NATIONAL INSURANCE CO. LTD. vs SEEMA MALHOTRA .

The Supreme Court held that under Section 149 of the Motor Vehicles Act, 1988, an insurer is liable to third parties despite the dishonor of a cheque for the premium, as the liability was incurred prior to the cancellation of the policy. The Court emphasized that the insurer cannot repudiate the contract based solely on the dishonored cheque when the insured's death and the accident occurred before the policy was canceled. The Court upheld the High Court's decision that the insurer remains liable for the claim made by the legal heirs of the insured.