to anticipate that another will be negligent and to avoid the effects of that negligent by anticipation. The position of a sufferer and the position of an insurer cannot be equated at all. 11. We have considered various judgments as available to us. In Oriental Insurance Co. Ltd. v. Inderjit Kaur and others, (1998) 1 SCC 371 , three Judges Bench of the Supreme Court held that the insurer is not entitled to avoid liability towards third party for not having premium since third party risk is a public interest to be served by the Insurance Company in accordance with law. It has a prevailing effect over the insurer’s own interest. 12. The aforesaid judgment is squarely applicable in this field. But since other judgments of two Judges’ Bench curved out the question of entitlement of the insurer to avoid relief in case of dishonourment of cheque we require further discussion. 13. In National Insurance Co. Ltd. v. Seema Malhotra and others, 2001 (2) TAC 1 (SC), two Judges’ Bench of the Supreme Court held that the Insurance Company is governed by a contract between it and the insured. Therefore, an agreement without consideration is void. Hence, when a contract becomes void any person who has received any advantage under such contract is bound to restore it to the person from whom he received it. Therefore, an agreement without consideration is void. Hence, when a contract becomes void any person who has received any advantage under such contract is bound to restore it to the person from whom he received it. So, even if the insurer has disbursed the amount covered by the policy to the insured before the cheque was returned dishonoured, insurer is entitled to get the money back. In any event, the Supreme Court also observed that in case the insured paid the premium before the date of accident then it is a different aspect altogether. In paragraph 9 and 10 of the said judgment two Judges Bench distinguished the three Judges Bench judgment of Inderjit Kaur (supra) by saying that the three Judges Bench refrained from expressing any opinion on the question of insurer’s entitlement to avoid or cancel the policy as against the insured when the cheque issued for payment of the premium was dishonoured. Such point is further discussed in another judgment. Such referred judgment is Deddappa and others v. Branch Manager, National Insurance Co. Ltd., 2008 (1) TAC 417 (SC). There the Supreme Court has taken note of both the judgments in paragraph 8 therein and again held in paragraph 16 that in the case of Inderjit Kaur (supra) although the three Judges Bench of the Supreme Court opined that by applying the provisions of the Motor Vehicles Act, 1988, the Insurance Company is liable to indemnify third party in respect of the policy and to satisfy the award of the compensation in respect of award thereof but the cause of its entitlement to avoid or cancel the policy for the reason that the cheque issued in respect of premium therein had not been honoured, was left open. It was further held there that the judgment reported in (2000) 3 SCC 195 : 2000(2) TAC 1, New India Assurance Co. Ltd. v. Rula and others, was considered and held on the basis of such judgment that if on the date of accident the policy subsists, then only the third party would be entitled to avail the benefit thereof. Thereafter it has followed the ratio of two Judges Bench judgment of the Supreme Court i.e. Seema Malhotra (supra) and held that a contract is based on reciprocal promise. Reciprocal promises by the parties are condition precedent for a valid contract. A contract furthermore must be for consideration. Thereafter it has followed the ratio of two Judges Bench judgment of the Supreme Court i.e. Seema Malhotra (supra) and held that a contract is based on reciprocal promise. Reciprocal promises by the parties are condition precedent for a valid contract. A contract furthermore must be for consideration. If the contract of insurance has been cancelled and all concerned have been intimated therein, the Insurance Company would not be liable to satisfy the claim. A beneficial legislation, as is well known, should not be construed in such a manner so as to bring within its ambit a benefit which was not contemplated by the Legislature to be given to the party. Thereafter it has quoted a part of the judgment reported in AIR 1985 SC 278 , Regional Director, Employees’ State Insurance Corporation, Trichur v. Ramanuja Match Industries, which is as follows : “We do not doubt that beneficial legislations should have liberal construction with a view to implementing the legislative intent but where such beneficial legislation has a scheme of its own there is no warrant for the Court to travel beyond the scheme and extend the scope of the statute on the pretext of extending the statutory benefit to those who are not covered by the scheme.” 14. Even thereafter the Supreme Court considered the claimants as people from the lowest strata of society and by applying Article 142 of the Constitution directed to pay and recover the amount. 15. On the other hand three Judges’ Bench of the Supreme Court in Inderjit Kaur (supra) held on the basis of the judgment of the Privy Council in AIR 1917 PC 142, Montreal Street Rly. Co. v. Normandin, as follows : ‘When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty and at the same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.” 16.Thereafter categorically held that the public interest will prevail over the interest of the appellant insurance company therein. 17. 17. From the judgments of Rula (supra) and Deddappa (supra) we find an observation of Roskill, L.J. in (Cehave NV v. Bremer Handelsgesellschaft mbH) reported in [1975] 3 All ER 739 at 756 that the law relating to contracts of insurance is part of the general law of contract. Inspite of following such observation the Supreme Court in Rula (supra) held that though purpose relating to an ordinary contract of insurance is to be understood in its proper prescription but the contract of insurance relating to motor vehicles has to be understood in the light of various provisions contained in the Act. In the said judgment it is further held that there are provisions of necessity of insurance against third party risks and duty of the insurer is to satisfy the judgments and awards against persons insured in respect of third party risk. It has also been held that Section 149 of the Act casts duty on the insurer to satisfy judgment and award against the persons insured in respect of third party risk. A two Judges’ Bench of the Supreme Court also followed the ratio of three Judges’ Bench judgment, as in the case of Inderjeet Kaur (supra), which is as follows : “10. The contract of insurance in respect of motor vehicles has, therefore, to be construed in the light of the above provisions. Section 146(1) contains a prohibition on the use of the motor vehicles without an insurance policy having been taken in accordance with Chapter XI of the Motor Vehicles Act. The manifest object of this provision is to ensure that the third party, who suffers injuries due to the use of the motor vehicle, may be able to get damages from the owner of the vehicle and recoverability of the damages may not depend on the financial condition or solvency of the driver of the vehicle who had cause the injuries. 11. Thus, any contract of insurance under Chapter XI of the Motor Vehicles Act, 1988 contemplates a third party who is not a signatory or a party to the contract of insurance but is, nevertheless, protected by such contract. As pointed out by this Court in New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani ( AIR 1964 SC 1736 ) the rights of the third party to get indemnified can be exercised only against the insurer of the vehicle. As pointed out by this Court in New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani ( AIR 1964 SC 1736 ) the rights of the third party to get indemnified can be exercised only against the insurer of the vehicle. It is thus clear that the third party is not concerned and does not come into the picture at all in the matter of payment of premium. Whether the premium has been paid or not is not the concern of the third party who is concerned with the fact that there was a policy issued in respect of the vehicle involved in the accident and it is on the basis of this policy that the claim. can be maintained by the third party against the insurer.” 18. Even in the cases of other statutory lapse or lapses under Section 149 of the Act three Judges’ Bench of the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh and others, (2004) 3 SCC 297 , held that the insurance company will make the payment and then recover the same from the owner even as a land revenue. Therefore, the interest of the insurer is fully protected even if lapses on the part of the insured is available. On the other hand, claimants will be nowhere if for no fault of themselves payment of compensation in any form is refused or withheld. Hence, any of the statutory lapses are to be controlled by the statute itself to give the benefit to the ultimate beneficiary under the beneficial piece of legislation because he has no protection against the payment of compensation in such circumstances. In doing so, if any tribunal directs any insurance company to pay the amount of compensation to the claimants with a direction upon them to recover such amount from the owner the same cannot be said to be departure from the statutory obligation. In both the cases i.e. Seema Malhotra (supra) and Deddappa (supra) we find that the Court was swayed away with the general principle of contract sitting in the jurisdiction of motor accident claim cases of the claimants. In both the cases i.e. Seema Malhotra (supra) and Deddappa (supra) we find that the Court was swayed away with the general principle of contract sitting in the jurisdiction of motor accident claim cases of the claimants. The excluding sentence of the three Judges Bench of the Supreme Court in Inderjeet Kaur (supra), i.e. “upon which we do not express any opinion”, does not give implied permission to the two Judges’ Bench to take contrary stand sitting in the similar jurisdiction of the motor accident claim cases. It has only meant and kept open for the appropriate Court to consider the general principle of contract between insurer and insured without frustrating claim of the claimants which is paramount consideration under such law. Supreme Court in New India Assurance Co. Ltd. v. Harshadbhai Amrutbhai Modhiya and another, 2006 (5) SCC 192 , categorically held that liability of the insurance companies under the Act is statutory but not contractual unlike other Act/s. Therefore, Court cannot go beyond the statute and confer upon the general conditions of contract. Even thereafter if we go by the composite reading of Seema Malhotra (supra) and Deddappa (supra) we find that there are two aspects in both the judgments. One is whether the insurance company has informed all concerned or not and another is whether payment of compensation to the third parties is absolute or in the nature of stop gap arrangement with a right of recovery. When all concerned are intimated, an insurance company both under the Act and under the contract can have a defence about refusal of compensation to the third parties even as a stop gap arrangement, failing which it would be treated to be statutory default on the part of the insurance company. Thus, the insurance company cannot avoid its liability in such circumstances. Secondly, stop gap arrangement cannot be treated to be a liability. It is a device of the Court to get a statutory compliance to facilitate the sufferer keeping pace with the intention of the legislature. Hence, such type of accommodation of the Court cannot be treated to be the liability on the part of the insurer and as such reference on that score seems to be academic in nature. 19. With the above observations and order, the appeals preferred before this Court are dismissed without imposing any cost. Hence, such type of accommodation of the Court cannot be treated to be the liability on the part of the insurer and as such reference on that score seems to be academic in nature. 19. With the above observations and order, the appeals preferred before this Court are dismissed without imposing any cost. However, if the insurance companies find that they have made statutory compliance by informing all concerned apart from insured, as aforesaid, it is open to them to make appropriate application/s before the appropriate tribunal in the self-same proceeding or initiate any independent proceeding, if so advised, for the purpose of redressal of its/their grievance/grievances. 20. We make it clear that apart from the sole issue as above no other issue is discussed and, accordingly, the appeals are dismissed only on such ground. If any other question on the part of the insurance company/companies is yet open for discussion, they are at liberty to raise such issue by way of any application in the selfsame proceeding before the tribunal, if so advised, and the same will be considered in accordance with law independently. 21. Incidentally, the appellant-insurance company prayed that the statutory deposit of Rs. 25,000/- made before this Court for preferring this appeal be remitted back to the concerned Motor Accidents Claims Tribunal as expeditiously as possible in order to adjust the same with the amount of compensation to be paid to the claimants, however, such prayer is allowed. 22. A copy of this order is directed to be given to the learned Advocate General! learned Additional Advocate General/learned Chief Standing Counsel free of cost for all practical purposes. Honble Shishir Kumar, J.—I agree. ————