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The Motor Vehicles Act, 1988
Section 3 in The Motor Vehicles Act, 1988
Section 96 in The Motor Vehicles Act, 1988
Section 4 in The Motor Vehicles Act, 1988
Article 142 in The Constitution Of India 1949
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The Branch Manager vs Soorya (Minor Rep By His Next ... on 11 June, 2014

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Madras High Court
The Icici Lombard General vs )Annakkili on 6 February, 2012

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 06.02.2012

CORAM :

THE HONOURABLE MR.JUSTICE S.MANIKUMAR

C.M.A.Nos.2126 of 2009, 3175, 3534, 3806 of 2011

and 100 and 179 of 2012 and connected Miscellaneous Petitions

C.M.A.No.2126 of 2009 & M.P.Nos.1 and 2 of 2009

The ICICI Lombard General

Insurance Company Ltd.,

140, Chotta Boy Centre,

Nungambakkam Road,

Chennai-600 034. ... Appellant

Vs...

1)Annakkili

2)Siluvaimani

3)Pakkiaraj

4)Dingumani

5)Selvarani

6)Minor Kanagaraj

(Minor is represented by his mother and

next friend 1st respondent)

7)P.Sudhakar ... Respondents

Prayer : Civil Miscellaneous Appeal filed Section 173 of the Motor Vehicles Act, 1988, against the Judgment and Decree dated 06.06.2008 made in M.C.O.P.No.9 of 2007 on the file of the Motor Accident Claims Tribunal, (Fast Track Court No.IV) at Poonnamallee.

C.M.A.No.3175 of 2011 & M.P.Nos.1 & 2 of 2011

M/s.New India Assurance Co.Ltd,

No.45, Moore Street,

Chennai. ... Appellant

Vs...

1)Tmt.Valliammal

2)Thiru.K.Muruganatham

3)Thiru.K.L.Kasi ... Respondents

Prayer : Civil Miscellaneous Appeal filed Section 173 of the Motor Vehicles Act, 1988, against the Judgment and Decree dated 30.05.2011 made in M.C.O.P.No.2564 of 2007 on the file of the Motor Accident Claims Tribunal, (II Judge), Small Causes Court, Chennai.

C.M.A.No.3534 of 2011 & M.P.No.1 of 2011

M/s.Bajaj Allianz General Insurance Company,

4th Floor, Prince Towers,

Numgambakkam, Chennai-600 034. ... Appellant

Vs...

1)S.Thangam

2)S.Vicky (Minor)

3)S.Sathish (Minor)

4)S.Selvi (Minor)

(Minors are represented by their mother

and next friend, 1st respondent)

5)B.Avinash

6)Tmt.K.Sumathi ... respondents

Prayer : Civil Miscellaneous Appeal filed Section 173 of the Motor Vehicles Act, 1988, against the Judgment and Decree dated 25.07.2011 made in M.C.O.P.No.2941 of 2006 on the file of the Motor Accident Claims Tribunal, (Court of Small Causes), Chennai.

C.M.A.No.3806 of 2011 & M.P.No.1 of 2011

The Branch Manager

The New India Assurance Co.Ltd.,

Tiruvannamalai. ... Appellant

Vs...

1)Sagunthala

2)Aravindan

3)M.Gnanaoli

4)P.Keerthy ... Respondents

Prayer : Civil Miscellaneous Appeal filed Section 173 of the Motor Vehicles Act, 1988, against the Judgment and Decree dated 15.06.2011 made in M.C.O.P.No.100 of 2011 on the file of the Motor Accident Claims Tribunal, (Additional District and Sessions Court cum Fast Track Court) at Tirupattur.

C.M.A.No.100 of 2012 & M.P.No.1 of 2012

United India Insurance Company Ltd.,

No.134, Silingi Buildings,

Greams Road,

Thousand Lights, Chennai-6. ... Appellant

Vs...

1)Sevanthi

2)M/s.Viswanatha Oil Mills,

No.3, Thatta Muthiappan Street,

Parrys, Chennai-1. ... Respondents

Prayer : Civil Miscellaneous Appeal filed Section 173 of the Motor Vehicles Act, 1988, against the Judgment and Decree dated 29.09.2011 made in M.C.O.P.No.2112 of 2010 on the file of the Motor Accident Claims Tribunal, (Court of Small Causes No.VI), Chennai.

C.M.A.No.179 of 2012 & M.P.No.1 of 2012

M/s.United Insurance Company Ltd.,

No.64, Cath Centre, Armenium Street,

Chennai. ... Appellant

Vs...

1)Mrs.K.Kasturi

2)Mr.V.G.Ramachandran ... Respondents

Prayer : Civil Miscellaneous Appeal filed Section 173 of the Motor Vehicles Act, 1988, against the Judgment and Decree dated 10.08.2011 made in M.C.O.P.No.4071 of 2007 on the file of the Motor Accident Claims Tribunal, (VI  Court of Small Causes), Chennai.

For Appellants

in C.M.A.No.3534/11 : Mr.M.B.Gopalan

For Respondents 1 to 5

in C.M.A.No.3534/11 : Mr.M.Swamikannu

For Appellant

in C.M.A.No.100 of 2012 : Mr.D.Baskaran

For Appellant

in C.M.A.No.2126 of 2009 : Mr.K.S.Narasimhan

For Appellant

in C.M.A.No.179 of 2012 : Mr.G.Udayasankar

For Appellant

in C.M.A.No.3175 of 2011 : Mr.J.Chandran

For 1st Respondent

in C.M.A.No.3175 of 2011 : Mr.K.Varadha Kamaraj

For Appellant

in C.M.A.No.3806 of 2011 : Mr.C.Ramesh Babu

For Respondent

in C.M.A.No.3806 of 2011 : Mr.V.Jeevagirdharan

COMMON JUDGMENT

In all these appeals, the common defence raised by the Insurance Companies is that they are not liable to pay compensation to a third party, injured or the legal representatives of the deceased, on the ground that the driver of the offending vehicle, insured with them, did not possess a valid and effective driving licence, required licence for that kind of vehicle, not renewed the licence, at the time of accident and thus, there is a breach of policy condition and violation of statutory provisions of the Motor Vehicles Act, 1988.

2. During the course of hearing of these appeals, when the learned counsel for the Insurance Companies were posed with a question as to why, the Insurance Companies file appeals, when they are given liberty to recover the amount from the insured, and consistently raise a plea to avoid their liability to pay compensation to third party accident victims, inspite of definite pronouncement by the Larger Benches of the Supreme Court in National Insurance Co. Ltd., v. Swaran Singh reported in 2004 ACJ 1, Oriental Insurance Co. Ltd., v. Meena Variyal reported in 2007 ACJ 1284 and other cases, as well as Division Bench judgments of this Court, it is the uniform reply of the learned counsel appearing for the Insurance Companies that even after, Larger Bench decisions in the above referred cases, the Supreme Court, in some of the judgments has totally exonerated the Insurance Companies of their liability to pay compensation to third party accident victims.

3. Some of the issues, which arise for consideration, in these appeals, are,

(i) Whether the Insurance Companies can avoid their liability to pay compensation to the injured third party or the legal representatives of the deceased third party, under the guise of raising a defence under Section 149(2)(a)(ii) of the Motor Vehicles Act?

(ii) When the Motor Vehicles Act, 1988, contemplates compulsory insurance against third party risks, whether the defences open to the insurers are to avoid their liability for payment of compensation to third party victims or to avoid their liability to the insured, when the insurance companies, prove the breach regarding licence? (iii) Whether mere proof of non-possession of licence alone is sufficient to exonerate the Insurance Companies from their liability towards payment of compensation to the third party victim or it is restricted to avoidance of liability towards the insured, when the Courts have repeatedly held that the introduction of Chapter XI to the Motor Vehicles Act, 1988 has to be interpreted to effectuate the object of the Act? (iv) When the object of the amendment is beneficent and when the Supreme Court in Swaran Singh's and other cases stated supra, has categorically held that payment of compensation to a third party is statutory in nature, whether the Insurance Companies can still contend that they are not liable to pay compensation to third parties or they can defend the claim, plead to avoid their liability to a third party, on the ground that the driver did not possess any kind of driving licence, possess a fake licence or not a valid and effective licence, the kind of licence required to drive a particular class or description of vehicle, etc., and for other defences permissible under Section 149(2)(a)(ii) of the Act, only towards the insured? (v) When the Supreme Court in Clauses (iv) and (vi) of the judgment in Swaran Singh's case (cited supra), has summaried the breach of the terms and conditions, whether the Courts can lay down any specific criteria for proof of breach, required to be proved by the Insurance Companies?

4. In law of precedents, it is a well accepted principle that a Larger Bench decision will prevail over a Smaller Bench decision and even if there is a conflict of decisions of Co-equal Benches of the Supreme Court, it would be appropriate for the High Courts and lower Courts to follow those judgements of the Supreme Court, where the Apex Court had considered and decided the issues, in conformity with the object and scheme of the Act, particularly, when specific issues are raised, elaborately and precisely dealt with and answered in the judgment, with reference to statutory provisions of an enactment, on the basis of which, the lis rests. In the backdrop of the above principles, issues raised in the present appeals are dealt with.

5. The issue as to whether the Insurance Companies are liable to pay compensation to an injured or the legal representatives of the deceased, a third party accident victim, is statutory and whether they can seek for exoneration of their liability, towards the insured or the third party, as the case may be, and under what circumstances, they can avoid their liability to the insured, are no longer res-integra, nevertheless, time and again, appeals have been filed by the Insurance Companies, though in many cases, depending upon the evidence let in, by the Companies, leave is granted by the Claims Tribunals to recover the amount, directed to be paid to the third party victims, from the insured, on the grounds, inter-alia, that they have discharged their burden of proving breach of policy conditions by the insured.

6. A few provisions of the Motor Vehicles Act, 1988, are relevant:

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. Requirement of policies and limits of liability.  (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) insurers 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 this 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 Workmens 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 the 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.

149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.  (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, judgement or award in respect of any such liability as is requirement 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 judgement 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 judgements. (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgement or award unless, before the commencement of the proceedings in which the judgement or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgement or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely :- (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely :-

(i) a condition excluding the use of the vehicle -

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organised racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licenced, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

(iii)a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.

(3) Where any such judgement as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgement is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgement were given by a Court in India : Provided that no sum shall be payable by the insurer in respect of any such judgement unless, before the commencement of the proceedings in which the judgement is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2). (4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of subsection (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect : Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. (6) In this section the expression material fact and material particular means, respectively, a fact or particular of such a nature as to influence the judgement of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression liability covered by the terms of the policy means liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy. (7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgement or award as is referred to in sub-section (1) or in such judgement as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation.  For the purposes of this section, Claims Tribunal means a Claims Tribunal constituted under section 165 and award means an award made by that Tribunal under section 168.

168. Award of the Claims Tribunal: (1) On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be: Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X. (2) The Claim Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award.

(3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct."

7. In exercise of the powers conferred by Sections 12, 27, 64, sub-section (14) of Section 88, Sections 110, 137, 164 and 208 read with Section 211 of the Motor Vehicles Act, 1988 (59 of 1988), the Central Motor Vehicles Rules, 1989 have been framed. Few provisions for the purpose of this case, are as follows: "8. Minimum educational qualification for driving transport vehicles:- The minimum educational qualification in respect of an applicant for obtaining a licence to drive a transport vehicle shall be a pass in the eighth standard:

Provided that the minimum educational qualification specified in this rule shall not apply in the case of:-

(i) renewal of a driving licence to drive a transport vehicle; or

(ii) addition of another class of transport vehicle to the driving licence; already held before the commencement of the Motor Vehicles (Amendment) Rules, 2007.

[The abovesaid Rule has been inserted by G.S.R.207(E), dated 10th April, 2007 (w.e.f. 10.4.2007) before it was omitted by G.S.R.933(E), dated 28.10.1989 (w.e.f.28.10.1989)]

9. Educational qualifications for drivers of goods carriages carrying dangerous or hazardous goods:-

(1) One year from the date of commencement of Central Motor Vehicles (Amendment) Rules, 1993, any person driving a goods of dangerous or hazardous nature to human life shall, in addition to being the holder of a driving licence to drive a transport vehicle, also possess a certificate of having successfully passed a course consisting of following syllabus and periodicity conneted with the transport of such goods. Period of training 3 Days

Place of training At any institute recognised by the State Government

Training comprises of three parts,

(A) Defensive driving

(B) Advanced driving skills and training

(C) Product safety.

(Syllabi for the training is provided in the abovesaid Rules)

(2) The holder of a driving licence possessing the minimum educational qualification or the certificate referred to in sub-rule (1), shall make an application in writing on a plain paper along with his driving licence and the relevant certificate to the licensing authority in whose jurisdiction he resides for making necessary entries in his driving licence and if the driving licence in Form 7, the application shall be accompanied by the fee as is referred to in Serial Number 8 of the Table to Rule 32. (3) The licensing authority, on receipt of the application referred to in sub-rule (2), shall make an endorsement in the driving licence of the applicant to the effect that he is authorised to drive a goods carriage carrying goods of dangerous or hazardous nature to human life.

(4) A licensing authority other than the original licensing authority making any such endorsement shall communicate the fact to the original licencing authority.

11. Preliminary test.(1) Save as otherwise provided in sub-rule (2), every applicant for a learner's licence shall present himself before the licensing authority on such date, place and time, as the licensing authority may appoint, for a test and satisfy such authority that the applicant possesses adequate knowledge and understanding of the following matters, namely: (a) the traffic signs, traffic signals and the rules of the road regulations made under section 118;

(b) the duties of a driver when his vehicle is involved in an accident resulting in the death or bodily injury to a person or damage to property of a third party;

(c) the precautions to be taken while passing an unmanned railway crossing; and

(d) the documents he should carry with him while driving a motor vehicle.

(1-A) In determining as to whether an applicant possesses adequate knowledge and understanding of the matters referred to in sub-rule (1), the licensing authority shall put to the applicant questions of objective type such as specified in Annexure VI.

Explanation.For the purpose of this sub-rule, "adequate knowledge" means answering correctly at least 60 per cent of the questions put to him.

(2) Nothing contained in sub-rule (1) shall apply to the following class of applicants, namely:

(a) the holder of an effective driving licence,

(b) the holder of a driving licence which has expired but five years have not elapsed,

(c) the holder of a learner's licence issued or renewed after the commencement of these rules,

(d) the holder of a certificate to the effect of the possession of adequate knowledge and understanding of the matters referred to in sub-rule (1), issued by any institution recognized and notified in this regard by the State Government.

15. Driving test.(1) No person shall appear for the test of competence to drive unless he has held a learner's licence for a period of at least 37 [thirty days]. (2) The test of competence to drive referred to in sub-section (3) of section 9 shall be conducted by the licensing authority or such other person as may be authorised in this behalf by the State Government in a vehicle of the type to which the application relates. (3) The applicant shall satisfy the person conducting the test that he is able to (a) adjust rear-view mirror;

(b) take suitable precautions before starting the engine;

(c) move away safely and smoothly straight ahead at an angle, while at the same time engaging all gears until the top gear is reached;

(d) to change to the lower gears quickly from the top gear when the traffic conditions warrant such change;

(e) change quickly to lower gears when driving downhill;

(f) stop and re-start the vehicle on a steep upward incline making proper use of the hand-brake or of the throttle and the foot-brake without any rolling back, turn right and left corners correctly and make proper use of the rear-view mirror before signalling;

(g) overtake, allow to be overtaken, meet or cover the path of other vehicles safely and take an appropriate course of the road with proper caution giving appropriate signals;

(h) give appropriate traffic signals at the appropriate time, in clear and unmistakable manner by hand or by electrical indicators fitted to the vehicle;

(i) change the lanes with proper signals and with due care;

(j) stop the vehicle in an emergency or otherwise, and in the latter case, bring it to rest at an appropriate course on the road safely, giving appropriate signals;

(k) in the case of vehicle having a reverse gear, driving the vehicle backwards, reverse it into a limited opening either to the right or left under control and with reasonable accuracy;

(l) cause the vehicle to face in the opposite direction by means of forward and reverse gears;

(m) take correct and prompt action on the signals given by traffic signs, traffic lights, traffic controllers, policemen and take appropriate action on signs given by other road users;

(n) act correctly at pedestrian crossings, which is not regulated by traffic lights or traffic police, by giving preference to persons crossing the roads;

(o) keep well to the left in normal driving;

(p) regulate speed to suit varying road and traffic conditions;

(q) demonstrate general control of the vehicle by confident steering and smooth gear changing and braking as and when necessary;

(r) make proper use of the rear-view mirror before signalling, beginning manoeuvring, moving away, altering the course to overtake, turning right or stopping;

(s) use proper side when driving straight, turning right, turning left and at junction of the road;

(t) make proper use of accelerator, clutch, gears, brakes (hand and foot) steering and horn;

(u) anticipate the actions of pedestrians, drivers of other vehicles and cyclists;

(v) take precautions at cross roads and on road junctions with regard to:

(i) adjustment of speed on approach,

(ii) proper use of rear-view mirror,

(iii) correct positioning of the vehicle before and after turning to the right or left,

(iv) avoidance of cutting right hand corners,

(v) looking right, left and right again before crossing or emerging;

(w) concentrate in driving without his attention being distracted and to demonstrate the presence of mind;

(x) show courtesy and consideration for the safety and convenience of other road users, such as pedestrians, drivers of other motor vehicles or cyclists.

16. Form of driving licence. (1) Every driving licence issued or renewed by a licensing authority shall be in Form 6.

(2) Where the licensing authority has the necessary apparatus, for the issue of a laminated card type or Smart Card type driving licence, such card type or Smart Card type driving licence, as may be specified in the Notification issued by the concerned State Government or Union Territory Administration, shall be in Form 7. (3) On and from the date of commencement of this sub-rule, every driving licence issued or renewed by the licensing authority shall be in Form 7.

(4) Every International Driving Pemit issued by a licensing authority shall be in Form 6-A and shall be valid for a period of not more than one year from the date of issue, as the case may be, or till the validity of the driving licence, whichever is earlier.

(5) The automobile associations authorised by the State Government/ Union Territory Administration shall be allowed to issue International Driving Permit to their own members as also others subject to counter-signature by competent authority.

17. Addition to driving licence. (1) An application for addition of another class or description of motor vehicle to the driving licence shall be made in Form 8 to the licensing authority and shall be accompanied by

(a) an effective learner's licence and driving licence held by applicant;

(b) in the case of an application for addition of a transport vehicle, the driving certificate in Form 5;

(d) appropriate fee as specified in rule 32. (2) The provisions of sub-section (1), subsection (3) and sub-section (4) of section 9 shall, insofar as may be, apply in relation to an application under subsection (1) as they apply in relation to an application for the grant of a driving licence.

18. Renewal of driving licence:- (1) An application for the renewal of a driving licence shall be made in Form 9 to the licensing authority having jurisdiction over the area in which the applicant ordinarily resides or carries on business and shall be accompanied by-

(a) appropriate fee as specified in Rule 32.

(b) three copies of the applicant's recent passport size photograph if renewal is to be made in Form 6.

(c) the driving licence,

(d) the medical certificate in Form 1-A.

(2) Where the driving licence authorises the holder of such licence to drive a transport vehicle as well as any other vehicle, then the licensing authority shall, subject to the production of medical certificate, renew such licence for the appropriate period as specified ini sub-section (2) of Section 14. (3) Where the licensing authority renewing the driving licence the fact of the renewal shall be intimated to the licensing authority who issued the driving licence:

Provided that in case the application is for issuance of a duplicate driving licence which has been lost, torn or mutilated such that the identification or authenticity of the document cannot be reasonably established, the licensing authority receiving such application shall on confirmation from the original issuing authority, issue the duplicate driving licence. Provided also that if such confirmation is not received within 60 days, duplicate licence shall be issued, without waiting for the confirmation.

22. Endorsement by Courts. A Court convicting a holder of a licence, for any one of the offences specified hereunder, shall endorse or cause to be endorsed in the driving licence, the particulars of such conviction, namely:

(a) Driving without a licence, or without a licence which is effective, or without a licence applicable to the vehicle driven (section 3).

...........

(i) Refusing or failing within specified time to produce licence or certificate of registration (section 130).

............

(u) Altering a licence or using an altered licence.

(v) An offence punishable with imprisonment in the commission of which a motor vehicle was used.

23.State Register of driving licences:-(1)Each State Government shall maintain a State Register of driving licences in respect of driving licences issued or renewed by the licensing authorities in the State in Form 10.

(2) Each State Government shall send to the Director (Transport Research), Ministry of Surface Transport, New Delhi, a printed copy of the register referred to in sub-rule (1).

FORM 10

[See rule 23(1)]

State Register of Driving Licence

1. (a) Driving licence number and date of initial issue. (b) Licensing Authority which issued the licence. (c) Name and designation of the officer who has taken driving test and the date of passing the test by the holder of the licence.

2. Name, address and other particulars of the holder of the driving licence.

(a) Name of the holder (with guardian's name, if minor)

(b) Date of birth

(c) Educational Qualifications

(d) Permanent address

(e) Temporary address/Official address (if any)

(f) Subsequent changes of addresses

(g) Class and types of vehicles for which licence is given.

(h) Addition of vehicles (if any) with dates.

(i) Date of expiry of the licence and further renewal (with details of licensing authority which renewed the licence.

(j) Details of disqualification, fine, cancellation, etc., in relation to the holder of the driving licence.

8. Rule 23 of the Central Motor Vehicles Rules, mandates that each State Government shall maintain a State Register of the Driving Licences in respect of the Driving Licences, issued or renewed by the Licencing Authority in the State, in Form No.10. The abovesaid Register, can be maintained by the State Government, only if the concerned Regional Transport Officers correspondingly maintain a separate list of driving licences issued, renewed, by them. As per the procedure, it is expected that the same would be sent to the State Transport Commissioner and thereafter, a consolidated list would be sent to the Government. Therefore, as mandated under rule 23 of the Central Motor Vehicles Rules, a list, as per Form 10 should be maintained, both in the Office of the State Transport Commissioner and the Secretary to the Government, Transport Department.

25. Duration of a licence and renewal thereof. A licence granted in Form 11 shall be in force for a period of five years and may be renewed on an application in Form 13 made to the licensing authority which granted the licence not less than sixty days before the date of its expiry:

Provided that the validity of the said licence shall be subject to fulfilling the criteria as prescribed by the State Government, which shall be certified by the licensing authority or any other authority as may be prescribed for the purpose by the State Government on an annual basis.

9. Before adverting to the facts of this case, it is necessary to reproduce the issues, that were considered extensively by the Hon'ble Supreme Court in National Insurance Co. Ltd., v. Swaran Singh reported in 2004 ACJ 1. In the reported judgment, the interpretation of Section 149(2)(a)(ii) vis-a-vis the proviso appended to sub-sections (4) and (5) of the Motor Vehicles Act, 1988, was the issue, in a batch of Special Leave Petitions filed by the Insurance Companies, assailing various decisions of the Motor Accident Claims Tribunal and High Courts. The contentions raised before the Supreme Court by the Insurance Companies, as summaried at Paragraph 11 of the judgment, are as follows: "(1) The insurer in terms of sub-section (2) of Section 149 of the Act has an absolute right to raise a defence specified, inter alia, in sub-clause (ii) of clause (a) thereof;

(2) Such a right being clear and unequivocal having regard to the judgment of this Court in National Insurance Company Ltd., Chandigarh v. Nicolletta Rohtagi and Others [(2002) 7 SCC 456 =2003-1-L.W. 151] must be allowed to be invoked by the insurer to its full effect. In the proceedings before the Tribunal, the insurers, thus, were entitled to show that the vehicle involved in the accident at the material point of time was driven by a person who was not duly licensed or was disqualified to hold a licence. (3) A person cannot be said to be duly licensed unless he has been granted a permanent licence for driving a particular vehicle in terms of the provisions of Chapter II of the Motor Vehicles Act and, thus, a vehicle cannot be held to be driven by a person duly licensed therefor if: (a) he does not hold a licence; (b) he holds a fake licence; (c) he holds a licence but the validity thereof has expired; or (d) he does not hold a licence for the type of vehicle which he was driving in terms of Chapter II of the Motor Vehicles Act, 1988, or (e) he holds merely a learner's licence. Reliance in this behalf has been placed on New India Assurance Co. Ltd. v. Mandar Madhav Tambe and Others [(1996) 2 SCC 328] and United India Insurance Co. Ltd. v. Gian Chand and Others [(1997) 7 SCC 558=1997-3-L.W. 408]. (4) Once the defence by the insurer is established in the proceedings before the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle.

(5) Once it is held that the insurer has been able to establish its defence, the Tribunal or the Court cannot direct the insurance companies to pay the awarded amount to the claimant and in turn recover the same from the owner and the driver of the vehicle. The decisions of this Court in New India Assurance Co., Shimla v. Kamla and Others etc. [(2001) 4 SCC 342=2001-3-L.W. 421] and United India Insurance Company Ltd. v. Lehru and Others [(2003) 3 SCC 338=2004-1-L.W. 5] wherein it has been held that the court is entitled to issue a direction upon the insurer to satisfy the award and thereafter recover the same from the owner of the vehicle do not lay down the correct law and should be overruled."

10. The reply, on behalf of the third party claimants, respondents therein, summaried at Paragraph 12, are as follows:

"(i) that the Parliament deliberately used two different expressions effective licence in Section 3 and duly licensed in sub-section (2) of Section 149 of the Act which are suggestive of the fact that a driver once licensed, unless he is disqualified, would continue to be a duly licensed person for the purpose of Chapter XI of the Act. (ii) Thus, once a person has been duly licensed but has not renewed his licence, the same would not come within the purview of Section 149 and thus would not constitute a statutory defence available to the insurer in terms thereof. Only in the event of lapse of five years from the date of expiry of the licence, such statutory defence may be raised. (iii) Once a certificate of insurance is issued in terms of the provisions of the Act, the insurer has a liability to satisfy an award. It has been pointed that a major departure has been made in the 1988 Act insofar as in terms of Section 96(2)(b) of the 1939 Act all the statutory defences were available in terms of sub-section (3) thereof provided that the policy conditions other than those prescribed therein had no effect; whereas in the new Act, Section 149(2)(a) prescribes that the policy is void if it is obtained by non-disclosure of material fact. Section 149(4) confines to only clause (b) and states that the conditions of policy except as mentioned in clause (b) of sub-section (2) are of no effect and, thus, after the amendment, except in cases which are covered under clause (b) of Section 149, the insurance companies are liable to pay to the third parties. In other words, the right of insurer to avoid the claim of the third party would arise only when the policy is obtained by misrepresentation of material fact and fraud and in no other case. (iv) Sub-section (1) of Section 149 makes it clear that the insurer should pay first to the third parties and recover the same if they are absolved on any of the grounds specified in sub-section (2) thereof. Reliance, in this connection, has been placed on BIG Insurance Co. Ltd. v. Captain Itbar Singh and Others [AIR 1959 SC 1331] and New India Assurance Company v. Kamla & Others [(2001) 4 SCC 342]. (v) The burden to prove the defence raised by the insurers as regard the question as to whether there has been any breach of violation of policy conditions of the insurance policy has been issued or not, would be upon the insurer.

(vi) The breach on the part of the insured must be a wilful one being of fundamental condition by the insured himself and the burden of proof, therefore, would be on the insurer.

(vii) With a view to avoid its liabilities it is not sufficient for the insurer to show that the person driving at the time of accident was not duly licensed but it must further be established that there was a breach on the part of the insured. Reliance, in this connection, has been placed on Narcinva V. Kamath and Another v. Alfredo Antonio Doe Martins and Others [(1985) 2 SCC 574], Skandia Insurance Company Ltd. v. Kokilaben Chandevadan and Others [(1987) 2 SCC 654=100 L.W. 790], Sohan Lal Passi v. P. Sesh Reddy and Others [(1996) 5 SCC 21] and United India Insurance Company Ltd. v. Lehru & Others [(2003) 3 SCC 338=2004-1-L.W. 5]."

11. Before dealing with the rival contentions, the Supreme Court traced down the history of the Motor Vehicles Act, at Paragraph 16, as follows:

"The intention of the Parliament became further evident when in the Motor Vehicles Act, 1939, a new chapter being Chapter VIIA dealing with insurance of motor vehicles against third party risks was introduced and the beneficent provisions contained in the Motor Vehicles Act, 1939 were further made liberal by reason of the Motor Vehicles Act, 1988 and the amendments carried out therein from time to time in aid of the third party claims by way of grant of additional or new rights conferred on the road accident victims."

12. While affirming that the Motor Vehicles Act, 1939 and the amended Act, 1988, as social welfare legislation and Chapter XI of the Motor Vehicles Act, 1988, which inter alia provides for compulsory insurance of vehicles, in relation to the matters specified therefor, the Apex Court held that the provision for compulsory insurance indisputably has been made inter-alia with a view to protect the right of a third party. At Paragraphs 17 and 18, the Apex Court further held as follows: "17. Under the common law a person injured by reason of another person's wrongdoing had no right of action against insurers who undertook to indemnify the wrongdoer. The first invasion of this principle took place by reason Third Parties (Rights against Insurers) Act, 1930. The British Parliament in the light of the aforementioned Act enacted the Road Traffic Act, 1930 which has since been replaced by Road Traffic Act, 1988.

18. The Third Parties (Rights Against Insurers) Act 1930 was enacted with a view to correct injustice effecting a statutory assignment of the rights of the assured to the injured person as prior thereto the right of a person to be indemnified under a contract of insurance against claims made against him by persons whom he might have injured was one personal to himself, and there was no privity of any sort between the injured person and the insurers. The injured person had no interest either at law or in equity in the insurance money, either before or after it was paid by the insurers to the assured. In a case where the assured became bankrupt and if the injured person had not already obtained judgment and levied execution of his claim for damages his only right was to move in the bankruptcy or the winding-up of proceedings. The beneficial provisions of the aforementioned English statutes were incorporated by the Parliament of India while enacting the Motor Vehicles Act, 1939 which has also since been repealed and replaced by the Motor Vehicles Act, 1988."

13. Recognising different types of insurance covers issued, containing different nature of contracts of insurance, the Supreme Courtat Paragraph 19 of the judgment, held that any condition in the Insurance Policy, whereby, the rights of the third party is taken away, is void. With reference to the dispute in the batch of cases, concerning third party rights and the policy, the Supreme Court, in its categorical terms, at Paragraph 20, held that, "Indisputably such a benefit to a third party was provided under the Statute keeping in view the fact that the conditions in the assured's policy may not be of no or little effect in relation to a claim by a person to whom an assured was under a compulsorily insurable liability."

14. A third party right arises when a victim of an accident suffers bodily injury or death, as a result thereof or his property is damaged. As regards the right of a victim, to claim compensation, at Paragraph 26 and 30 the Supreme Court, further held that,

"A right of the victim of a road accident to claim compensation is a statutory one. He is a victim of an unforeseen situation. He would not ordinarily have a hand in it. The negligence on the part of the victim may, however, be contributory. He has suffered owing to wrongdoing of others."

30. ...Sub-Section (1) of Section 149 casts liability upon the insurer to pay the person entitled to the benefit of the decree, as if he were the judgment debtor. Although the said liability is subject to the provision of this Section. It prefaces with a non-obstante clause that the insurer may be entitled to avoid or cancel or may be avoided or cancelled the policy. Furthermore, the statute raises a legal fiction to the effect that for the said purpose, the insurer would be deemed to be judgment debtor in respect of the liability of the insurer."

15. On the question as to whether the insurer can avoid its liability in the event if it raises as a defence, as envisaged under Section 149(2) of the 1988 Act, at Paragraph 34, the Supreme Court, has categorically held that,

"It is beyond any doubt or dispute that under Section 149(2) of the Act an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action or any of the grounds mentioned therein."

16. Recognising the difference between the words "effective licence" used in Section 3 of the Motor Vehicles Act and "duly licenced" used in Section 149(2) of the Act, the Supreme Court observed that if the person does not hold effective licence, as on the date of accident, he may be liable for prosecution in terms of Section 181 of the Act, but since Section 149 pertains to insurance, as regards third party risk, the Apex Court, has categorically drawn a distinction in the usage of the words in the abovesaid Sections, the different object and purpose and having regard to the nature of the social welfare legislation and introduction of the new Chapter, which deals with the insurance of the Motor accident against the third party risk and the subsequent amendment to the Motor Vehicles Act, carried out from time to time, in aid of the third party claims, by way of additional or new rights to the road accident victims, at Paragraph 37, the Apex Court, has made it clear as to how the provision has to be construed and it is as follows: "A provision of a statute which is penal in nature vis-a-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently."

17. The Supreme Court has also made it clear that the words "effective licence" used in Section 3, cannot be imported for sub-section (2) of Section 149 of the Motor Vehicles Act and that it has also noticed that the words "duly licensed" used in sub-section (2) of Section 149 are used in past tense.

18. On the aspect of the defences taken by the Insurance Companies, with a view to avoid their liability, the Apex Court, at paragraphs 42 to 45, held as follows:

"42. Furthermore, the insurance company with a view to avoid its liabilities is not only required to show that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured. By reason of the provisions contained in the 1988 Act, a more extensive remedy has been conferred upon those who have obtained judgment against the user of a vehicle and after a certificate of insurance is delivered in terms of Section 147(3) a third party has obtained a judgment against any person insured by the policy in respect of a liability required to be covered by Section 146, the same must be satisfied by the insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy or may in fact have done so. The same obligation applies in respect of a judgment against a person not insured by the policy in respect of such a liability, but who would have been covered if the policy had covered the liability of all persons, except that in respect of liability for death or bodily injury.

43. Such a breach on the part of the insurer must be established by the insurer to show that not only the insured used or caused or permitted to be used the vehicle in breach of the Act but also that the damage he suffered flowed from the breach.

44. Under the Motor Vehicles Act, holding of a valid driving licence is one of the conditions of contract of insurance. Driving of a vehicle without a valid licence is an offence. However, the question herein is whether a third party involved in an accident is entitled to the amount of compensation granted by the Motor Accidents Claims Tribunal although the driver of the vehicle at the relevant time might not have a valid driving licence but would be entitled to recover the same from the owner or driver thereof.

45. It is trite that where the insurers relying upon the provisions of violation of law by the assured takes an exception to pay the assured or a third party, they must prove a wilful violation of the law by the assured. In some cases violation of criminal law, particularly, violation of the provisions of the Motor Vehicles Act may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done intentionally or so recklessly as to denote that the assured did not care what the consequences of his act might be.

19. Repeatedly, in most of the claim petitions, the Insurance Companies take up a defence that a contract of insurance falls within the realm of contract and thus, like in any other contract, the intention of the parties must be gathered from the expressions used therein. In most of the contracts of insurance, there is a specific condition that the insured should not allow the vehicle to be driven by a person, without a valid and effective driving licence and therefore, if there is any breach of the terms and conditions of the contract, which could be deduced from the policy, the Companies are not liable to pay compensation.

20. Taking note of the decisions in Oriental Insurance Co. Ltd., v. Sony Cheriyan reported in 1999 (6) SCC 451 and Oriental Insurance Co. Ltd., v. Samayanallur Primary Agricultural Co-op. Bank reported in AIR 2000 SC 10, at Paragraph 54 in Swaran Singh's case, the Supreme Court has made it clear that "The insurer's liability arises both from the contract as well as statute. It will, therefore, may not be proper to apply the rules for interpretation of a contract for interpreting a statute."

21. After referring to the decision in Skandia Insurance Company Ltd., v. Kokilaben Chandevadan and others reported in (1987) 2 SCC 654 and the correctness thereof, questioned and that when the matter was referred to a Larger Bench of the Three Judges, in Sohan Lal Passi v. P.Sesh Reddy reported in 1996 (5) SCC 21 and Rukmani and Others v. New India Assurance Co. Ltd., and others reported in 1999 ACJ 171, at Paragraphs 62 to 64, held as follows: "62. The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event, the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. (See Sohan Lal Passi's case (supra)

63. Apart from the above, we do not intend to lay down anything further i.e. degree of proof which would satisfy the aforementioned requirement in as much as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance. Each case may pose different problem which must be resolved having to a large number of factors governing the case including conduct of parties as regard duty to inform, correct disclosure, suppression, fraud on the insurer etc. It will also depend upon the fact as to who is the owner of the vehicle and the circumstances in which the vehicle was being driven by a person having no valid and effective licence. No hard and fast rule can therefor be laid down. If in a given case there exists sufficient material to draw an adverse inference against either the insurer or the insured, the Tribunal may do so. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of contract of insurance on the part of the insurer by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records.

64. In the aforementioned backdrop, the provisions of sub-sections (4) and (5) of Section 149 of the Motor Vehicles Act, 1988 may be considered as the liability of the Insurer to satisfy the decree at the first instance. "

22. Having regard to the beneficent statute, which should receive a liberal interpretation, the Supreme Court, at Paragraph 68 of the judgment, has made it clear that the liability of the insurer is statutory and he should satisfy the decree passed in favour of a third party.

23. Taking note of the principles of law involved in Halsbury's Laws of England and the decision of the Supreme Court in Sohan Lal Passi's case, the Apex Court has further made it clear that the Insurance Company cannot shake off its liability to pay the compensation only by saying that the at the relevant point of time the vehicle was driven by a person having no licence. At Paragraph 69, the Apex Court further added that, "Thus, where a liability has been established by a judgment, it is not permissible to look beyond the determination in order to establish the basis of the liability."

24. Considering the social need of the victim to be compensated as enacted by Parliament, which was the subject matter in British India Genl. Ins. Co. Ltd., v. Captain Itbar Singh [1958-65 ACJ 1 (SC)] and a similar view taken in Skandia's case, Sohan Lal Passi's case, Kashiram Yadav v. Oriental Fire and Genl. Ins. Co. Ltd., [1989 ACJ 1078 (SC)], Kamala's case, vis-a-vis., the submissions of the learned counsel for the Insurance Companies that sub-Section (4) of Section 149 deals with the situations, where the insurer in the policy purports to restrict the insurance of persons insured thereby by reference to any condition other than those in clause (b) of sub-Section (2) of Section 149 and in that view of the matter, no liability is covered for driving of a vehicle, without licence or fake licence, the Supreme Court, at Paragraphs 74 to 76, has observed as follows: ".....The submission ignores the plain and unequivocal expression used in sub-section (2) of Section 149 as well as the proviso appended thereto. With a view to construe a statute the scheme of the Act has to be taken into consideration. For the said purpose the entire Act has to be read as a whole and then chapter by chapter, section by section and word by word.

75. Proviso appended to sub-section (4) of Section 149 is referable only to sub-section (2) of Section 149 of the Act. It is an independent provision and must be read in the context of Section 96(4) of the Motor Vehicles Act, 1939. Furthermore, it is one thing to say that the insurer will be entitled to avoid its liability owing to breach of terms of a contract of insurance but it is another thing to say that the vehicle is not insured at all. If the submission of the learned counsel for the petitioner is accepted, the same would render the proviso to sub-section (4) as well as sub-section (5) of Section 149 of the Act otiose, nor any effective meaning can be attributed to the liability clause of the insurance company contained in sub-section (1). The decision in Kamla's case (supra) has to be read in the aforementioned context.

76. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading."

25. At Paragraph 77, the Supreme Court considered a case, where admittedly, no licence was obtained by a driver and it is as follows:

"We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle admittedly did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand at all, e.g. a case where an accident takes place owing to a mechanical fault or vis-major. [See Jitendra Kumar v. Oriental Insurance Co. Ltd., [JT 2003 (5) SC 538]."

26. At Paragraph 81 and 82, the Supreme Court, considered a case, when the person has been granted licence for one type of vehicle, but at the relevant time of the accident, he was driving another type of vehicle, as follows:

"81. Section 10 of the Act provides for forms and contents of licences to drive. The licence has to be granted in the prescribed form. Thus, a licence to drive a light motor vehicle would entitle the holder there to drive the vehicle falling within that class or description.

82. Section 3 of the Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle which he intends to drive. Section 10 of the Act enables Central Government to prescribe forms of driving licences for various categories of vehicles mentioned in sub-section (2) of said section. The various types of vehicles described for which a driver may obtain a licence for one or more of them are (a) Motorcycle without gear, (b) motorcycle with gear, (c) invalid carriage, (d) light mo tor vehicle, (e) transport vehicle, (f) road roller and (g) motor vehicle of other specified description. The definition clause in Section 2 of the Act defines various categories of vehicles which are covered in broad types mentioned in sub-section (2) of Section 10. They are goods carriage, heavy-goods vehicle, heavy passenger motor-vehicle, invalid carriage, light motor-vehicle, maxi-cab, medium goods vehicle, medium passenger motor-vehicle motor-cab motorcycle, omnibus, private service vehicle, semi-trailer, tourist vehicle, tractor, trailer, and transport vehicle. In claims for compensation for accidents, various kinds of breaches with regard to the conditions of driving licences arise for consideration before the Tribunal. A person possessing a driving licence for motorcycle without gear, for which he has no licence. Cases may also arise where a holder of driving licence for light motor vehicle is found to be driving a maxi-cab, motor-cab or omnibus for which he has no licence. In each case on evidence led before the tribunal, a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or contributory cause of accident. If on facts, it is found that accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence."

27. At Paragraph 85, the Supreme Court considered a situation, where the driver's licence was found to be fake,

"It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru's case (supra), the matter has been considered at some details. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or the owners be absolved from any liability whatsoever. We would be dealing in some details with this aspect of the matter a little later."

28. The case of Learner's Licence has been dealt with at Paragraphs 86 and 87, which are as follows:

"86. Motor Vehicles Act, 1988 provides for grant of learner's licence. [See Section 4(3), Section 7(2), Section 10(3) and Section 14]. A learner's licence is, thus, also a licence within the meaning of the provisions of the said Act. It cannot, therefore, be said that a vehicle when being driven by a learner subject to the conditions mentioned in the licence, he would not be a person who is not duly licensed resulting in conferring a right on the insurer to avoid the claim of the third party. It cannot be said that a person holding a learner's licence is not entitled to drive the vehicle. Even if there exists a condition in the contract of insurance that the vehicle cannot be driven by a person holding a learner's licence, the same would run counter to the provisions of Section 149(2) of the said Act.

87. The provisions contained in the said Act provide also for grant of driving licence which is otherwise a learner's licence. Section 3(2) and 6 of the Act provides for the restriction in the matter of grant of driving licence, Section 7 deals with such restrictions on granting of learner's licence. Section 8 and 9 provide for the manner and conditions for grant of driving licence. Section 15 provides for renewal of driving licence. Learner's licences are granted under the rules framed by the Central Gove rnment or the State Governments in exercise of their rule making power. Conditions are attached to the learner's licences granted in terms of the statute. A person holding learner's licence would, thus, also come within the purview of duly licensed as such a licence is also granted in terms of the provisions of the Act and the rules framed thereunder. It is now a well-settled principle of law that rules validly framed become part of the statute. Such rules are, therefore, required to be read as a part of main enactment. It is also well-settled principle of law that for the interpretation of statute an attempt must be made to give effect to all provisions under the rule. No provision should be considered as surplusage."

29. Earlier, in Skandia Insurance Co. Ltd., v. Kokilaben reported in (1987) 2 SCC 654, a Two Judges Bench of the Supreme Court, considered a question, whether the Insurance Company can avoid its liability to pay compensation, because the accident was caused by the cleaner of the truck, who had no licence. At Paragraphs 12 to 14 in Skandia's case (cited supra), the Supreme Court has elaborately considered the intention of the Legislature in engrafting Sections 96(2)(b)(ii) (now amended as Section 149(2)(b)(ii) of 1988 Act), which are as follows: "12. The defence built on the exclusion clause cannot succeed for three reasons viz.:

(1) On a true interpretation of the relevant clause which interpretation is at peace with the conscience of Section 96, the condition excluding driving by a person not duly licensed is not absolute and the promisor is absolved once it is shown that he has-done everything in his power to keep, honour and fulfil the promise and he himself is not guilty of a deliberate breach. (2) Even if it is treated as an absolute promise, there is substantial compliance therewith upon an express or implied mandate being given to the licensed driver not to allow the vehicle to be left unattended so that it happens to be driven by an unlicensed driver.

(3) The exclusion clause has to be read down in order that it is not at war with the main purpose of the provisions enacted for the protection of victims of accidents so that the promisor is exculpated when he does everything in his power to keep the promise.

13. In order to divine the intention of the legislature in the course of interpretation of the relevant provisions there can scarcely be a better test than that of probing into the motive and philosophy of the relevant provisions keeping in mind the goals to be achieved by enacting the same. Ordinarily it is not the concern of the legislature whether the owner of the vehicle insures his vehicle or not. If the vehicle is not insured any legal liability arising on account of third-party risk will have to be borne by the owner of the vehicle. Why then has the legislature insisted on a person using a motor vehicle in a public place to insure against third-party risk by enacting Section 94? Surely the obligation has not been imposed in order to promote the business of the insurers engaged in the business of automobile insurance. The provision has been inserted in order to protect the members of the community travelling in vehicles or using the roads from the risk attendant upon the user of motor vehicles on the roads. The law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the dependents of the victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the courts would be recoverable from the persons held liable for the consequences of the accident. A court can only pass an award or a decree. It cannot ensure that such an award or decree results in the amount awarded being actually recovered, from the person held liable who may not have the resources. The exercise undertaken by the law courts would then be an exercise in futility. And the outcome of the legal proceedings which by the very nature of things involve the time cost and money cost invested from the scarce resources of the community would make a mockery of the injured victims, or the dependents of the deceased victim of the accident, who themselves are obliged to incur not inconsiderable expenditure of time, money and energy in litigation. To overcome this ugly situation the legislature has made it obligatory that no motor vehicle shall be used unless a third-party insurance is in force. To use the vehicle without the requisite third-party insurance being in force is a penal offence. The legislature was also faced with another problem. The insurance policy might provide for liability walled in by conditions which may be specified in the contract of policy. In order to make the protection real, the legislature has also provided that the judgment obtained shall not be defeated by the incorporation of exclusion clauses other than those authorised by Section 96 and by providing that except and save to the extent permitted by Section 96 it will be the obligation of the insurance company to satisfy the judgment obtained against the persons insured against third-party risk (vide Section 96). In other words, the legislature has insisted and made it incumbent on the user of a motor vehicle to be armed with an insurance policy covering third-party risks which is in conformity with the provisions enacted by the legislature. It is so provided in order to ensure that the injured victims of automobile accidents or the dependents of the victims of fatal accidents are really compensated in terms of money and not in terms of promise. Such a benign provision enacted by the legislature having regard to the fact that in the modern age the use of motor vehicles not with standing the attendant hazards, has become an inescapable fact of life, has to be interpreted in a meaningful manner which serves rather than defeats the purpose of the legislation. The provision has therefore to be interpreted in the twilight of the aforesaid perspective.

14. Section 96(2)(b)(ii) extends immunity to the insurance company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not fully licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification. The expression breach is of great significance. The dictionary meaning of breach is infringement or violation of a promise or obligation. It is therefore abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression breach carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is guilty of the breach of the promise that the vehicle will be driven by the licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is' guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power in as much as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself it cannot be said that the insured is guilty of any breach. And it is only in case of a breach or a violation of the promise on the part of the insured that the insurer can hide under the umbrella of the exclusion clause. To construe the provision differently would be to rewrite the provision by engrafting a rider to the effect that in the event of the motor vehicle happening to be driven by an unlicensed person, regardless of the circumstances in which such a contingency occurs, the insured will not be liable under the contract of insurance. It needs to be emphasised that it is not the contract of insurance which is being interpreted. It is the statutory provision defining the conditions of exemption which is being interpreted. These must therefore be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward-looking interpretation which serves to defeat the provision rather than to fulfil its life aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not tuned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. What the legislature has given, the court cannot deprive of by way of an exercise in interpretation when the view which renders the provision potent is equally plausible as the one which renders the provision impotent. In fact it appears that the former view is more plausible apart from the fact that it is more desirable. When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equal ly plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of reading down the exclusion clause in the light of the main purpose of the provision so that the exclusion clause does not cross swords with the main purpose highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose.

30. In Sohan Lal Passi Vs. P.Sesh Reddy, reported in (1996) ACC 617 (SC) = 1996 ACJ 1044 (SC) = 1996(5) SCC 21, a Three Judges Bench of the Supreme Court, considered a case wherein, a bus was driven by a cleaner, an employee of the owner, at the time of accident. The cleaner did not have a valid licence. Being so, to avoid its liability on the ground that there was a breach of section 96(2)(b)(ii) of the Motor Vehicles Act, 1939, inasmuch as the vehicle was driven by a person, who was not duly licensed, the Insurance Company questioned the correctness of the view taken in Skandia's case. Therefore, it was placed before a Three Judges Bench. Rejecting the contention, the Supreme Court, at Paragraph 12, held as follows: "12.  on behalf of the insurance company, a stand was taken that when Section 96(2)(b)(ii) has provided that the insurer shall be entitled to defend the action on the ground that there has been breach of a specified condition to the policy i.e. the vehicle should not be driven by a person who is not duly licensed, then the insurance company cannot be held to be liable to indemnify the owner of the vehicle. In other words, once there has been a contravention of the condition prescribed in sub-section (2)(b)(ii) of Section 96, the person insured shall not be entitled to the benefit of sub-section (1) of Section 96. According to us, Section 96(2)(b)(ii) should not be interpreted in a technical manner. Subsection (2) of Section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in sub-section (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression breach occurring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the tribunal or the court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive, the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of Section 96. In the present case far from establishing that it was the appellant who had allowed Rajinder Pal Singh to drive the vehicle when the accident took place, there is not even any allegation that it was the appellant who was guilty of violating the condition that the vehicle shall not be driven by a person not duly licensed. From the facts of the case it appears that the appellant had done everything within his power in as much as he has engaged a licensed driver Gurbachan Singh and had placed the vehicle in his charge. While interpreting the contract of insurance, the tribunals and courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds. Unless it is established on the materials on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licensed to drive the vehicle when the accident took place, the insurer shall be deemed to-be a judgment-debtor in respect of the liability in view of sub-section (1) of Section 96 of the Act. It need not be pointed out that the whole concept of getting the vehicle insured by an insurance company is to provide an easy mode of getting compensation by the claimants, otherwise in normal course they had to pursue their claim against the owner from one forum to the other and ultimately to execute the order of the Accidents Claims Tribunal for realisation of such amount by sale of properties of the owner of the vehicle. The procedure and result of the execution of the decree is-well known."

31. In the abovesaid case, the Supreme Court on facts found that the owner of the vehicle had engaged a licenced driver. The Supreme Court further observed that while interpreting the contract of insurance, the Tribunals and Courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims should not defeated on technical grounds, unless it is established on material on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licenced to drive a vehicle when the accident took place.

32. In the above judgment, the Supreme Court also took note of another decision made earlier in Kashiram Yadav Vs. Oriental Fire and General Insurance Company Ltd., reported in 1989 ACJ 1078 (SC), wherein, at paragraph No.13, it is held as follows:-

"... There the facts found were quite different. The vehicle concerned in that case was undisputedly entrusted to the driver who had a valid licence. In transit the driver stopped the vehicle and went to fetch some snacks from the opposite shop leaving the engine on. The ignition key was at the ignition lock and not in the cabin of the truck. The driver had asked the cleaner to take care of the truck. In fact the driver had left the truck in care of the cleaner. The cleaner meddled with the vehicle and caused the accident. The question arose whether the insured (owner) had committed a breach of the condition incorporated in the certificate of insurance since the cleaner operated the vehicle on the fatal occasion without driving licence. This Court expressed the view that it is only when the insured himself entrusted the vehicle to a person who does not hold a driving licence, he could be said to have committed breach of the condition of the policy. It must be established by the Insurance Company that the breach is on the part of the insured. Unless the insured is at fault and is guilty of a breach of the condition, the insurer cannot escape from the obligation to indemnify the insured. It was also observed that when the insured has done everything within his power inasmuch as he has engaged the licensed driver and has placed the vehicle in his charge with the express or implied mandate to drive himself, it cannot be said that the insured is guilty of any breach. We affirm and reiterate the statement of law laid down in the above case. We may also state that without the knowledge of the insured, if by driver's acts or omission others meddle with the vehicle and cause an accident, the insurer would be liable to indemnify the insured. The insurer in such a case cannot take the defence of a breach of the condition in the certificate of insurance."

33. In Chinnama George and others Vs. N.K.Raju and another, reported in AIR 2000 SC 1565 = 2000 (4) SCC 130, a Two Judges Bench of the Supreme Court held that it is legally obligatory on the insurer to satisfy the award, in respect of a third party risk. At Paragraph 7, held as follows:

"7. Sections 146, 147, 149 and 173 are in the scheme of the Act and when read together mean: (1) it is legally obligatory to insure the motor vehicle against third-party risk. Driving an uninsured vehicle is an offence punishable with an imprisonment extending up to three months or fine which may extend to Rs 1000 or both; (2) policy of insurance must comply with the requirements as contained in Section 147 of the Act; (3) it is obligatory for the insurer to satisfy the judgments and awards against the person insured in respect of third-party risks. These are sub-sections (1) and (7) of Section 149. Grounds on which the insurer can avoid his liability are given in sub-section (2) of Section 149."

34. In New India Assurance Company Ltd., Shimla, Vs. Kamla and others, reported in 2001 (4) SCC 342, a Two Judges Bench of the Supreme Court considered a case, as to whether the insurance company is liable to pay compensation to a third party and at paragraphs 16 to 23 and 25, summed up as follows:-

"16. Chapter XI of the Act contains provisions for insurance of motor vehicles against third-party risk. Sections 145 to 164 are subsumed in the said Chapter. Section 146 of the Act imposes a prohibition against use of a motor vehicle in a public place unless the vehicle is covered by a policy of insurance complying with the requirements enumerated in the Chapter. Some categories of vehicles are exempted from the aforesaid compulsion, but we are not concerned with any such category now.

17. The details regarding the requirements of the policy including the limits of liability to be insured are enumerated in Section 147. Sub-section (3) of it states that a policy shall be of no effect for the purposes of that Chapter unless and until a certificate of insurance is issued by the insurer in the prescribed form in favour of the insured. It is in Section 149 that provisions, relating to the duty of the insurer for satisfying the judgments and awards in respect of third-party claims, are incorporated. Sub-section (1) says that the insurer shall pay to the person entitled to the benefit of a judgment or award as if the insurer were the judgment-debtor in respect of the liability, when any such judgment or award is obtained against the insured in whose favour a certificate of insurance has been issued. Of course, the said liability of the insurer is subject to the maximum sum assured payable under the policy.

18. Section 149(2) of the Act says that notice regarding the suit or other legal proceedings shall be given to the insurer if such insurer is to be fastened with such liability. The purpose of giving such notice is to afford the insurer to be made a party in the proceedings for defending the action on any one of the grounds mentioned in the sub-section. Among the multiplicity of such grounds the one which is relevant in this case is extracted below: 149. (2)(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely

* * *

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification;

19. Sub-section (4) of Section 149 of the Act says that so much of the policy as purports to restrict the insurance of the person insured by reference to any condition shall as respects such liabilities as are required to be covered by a policy ..., be of no effect. The proviso to the said sub-section is important for the purpose of considering the question involved in this case and hence that proviso is extracted below: Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. 20. Similarly, in this context sub-section (5) is equally important and hence that is also extracted below: 149. (5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

21. A reading of the proviso to sub-section (4) as well as the language employed in sub-section (5) would indicate that they are intended to safeguard the interest of an insurer who otherwise has no liability to pay any amount to the insured but for the provisions contained in Chapter XI of the Act. This means, the insurer has to pay to the third parties only on account of the fact that a policy of insurance has been issued in respect of the vehicle, but the insurer is entitled to recover any such sum from the insured if the insurer were not otherwise liable to pay such sum to the insured by virtue of the conditions of the contract of insurance indicated by the policy.

22. To repeat, the effect of the above provisions is this: when a valid insurance policy has been issued in respect of a vehicle as evidenced by a certificate of insurance the burden is on the insurer to pay to the third parties, whether or not there has been any breach or violation of the policy conditions. But the amount so paid by the insurer to third parties can be allowed to be recovered from the insured if as per the policy conditions the insurer had no liability to pay such sum to the insured.

25. The position can be summed up thus: The insurer and insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence. Learned counsel for the insured contended that it is enough if he establishes that he made all due enquiries and believed bona fide that the driver employed by him had a valid driving licence, in which case there was no breach of the policy condition. As we have not decided on that contention it is open to the insured to raise it before the Claims Tribunal. In the present case, if the Insurance Company succeeds in establishing that there was breach of the policy condition, the Claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer shall be allowed to recover that amount (which the insurer is directed to pay to the claimants - third parties) from the insured person."

35. In Lakshmi and seven others, Vs. The National Insurance Company Limited, Trichy Branch, Trichy, reported in 2002 (4) L.W 288, the claimants filed an appeal to this Court, challenging a decree, made against the driver and owner of the vehicle respectively, wherein, it was held by the Claims Tribunal that inasmuch as, the driver did not possess any driving licence, the Company has to be exonerated. Placing reliance on New India Assurance Company v. Kamla reported in 2001 (3) LW 421 and M/s.National Insurance Company Limited v. Sakthi reported in 2001 (3) LAW 367, this Court held as follows:- It is clear that insofar as the third parties are concerned, the insurer, namely, the Insurance Company has to pay and settle the claim on account of the policy of insurance which has been issued in respect of the vehicle and the insurance company is entitled to recover such sum from the owner of the vehicle, the insured, if the insurance company was not otherwise liable to pay such sum to the insured by virtue of the conditions of the contract of insurance indicated in the policy.

36. In United India Insurance Company Ltd., Vs. Lehru and others, reported in 2003 (3) SCC 338, wherein, the insurance company sought for a prayer to avoid its liability, on the ground that the licence of the driver of the car was a fake licence. Though a question whether the insurance company can avoid its liability to a third party, involved in the accident was no longer res integra and covered by decisions, having regard to the large number of matters on the issue, the Supreme Court restated the legal position regarding the liability of the insurance company to pay compensation to third parties. While doing so, the Supreme Court, at paragraph No.12, explained the importance of insuring a vehicle against the third party claims, and the need to provide compensation to third parties. At paragraph No.13, a Two Judges Bench of the Supreme Court, held as follows:- "13. Thus Section 96 has been interpreted keeping in mind the object and purpose of the legislature in providing for compulsory insurance. It has been held that the insurance company gets absolved of its liability only if it establishes that the breach is by the insured. It is held that if the insured is not at fault and has not done anything he should not have done or is not amiss, then he cannot be held to have committed a breach.

37. On the facts of the above case, while observing that the licence of the driver was a fake licence, referring to Skandia Insurance Co. Ltd., v. Kokilaben reported in (1987) 2 SCC 654, Sohan Lal Passi v. P.Sesh reported in 1996 (5) SCC 21 and Kashiram Yadav v. Oriental Fire and General Insurance Co., reported in 1989 (4) SCC 654 and after considering the statutory provisions under Sections 149(2)(a)(ii) of the Act, the Supreme Court, at Paragraphs 17 to 20, further held as follows: "17. It is submitted that Kamla case is not correctly decided. It is submitted that sub-section (7) of Section 149 of the Motor Vehicles Act, 1988 has not been noticed by this Court in Kamla case. We see no substance in this submission. A plain reading of Section 149 would show that an insurance company would continue to be liable to third persons. * * * *

Thus under sub-section (1) the insurance company must pay to the person entitled to the benefit of the decree, notwithstanding that it has become entitled to avoid or cancel or may have avoided or cancelled the policy. The words subject to the provisions of this section mean that the insurance company can get out of the liability only on grounds set out in Section 149. Sub-section (7), which has been relied on, does not state anything more or give any higher right to the insurance company. On the contrary, the wording of sub-section (7) viz. no insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability indicates that the legislature wanted to clearly indicate that insurance companies must pay unless they are absolved of liability on a ground specified in sub-section (2). This is further clear from sub-section (4) which mandates that conditions, in the insurance policy, which purport to restrict insurance would be of no effect if they are not of the nature specified in sub-section (2). The proviso to sub-section (4) is very illustrative. It shows that the insurance company has to pay to third parties but it may recover from the person who was primarily liable to pay. The liability of the insurance company to pay is further emphasised by sub-section (5). This also shows that the insurance company must first pay, then it can recover. If Section 149 is read as a whole it is clear that sub-section (7) is not giving any additional right to the insurance company. On the contrary it is emphasising that the insurance company cannot avoid liability except on the limited grounds set out in sub-section (2).

18. Now let us consider Section 149(2). Reliance has been placed on Section 149(2)(a)(ii). As seen, in order to avoid liability under this provision it must be shown that there is a breach. As held in Skandia and Sohan Lal Passi cases the breach must be on the part of the insured. We are in full agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen. Whilst it is being driven by the thief there is an accident. The thief is caught and it is ascertained that he had no licence. Can the insurance company disown liability? The answer has to be an emphatic No. To hold otherwise would be to negate the very purpose of compulsory insurance. The injured or relatives of the person killed in the accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner himself would be an innocent sufferer. It is for this reason that the legislature, in its wisdom, has made insurance, at least third-party insurance, compulsory. The aim and purpose being that an insurance company would be available to pay. The business of the company is insurance. In all businesses there is an element of risk. All persons carrying on business must take risks associated with that business. Thus it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time innocent parties must not be made to suffer or loss. These provisions meet these requirements. We are thus in agreement with what is laid down in the aforementioned cases viz. that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The insurance company must establish that the breach was on the part of the insured.

19. Section 3 of the Motor Vehicles Act, 1988 prohibits driving of a motor vehicle in any public place unless the driver has an effective driving licence. Further, Section 180 of the Motor Vehicles Act makes an owner or person in charge of a motor vehicle punishable with imprisonment or fine if he causes or permits a person without a licence to drive the vehicle. It is clear that the punishment under Section 180 can only be imposed if the owner or person in charge of the vehicle causes or permits driving by a person not duly licensed. Thus there can be no punishment if a person without a licence drives without permission of the owner. Section 149(2)(a)(ii) merely recognises this condition. It therefore only absolves the insurance company where there is a breach by the insured.

20. When an owner is hiring a driver he will therefore have to check whether the driver was a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner should then take the test of the driver. If he find that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that Insurance Companies expect owners to make enquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The Insurance Company would not then be above of liability. If it ultimately turns out that the licence was fake the Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had notice that the licence was fake and still permitted that person to drive. More importantly even in such a case the Insurance Company would remain liable to the innocent third party, but it may be able to recover from the insured. This is the law which has been laid down in Skiandia's Sohan Lal Passi's and Kamla's case We are in full agreement with the views expressed therein and see no reason to take a different view."

38. Reverting back to Swaran Singh's case, rejecting the contentions of the Insurance Companies that there was a conflict of decisions in the Supreme Court and clarifying the decision made in Lehru's case (cited supra), that the insurer can raise a defence that the licence is fake, the Supreme Court in Swaran Singh's case (cited supra), has reiterated that it would be for the insurer to prove that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the driver. While summing up, the Supreme Court, at 96, the Supreme Court, held that, "It is, therefore, evident from the discussions made hereinbefore that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time."

39. At the end, the Supreme Court in the summary of findings, answered the questions raised in the batch of appeals, as follows:

"(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object. (ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act.

(iii) The breach of policy condition e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.

40. As regards the question, as to who has to prove that at the time of accident, whether the driver was duly licenced or not, to avoid the liability of the insurer and whether there was any breach on the part of the insured, whether the breach or breaches of the conditions of driving licence, is/are so fundamental to have contributed to the accident, the Apex Court held that, (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish breach on the part of the owner of the vehicle; the burden of proof wherefor would be on them.

(v) The court cannot lay down any criteria as to how said burden would be discharged, in as much as the same would depend upon the facts and circumstance of each case.

(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply the rule of main purpose and the concept of fundamental breach to allow defences available to the insured under section 149(2) of the Act. (vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.

(ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured., The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the j Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal. (xi) The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims."

41. In Oriental Insurance Co. Ltd., v. Meena Variyal reported in 2007 ACJ 1284, the Insurance Company disputed the claim, on the ground that the deceased himself had driven the vehicle and caused the accident and therefore, the company was not liable to pay compensation. The claimant was not a third party. While dealing with the liability of the Insurance Company under the contract of insurance, a Two Judges Bench of the Supreme Court, at Paragraphs 9 to 11, held as follows: "It may be true that the Motor Vehicles Act, insofar as it relates to claims for compensation arising out of accidents, is a beneficent piece of legislation. It may also be true that subject to the rules made in that behalf, the Tribunal may follow a summary procedure in dealing with a claim. That does not mean that a Tribunal approached with a claim for compensation under the Act should ignore all basic principles of law in determining the claim for compensation. Ordinarily, a contract of insurance is a contract of indemnity. When a car belonging to an owner is insured with the insurance company and it is being driven by a driver employed by the insured, when it meets with an accident, the primary liability under law for payment of compensation is that of the driver. Once the driver is liable, the owner of the vehicle becomes vicariously liable for payment of compensation. It is this vicarious liability of the owner that is indemnified by the insurance company. A third party for whose benefit the insurance is taken, is therefore entitled to show, when he moves under Section 166 of the Motor Vehicles Act, that the driver was negligent in driving the vehicle resulting in the accident; that the owner was vicariously liable and that the insurance company was bound to indemnify the owner and consequently, satisfy the award made.

10. Chapter XI of the Act bears a heading, Insurance of Motor Vehicles against third party risks. The definition of third party is an inclusive one since Section 145(g) only indicates that third party includes the Government. It is Section 146 that makes it obligatory for an insurance to be taken out before a motor vehicle-could be used on the road. The heading of that Section itself is Necessity for insurance against third party risk. No doubt, the marginal heading may not be conclusive. It is Sec tion 147 that sets out the requirement of policies and limits of liability. It is provided therein that in order to comply with the requirements of Chapter XI of the Act, a policy of insurance must be a policy which is issued by an authorised insurer; or which insures the person or classes of persons specified in the policy to the extent specified in sub-section (2) against any liability which may be incurred by the owner in respect of the death of or bodily injury or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place.

11. The object of the insistence on insurance under Chapter XI of the Act thus seems to be to compulsorily cover the liability relating to their person or properties of third parties and in respect of employees of the insured employer, the liability that may arise under the Workmen's Compensation Act, 1923 in respect of the driver, the conductor and the one carried in a goods vehicle carrying goods." At Paragraph 26, the Supreme Court further held that,

"26. On the facts of this case, there is no finding that Mahmood Hasan, another employee of the owner was driving the vehicle. Even if he was, there is no finding of his negligence. The victim was the Regional Manger of the Company that owned the car. He was using the car given to him by the Company for use. Whether he is treated as the owner of the vehicle or as an employee, he is not covered by the insurance policy taken in terms of the Act -- without any special contract -- since there is no award under the Workmen's Compensation Act that is required to be satisfied by the insurer. In these circumstances, we hold that the appellant - Insurance Company is not liable to indemnify the insured and is also not obliged to satisfy the award of the Tribunal/Court and then have recourse to the insured, the owner of the vehicle. The High Court was in error in modifying the award of the Tribunal in that regard."

42. In National Insurance Company Ltd., Vs Laxmi Narain Dhut, reported in 2007 (2) L.W 719 (SC), the Supreme Court considered the correctness of the impugned judgments of various Courts, holding that the principles laid down in Swaran Singh's case (cited supra), are not applicable even to claims other than third party claims. After considering the relevant provisions, in particular, Section 149 of the Motor Vehicles Act, and the Indian Law on Motor Vehicles, with reference to third party claims, a Two Judges Bench of the Supreme Court at paragraph Nos.15, 21, 22 and 37 to 39 held as follows:- "15. Section 149 is part of Chapter XI which is titled "Insurance of Motor Vehicles against Third Parties". A significant factor which needs to be noticed is that there is no contractual relation between the insurance company and the third party. The liabilities and the obligations relatable to third parties are created only by fiction of Sections 147 and 149 of the Act.

17. The primary stand of the insurance company is that the person driving the vehicle did not have a valid driving license. In Swaran Singh's case (supra) the following situations were noted:

(i) the driver had a license but it was fake;

(ii) the driver had no license at all;

(iii) the driver originally had a valid license but it had expired as on the date of the accident and had not been renewed;

(iv) the license was for a class of vehicles other than that which was the insured vehicle;

(v) the license was a learner's license. Category (i) may cover two types of situations. First, the license itself was fake and the second is where originally that license is fake but there has been a renewal subsequently in accordance with law.

18. Chapter II contains Sections 3, 4 and 5 of the Act relating to licensing of drivers driving the motor vehicles.

19. Where the claim relates to own damage claims, it cannot be adjudicated by the insurance company. But it has to be decided by an other forum i.e. forum created under the Consumer Protection Act, 1985 (in short the 'CP Act'). Before the Tribunal, there were essentially three parties i.e. the insurer, insured and the claimants. On the contrary, before the consumer forums there were two parties i.e. owner of the vehicle and the insurer. The claimant does not come in to the picture. Therefore, these are cases where there is no third party involved.

20. ............

21. As noted above, there is no contractual relation between the third party and the insurer. Because of the statutory intervention in terms of Section 149, the same becomes operative in essence and Section 149 provides complete insulation.

22. In the background of the statutory provisions, one thing is crystal clear i.e. the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake license has to be considered differently in respect of third party and in respect of own damage claims.

37. As noted above, the conceptual difference between third party right and own damage cases has to be kept in view. Initially, the burden is on the insurer to prove that the license was a fake one. Once it is established the natural consequences have to flow.

38. In view of the above analysis the following situations emerge:

1. The decision in Swaran Singh's case (supra) has no application to cases other than third party risks.

2. Where originally the license was a fake one, renewal cannot cure the inherent fatality.

3 In case of third party risks the insurer has to indemnify the amount and if so advised to recover the same from the insured.

4. The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.

39. The High Courts/Commissions shall now consider the matter afresh in the light of the position in law as delineated above."

43. In National Insurance Co.Ltd., Vs. Renuka Saha and others, reported in 2010 (1) TN MAC (DB) 617 (Cal), one of the contentions raised by the National Insurance Company Ltd., was that the Tribunal has no jurisdiction to make payment of any sum beyond the limit mentioned in Section 149(1) of the Act, i.e., "being a sum not exceeding the sum assured payable thereunder" and for this purpose, the Tribunal had a duty to first adjudicate what was the sum assured under the policy and since the said exercise was not done, the award passed by the claims Tribunal was wholly without jurisdiction. In sum and substance, the contention was that the liability of the insurance company in respect of compensation payable for the death or bodily injury or damage to any property of the third parties is not unlimited. A cross objection was also filed by the claimants for enhancement. While adjudicating the abovesaid issue, the Division Bench of Calcutta High Court, at paragraph No.33, held as follows:- "33. On a plain reading of the aforesaid two Sections of the Act, it is clear that so far as the liability of the Insurer towards the injury caused to the third party is concerned, once it is established from the evidence that there exists a valid Insurance Policy taken by the insured owner of the vehicle in terms of the Act whose conditions have not been violated by the insured, the statutory liability of the insurer is fixed by the Act itself as indicated below: (1) As regards its liability to pay compensation for the damage caused to the property of the third party due to negligence of the driver of the insured vehicle is concerned, it is not unlimited but is restricted to the amount specified in sub-section (b) of Section 147(2) of the Act.

(2) However, in case of compensation for the death or bodily injury of a third party travelling as a passenger in the insured vehicle due to the accident for the negligence of its driver, if such third party happens to be an employee of the insured and the death occurred or the bodily injury sustained due to an accident in course of his employment, the statutory liability of the Insurer will be restricted to the amount payable by the employer as specified in the Workmen's Compensation of Act, 1923 to such employee and the excess balance amount payable under the general law of compensation as fixed by the decree or award is payable by the owner of the vehicles. (3) However, if the victim does not happen to be one of the classes of passenger specified in the policy of the vehicle insured or does not come within the purview of Section 147(1)(b) of the Act, the Insurer has no liability to make any compensation as those types of persons are gratuitous passengers.

(4) In case of compensation payable for the bodily injury or the death of any third party who is not a passenger of the said vehicle or who is not an employee involved in the accident in course of his employment as mentioned above, if the injury sustained or the death occurred due to the fault of the driver of the offending insured vehicle, the liability of the Insurer will be unlimited to the extent of the liability incurred by the insured as fixed by the judgment or award as provided in Section 147(2)(a) of the Act. (5) The aforesaid principles will be applicable also to the proceedings under Section 163-A of the Act with this difference that the claimants in such a situation will be entitled to get compensation even if there no fault of the driver of the insured vehicle provided however that the annual income of the victim did not exceed Rs. 40,000/-. The amount of compensation in such a proceeding will be determined in accordance with the Second Schedule of the Act subject to such modification as indicated by the Apex Court in various decisions which have since become the law of the land by virtue of Article 141 of the Constitution of India. In all the circumstances mentioned above, there may be special contract between the insured and the Insurer stipulating indemnification of the liability of the insured in excess of the amount of the statutory liability provided in the Act or even in respect of the classes of passengers in addition to those classes mentioned in Section 147(1)(b) of the Act to whom the Insurer owes no statutory liability fixed by the Act. (6) Even if the Insurer is successful in proving breach of the conditions of insurance as provided in Section 149(2)(a)(ii) of the Act, it has the duty to satisfy the award at the first instance and then to recover the amount from the insured and for that purpose, the principles and the guidelines indicated by the Apex Court in the case of National Insurance Company Ltd v. Swaran Singh , 2004 (1) TN MAC 104 (SC): AIR 2004 SC 1531."

44. The Bench judgments of this Court regarding non-possession of licence/required licence/kind of licence, are as follows:

45. In G.Nagendra Devi v. V.Mosses reported in 2001 (3) LW 261, for the death of one G.Krishnamurthy, his wife and mother claimed compensation. The Insurance Company disputed the liability to pay compensation, on the ground that the motorcyclist, who caused the accident, did not possess a licence. The Tribunal passed an award against the insurer. On behalf of the Insurance Company, an Officer of the Company was examined as RW.1 and he produced copy of the letters, as well as the returned covers, Exs.R1 to R4. It was also contended that the Traffic Police, after verification and investigation, charge sheeted the rider of the motorcycle, under Sections 304A IPC, Section 184, 134A & B, 177 and 158 of the Motor Vehicles Act, for rash and negligent driving as well as failure to produce the driving licence. Upon considering the abovesaid documents and the contention of the insurer that they had discharged their burden, the Tribunal passed an award, only against the owner of the motorcycle. Being aggrieved by the same, the legal representatives, stated supra, filed an appeal before this Court, seeking for a direction to fix liability on the Insurance Company, as well as for higher compensation. Adverting to the abovesaid facts, a Division Bench of this Court, at Paragraph 8, held as follows: "8. It is true that the Insurance Company had sent notice calling upon the rider of the motorcycle for production of driving licence. However, a perusal of the impugned proceedings show that no steps have been taken to verify the records from the concerned authority, viz., Regional Transport Authority to show that the rider of the motorcycle was having a valid licence or not. In the absence of any such effort by taking summons to the concerned authority, we are of the view that the Insurance Company failed to discharge their burden on this aspect. In this regard, the learned counsel for the appellants-claimants has relied on several decision of this Court, other High Courts and Supreme Court."

46. From the above, it could be seen that though the Company had pleaded that notices have been sent to the rider of the motorcyclist, for production of licence, but when no efforts were taken by the Company to verify from the Office of the Regional Transport Office, by taking steps to summon the concerned authority, the Bench held that the Company has failed to discharge its burden and ultimately, set aside the judgment of the Tribunal and made the Company liable to pay compensation to the third party/claimants.

47. In National Insurance Company Ltd., v. Samiyathal reported in 2003 (1) LW 539, for the death of 'X', wife and children preferred a claim. The Insurance Company contended that the driver of the offending vehicle insured with them, did not possess a valid driving licence on the date of accident and therefore, the Tribunal committed an error, fastening liability on the Company. The owner remained ex parte before the Tribunal. Though the owner appeared at the appellate stage before the Division Bench of this Court, he could not give any explanation, as to whether, the driver possessed any licence at the time of accident. Even in such cases, the Division Bench did not absolve the Insurance Company from the payment of compensation to the legal representatives of the deceased. But the company was exonerated of its liability towards the insured and in such circumstances, granted liability to recover from the owner of the vehicle, the compensation compelled to pay to the claimants therein. The details of the case is also discussed in the later paragraphs of this judgment.

48. In United India Insurance Company Ltd., v. S.Saravanan reported in 2009 (2) TNMAC 103 (DB), a Division Bench of this Court, after considering a catena of decisions, at Paragraph 22, held that,

"At the same time, as far as the third party risk is concerned, the consistent view has been, as can be seen from the above, that the insurer must pay the third party and then take a decision whether to proceed aganist the owner. This is in consonance with the spirit of the Act. It would be the only just and reasonable course since the claimant, an intelligent young man, has been reduced to nothing in one moment of negligence. The continuous care and support he needs must be taken note of. It is virtually a life sentence that has been imposed on the claimant and his wife and his children too a sentence of living death on the claimant, and a life sentence on the wife, to care and nurture for 24 hours a dear husband, who is no more than a vegetable now. And, to require them to proceed against the owner would be rubbing salt in their raw wounds. We, therefore, feel that we must ask the appellant-insurance company to pay the compensation to the claimant and recover it from the owner for his breach of the policy conditions."

49. In United India Insurance Company Limited, Salem, Vs. V.Vijayakumar, represented by his mother Kalamani and three others, reported in 2010 (2) TN MAC 388 (DB), the driver was holding only a Light Motor Vehicle licence, but drove a Tourist Maxi Cab Mahendra Van, which met with an accident, causing grievous injuries. The insurance company contended that the driver did not possess a badge and as per the terms and conditions of policy and provisions, under the Motor Vehicles Act, there was a breach by the owner of the vehicle in allowing a driver who did not have a badge to drive the vehicle and therefore, no liability can be fastened and that only the owner and driver of the vehicle should alone be made liable to pay compensation. On the side of the insurance company, they examined a Motor Vehicle Inspector, as RW1 and an Assistant Administrative Officer of the insurance company as RW2. The Tribunal held that the insurance company was liable to pay compensation along with the owner and driver of the vehicle. On appeal, they submitted that a badge is required to drive a private transport vehicle and therefore, the Tribunal has erred in fastening liability on the insurance company. Going through the provisions of the Motor Vehicles Act, which distinguishes different types of vehicles and the different kinds of licences, granted in terms of provision Sections 2(14) and 2(47), a Division Bench of this Court held that the driver was having a driving licence, that he had not obtained necessary authorisation to drive a transport vehicle and that badge was not obtained and further held that there was a violation of the policy conditions. The Division Bench further held that the Tribunal ought not to have fastened the statutory liability upon the insurance company. However, keeping in view of the injuries sustained by the claimant and that he was reduced to a vegetable existence, the Bench was observed that the only just and reasonable course would be to direct the insurance company to pay compensation to the 1st respondent/claimant and recover the same from the owner for breach of policy conditions. Thus, it could be seen from the above judgment that though the Insurance Company was able to establish that the driver did not possess the required licence with the badge, at the time of accident, this Court directed only pay and recover.

50. In Bajaj Alliance General Insurance Company Ltd., Pune, Vs. Manimozhi and four others, reported in 2010 (2) TN MAC 542 (DB), legal representatives of a third party claimed compensation. The insurance company resisted the claim, on the ground that the rider did not possess a valid driving licence to drive a two wheeler which caused the accident. The Tribunal by relying on the decision of the Apex Court in Premkumari and Others Vs. Prahlad Dev and others, reported in 2008 (1) TN MAC 115 (SC), directed the insurance company to pay compensation to the claimants and recover the same, from the owner and driver. After referring to a Division Bench judgment in United India Insurance Company Ltd., Vs. S.Saravanan, reported in 2009 (2) TN MAC 103 (DB) and National Insurance Co. Ltd., Vs. Parvathneni and another, reported in 2009 (2) TN MAC 241 (SC) = 2009 (4) CTC 798, the Hon'ble First Bench of this Court has dismissed the appeal, filed by the Insurance Company.

Let me consider some of the cases, where the driver did not possess any licence.

51. In Velammal v. P.Kanagu reported in 2004 (1) LW 16, on account of rash and negligent manner by the driver of a Maxi-cab, a motorcyclist, died. Legal representatives of the deceased claimed compensation. Though the manner of accident, was denied, the main contention of the Insurance Company was that the driver of the Mahendra Maxi Cab did not possess a valid driving licence, besides, the vehicle was not operated with fitness certificate. It was brought on record before the Claims Tribunal that the Regional Transport Officer has levied a fine on the driver, on the basis of the report of the Motor Vehicles Inspector. The vehicle was impounded and released, later on. In the above back drop, the Tribunal exonerated the insurer and dismissed the claim against the insurer. On appeal by the claimant, a Division Bench of this Court, having regard to the fact that the vehicle was covered by a policy of Insurance and since the claim was made by a third party, held that the insurer cannot avoid its liability to pay compensation to a third party and directed recovery, after payment to the accident victims. It could be seen from the judgment that though the driver had been fined for not possessing a licence, at the time of accident, the claim of the insurer to extricate itself from its liability to pay compensation to a third party, has been rejected.

52. In National Insurance Co.Ltd., Vs. Savitri Devi and others, reported in (2004) 1 SCC 596 = 2004 (4) L.W 15, a Three Judges Bench of the Supreme Court confirmed the decision of the Claims Tribunal, rejecting the preliminary objections taken in the written statement by the Insurance Company that it is not liable to pay compensation to the claimant therein, on the ground that the vehicle in question was driven without a valid and effective licence, at the time of accident. By an award, the Tribunal has permitted the insurance company to recover the amount, from the owner of the vehicle.

53. In Lal Chand v. Oriental Insurance Co. Ltd., reported in 2006 ACJ 2161, the driving licence of driver of the offending truck was found as not issued by licensing authority. The owner claimed to have seen and examined the driving licence produced by the driver, took his driving test and found that the driver was competent to drive and appointed him. The driver caused the accident, which gave raise to a claim petition. The Claims Tribunal held that the accident took place due to rash and negligent driving of the driver and that the owner had not committed any breach of the terms and conditions of the Insurance Policy and therefore, held that the Insurance Company was liable to make the payment of compensation to the claimants. Being aggrieved by the same, the Company filed an appeal and the High Court modified the order passed by the Tribunal and directed that the Insurance Company to pay and then recover the compensation from the owner of the vehicle, as per law laid down by the Supreme Court in New India Assurance Co. Ltd., v. Kamala reported in 2001 ACJ 843 (SC). The High court also held that the appellant had contravened the terms and conditions of the insurance policy as the driving licence was not issued by the Licencing Authority, Hyderabad. The Insurance Company filed an application under Section 174 of the Motor Vehicles Act for recovery of the amount paid as compensation to the claimants. The appellant therein filed a reply to the application, in which, he averred that the application for recovery of the compensation paid to the claimants by the Insurance Company is not maintainable as the rights of the parties have not been determined by the civil court. However, the Tribunal held that the Insurance Company is entitled to recover the money from the appellant therein through an execution application and ordered to issue a certificate of recovery of the amount under Section 174 of the Motor Vehicles Act and directed, the same be sent to the District Collector. Aggrieved by the order passed by the Tribunal, the owner of the vehicle moved the Supreme Court. Having regard to the observations made in sub-para (iii) of para 102 in Swaran Singh's case, a Two Judges Bench of the Supreme Court in Lal Chand's case, at paragraph 11, held that the Insurance company has to prove that the insured, viz., the owner of the vehicle, was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding the use of vehicle, by a duly licenced driver or one who was disqualified to drive, at the relevant point of time. On the facts of the case, the Supreme Court found that the owner of the vehicle had satisfied himself that the driver had a driving licence, at the time of accident and accordingly, absolved him from the liability.

54. In National Insurance Company Vs. Govindasamy, rep. by his wife & guardian Dhanalakshmi and another, reported in 2006 (2) CTC 563, a learned single Judges of this Court [Hon'ble Mr. Justice V.Dhanapalan] considered a contention as to whether the insurance company is liable to pay compensation, when there is a lack of valid driving licence. Reiterating the legal position that the burden is on the insurance company to establish lack of licence and holding that the beneficial legislation has to be given effect, at paragraph No.25, held as follows:- "25. The object of the Motor Vehicles Act, 1888, is a beneficial legislation in nature and when there is a decree passed against the Insurance Company, it is the liability of the Insurance Company to satisfy the decree at the first instance and the liability cannot be shaken off only by saying that at the relevant point of time, the vehicle was driven by a person having no licence. The liability of the Insurance Company to satisfy the decree passed in favour of the third party at the first instance and to recover the award amount from the owner or driver thereof. The Tribunal and the Court must however exercise its jurisdiction to issue such a direction, upon consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of Clause (a) and sub-section (2) of Section 149 of the Motor Vehicles Act, 1988, the Insurance Company shall be entitled to realize the award amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act.

55. In Sardari & Ors. v. Sushil Kumar & Ors. reported in 2008 (1) TNMAC 294 (SC) = 2008 (17) SCC 208, on 10.02.1985, a Tonga driver met with an accident, as it collided with a Tractor. He sustained injuries and succumbed to the same. An application for compensation was filed, in terms of Section 110-A of the Motor Vehicles Act, 1939. The respondent-Insurance Company, inter alia, raised a contention that the driver of the said tractor did not hold a valid and effective driving licence. Before the Claims Tribunal, the driver of the said Tractor, had categorically deposed that he did not know how to drive a tractor and he never even tried to learn driving of the tractor. In view of the said admission on the part of the driver, the Tribunal held that the Insurance Company is not liable to pay compensation and that the application for grant of compensation was dismissed. Appeal preferred by the claimants before the High Court was also dismissed, holding that the driver and owner alone were responsible to pay compensation to the claimants. Against which, the claimants preferred an appeal to the Supreme Court and the owner did not appear. A Two Judges Bench of the Supreme Court, at Paragraph 6, held as follows: Although, in terms of a contract of insurance, which is in the realm of private law domain having regard to the object for which, Sections 147 and 149 of the Act had been enacted, the social justice doctrine as envisaged in the preamble of the Constitution of India has been given due importance. The Act, however, itself provides for the cases where the Insurance Company can avoid its liability. Avoidance of such liability would largely depend upon violation of the conditions of contract of insurance. Where the breach of conditions of contract is ex-facie apparent from the records, the Court will not fasten the liability on the Insurance Company. In certain situations, however, the Court while fastening the liability on the owner of the vehicle may direct the Insurance Company to pay to the claimants the awarded amount with liberty to it to recover the same from the owner.

56. Referring to the decisions in National Insurance Co. Ltd., v. Swaran Singh and Others reported in 2004 (3) SCC 297, New India Assurance Co. Ltd., v. Prabhu Lal reported in JT 2007 (13) SCC 246 [a Two Judges Bench of the Supreme Court], a case, wherein, there was no endorsement in the licence, as required under Section 3 of the Act r/w., Rule 16 of the Rules and Form No.6, Premkumari & Ors., v. Prahalad Dev & Ors., reported in 2008 (1) SCALE 531, wherein, the driver of the vehicle did not possess any licence to drive a commercial vehicle, Oriental Insurance Co. Ltd., v. Prithvi Raj reported in 2008 (1) SCALE 727 [a Two Judges Bench of the Supreme Court], wherein, the Junior Assistant of the Office of the Joint Commissioner and Secretary, Regional Transport Authority, was examined, to produce the official records and establish that no driving licence was issued to the driver, Ishwar Chandra & Ors., v. The Oriental Insurance Co. Ltd., & Ors., reported in 2007 (4) SCALE 292 [a Two Judges Bench of the Supreme Court], wherein, the driver did not have a valid licence, as the licence expired earlier, when the vehicle met with an accident, the Supreme Court in Sardari's case, dismissed the appeal preferred by the claimants.

57. United India Insurance Co. Ltd., v. Rakesh Kumar Arora & Ors., reported in 2008 (2) TNMAC 508 (SC), one X died in an accident. Owner Y appeared and contested the claim. The appellant-Insurance Company, inter-alia, raised a contention before the Tribunal that the driver of the vehicle Z, a minor on the date of accident, was not holding any valid and effective licence and hence, the Company is not liable to reimburse the owner of the vehicle. The Tribunal held that the Company is not liable for payment of compensation. Appeal under Section 173 of the Motor Vehicles Act was allowed, on the ground that wilful breach by Y, father of Z, was not proved on the ground that no sane father would like to give the custody or the keys of the vehicle to a minor son, Z. The Letter patent Appeal by the Insurance Company failed. Testing the correctness of the above judgments, the Supreme Court, on the facts of the case, observed that the High Court did not advert to the provisions of Sections 4 and 5 and thus, mis-directed itself in law and further observed that the High Court proceeded on a wrong premise that it was the Insurance Company to prove breach of conditions of contract of Insurance. Following the decisions in Oriental Insurance Co. Ltd., v. Prithvi Raj reported in 2008(1) TNMAC 216 (SC) = 2008 (1) SCALE 727 and National Insurance Co.Ltd., vs. Kaushalya Devi and Others, reported in 2008 (2) TN MAC 497 (SC), the Supreme Court set aside the judgment of the High Court and at Paragraph 17, held as follows: "It is set aside accordingly and that of the learned Tribunal is restored. However, keeping in view the admitted fact that as no stay has been granted by the High Court the appellant has deposited the entire amount which has since been withdrawn by the claimant-respondent; we direct that the appellant shall be entitled to recover the amount in question from the owner of the vehicle, namely, respondent No.1."

58. In Bhuwan Singh Vs. Oriental Insurance Company Ltd., Anr. reported in 2009 (1) TN MAC 487 (SC) = 2009 (5) SCC 136, a Two Judges Bench judgment of the Supreme Court, relied on by Mr.J.Chandran, learned counsel for the appellant-insurance company in C.M.A.No.3175 of 2011, the owner of the vehicle was the appellant before the Supreme Court. The vehicle, insured with Oriental Insurance Company, which caused the death of cyclist, was driven by a person, aged 19 years. When a claim was made by the legal heirs and representatives of the deceased, the insurance company raised a contention that since the driver of the Tractor, offending vehicle, was not holding a valid and effective licence, it has no liability to reimburse the owner or the driver for the damages payable by the owner of the vehicle to the claimants. Before the Supreme Court, the appellant-owner submitted that during the relevant time, he was holding an effective driving licence, as he had been granted a learner's licence earlier and therefore, the finding of the Tribunal and the High Court, exonerating the insurance company from its liability to reimburse the owner in respect of the award amount, suffers from serious legal infirmity. Having regard to the statutory duties imposed upon the insurance company to reimburse the owner of the vehicle or driver as provided in Section 149 of the Motor Vehicles Act, 1988, reliance was also placed on National Insurance Co.Ltd., Vs. Swaran Singh and Others, reported in 2004 91) TN MAC 104 (SC) = 2004 (3) SCC 297, and a further contention was also made that the insurance company has failed to prove breach of conditions of the contract of insurance. Per contra, it was inter alia contended by the insurance company that a finding of fact having been arrived at, to the effect that the owner of the vehicle himself had driven the vehicle, the onus of proof that he did not drive the vehicle, was upon the appellant and not on the insurance company, when admittedly, he was the owner of the vehicle. In the reported judgment, FIR had been lodged against him. He had been charge sheeted by the investigating agency. At the time of accident, his licence had expired. Though the appellant made a plea that he was not driving the vehicle at the time of accident and one Diwan Singh was the driver, he did not prove the same, by examining the said Diwan Singh. The Tribunal held that he was not holding any valid and effective licence. On the abovesaid facts, at paragraph Nos.21 and 22, the Supreme Court held as follows:- The question as to whether the appellant was holding a valid licence or not was within his knowledge. The driver was to show that he held licence in respect of the vehicle for which he had filed an application. Filing of an application and grant thereof would therefore are pre-requisite for holding a valid and effective licence. As on 05.01.2001, the appellant was not duly licenced, as his learner's licence expired on 22.12.2000. He filed an application for grant of licence much later. Insurance Company, therefore, in our opinion was not bound to reimburse him in terms of the Contract of Insurance.

59 In the abovesaid judgment, the Bench comprising of Two Judges observed that the fact as to whether the driver had a valid and effective licence on the date of accident, is within the specific knowledge and that the burden of proof would be on the driver. With due respect, the observation of the Supreme Court stated supra, cannot be applied in rem, for the reason that in Swaran Singh's case, a larger Bench of the Supreme Court has categorically held that it is for the insurer to establish that at the time of accident, the driver of the offending vehicle did not possess a valid and effective driving licence. Further, in the reported judgment, on the facts of the case, it is evident that he was the owner-cum-driver of the Tractor, which caused the accident and when he had failed to examine Diwan Singh, said to have driven the vehicle, at the time of accident, and in such circumstances, the Supreme Court held that the fact whether the driver did possess the licence or not, was within his knowledge and the burden is on the propounder of the case to prove the same.

60. In National Insurance Co. Ltd. v. Tharabai reported in 2009 (2) TNMAC 353, a pedestrian was knocked down by a Kinetic Honda motorcycle. The claim was resisted by the Insurance Company, on the grounds inter-alia that the vehicle was driven by a person without a valid licence. It was also contended that the particulars of licence furnished by the claimant in his claim form differed from the one maintained by the concerned Regional Transport office. Before the Claims Tribunal, an official from the Regional Transport Office, Madras City (Central), was examined as RW.1, to prove that the licence produced by the owner was found to be not genuine. Nevertheless, the Tribunal directed the Insurance Company to pay the compensation. On facts and scrutiny of the licence particulars, this Court (Hon'ble Mr. Justice S.Palanivelu), found that the driver of the vehicle did not possess a valid licence, at the time of accident. A contention was also raised by the respondent/claimant that the owner of the vehicle was not charge-sheeted under Section 3 of the Motor Vehicles Act. Rejecting the said contention, this Court further held that merely because there was no charge sheet, it could not be concluded that the owner was possessing a valid licence. On the facts of the case, this Court held that when ample evidence has been let in by RW.1, an official from the Regional Transport Office, failure on the part of the police to lay a charge sheet against the owner of the vehicle under Section 3 of the Motor Vehicles Act would not come to the rescue of the owner. In the above reported judgment, the owner of the vehicle had entered appearance, defended the claim and let in evidence and it was also a case, wherein documentary evidence has been let by the Insurance Company through an official of the RTO Office, to prove that there was no licence, at the time of accident.

61. In Oriental Insurance Co. Ltd., v. Angad Kol reported in 2009 (11) SCC 356, heirs and legal representatives of one Genda Bai, who died in an accident, which took place on 31.10.2004, claimed compensation, contending inter alia that her death was caused due to the injuries sustained in the accident, when she was knocked down by a Mini Door Auto. Disputing the liability to pay compensation, the appellant-Insurance Company raised a plea that the driver did not possess a valid and effective licence. However, the Tribunal, fastened the liability on the Insurance Company and quantified the compensation at Rs.1,83,000/-. The claimants sought for enhancement. The Company filed a Cross Objection. A Division Bench of the Madhya Pradesh High Court enhanced the compensation and dismissed the Cross-Objection. Testing the correctness of the judgment, on the contention that the Insurance Company is not liable to pay compensation, after considering the statutory provisions and the need for a particular kind of licence, a Two Judges Bench of the Supreme Court, at Paragraph 19, held that, "Interest of justice would be subserved, if we, in exercise of our jurisdiction under Article 142 of the Constitution while directing the insurance company to deposit the balance amount before the Tribunal with liberty to the claimants to withdraw the same give right to the appellant to recover the said amount from the owner and the driver of the vehicle."

62. Though the Supreme Court declared that the appellant-Insurance Company cannot be statutorily mulcted with the liability to pay compensation to the injured or legal representatives of the deceased, if the driver of the offending vehicle did not possess the required licence to operate the vehicle, depending upon the class of the vehicle, yet in the interest of justice, directed the Insurance Company to pay and recover.

63. The relevant portion of the judgment in New India Assurance Co. Ltd., v. Prabhu Lal reported in AIR 2008 SC 614 and considered in Angad Kol's case is extracted hereunder:

"37. The argument of the Insurance Company is that at the time of accident, Ram Narain had no valid and effective licence to drive Tata 709. Indisputably, Ram Narain was having a licence to drive light motor vehicle. The learned Counsel for the Insurance Company, referring to various provisions of the Act submitted that if a person is having licence to drive light motor vehicle, he cannot drive a transport vehicle unless his driving licence specifically entitles him so to do (Section 3). Clauses (14), (21), (28) and (47) of Section 2 make it clear that if a vehicle is "light motor vehicle", but falls under the category of transport vehicle, the driving licence has to be duly endorsed under Section 3 of the Act. If it is not done, a person holding driving licence to ply light motor vehicle cannot ply transport vehicle. It is not in dispute that in the instant case, Ram Narain was having licence to drive light motor vehicle. The licence was not endorsed as required and hence, he could not have driven Tata 709 in absence of requisite endorsement and the Insurance Company could not be held liable.

38. We find considerable force in the submission of the learned Counsel for the Insurance Company. We also find that the District Forum considered the question in its proper perspective and held that the vehicle driven by Ram Narain was covered by the category of transport vehicle under Clause (47) of Section 2 of the Act. Section 3, therefore, required the driver to have an endorsement which would entitle him to ply such vehicle. It is not even the case of the complainant that there was such endorsement and Ram Narain was allowed to ply transport vehicle. On the contrary, the case of the complainant was that it was Mohd. Julfikar who was driving the vehicle. To us, therefore, the District Forum was right in holding that Ram Narain could not have driven the vehicle in question."

64. In Cholamandalam MS General Insurance Co. Ltd., v. Veerasamy reported in 2010 (2) CTC 423, after considering the decisions in National Insurance Co. Ltd. v. Annappa Irappa Nessaria and others reported in 2008 (1) TN MAC 200 (SC), National Insurance Co. Ltd., v. Vidhyadhar Mahariwala and others reported in 2008 ACJ 2860, New India Assurance Co. Ltd., v. V.Bommi reported in 2009 (2) TN MAC 86 (DB), New India Assurance Co. Ltd., v. Kamala reported in 2001 ACJ 843 (SC), Oriental Insurance Co. Ltd., v. Mohammed Hussain reported in 2005 (4) CTC 127 and Oriental Insurance Co. v. Zaharulnisha reported in AIR 2001 SC 2218, another learned Judges of this Court (Hon'ble Mr. Justice R.Subbiah), at Paragraph 10, held that, "10. A reading of the said judgments would show that if there is a fundamental breach in respect of the defence available to the insured under Section 149(2) of the Act, the insurer can repudiate their liability to pay the compensation. So far as the non-possession of the driving licence is concerned,it is only a breach of policy condition and it cannot be said that it is not a breach of defence available to the insured under Section 149(2) of the Act and under such circumstances, I do not find any error in the observation made by the Tribunal in directing the Insurance Company to pay the compensation and to recover the same from the owner of the vehicle. Though the decision reported in National Insurance Co. Ltd. v. Annappa Irappa Nessaria and others, 2008 (3) SCC 464 : AIR 2008 SC 1418 (1), was relied upon by the appellant, in the said judgment, the question of "Payment and recovery" was not dealt with, I am not inclined to accept the submission made by the learned counsel for the appellant."

65. In New India Insurance Company Ltd., Thiruchirapalli, Vs. Kavitha and six others, reported in 2010 (6) CTC 739, the insurance company challenged the award on the ground that there was a violation of policy condition, since the driver of the vehicle did not have a valid driving licence. Following the decision of this Court in B.M., New India Assurance Company Ltd., Vs. Muralikrishnan, reported in 2010 (3) MLJ 271, and the decision of this Court in The Manager, United India Insurance Company Ltd., Vs. Tmt.P.Muthamani, reported in 2010 (1) TN MAC 486, a learned single Judge [Hon'ble Mrs. Justice Chitra Venkataraman] of this Court, at paragraph No.7, held as follows:- "7. As already pointed out, the only question raised herein is the breach of policy conditions. As far as the registration is concerned, that learned Counsel appearing for the Respondents pointed out that considering the decision of this Court in B.M., New India Assurance Co. Ltd. v. Muralikrishnan , 2010 (3) MLJ 271, which followed the decision of the Apex Court in and National Insurance Co. Ltd. v. Swaran Singh , 2004 (1) TN MAC 104 (SC) : AIR 2004 SC 1531, the concept of pay and recover still holds good and no exception could be taken to the decision of the Tribunal holding that the Insurance Company is responsible to make payment. That even in the case of policy violation, this Court in the decision reported in The Manager, United India Insurance Company Ltd. v. Tmt. P. Muthamani , 2010 (1) TN MAC 486, referring to the decision of the Apex Court in Swaran Singh's case (cited supra), pointed out that the mere absence of an endorsement, per se would be dilute the liability of the Insurance Company. In the circumstances, the compensation has to be made by the Insurance Company at the first instance and has to be made by the Insurance Company at the first instance and thereafter, they have to recover the same from the owner of the vehicle. The said line of reason envisages the fact that in the Motor Vehicles Act, being a beneficial provision, the aim and purpose of the same cannot be defeated by the Insurance Company by raising a technical plea. Even in the case of violation to the policy condition, the victim of the accident being an innocent person, it is necessary to see that the innocent persons do not suffer an injury or a loss by reason of mere policy violation. The injured person or the relatives of the person killed in the accident should not be allowed to go with the mind that the decree obtained by them is merely a paper decree and that on a technical plea, the owner or the Insurance Company would not escape from the liability."

66. In National Insurance Company Limited, Branch Office, Erode, Vs. Muthayammal and others, reported in 2010 (1) TN MAC 236, the insurance company took a plea that they are not liable to pay compensation, on the ground that the driver did not possess a valid driving licence and therefore, there was a violation of policy condition. This Court [Hon'ble Mr. Justice P.R.Shivakumar], at Paragraphs 6 and 7, held as follows: "6. The second ground alleged is that this Court committed an apparent error in arriving at a conclusion that in a case wherein the driver/rider of the vehicle involved in the accident was proved to hold no valid driving license, the insured can be directed to shoulder the liability of the owner of the vehicle with permission to recover the amount after such payment from the insured on the ground that there was violation of a policy condition. The learned counsel for the applicant submits that the said view was taken by this Court in ignorance of a judgment of the Hon'ble Supreme Court in Oriental Insurance Company v. Meena Variyal , 2007 (2) TN MAC 9 (SC): AIR 2007 SCC 1609. The facts of the said case are different from the facts of the case on hand. The other cases decided by the Supreme Court including, National Insurance Company Limited v. Batjit Kaur and others , 2004 (1) TN MAC 1 (SC) : 2004 ACJ 428 and New India Assurance Company Limited v. Asha Rani , 2004 (2) TN MAC 387 (SC) : 2003 ACJ 1 (SC) and also a Division Bench of this Court are to the effect that the liability of the Insurer towards the third party shall be intact even if there was a violation of a condition of the insurance contract between the owner and the Insurer. The reason assigned therein was that the compulsory scheme of insurance was introduced to benefit the poor victims who may not be able to recover compensation from the owner of such offending vehicles who may even be a person having meager resources from which the compensation could not be collected. A distinction was also made in the judgment regarding the liability of the Insurer in case of a no coverage of a particular person from the violation of the condition of contract of insurance giving a right to the Insurer to rescind the contract. In the first case the Insurer will not be liable at all as there was no contract covering the risk involved to that person. In the second one, the Insurer shall have only a right to rescind the contract, but however, the Insurer's liability towards the third party victim shall be intact. In such cases the insurer shall have the right to seek recovery from the insured based on violation of the policy condition. Such a view was taken following the earlier judgment of the Supreme Court as well as the judgment of a Division Bench of this Court.

7. The judgment now sought to be relied on by the learned counsel for the applicant is one which dealt with the liability of the Insurer in respect of death of a person who acted as the driver of the vehicle involved in the accident and who did not possess a valid driving licence at the time of accident. Therein Hon'ble Supreme Court held that the Insurer was not liable because it was of the view that the victim himself knew that he was driving the vehicle without a valid driving licence and thus in violation of a condition of contract of insurance. The said proposition cannot be extended to other cases of absence of driving licence. Otherwise, the very beneficial legislation which seeks to protect the interest of poor victims, for no fault of their part, will be defeated by a syndicate that may be made by the Insurer and the owner wherein the owner may not have any other asset out of which the compensation can be recovered. That could be the intention of the legislature also. All these points were discussed in detail in the judgment which is now sought to be reviewed. Therefore, this Court comes to the conclusion that this Application for review had to fail even regarding the second ground raised in the Application."

67. In ICICI Lambard General Insurance Company Ltd., v M.Rakkathal reported in 2010 (1) TNMAC 123, in an accident, a pedestrian died. The claim of the legal representatives was disputed on the ground that the driver of the offending vehicle, Tractor, did not possess a valid licence and therefore, there is no liability to pay compensation. The Tribunal passed an award, holding that the Insurance Company is not liable to pay compensation. However, directed them to pay and recover from the owner of the vehicle Challenging the same, the Company filed the appeal and inter-alia contended that the principle of pay and recover, is not applicable to cases, wherein, the driver had no valid licence, at the time of accident. Paragraph 100 of Swaran Singh's case, has been relied on. Rejecting the said contention, a leaned Single Judge of this Court (Hon'ble Mr. Justice D.Hariparanthaman), at Paragraphs 15 and 16, held as follows: "15. In fact, Para 4 of the judgment in Swaran Singh's case states the five instances that could be covered under section 149(2)(a)(ii) of the Motor Vehicles Act and "no licence" is one among the five. Para 4 of the judgment is extracted hereunder:

"4. Defences raised by the petitioner company in the claim petitions purported to be in terms of Section 1492(a)(ii) of the Motor Vehicles Act, 1988(hereinafter referred to as 'the Act') were: (a) driving licence produced by the driver or owner of the vehicle was a fake one;(b) driver did not have any licence whatsoever; (c) licence, although was granted to the concerned driver but on expiry thereof, the same had not been renewed; (d) licence granted to the drivers being for one class or description of vehicle but the vehicle involved in the accident was of different class or description; and (e) the vehicle in question was driven by a person having a learner's licence."

16. Therefore, the Swaran Singh's case took into account five instances that could be covered under Section 149(2)(a)(ii) of the Motor Vehicles Act. Each instance was discussed and paragraphs 77 to 80 relates to the instance of "no licence". In fact, prior to para 77,the heading is given as, "when admittedly no licence was obtained by a driver".

68. Having regard to the plea that the Supreme Court in Swaran Singh's case, did not consider a case of "no licence", at Paragraph 18, the learned Judge has observed that, "Hence, the attempt made by the appellant to exclude the category of "no licence" from Section 149(2)(a)(ii)is of no substance. While accepting the submission of the claimants therein, regarding the liability of the Insurance Company to satisfy the award, the learned Judge, at Paragraphs 20 and 21, further added as follows: "20. Further, as rightly contended by the learned counsel for the respondents 1 to 5, in para 102(X), the Honourable Apex Court has categorically held that in case, where the Insurance company satisfactorily proved its defence in accordance with Section 149(2) of the Motor Vehicles Act, the Tribunal could direct the insured to reimburse the compensation to the insurer by applying the principle of pay and recover. Para 102(x) is extracted hereunder:- "(x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section(7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of the claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub- section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal.

69. In National Insurance Company Ltd., v. Lakshmi reported in 2011 (1) TNMAC 276, rejecting the contention that the driver did not possess a valid and effective driving licence, which amounts to violation of police condition and therefore, the Insurance Company is not liable to pay compensation, the Hon'ble Mr. Justice N.Kirubakaran, has ordered 'pay and recovery'.

70. In Jawahar Singh Vs. Bala Jain and others, reported in 2011 (5) L.W 416 = 2011 (6) SCC 425, one Mukesh Jain was riding his two wheeler, Scooter bearing Registration No.DAI 1835, with his son, Shashank Jain, as pillion rider. When they had reached the SDM's Office, Geeta Colony, Delhi, a motorcycle, bearing Registration No.DL-7S-G-3282, being driven in a very rash and negligent manner, tried to overtake the scooter and in that process, struck against the scooter with great force, as a result whereof the deceased and his son were thrown on to the road and the deceased succumbed to the fatal injuries sustained by him. Two claims were made by the widow, two daughters and one son of the deceased. A separate claim was filed by another son. They were jointly tried. The Tribunal passed an award, directing the insurer to satisfy the award and recover the amount from the owner of the motor cycle. Challenging the award before the Delhi High Court, it was contended by the owner of the motorcycle that the rider was a minor on the date of accident and therefore, there is a violation of the provisions of Motor Vehicles Act, 1988. Insofar as the manner of accident, the finding attained finality. The High Court confirmed the order of the Claims Tribunal and that the review petition filed was also dismissed. Before the Supreme Court, it was contended that as the motor cycle was driven by a minor, he was solely responsible for the accident. Before the Claims Tribunal, the owner of the vehicle deposed that while he was at his residence, he received a telephonic message informing that his nephew, Jatin had met with an accident and that when the key of the motorcycle was on the Dining table of his house, without his knowledge and consent, Jatin had taken away the keys of the motor cycle, which was involved in the accident. On the abovesaid facts, the owner submitted that the Claims Tribunal erred in directing recovery from him. Per contra, the National Insurance Company contended that the fact that the minor driver did not possess a valid driving licence had been clearly established, and therefore, the insurance company had rightly been relieved from the liability to pay compensation and that such liability has been correctly fixed on the owner, namely, Jawahar Singh. While disbelieving the evidence of the owner that the minor had walked into his house and taken away the key of the motor cycle without any intimation, the Supreme Court, having regard to the fact that the driver was a minor and it was the responsibility of the owner that the vehicle was not misused and that too by a minor, who had no licence to drive the same, held that the Motor Accidents Claims Tribunal quite rightly has saddled the liability for payment of compensation on the owner of the vehicle and accordingly, directed the insurance company to pay the award amount to the claimants and thereafter, recover the same from the owner.

71. Thus it could be seen that in the latest judgment, though the negligence was on the rider of the motor cycle and even though he did not possess a valid licence at the time of accident, a Two Judges Bench of the Supreme Court directed the insurance company to pay the compensation to the legal representatives of the deceased and thereafter, to recover from the owner.

72. It could be seen from the line of judgments cited supra, even in case of no licence, directions granted by the Claims Tribunal/Courts to pay compensation to the injured/legal representatives of the deceased/third parties and thereafter, to recover the said amount from the insured has been sustained by the Supreme Court, giving effect to the statutory provisions of the beneficent legislation, insofar as granting relief to a third party victim is concerned, who is not expected to run around the corridors of the Courts/Tribunals to realise the award against the insured. A third party injured victim or the legal representatives of the deceased, who had already lost their breadwinner, as the case may be, would be both physically and mentally, shattered and only to provide a just and reasonable compensation, to be paid by the Insurance Companies, provision for compulsory insurance has been made under the Motor Vehicles Act and the compensation awarded can always be recovered from the insured, if willful or reckless breach on the part of the insured is proved, if any of the defences under 149(2) is pleaded and proved in the manner known to law. Let me consider some of the decisions, where the driver did not possess the required licence at the time of accident.

73. In Oriental Insurance Company Ltd., Regional Office, Esplanade, Madras, Vs. Amudha and four others, reported in 2000 (1) L.W 276, the insurance company raised an objection to the claim contenting inter alia that the Van driver involved in the accident, possessed only a licence to drive Auto rickshaw and not the required licence to drive the vehicle in question. A learned Single Judge of this Court [Hon'ble Justice M. Karpagavinayakam], held that it is the burden of the insurance company to prove that the driver did not have the required licence to drive, such vehicle and that on the facts and circumstances of the above case, held that the burden was not discharged by the Company.

74. In National Insurance Co.Ltd., Vs. Kusum Rai and Others, reported in 2006 (4) SCC 250, the driver, who was granted licence for driving a light motor vehicle drove a Jeep, used it as a taxi. The vehicle met with an accident, as a result whereof, a girl aged about 12 years died and her legal representatives made a claim for compensation before the Motor Accidents Claims Tribunal. The owner did not appear before the Claims Tribunal. The claimants were from a poor background. The driver had a LMV licence, but he did not possess a licence to drive a commercial licence. The Tribunal proceeded on the basis of Kamla's case (cited supra). The High Court, without going into the aspect of liability, dismissed the appeal filed by the Insurance Company, as not maintainable. On further appeal by the Insurance Company, the Supreme Court, at Paragraph 12 of the judgment in Kusum Rai's case, held that the owner would be liable for payment of compensation in a case, where the driver was not having a licence at all. It was further held that it was the obligation of the owner to take adequate care to see that the driver had appropriate licence to drive the vehicle. The Apex Court also noticed an earlier decision in Malla Prakasa Rao v. Malla Janaki and others reported in 2004 (3) SCC 343, wherein, it has been held that, "(1) It is not disputed that the driving licence of the driver of the vehicle had expired on 20-11-1982 and the driver did not apply for renewal within 30 days of the expiry of the said licence, as required under Section 11 of the Motor Vehicles Act, 1939. It is also not disputed that the driver of the vehicle did not have driving licence when the accident took place. According to the terms of the contract, the Insurance Company has no liability to pay any compensation where an accident takes place by a vehicle, driven by a driver without a driving licence. In that view of the matter, we do not find any merit in the appeal."

75. On the facts of the case, a two Judges Bench of the Supreme Court in Kusum Rai's case, by observing that the legal representatives should not be pushed to another round of litigation, particularly, when they found it difficult to secure the presence of the owner of the vehicle in exercise of their jurisdiction under Article 136 of the Constitution of India, directed the appellant insurance company to pay the compensation to the claimants and thereafter, recover from the owner in the same manner as provided in Oriental Insurance Co.Ltd., Vs. Nanjappan and Others, reported in 2005 SCC (Cri) 148.

76. In New India Assurance Co.Ltd., Vs. Roshanben Rahemansha Fakir and another, reported in 2008 ACJ 2161 = 2008 (2) TN MAC 201 (SC) = 2008 (8) SCC 253, the driver was a holder of the licence of a three wheeler which was not meant to be used to drive a transport vehicle. It was owned by one 'X'. The Tribunal noticing the description of the class of vehicle i.e., Autorikshaw Delivery Van, not meant to be used for private purpose, but as a commercial vehicle and through the certificate of insurance also showed that the vehicle was a goods carrying public carrier, within the meaning of Rule 51 of the Central Motor Vehicles Rules, 1989 and even after considering the plea of the appellant insurance company that the driver of the said vehicle was not a holder of a valid and effective licence, negatived the plea of the Company that it was not liable to reimburse the claim of the claimants. The High Court dismissed the appeal summarily. The Supreme Court, after considering Swaran Singh's case (cited supra) and National Insurance Company Ltd., Vs. Annappa Irappa Nesaria and others, reported in 2008 (1) TN MAC 200 (SC) = 2008 (1) SCALE 642, held that the judgment of the High Court cannot be sustained. Setting aside the same and in exercise of Their powers under Article 142 of the Constitution of India, a Two Judges Bench of the Apex Court directed the appellant insurance company to satisfy the award in favour of the claimants and recover the same from the owner of the vehicle.

77. In Oriental Insurance Co.Ltd., Vs. Zaharulnisha and Others, reported in 2009 (1) TN MAC 419 (SC) = 2008 (12) SCC 385, the driver having a licence to drive a heavy motor vehicle drove a Scooter and caused the accident. The licence possessed by him was for different class of vehicle and on the facts of this case, a Two Judges Bench of the Supreme Court held that the insurer cannot be made liable to pay compensation.

78. In Nagamani & Another v. Singaravelu & Another reported in 2009 (2) TNMAC 77, legal representatives of the deceased, third party, claimed compensation. The Insurance Company raised a plea that the driver of the offending lorry was not in possession of a valid driving licence to drive the vehicle, carrying hazardous goods and that he possessed only a licence to drive heavy goods vehicle. Before the Claims Tribunal, the Insurance Company examined the Investigator of the Company and a Junior Assistant of Regional Transport Officer, in support of their contention. The Tribunal passed an award, against the owner of the vehicle. On the appeal preferred by the claimants, a learned Single Judge of this Court (Hon'ble Mr. Justice M.Venugopal), held that it is suffice to point out that the offending lorry driver was not in possession of the licence or endorsement to drive hazardous goods vehicle and therefore, there is a violation of policy condition. So saying, dismissed the appeal filed by the claimants.

79. Nagamani's case (cited supra) has been decided on 11.06.2007, much earlier to Saravanan's case (cited supra), which was decided on 12.06.2009.

80. In National Insurance Co. Ltd., v. Murugan reported in 2011 (1) TNMAC 595, to avoid its liability to pay compensation to the third party, the Insurance Company contended that the driver did not possess the licence with specific endorsement for driving heavy vehicle, JCB and therefore, they should be exonerated. Rejecting the same, the Hon'ble Mr. Justice B.Rajendran, has directed the Insurance Company to pay compensation to the accident victims and recover the same from the owner. Some of the decisions, where the driver did not renew his licence, are as follows.

81. In Eshwar Chandra and others v. The Oriental Insurance Company Ltd., reported in 2007 (4) SCALE 292, licence of the driver expired. On the date of accident, the application for renewal of licence was not filed by the driver within the prescribed period and under such circumstances, a Two Judges Bench of the Supreme Court confirmed the view of the High Court that the driver had no valid licence and the direction issued by the High Court to the Insurance Company to pay and recover from the insured has been confirmed.

82. In Ram Babu Tiwari v. United India Insurance Co. Ltd., reported in 2008 (4) LW 681 (SC), decided on 01.08.2008, when X was travelling in a truck with his buffalos, it was hit by a tractor trolly. He sustained injuries and died in the hospital. Insurance Company disputed the liability on the ground that the driver of the Tractor did not have any valid and effective driving licence on the date of accident. The Tribunal held that driver was having a valid licence only for the period from 11.02.1990 and 10.02.1993 and again from 07.02.1996 to 07.02.1999. Indisputably, the driver did not have any valid licence during the period 11.02.1993 and 08.02.1999. The Tribunal held that the Insurance Company cannot be exonerated from its liability. On appeal, the High Court held that the compensation amount shall be paid by the Insurance Company with liberty to recover from the driver and owner. On further appeal by the aggrieved owner, a Two Judges Bench of the Supreme Court observed that the question as to whether the owner of a vehicle had taken care to inform himself, as to whether the driver entrusted to drive the vehicle was having a licence or not, is essentially a question of fact. However, noticing that on the date of accident, the driver did not hold any licence and that the same was only renewed subsequently, following the decision in Swaran Singh's case (cited supra), rejected the plea made in the appeal that the renewal of licence should be taken effect from the retrospective date. Ultimately, taking note of the decisions in Ishwar Chandra's case (cited supra), held that there was no infirmity in the impugned judgment of the High Court. In the above judgment, it could be noticed that though on the date of accident, there was no licence, the decision of the High Court, directing pay and recover, has been sustained.

83. In Oriental Insurance Co.Ltd., Vs.Prithvi Raj, reported in 2008 (1) TN MAC 216 (SC) = 2008 (2) SCC 338, the respondent therein preferred a claim before the Himachal Pradesh State Consumer Disputes Redressal Commission, alleging that a Mini Bus owned by him met with an accident, during the period, when the insurance cover/policy issued by the appellant insurance company was in force. Though the accident was reported to the insurance company, the claim made with them was not settled on the ground that the driver of the offending vehicle did not have a valid and effective driving licence. The respondent/complainant took a stand that there was a renewal of the driving licence which was valid and legal and therefore, the claim should not have been repudiated. The State Commission rejected the plea categorically holding that there was no valid licence issued by the Regional Transport Authority, Hyderabad. On appeal, the National Commission accepted the contention that the licencing authority at Hyderabad had not issued any licence as claimed, yet, in view of the fact that there was a renewal at Tinsukia, the National Commission held that the claim ought not to have been refused by the insurance company. When the matter reached the Supreme Court, following the decisions in Swaran Singh's case and Narain Dhut's case, the Apex Court held as follows:- "In the instant case, the State Commission has categorically found that the evidence on record clearly established that the licensing authority had not issued any license, as was claimed by the Driver and the respondent. The evidence of Shri A.V.V. Rajan, Junior Assistant of the Office of the Jt. Commissioner & Secretary, RTA, Hyderabad who produced the official records clearly established that no driving license was issued to Shri Ravinder Kumar or Ravinder Singh in order to enable and legally permit him to drive a motor vehicle. There was no cross examination of the said witness. The National Commission also found that there was no defect in the finding recorded by the State Commission in this regard.

11. It appears that pursuant to the orders dated 14.07.2005 passed by this Court, the entire amount awarded was deposited in this Court. Since, we have held that the appellant-Insurance Company has no liability, the amount deposited be returned to the appellant-Insurance Company with accrued interest, if any."

84. Ultimately, the Supreme Court held that the appellant insurance company has no liability to pay the compensation and further ordered that the amount deposited should be returned to the insurance company with accrued interest if any. Reading of the judgment makes it abundantly clear that the Supreme Court reiterated its earlier decision that statute being beneficial one qua third party and it is created by fiction of law under Section 147 and 149 of the Motor vehicles Act, but held that the logic of fake licence has to be construed differently in respect of third party and in respect of own damage claims. In the above judgment, as the claim was with respect to damages to the vehicle, relief was denied to the claimant.

85. In National Insurance Co.Ltd Vs. Vidhyadhar Mahariwala and others, reported in 2008 (2) TN MAC 369 (SC) = 2008 (12) SCC 701, decided on 01.09.2008, licence expired on 14.12.2003, renewed on 16.05.2005, and the accident occurred on 11.06.2004, when there was no licence. The Tribunal awarded compensation on the ground that during the intervening period, the driver was not incompetent or disqualified to drive the vehicle. The High Court on appeal, held that merely because there was a gap of renewal of driving licence that cannot be a ground for exoneration. A Two Judges Bench of the Apex Court, while setting aside the order of the High Court, directed the claimant therein, to recover the amount from the insured.

86. The Apex Court in the above reported judgment has considered one aspect of the matter that the driver did not have the licence, on the day, when the accident occurred. However, the other aspect as to whether the insurer is liable to satisfy the award, as per Section 149(4) and (5) of the Motor Vehicles Act to a third party and recover the same from the insured has not been dealt with. As stated supra, in the earlier portion of the judgment in the present appeals, this Court has extracted the decisions of the Supreme Court in Swaran Singh, Lehru and other decisions, wherein, the Apex Court has reiterated that the liability of the insurance company to pay compensation to the third party or the dependants of the deceased is statutory in nature, considering the beneficial nature of the legislation.

87. In New India Assurance Co. Ltd. v. Anbalagan reported in 2009 (2) TNMAC 345, a scooterist met with an accident on 27.03.2002, when the vehicle collided with a Tractor. The Insurance Company disputed the claim on the ground that that the driver of the Tractor did not possess a valid licence. Ex.P5  Xerox copy of the Licence produced before the Claims Tribunal, revealed that the licence to drive light motor vehicle was given for the period between 23.02.2000 and 24.02.2003 and there was no endorsement to drive a heavy goods vehicle or tractor. Though it was mentioned therein that the licence obtained to drive tractor or trailor was valid upto 12.08.1986, there was nothing to show that afterwards, it was renewed by a competent authority. Following the decisions in United India Insurance Co. Ltd., v. Rakesh Kumar Arora and others reported in 2008 (2) TNMAC 508 (SC), wherein, the Apex Court observed that when there was no valid and effective licence on hand, the Insurance Company cannot be held liable for payment of compensation and National Insurance Co. Ltd., v. Kaushalaya Devi & Ors., reported in 2008 (2) TNMAC 479 (SC), wherein, the Apex Court held that when an endorsement permitting the driver to drive heavy goods vehicle was not in existence on the date of accident and of the fact that the owner not stepping into the witness box to say anything in this regard, then the Insurance Company could not be made liable, a learned Single Judge of this Court (Hon'ble Justice S. Palanivelu), allowed the appeal filed by the Insurance Company and exonerated the Company from payment of compensation. Insofar as the amount already withdrawn by the claimant from the deposit made by the Company, liberty has been given to the Insurance Company to realise the part of compensation from the owner of the vehicle. The claimant was also directed to realise the balance of compensation from the owner of the vehicle.

88. Though Anbalagan's case (cited supra) has been decided on 05.08.2009, the judgment of the Division Bench in Saravanan (cited supra) has not been placed before the learned Single Judge.

89. In The Branch Manager, The New India Assurance Co. Ltd., v. Muralikrishnan reported in 2010 (3) MLJ 271, The Honble Mr. Justice P.K.Misra, learned Single Judge of this Court considered an issue, as to whether the Insurance Company can be exonerated of its liability to pay compensation, when the driver of the offending vehicle did not possess a valid and effective driving licence. In that case, in support of the contention, the Company relied on a decision in National Insurance Co. Ltd., v. Vidhyadhar Mahariwala and others reported in 2008 ACJ 2860. In the aforesaid decision of the Supreme Court, the accident took place on 11.06.2004 and that the driving licence was valid for a period between 29.12.2002 to 28.12.2003 and it was again renewed from 16.05.2005. The High Court, keeping in view of the fact that previously there was a valid driving licence and that such licence was also renewed after the accident had taken place, fastened the liability on the Insurance Company. But on appeal, the Supreme Court in Vidyadhar Mahariwala's case (cited supra) observed that during the interregnum period, there being no driving licence and therefore, the Company was not liable.

90. While testing the correctness of the impugned order of the Tribunal, in Muralikrishnan's case (cited supra), the abovesaid learned Single Judge of this Court, observed as follows:

"In these circumstances, I don't think it can be said that the Supreme Court has laid down as an inexorable principle when there is no valid driving licence, the principle when there is no valid driving licence, the principle of Section 149(4) cannot be applied. On the other hand there are several decisions of the Supreme Court which categorically recognises the underlying facility in section 149(4) by giving direction regarding pay and recovery when there was absence of valid driving licence."

91. In United India Insurance Co. Ltd., v. K.G.Vimala reported in 2010 (3) MLJ 584 = 2010 (1) TNMAC 340, the licence of the driver of the offending vehicle had expired two years prior to the accident. The Company sought for exoneration. The Tribunal has directed the Insurance Company to pay the compensation to the accident victim and recover the same from the owner of the vehicle. On appeal, The Honble Mr. Justice R.Subbiah, learned Single Judge of this Court by observing that non-possession of the driving licence was only a breach of policy condition and not a violation of Section 149(2)(a)(ii) of the Act, viz., a condition excluding driving by a named person or persons or by any person who is not duly licenced, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification, held that there was no error in the order of the Tribunal. Some of the cases, where the licence was found to be fake or duplicate, are given below,

92. In National Insurance Co.Ltd., vs. Kaushalya Devi and Others, reported in 2008 (2) TN MAC 497 (SC), the deceased was found to be a gratuitous passenger in a Truck, which met with an accident. The Tribunal granted an award, notwithstanding the objections of the insurance company that the driver did not possess any valid and effective driving licence to drive the Truck. The High Court found that the endorsement permitting the driver to drive Heavy Goods Vehicle was ante-dated and the licence was not existing, on the date of accident. Further, the driver had only a licence to drive a Light Motor Vehicle and as the owner did not step into the witness box, the High Court held that the insurance company was not liable to pay compensation. While upholding the said judgment, the Supreme Court held that if the compensation amount deposited by the insurance company had since been withdrawn by the 1st respondent, it would be open to the insurance company to recover the same in the manner specified by the High Court, but, if the same had not been withdrawn, the deposited amount may be refunded to the insurance company and the proceedings for realisation of the amount may be initiated against the owner of the vehicle. In the abovesaid judgment, the Supreme Court, on facts found that the deceased was not the owner of any goods which were carried in the Truck and that he was travelling in the Truck for the purpose, other than the one for which, he was entitled to travel in a public carriage goods vehicle.

93. In the abovesaid reported judgment, while allowing the appeal filed by the insurance company, the Supreme Court has also taken note of the decision in Laxmi Narain Dhut's case (cited supra), wherein, the Apex Court held that,

1)The decision in Swaran Singh's case (supra) has no application to cases other than third party risks.

2)Where originally the licence was a fake one, renewal cannot cure the inherent fatality.

3)In case of Third party Risks the insurer has to indemnify the amount and if so advised, to recover the same from the insured.

4)The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.

94. In Premkumari and others Vs. Prahlad Dev and others, reported in 2008 (1) TN MAC 115 (SC) = (2008) 3 SCC 193, one 'X' died. Dependants made a claim. The insurance company filed a written statement, denying the claim and pleaded that the driver of the offending vehicle did not have a valid and effective driving licence on the date of accident. Accepting the plea of the insurance company, the claims Tribunal exonerated the insurance company from its liability to pay compensation. On appeal filed by the claimants challenging the exoneration of the insurance company, the High Court, finding that the licence issued to the driver was duplicate, sustained the finding of the Tribunal. However, considering the merits of the case, age and income of the deceased, enhanced the compensation and directed the owner and driver of the vehicle to pay compensation. The review petition filed by the claimants has also been dismissed.

95. Perusal of the above reported judgment shows that a sum of Rs.50,000/- with interest had been paid to the appellants/claimants. In view of the judgment of the High Court, recovery proceedings were initiated by the insurance company for refund of the amount paid to the appellants/claimants. Though Two Judges Bench of the Supreme Court upheld the factual finding of the Tribunal that the driver was holding a duplicate licence on the date of accident and in view of an order granting stay of the recovery proceedings initiated by the insurance company for refund, made it clear the appellants/claimants need not repay the said amount inspite of the conclusion, which was in favour of the insurance company. However, the Apex Court permitted the insurance company to recover the said amount from the owner of the vehicle in the same manner as was directed in Nanjappan's case. The Supreme Court permitted the appellants/claimants to proceed and recover the rest of the amount from the owner and driver of the vehicle. In this case, there was a clear finding that the driver had a duplicate (Fake) licence, at the time of accident. Let me consider some of the cases, where the driver had only learner's licence,

96. In Branch Manager, Oriental Insurance Company Ltd., v. S.Kadarshaw Rowther reported in 2004 (2) TNMAC 13 (DB), parents of the deceased claimed compensation. Resisting the claim, the Insurance Company took a plea that the driver of the vehicle, did not possess a valid licence and thus, violated the terms and conditions of the policy. It was also contended that the vehicle was stolen by some miscreants and they murdered the driver. However, he had a learner's licence (LLR) at the time of accident. RW.1, owner of the vehicle, deposed that the deceased was not authorised or permitted to drive the car nor there was any acceptable evidence that the driver was prevented by the employer. In the abovesaid circumstances, having regard to the admitted plea that the deceased was having a LLR and placing reliance on a decision in National Insurance Company Ltd., v. Swaran Singh reported in 2004 (1) ACJ 1, a Division Bench of this Court [Hon'ble Mr. Justice P. Sathasivam and Hon'ble Mr. Justice S.R.Singharavelu] held that the Insurance Company cannot escape from its liability.

97. In Radhika Devi v. Vasantha reported in 2004 (2) TNMAC (DB) 567, a Division Bench of Kerala High Court considered a plea of the owner of the vehicle, as to whether the Insurance Company can avoid its liability, if the driver of the insured vehicle was having only LLR licence at the time of accident. After referring to the decision in Swaran Singh's case (cited supra), the Division Bench, at Paragraph 10, held that, "In view of the above recent Apex Court decision, we are of the view that the Insurance Company cannot avoid liability to the third party on the ground that the driver of the insured vehicles has got only a learner's licence at the time of accident and it cannot be stated that the owner has also committed breach of policy condition." In the above reported judgment, the Division Bench has directed that the amount deposited by the appellant as a condition for filing the appeal should be refunded, while issuing further directions to the Insurance Company to pay the compensation to the accident victims.

98. In Mahamooda and others v. United India Insurance Company Ltd., reported in 2004 (13)SCC 684, the vehicle was driven by a person, having LLR and the Tribunal fixed the liability on the Insurance Company. Following Swaran Singh's case, a Two Judges Bench of the Supreme Court directed the appellant-Insurance Company to deposit the compensation with the Tribunal, if the Company had already withdrawn the amount, after the judgment of the High Court.

99. In National Insurance Company Ltd., v. Dhanalakshmi reported in 2006 (1) TNMAC 343, the offending vehicle was driven by the deceased driver, who did not possess a valid driving licence. Violation of terms and conditions of policy was insisted. However, no evidence was let in to show that the learner's licence holder had any lorry driver, duly licenced, beside him, when he was driving the lorry and whether he had 'L' plates, both in front and rear side of the vehicle, at the time of accident. Even though it was found that there was violation of Rule 3 of the Central Motor Vehicles Rules, 1989, a learned Single Judge of this Court [Hon'ble Mr. Justice A.C.Arumuga Perumal Adityan], held that the Insurance Company is still liable to pay compensation and recover the same from the owner of the vehicle.

100. Motor Vehicles Act 1988, recognizes different kinds of insurance. Comprehensive , third party, coverage for employees in a goods vehicle and such other policies under the Public Liability Insurance Act, 1991 (6 of 1991).

101. Third party insurance is also known as Act Policy, which is compulsory as per Section 146 of the Motor Vehicles Act, which reads that 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 Chapter XI of the Motor Vehicles Act. The section provides for a proviso and explanation, extracted supra.

102. Certain provisions of the Motor Vehicles Act require consideration to understand the scheme and object of the Motor Vehicles Act,

"3. Necessity for driving licence:- (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle other than a motor cab or motor cycle hired for his own use or rented under any scheme made under sub-section (2) of section 75 unless his driving licence specially entitles him so to do. (2) The conditions subject to which sub-section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be prescribed by the Central Government.

4. Age limit in connection with driving of motor vehicles:- (1) No person under the age of eighteen years shall drive a motor vehicle in any public place:

Provided that a motor cycle with engine capacity not exceeding 50cc may be driven in a public place by a person after attaining the age of sixteen years.

(2) Subject to the provisions of Section 18, no person under the age of twenty years shall drive a transport vehicle in any public place.

(3) No learner's licence or driving licence shall be issued to any person to drive a vehicle of the class to which he has made an application unless he is eligible to drive that class of vehicle under this section.

5. Responsibility of owners of motor vehicles for contravention of sections 3 and 4. - No owner or person in charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of section 3 section 4 to drive the vehicle.

6. Restrictions on the holding of driving licences. - (1) No person shall, while he holds any driving licence for the time being in force, hold any other driving licence except a learners licence or a driving licence issued in accordance with the provisions of section 18 or a document authorising, in accordance with the rules made under section 139, the person specified therein to drive a motor vehicle. (2) No holder of a driving licence or a learners licence shall permit it to be used by any other person.

(3) Nothing in this section shall prevent a licensing authority having the jurisdiction referred to in sub-section (1) of section 9 from adding to the classes of vehicles which the driving licence authorises the holder to drive.

10. Form and contents of licences to drive:- (1) Every learner's licence and driving licence, except a driving licence issued under Section 18, shall be in such form and shall contain such information as may be prescribed by the Central Government.

(2) A learner's licence or, as the case may be, driving licence shall also be expressed as entitling the holder to drive a motor vehicle of one or more of the following classes, namely:-

(a) motor cycle without gear;

(b) motor cycle with gear

(c ) invalid carriage;

(d) light motor vehicle;

(e) transport vehicle;

(i) road-roller;

(j) motor vehicle of a specified description

11. Additions to driving licence. - (1) Any person holding a driving licence to drive any class or description of motor vehicles, who is not for the time being disqualified for holding or obtaining a driving licence to drive any other class or description of motor vehicles, may apply to the licensing authority having jurisdiction in the area in which he resides or carries on his business in such form and accompanied by such documents and with such fees as may be prescribed by the Central Government for the addition of such other class or description of motor vehicles to the licence. (2) Subject to such rules as may be prescribed by the Central government, the provisions of section 9 shall apply to an application under this section as if the said application were for the grant of a licence under that section to drive the class or description of motor vehicles which the applicant desires to be added to his licence.

14. Currency of licences to drive motor vehicles- (1) A learners licence issued under this Act shall, subject to the other provisions of this Act, be effective for a period of six months from the date of issue of the licence.

(2) A driving licence issued or renewed under this Act shall 

(a) in the case of a licence to drive a transport vehicle, be effective for a period of three years :

Provided that in the case of licence to drive a transport vehicle carrying goods of dangerous or hazardous nature be effective for a period of one year and renewal thereof shall be subject to the condition that the driver undergoes one day refresher course of the prescribed syllabus ; and

(b) in the case of any other licence -

(i) if the person obtaining the licence, either originally or on renewal thereof, has not attained the age of fifty years on the date of issue or, as

the case may be, renewal thereof 

(A) be effective for a period of twenty years from the date of such issue or renewal ; or

(B) until the date on which such person attains the age of fifty years,

whichever is earlier ;

(ii) if the person referred to in sub-clause (i), has attained the age of fifty years on the date of issue or, as the case may be, renewal thereof, be effective, on payment of such fee as may be prescribed, for a period of five years from the date of such issue or renewal :

Provided that every driving licence shall, notwithstanding its expiry under this sub-section, continue to be effective for a period of thirty days from such expiry.

15. Renewal of driving licence:- (1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of its expiry:

Provided that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal:

Provided further that where the application is for the renewal of a licence to drive a transport vehicle or where in any other case the applicant has attained the age of forty years, the same shall be accompanied by a medical certificate in the same form and in the same manner as is referred to in sub-section (3) of Section 8, and the provisions of sub-section (4) of Section 8 shall, so far as may be, apply in relation to every such case as they apply in relation to a learner's licence. (2) An application for the renewal of a driving licence shall be made in such form and accompanied by such documents as may be prescribed by the Central Government.

(3) Where the application for the renewal of a driving licence is made previous to, or not more than thirty days after the date of its expiry, the fee payable for such renewal shall be such as may be prescribed by the Central Government in this behalf.

(4) Where the application for the renewal of a driving licence is made more than thirty days after the date of its expiry, the fee payable for such renewal shall be such amount as may be prescribed by the Central Government:

Provided that the fee referred to in sub-section (3) may be accepted by the licensing authority in respect of an application for the renewal of a driving licence made under this sub-section if it is satisfied that the applicant was prevented by good and sufficient cause from applying within the time specified in sub-section (3): Provided further that if the application is made more than five years after the driving licence has ceased to be effective, the licensing authority may refuse to renew the driving licence, unless the applicant undergoes and passes to its satisfaction the test of competence to drive referred to in sub-section (3) of Section 9. (5) Where the application for renewal has been rejected, the fee paid shall be refunded to such extent and in such manner as may be prescribed by the Central Government.

(6) Where the authority renewing the driving licence is not the authority which issued the driving licence it shall intimate the fact of renewal to the authority which issued the driving licence.

103. The Motor Vehicles Act read in entirety is a comprehensive code, prescribing different classes of vehicles for which different kind of licence is required. Criteria has been fixed for getting a learner's licence, regular licence and for addition of licence, depending upon the class of vehicle, categorisation of different kind of vehicle, etc.

104. Reading of the provisions would make it clear that the conditions set out are to prevent accidents for want of skill in driving the kind of vehicle, without appropriate licence. Public safety is the paramount consideration. The Act also provides for suspension or revocation and for such other matters. Penal provisions are also provided for violation of certain provisions. When the interpretation of Section 149(2)(a)(ii) vis-a-vis the proviso appended to sub-sections (4) and (5) of the Motor Vehicles Act, 1988, came up for consideration before the Supreme Court in Swaran Singh's case, considering the beneficial enactment, there is a categorical pronouncement by the Supreme Court, that the rights of the third party to claim compensation is statutory. When the statutory provisions are interpreted with a declaration that the insurer has to pay the compensation to a third party and recover, is it open to the insurers to harp on the ground that they are bound only by the terms of contract? In this context, this Court deems it fit to consider Section 23 of the Contract Act, which reads as follows: "23. What considerations and objects are lawful, and what not:- The consideration or object of an agreement is lawful, unless-

it is forbidden by law; or

is of such a nature that, if permitted, it would defeat the provisions of any law; or

is fraudulent; or

involves or implied injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void."

105. As per the abovesaid Section, a contract of insurance is executed between the insurer and insured. As per the terms and conditions of the contract, the insurer promises to indemnify the insured, in the event of any liability that may be fastened on the insured (owner), as per Section 147 of the Act. For the promise held out by the insurer to indemnify, the insured, not only has to make the payment, by way of premium, but he has to abide by the terms and conditions of the policy and also the provisions of the statute. The insurance company is not directly liable to pay compensation to the person, who has suffered a bodily injury or the legal representatives of the deceased, on account of the accident, the liability to compensate the third party is that of the insured and that the insurer merely indemnifies him. Thus, indisputably the contract of insurance is purely between the insurer and the insured and that the third party is not a privy to the same. In the event of any violation of statutory provisions or policy conditions by the insured, it would be open to the insurer to repudiate the contract of insurance to the insured or contend that inasmuch as, there is a breach or violation of the statutory provision and therefore, there is no obligation for the insurer to indemnify the insured, for any loss sustained by the insured, in the event of any liability fastened on the insured and required to be indemnified under Section 147 of the Motor Vehicles Act. But the insurer cannot avoid its payment of compensation to a third party victim.

106. At this juncture, the expression in Section 149(4) of the Act, "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" assumes greater significance and should be given due importance to give effect to the divine intention of the legislature. Section 146 of the Act mandates compulsory insurance, in respect of third parties and all other policies are optional. If the insured opts for a different kind of policy and seeks for protection, subject to the terms and conditions of that policy, he can always take a policy, in addition to compulsory insurance. The object of compulsory insurance is to grant relief to third party victims and in all other cases, the insurer has no obligation to indemnify the insured, unless a specific policy is taken by the insured. If the insured commits a breach, in respect of third party claims, he cannot seek for indemnification by the insurer for his own breach. But the breach has to be proved by the insurer, to avoid its liability to the insured. In such an event, the insurer can contend that he is not liable to indemnify the insured. Section 149(1), (4) and (5) have been incorporated in the statute only to grant relief to third party victims, by making payment and then to recover from the owner of the vehicle. If the contentions of the Insurance Companies that they should be totally exonerated from payment to third party victims, inspite of compulsory insurance cover, are to be accepted, then there is no necessity for the legislature to incorporate the words "Pay and Recover". The argument of the Insurance Companies, in my humble view is against the statutory provisions. Section 149(2) of the Act cannot be interpreted and given effect to, as suggested by the Companies, ignoring Sections 146 and 149(1), (4) and (5) of the Act, otherwise, the provisions of Sections 149(4) and (5) of the Act, would be redundant.

107. In this context, it is relevant to extract Clause (i) of the Summary of Findings of the Supreme Court to the various issues raised in Swaran Singh's case. It states that Chapter XI of the Motor Vehicles Act, 1988, providing compulsory insurance of vehicles against third party risks in a social welfare legislation to extend the relief of compensation to victims of accident caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

108. In Swaran Singh's case, the Supreme Court in the summary of finding starts with a specific note of giving effect to the beneficent statute to grant relief to third parties. As extracted in the earlier paragraphs of this judgment from various decisions, the Apex Court has made it clear that the divine intention of the legislature, its scope, interpretation with reference to the contract of insurance in more than one places and categorically held that payment of compensation to third party is statutory. Though the Supreme Court in Clause (iii) of the judgment in the Summary of Findings, has held that the insurer is entitled to raise a defence in a claim petition filed under Section 163A or Section 166 of the Motor Vehicles Act, inter alia in terms of Section 149(2)(a)(ii) of the said Act in Clause (iii) of the summary, has made it clear that the breach of the policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149 have to be proved to have been committed by the insured for avoiding liability by the insurer. The Supreme Court has also made it clear that mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. If the compensation to be paid to the injured, third party or the legal representatives of the deceased is statutory and in the light of the extensive consideration as to the interpretation of the statutory provisions, Section 149(2)(a)(ii) vis-a-vis the provision appended to sub-sections 4 and 5 of the Motor Vehicles Act, 1988, i.e., with reference to the defences available to the insurance company, this Court is of the view that in matters pertaining to the alleged breach under Section 149(2)(a)(ii) of the Act, the dispute to be adjudicated by the Courts/Tribunals should be inter se dispute, as to whether the insurer can claim exoneration of its liability to the insured, as to whether there was any breach of policy condition or statutory provisions of the Motor Vehicles Act, so that they can avoid their liability towards the insured or in other words, not to indemnify the insured, as per the contract of insurance, for the reason that the third party is not privy to the contract, and where his case is covered by a compulsory insurance and that is why the Supreme Court at Clause (iii), has held that mere absence, fake or invalid driving licence or disqualification of the driver at the relevant time, are not in themselves defences available to the insurer against the insured or third parties.

109. It could be noticed that the Apex Court, while interpreting the provisions, is also cautious in stating that to avoid the insurer's liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfulling the conditions of policy, regarding use of vehicles by a duly licenced driver or one who was not disqualified to drive at the relevant time. Liability to the insured arises out of a contract of insurance between the insured and the insurer with a legal obligation to indemnify the insured or not, as per the contract of insurance, subject to proof of breach of policy conditions or statutory provisions of the Motor Vehicles Act, if the insured consciously or recklessly allowed a person who does not possess a licence to drive the vehicle. That is why, at Clause (vi) of the Summary of Findings, the Supreme Court has further held that even if the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of valid licence by the driver or disqualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured, unless the said breach or breaches of the conditions of the driving licence is/are so fundamental, as are found to have contributed to the cause of the accident.

110. Here again, it could be noticed that even if there was a breach, the Supreme Court has made it clear that the avoidance of liability could be only towards the insured. It has also made it clear that the Tribunals in interpreting the policy conditions would apply the 'rule of main purpose' and the concept of 'fundamental breach' to allow the defences available to the insurer under Section 149(2) of the Act.

111. Reading of Clause (xi) makes it clear that the above clause gives a right to the insurer to raise all the defences that are permissible under Section 147 read with Section 149 of the Motor Vehicles Act, which includes negligence i.e., if not proved against the driver of the offending vehicle, there is no need for the company to pay compensation, provided the claim is made under Section 166 of the Act. The claim can be defended by the Company, if fraud is played on the insurance company, disqualification from holding the licence and all other grounds that are permissible under law, both the insurer and the insured can defend. The Tribunal has the power to adjudicate and decide all inter se disputes stated supra, which are only illustrative, between the claimants and the insurer. The Tribunal is also empowered to adjudicate the inter se disputes between the insured and the insurer, regarding its liability towards the insured, i.e., their legal obligation to indemnify the insured under the contract of insurance. If the insurer establishes a breach as explained by the Apex Court, then it would be exonerated of its liability towards the insured, but by no stretch of imagination, it can claim exoneration from payment of compensation to the injured, third party or the legal representatives of the deceased. Having considered the interpretation of Section 149(2)(a)(ii) vis-a-vis the provision to sub-section 4 and 5 of the Motor Vehicles Act, extensively, the Supreme Court has not excluded the liability of the insurer to third parties. Therefore, when the Insurance Companies have a statutory duty or obligation to pay compensation to third party victims, opposing their claim solely on the ground of non possession of licence, by the driver of the vehicle, at the time of accident, in my view, would be contrary to statutory provision and the decisions of the Supreme Court. At best, the insurer can only seek for exoneration of its liability towards the insured and not against the third party. Clause X of the Summary of Findings in Swaran Singh's case (cited supra) also makes it clear that where on adjudication of the claim under the Act, the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section (7) as interpreted by the Supreme Court, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which the Insurance Companies are compelled to pay to the third party under the award of the Tribunal.

112. In a claim petition before the Claims Tribunal, the insurance company fails to lead reliable and cogent evidence to support its contentions regarding breach of policy conditions or statutory provisions of the Motor Vehicles Act and also the fact that the insured has consciously allowed a driver, who had no licence to drive the vehicle and thus, guilty of negligence or non fulfillment of conditions of policy regarding use of the vehicle by a duly licenced driver, their liability to the insured to indemnify under the Contract of insurance, cannot be avoided. The inevitable conclusion would be that the liability is compulsory to the third party, as it is statutory.

113. Predicaments of the insurer to prove its defence of no licence, fake licence, etc., is also one of the arguments placed before this Court. In most of the cases, owners and drivers of the offending vehicle, do not respond to the letters of the insurers, seeking licence particulars from them or they do not appear before the Claims Tribunal or they do not file their written statements/counter, even though they are if represented by lawyer or after filing of the counter/written statement, they remain ex parte.

114. In a given case, when the owner and the driver, both remain ex parte and not produced the original driving licence and not satisfied the insurance company that the driver was having valid driving licence,the company has to prove that the driver was not in a possession of the driving licence, at the time of accident, but it is the grievance of the Insurance Companies that there is no prescribed method or yardstick, regarding proof.

115. In most of the claims, only the insured and insurer are made as parties, although under Section 168 of the Motor Vehicles Act, the Claims Tribunal is empowered to specify the amount, which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be. In most of the claims made under Section 166 of the Act, the insured remains ex parte and an application is taken out by the Insurance Companies, under Section 170 of the Motor Vehicles Act, seeking permission to contest the claim on all or any of the ground that are available to the person, against whom, the claim has been made.

116. If the driver has not been made as a party in the claim petition, but the owner alone has been made as a party, in addition to the Insurance Company, on receipt of summons and if the owner appears before the claims tribunal and asserts that he had verified as to whether the driver was duly licensed to drive the vehicle, it is for the Insurance Company to prove that the driver did not possess any licence and also to prove that the owner has consciously allowed the vehicle to be driven by the owner, by such person, who has no licence or the required licence, valid and effective licence, etc., and if the Courts/Tribunals arrive at a conclusion on evidence that the Insurance Company with a view to avoid its liability, has established the defence of breach on the part of the owner of the vehicle, then the insurer could succeed in its defence to avoid its liability towards the insured under the contract of insurance. In most of the claim petitions, though the owner is made as a party respondent, invariably, it could be noticed that he remains exparte, in which case, the breach of policy condition, viz., disqualification of the driver or invalid driving licence of the driver, etc., as contained in sub-section 2(a)(ii) of Section 149 of the Motor Vehicles Act or for the matter as to whether the driver had any valid and effective licence, to drive that particular kind of vehicle at the time of accident or not, has to be proved by the Insurance Company and also the breach of the policy conditions or statutory provisions, for avoiding the liability towards the insured. Where on adjudication of the claim under the Act, the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-section (7), as interpreted by the Courts, the Tribunal can direct that the insurer is liable to be reimbursed by the insured, for the compensation and other amounts, which the insurer has been compelled to pay to a third party under the award of the tribunal. Invariably in most of the cases, the Insurance Companies engage their investigating officers, who collect information and lead evidence to dispute the manner of accident and to avoid their liability to pay compensation to a third party victim. Mere tendering of evidence through an Investigating Officer, by filing a report, would not amount to establishing their defence under Section 149(2)(ii), unless the insurer establishes non-possession of licence, by letting in documentary evidence, through an official from the RTO office, within whose jurisdiction, the driver ordinarily resides. Report by the Investigation officer cannot be given any credence, for proving the manner of accident or for that matter, there was no licence at the time of accident or to prove that there was willful breach on the part of the insured, unless the insurance companies examine those persons examined by the Investigator, otherwise, the report would be based on information, collected from persons, who are not allowed to be cross examined by the claimants or the owner or driver or both, if they enter appearance and defend the manner of accident or for that matter, even the licence aspect. Even if the owner or driver remain absent, the report would be mere collection of some information and it is not a direct evidence. It could be even based on hearsay.

117. In some cases, the Insurance Companies addresses the concerned Regional Transport Office, to furnish the licence particulars of the driver and they let in evidence through the officials of the Licencing Authority, to prove that the driver did not possess licence to drive the vehicle or that kind of licence to drive the vehicle or there was no renewal at the time of accident, fake licence, etc., which caused the accident. In some cases, summons are taken out to the officials of the concerned Regional Transport Office and evidence is let in through him or his representative. In all the above cases, invariably, it would be the contention of the Insurance Companies that by production of documentary evidence, i.e., any document in the form of a letter, obtained from the Regional Transport Office or examination of an official from the Regional Transport Office that they have discharged the initial burden of proof, that the driver of the offending vehicle did not possess a valid licence and that a contention is also raised that the Insurance Companies cannot be mulcted with the liability to pay compensation, to a third party victim.

118. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Sections 3 or 4 of the Act. At this juncture, it is relevant to extract Rule 375 of the Tamil Nadu Motor Vehicles Rules, which mandates that, "no owner of a motor vehicle shall cause or allow any person to function as a driver or conductor unless the owner has in his possession a record in writing of the name and address of the driver or conductor as set forth in his licence, the number of licence, the validity of the licence and also the classes of vehicles authorised to be driven by the driver and the name of the authority by which it was issued". When the driver of the vehicle did not possess any licence and that the vehicle was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability to the insured.

119. The question as to whether the owner has taken a reasonable care to find out, as to whether the driving licence produced by the driver is a fake one or for the matter that, the owner of the vehicle has committed a breach of the contract of insurance, consciously by allowing the vehicle to be driven by a person, who did not possess any licence, depends upon the facts and circumstances of each case and in that context, this Court is of the view that mere writing letters to the owner or the driver of the vehicle to furnish the licence particulars or to produce the licence, by itself is not sufficient proof of evidence, to establish lack of licence or breach on the part of the owner of the vehicle. If notices are refused or evaded by the driver or owner, as the case may be, or by both, it is also the duty of the Insurance Companies to summon the official from the Regional Transport Authority, to produce the licence particulars, if any, or produce any record from the Regional Transport Officer's Office. If steps are not taken by the Insurance Companies to summon the abovesaid official, then it can be safely concluded that no diligent steps have been taken to discharge their initial burden. When the Insurance Companies let in evidence, through a RTO or his representative and produce the licence particulars, then the Court/Tribunals can arrive at a reasonable conclusion that the Companies have discharged their burden of proof, as to the fact that the driver did not possess any licence at the time of accident, like in the case of Divisional Manager, New India Assurance Company Ltd., v. V.Chandran reported in 2010 (1) TNMAC 65.

120. As stated supra, even if the insured or the driver is made as a party to the claim petition and if they fail to appear before the claims Tribunal, recourse should be made to ascertain the licence particulars from the Regional Transport Officer's Office. If the driver has not been made as a party to the claim petition, the Insurance Companies can always take out an application to implead him as a party respondent, so that, the Tribunal, on adjudication can fix the responsibility on the owner, driver and the insurer, as the case may be, as per Section 168 of the Motor Vehicles Act.

Let me now consider some of the decisions, as to how the Courts have considered the evidence let in by the Companies to discharge their burden, regarding non-possession of licence of any kind, licence for a different kind of vehicle, etc., and the burden of proof of breach of policy conditions or statutory provisions of the Act.

121. In M/s.National Insurance Company Ltd., Gobichettipalayam v. Thulasi reported in 1994 (1) LW 567, a Division Bench of this Court comprising of Hon'ble Justice Srinivasan and Abdul Hadi, considered a case, where the driver of the offending vehicle was issued with a driving licence by the Assistant Licencing Authority only from 08.07.1986 to 07.07.1991, marked as Ex.B2. The application for licence was made, 5 days after the accident, which occurred on 03.07.1986. The licence was issued on 10.07.1986, w.e.f. 08.07.1986. The Motor Vechicles Inspector's Report was produced, wherein, it was mentioned that the licence was produced before the Inspector. The original Motor Vehicles report has been received from the Criminal Court. Liability has been fastened on the owner of the pay compensation. In the appeal before the Bench, the claimant has contended that the insurer had not examined any witness and discharged its burden to bring it under the exception clause. Rejecting the contention, the Bench has raised a question and answered as follows: "How can the insurer examine any person who can assert from his personal knowledge that the driver of the vehicle had no driving licence at the relevant time? We should not forget that both the owner of the vehicle and the driver will in their own interests do their best to defeat the case of the insurer. The best evidence that can be adduced by the insurer is the relevant record only and it is placed before the Court. Once that is done the burden shifts on to the person who wants to prove the positive, viz., that the driver had a licence."

122. It could be seen from the above judgment, there was a positive assertion by the Motor Vehicle's Inspector, who had recorded in his report that a licence was produced and that the details of the same have been specifically noted down by him. Therefore, in such circumstances, the Division Bench, rejecting the plea of the claimant, regarding examination of any witness on the side of the Insurance Company, has observed that the best evidence to prove whether the driver did possess a licence or not, at the time of accident, is the record and not the examination of the owner or driver. From the above judgment, it could be deduced that even if the owner or the driver is summoned for examination, it is the observation of the Division Bench that they would only try to defeat the case of the insurer and therefore, the Bench has given importance only to the record, produced before the Claims Tribunal.

123. The concerned Regional Transport Officer, within whose jurisdiction, the driver ordinarily resides, as per the address furnished in the claim petition, would be competent to ascertain from the records maintained by him to speak, as to whether, the driver, at the time of accident, did possess a licence or not. Mere sending notices to the owner or the driver of the vehicle does not amount to proof of no licence or the kind of licence required to drive, etc. In this context, it is worthwhile to consider a judgment of the Apex Court in Narcinva V. Kamat v. Alfredo Antonio Doe Martins and others reported in 1985 ACJ 397, wherein, the Insurance Company pleaded that the driver of the offending vehicle did not possess a valid licence. The driver of the vehicle was also impleaded as a party respondent, before the Claims Tribunal. Upon adjudication, the Tribunal answered the issue in favour of the company, stating that it had discharged the burden of proving non-possession of licence and breach by the owner. The High Court confirmed the decision. On appeal by the owner, the Supreme Court considered, as to whether the driver of the offending vehicle is under any obligation to furnish evidence and whether the Insurance Company has discharged its burden. The only evidence available before the Claims Tribunal was that during cross-examination of the driver, a question was posed to him, as to whether he would produce the driving licence and since he had failed to produce the same, the Company pleaded that an adverse inference should be drawn against the driver. Considering the said plea, the Supreme Court at Paragraphs 14 and 15, held as follows: "The last question is whether he had a valid driving licence. The High Court has not recorded a clear cut finding on this point. The finding of the Tribunal is more evasive then the one by the High Court. Mr.Sharma did not dispute that the second appellant had driving licence. His grievance is that he having failed to produce the same when called upon to do so in the cross examination, an adverse inference be drawn against him that he did not have a valid licence to drive a pick-up van. The submission fails to carry conviction with us. The burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company. It could not be said to have been discharged by it by a mere question in cross- examination. The second appellant was under no obligation to furnish evidence so as to enable the insurance company to wriggle out its liability under the contract of insurance. Further the R.T.A. which issues the driving licence keeps a record of the licences issued and renewed by it. The insurance company could have got the evidence produced to substantiate his allegation. Applying the test who would fail if no evidence is led, the obvious answer the insurance company. To sum up, the insurance company failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance."

124. Thus, in the light of the above decision, it could be inferred that even if the insurer sends any notice to the driver to produce the particulars of licence, still he is not under any obligation to furnish any evidence and in such circumstances, mere causing of notice to the owner or driver, would not lead to a conclusion that the insurer has discharged its burden to prove non-possession of licence or for that matter, an adverse inference could be drawn, for not furnishing the details. In the reported judgment, the driver was examined and even then, the Supreme Court observed that evidence from the Regional Transport Authority is the best evidence.

125. It is also worthwhile to consider a case in United India Fire and General Insurance Co. Ltd., v. Surindarsinh Gurasinh reported in AIR 1981 Guj. 237, wherein, a Division Bench of the Bombay High Court, considered the contentions of the appellant-Insurance Company that they have made sufficient pleadings, regarding lack of licence and in that case, when a suggestion was made during cross-examination, the witness examined on behalf of the owner of the vehicle, denied the suggestion that he had no personal knowledge as to whether the driver had any licence, at the time of accident and in such circumstances, the company pleaded that it has no obligation to pay compensation and that the owner alone should be mulcted with the liability. Rejecting the contentions of the appellant-Insurance Company that an adverse inference should be drawn against the driver, the Division Bench held as follows: "The appellant sought to sustain its ill-founded submission on the basis of certain observations in Gopal Krishnaji v. Mohamed Haji Latif, AIR 1968 SC 1413 to the effect that the Court ought to draw an adverse inference when a party in Possession of best evidence which would throw light on the issues in controversy withholds the same and that such adverse inference can be drawn again such party notwithstanding that the onus of proof did not lie on him. We do not think any assistance can be derived by the appellant from the observations in the aforesaid decision, in-view of the fact that while considering the position of an insurer in the context of the provisions of Ss. 95 and 96 of the Motor Vehicles Act, 1939 and the limited defences available to the insurer in a proceeding under the said Act, the Supreme Court has in unequivocal terms held that it is the duty of the insurer to substantiate the plea that the vehicle was driven by a person who was not duly licensed and that a mere averment to that effect in in the Written Statement and a mere suggestion to a party in that behalf in cross-examination is not sufficient to discharge the said duty. When there is a direct judgment of the Supreme Court governing the matter and delivered in a proceeding arising under this very statute it is not open to have recourse to certain observations 'in a judgment delivered in a different context."

126. In Karan Singh v. Manoharlal reported in 1989 ACJ 177, the Insurance Company disowned its liability on the ground that the person who drove the motorcycle, did not possess a licence. The driver was not examined. The Insurance Company gave notice to the owner. But the driving licence was not produced. The Insurance Company did not call for any record from the Regional Transport Authority or any other evidence was let in to establish that the driver had no driving licence. Following Narcinva V. Kamat's case (cited supra), the Madhya Pradesh High Court, held that the Insurance Company failed to discharge its burden by leading legal evidence. At Paragraphs 8 to 10, the Court held as follows: "8. Admittedly, in the present case, the driver of the vehicle has not been examined though a notice dated 25-1-78 to produce document i.e. driving licence, was served on the counsel for the non-applicants No. 1 and 2, but no driving licence was produced in response to the notice. There is no evidence on record either of the Regional Transport Officer or of any other witness, either documentary or oral, except the statement of DW-I Jagdishprasad, the owner of the vehicle. In para 12, this witness has stated that his relations with non-applicant No. 1 Manoharlal were strained; hence, in response to the notice of the Insurance Company, he did not contact Manoharlal and produce his licence before the Insurance Company. He also admitted that he cannot give the number and the date of issue of licence in favour of Manoharlal. Except this, there is no other evidence led by the Insurance Company to substantiate its contention. The Apex Court in the case of Narcinva V.Kamat v. Alfredo Antonio Doe Martins, 1985 ACJ 397 (SC), observed that when the Insurance Company complains of a breach of the term of contract, which would permit it to disown its liability under the contract of insurance, the burden is squarely on the Insurance Company to prove that the breach has been committed by the other party to the contract. The rest in such a situation would be 'who would fail, if no such evidence is led'. With this principle of law in view, the evidence has to be judged. Merely non-production of licence or non-examination of the driver of the vehicle is not enough nor any adverse inference can be drawn against the person holding that because of non-examination of the driver or non-production of the licence, the burden is discharged by a mere question in cross examination nor the owner is under any obligation to furnish the evidence so as to enable the Insurance Company not to riggle out its liability under the contract of insurance. However, the RTA who issues the driving licence, keeps record of the licence issued and renewed by him and the Insurance Company could have got the evidence produced to substantiate its defence. Not only, this, no enquiries were made by the Insurance Company from the RTA concerned regarding the fact of issue of a driving licence to Manohar Lal. Hence, it would not give rise to an adverse inference about respondent No. 1 being an unauthorised driver (see the Division Bench case of this Court reported in Shajadibai v. Babookhan, Vol. 1, 1988 ACC 24 (Supra).

9. The contention of the learned Counsel for the Insurance Company was that notice to produce the driving licence was given during the trial and in response to that notice, the driving licence was not produced. Therefore, the Tribunal was right in raising an adverse inference. By this notice, at the most, the Insurance Company wanted a disclosure or discovery of the document. Under order 11 CPC, the object of such a discovery is' to save expenses and time to shorten the litigation. The Tribunal did not pass any order for production of documents but a discretion as envisaged Under Order 11 Rule 12 CPC or Under Order 11 Rules 14 CPC was not exercised by issuing an order for discovery. Hence, the Tribunal was wrong in raising an adverse inference and it cannot be said, in such circumstances, that the Insurance Company was not bound to produce any legal evidence to discharge the burden. As stated earlier, the object of notice is to save time and expenses only, the cost or the expenses of such evidence could have been imposed on the owner or the driver of the vehicle and nothing more, if in response to the notice, the licence was not produced, the Insurance Company ought to have called for the record of the R.T.A. or could have produced other evidence.

10. From the above discussion, I am of the opinion that the Insurance Company has not discharged its burden by leading legal evidence and the Tribunal was wrong in arriving at a finding and in absolving the Insurance Company under the umbrella of exclusion clause that the respondent No. 1 was not holding any valid driving licence."

127. In Lalchand v. Kanta reported in 1992 ACJ 469, the non-applicant No.2 before the Claims Tribunal was the driver stated to have driven the vehicle, without a licence. The Tribunal absolved the company from payment of compensation. Before the High Court, it was contended that the Claims Tribunal erred in drawing an adverse inference against the non-applicant, for not producing licence, despite repeated demands and erred in exonerating the Company. Considering the said plea and following Narcinva V. Kamat's case (cited supra), at Paragraph 7, the Court held as follows: "7. In my opinion the approach of the learned lower Tribunal in drawing an adverse inference against the non-applicant No. 2 is clearly erroneous in view of the fact that whenever the insurance company takes a plea that the driver of the accident vehicle was not holding a valid licence at the time of the accident, it is for the insurance company to prove that fact by bringing the relevant documents, i.e., the extracts from the R.T.A. or a certificate to the effect that the person driving the vehicle at the time of the accident was not issued a licence at all. The Supreme Court in the case of Narcinva V. Kamat v. Alfredo Antonio Doe Martins and others reported in 1985 ACJ 397, has held that whenever the insurance company pleads a breach of the condition of policy by pleading that the driver had no driving licence at the time of the accident the onus is on the insurance company to prove that fact. The insurance company cannot contend that only because the driver failed to produce the licence when asked to do so in the cross-examination an adverse inference should be drawn against the driver. The onus is always on the insurance company to prove that the driver had no driving licence to escape liability. Mere non-production of the licence by the driver does not exonerate the insurance company. Therefore, the insurance company was held liable to indemnify the award. The driver is under no obligation to furnish evidence so as to enable the insurance company to wriggle out of its liability under the contract of insurance. Further the R.T.A. which issues the driving licence keeps a record of the licences issued and renewed by it. The insurance company could have got the evidence produced to substantiate its allegation. The Supreme Court applying the aforesaid test had held that in the absence of the evidence about the non-holding of licence by the driver it is the insurance company which has to fail."

128. Even assuming that the driver or the owner of the offending vehicle insured with the Company, is charge sheeted under Sections 3 and 5 r/w. 181 of the Motor Vehicles Act, that would not ipso facto amount to proof that he did not possess any valid and effective driving licence, because, even during trial, the accused therein, by producing licence, if any, or for any other valid reasons, has a chance of acquittal. When the prosecution has to prove the charge, beyond all reasonable doubt, the Claims Tribunal cannot record any positive finding on the charge. However, if any record is produced before the Claims Tribunal, from the Regional Transport Officer, who maintains the licence particulars, then it would be an authentic piece of evidence. Again, filing of a charge sheet alone would not give rise to any conclusion that the insured committed a breach, by consciously and recklessly allowing the driver, who did not possess a licence to drive the vehicle. It is for the Claims Tribunal to arrive at a reasonable conclusion on the basis of oral and documentary evidence adduced before it. If no rebuttal evidence is let in by the owner, then the Claims Tribunal may consider, as to whether there is a specific plea of breach of policy condition or statutory provisions and whether any evidence has been let in by the company to substantiate, breach.

129. When the insurance company can be said to have discharged its initial burden of proving that the driver of the vehicle had no licence, has been considered by the Division Bench of this Court in G.Nagendra Devi and others Vs. Mosses 2)National Insurance Company Limited, T.Nagar, Chennai, 3)Dr.Ambedkar Transport Corporation Ltd., represented by its Managing Director, Chennai, reported in 2001 (3) L.W 261, wherein, this Court held that if the insurance company fails to verify the records from the concerned authority (R.T.A), as to whether the rider of the motor cycle was having a valid licence or not, then the insurance company cannot be said to have discharged its burden and proved that the rider of the vehicle did not possess a valid licence and in such circumstances, the Company is liable to pay compensation. Mere pleadings in the counter affidavit or written statement by the insurers before the Claims Tribunal, that the insured has committed breach of policy conditions or statutory provisions of the Motor Vehicles Act, alone is not sufficient to prove that they have discharged their burden of proof of non-possession of licence or breach/breaches, so fundamental to have contributed to the cause of the accident, so as to avoid its liability to the insured. Thus, it could be seen from the line of judgments stated supra, that despite pleadings and leading oral evidence by the Insurance Companies, the Supreme Court and High Courts have recognised only an authentic evidence from the office of the concerned Regional Transport Office, to speak about the fact, as to whether the driver did possess licence or not, at the time of accident. The proof required and given credence by Courts is in the form of record and not mere oral evidence.

130. In National Insurance Company Ltd., v. Samiyathal reported in 2003 (1) LW 539, for the death of 'X', wife and children preferred a claim. The Insurance Company contended that the driver of the offending vehicle insured with them, did not possess a valid driving licence on the date of accident and therefore, the Tribunal committed an error, fastening liability on the Company. Before the Claims Tribunal, the Company examined an officer, working in the Regional Office of the Insurance Company, who deposed that as per the policy conditions, liability to the third parties is restricted. To prove that the driver did not possess a valid licence to drive the offending vehicle, a lorry, he further deposed that the driver has been charge-sheeted. Copy of the policy was marked as Ex.R1. Ex.R2 was a letter addressed to the driver to produce his licence, which remained unserved. The returned cover was marked as Ex.R3. A similar letter has also been sent to the owner of the lorry, informing him about the non-production of driving licence by the driver and of the violation of the policy condition. The owner refused to receive the registered letter, which was also marked as Ex.R4. The returned cover was marked as Ex.R5. However, before the Claims Tribunal, RW.1, Official from the Insurance Company admitted that the Company did not take any steps to ascertain the licence particulars, from the Regional Officer, as to where the lorry driver was issued with any driving licence, to drive the lorry. As stated supra, the notice to the driver was unserved and that the owner had refused to receive the notice. The owner did not represent before the Tribunal. However, before the High Court, the owner was represented by a counsel. There was explanation or information regarding the stand taken by the Insurance Company, viz., the driver did not possess the valid driving licence and in such circumstances, a Division Bench of this Court, accepting the contention of the Insurance Company that they had discharged their initial burden in proving that the driver did not possess a driving licence and that the owner did not furnish any explanation before the High Court, through he was represented by a counsel, held that the Insurance has to pay and recover the compensation amount from the insured. It could be seen from the above judgment that before the Division Bench, the owner could not offer any explanation, regarding possession of any licence and even in such circumstances, there was no total exoneration of the Insurance Company from payment of compensation to the claimant, but the Company was exonerated of its liability to the insured and liberty has been granted for recovery.

131. In Punam Devi and another Vs. Divisional Manager, New India Assurance Co.Ltd., and others, reported in AIR 2004 SC 1742 = 2004 (3) SCC 386 = 2004 (1) TN MAC 214 (SC), the Supreme Court held that when the insurer failed to prove that the driver has no licence, the insurance company is liable to pay compensation and in that event, there is no case of breach of policy conditions.

132. In United India Insurance Company Limited, Tiruchirapalli, Vs. Minor R.Baskar, represented by his father and next friend V.Ramalingam, reported in 2004 (1) TN MAC (DB) 459, the insurance company sought to avoid its liability on the ground that the driver of the offending vehicle did not possess a valid licence to drive the vehicle. They also examined a Branch Assistant from the office of the Regional Transport Office as well as an officer from the insurance company and let in evidence to prove that the company sent notices to the owner of the vehicle, calling upon him to produce the RC Book and driving licence. The act of the owner of the vehicle in not producing the licence and not sending any reply to the notice, coupled with the fact of letting in evidence, through the official of the concerned Regional Transport Office, has been construed to have the effect that the insurance company has discharged its burden and even in such case, following the judgment of the Supreme Court in New India Assurance Company, Shimla Vs. Kamla and others, reported in 2001 (3) L.W 421, a Division Bench of this Court only directed the insurance company to pay compensation to the accident victims and thereafter, recover the same from the insured and that the Company was not absolved of its liability to pay compensation to a third party.

133. In Om Prakash Goyal Vs. Bhikhari Dhanwar and others, reported in 2008 (1) TN MAC 15 (DB) (Jharkand.), the insurance company took a defence in the written statement that the driver did not have a valid driving licence. In support of their case, the company marked Ex.'A' is a letter issued by the Investigator, National Insurance Company, informing to the licencing authority that on investigation, it was found that the driving licence in favour of the driver was never issued by the Licencing Authority, Murshidabad. Ex.'B' was a letter issued from the office of the Licensing Authority, District Murshidabad, Motor Vehicles Department informing the Investigator that no such licence was issued in favour of the driver. Neither the owner examined himself nor the driving licence of the driver was produced. The owner of the vehicle didnot depose that the vehicle was entrusted to the driver after verifying the driving licence or even on bona fide belief that the driver was holding a valid driving licence. In the abovesaid circumstances, the Division Bench of the Jharkand High Court headed by Hon'ble Mr. Justice M.Y.Iqbal, held as follows:- "In absence of any iota of evidence from the side of the owner of the vehicle and on the basis of evidence adduced by the Insurance Company it can safely be concluded that the driver was not holding valid driving licence and that the owner did not entrust the vehicle to the driver bonafidely to drive the same. We do not find any error in the impugned judgment whereby the Tribunal directed the Insurance Company to pay the compensation amount to the claimant and recover the same from the owner of the vehicle" What could be deduced from the Division Bench judgment of Jharkhand High Court is that the evidence adduced by the Insurance Company was found to be sufficient only to exonerate its liability to indemnify the insured alone.

134. In United India Insurance Co.Ltd., Kovilpatti, Vs. Ramiah Thevar and Muthusamy, reported in 2008 (1) TN MAC 123, the driver of the Auto did not have a badge to drive motor vehicle. The driving licence was marked. However, the Tribunal by observing that the concerned official from the Regional Transport Office was not examined to prove that the Auto driver was not permitted to drive the vehicle without badge, held that the insurance company was jointly and severally liable to pay compensation, without giving liberty to recover the amount from the owner after satisfying the award. Testing the correctness of the same and having regard to the factual finding recorded by the Tribunal, on the basis of Ex.P3 Driving Licence, that the driver had no authorisation or badge to drive a public carrier, the Hon'ble Mr. Justice G.Rajasuria, a learned single Judge of this Court, following the decision of the Apex Court in Swaran Singh's case, directed the appellant insurance company therein, to pay the compensation to the claimants and thereafter, recover the same from the owner without instituting a separate suit. In the above case, though the concerned official was not examined before the Claims Tribunal, Ex.P3  Driving Licence was available to arrive at a conclusion, as to whether, the driver possessed the required licence or not.

135. In National Insurance Co. Ltd., v. Geeta Bhat reported in 2008 ACJ 1498 = 2008 (12) SCC 426, a passenger travelling in a three wheeler, died, when the vehicle was hit by a truck. The Insurance Company raised a defence that the driving licence possessed by the driver of the truck was fake. An official of the concerned Licencing Authority was summoned, but no one turned out. The Insurance Company brought on record, evidence to the effect that on an investigation made by its own investigator, it was found that there was no licence in the name of the driver. The Tribunal found that the Insurance Company has failed to lead evidence in support of its defence and accordingly, fastened the liability. The appeal filed by the Insurance Company was also dismissed by the High Court. The Apex Court held that even assuming that the licence of the driver was fake, the Insurance Company is liable to make the payment to the third party and recover the same from the owner of the vehicle.

136. In Divisional Manager, New India Assurance Company Ltd., v. V.Chandran reported in 2010 (1) TNMAC 65, the Madurai Bench of Madras High Court considered a case, where the Insurance Company, to avoid its liability, submitted that inspite of receipt of a legal notice sent to the owner of the vehicle and its driver, they have not chosen to give any reply, as to whether the driver did or did not possess a valid licence and RW.2 therein, an official from the RTO Office, Dindigul, deposed that no document was available in the Office, with regard to licence number of the driver. On the basis of the above evidence let in by the Company, a learned Single Judge, by observing that if really the driver/owner of the vehicle, had possessed any licence at the time of accident, definitely, the owner of the vehicle and his driver, would have given a suitable reply to Ex.R3  Legal Notice and a relevant document would be available in the office of the Regional Transport office, Dindigul and in the abovesaid circumstances, further observed that it was quite clear that the Insurance Company had discharged his burden to the effect that the driver/owner did not possess any licence on the date of accident.

137. Though in the present appeals, one of the arguments, placed before this Court is that when the owner of the vehicle/driver, did not choose to sent a reply to the notice sent by the appellant-Insurance Companies, calling for furnishing of the licence particulars, adverse inference should be drawn against them, as per Section 114(g) of the Indian Evidence Act, it could be seen from the above judgment that the learned Single Judge, has taken into account the cumulative effect of the failure on the part of the owner/driver in choosing to send any reply to the letters, as well as the evidence let in by an official of the Regional Transport Office, Dindigul, wherein, he had categorically deposed that no document was available in the Office. The conclusion of the learned Judge that the driver did not possess the driving licence has not been reached solely on the basis of the returned covers.

138. Though the learned Single Judge [Hon'ble Mr. Justice A.Selvam], in V.Chandran's case (cited supra), by referring to Paragraph 108 in National Insurance Company Ltd., v. Swaran Singh and others reported in 2004 (1) TNMAC 104 (SC) = 2004 (3) SCC 297, and the decision of the Apex Court in Sardari and others v. Sushil Kumar and others reported in 2008 (1) TNMAC 294 (SC) = 2008 ACJ 1307, has observed that the judgment in Swaran Singh's case, cannot be treated as precedent in all type of cases and it could be applied only with regard to the cases, considered in Swaran Singh (cited supra) and applied the latin maxim "stare decisis, stare decisis et non quieta movere", which means "to stand by things decided, and not to disturb settled points and ultimately exonerated the Insurance Company from payment of compensation to the accident victims therein, this Court deems it fit to extract, as to how the judgment rendered by a Three Judges Bench in Swaran Singh's case, has been considered a Two Judges Bench of the Apex Court in Oriental Insurance Co.Ltd., Vs. Zaharulnisha and Others, reported in 2009 (1) TN MAC 419 (SC) = 2008 (12) SCC 385, wherein, at Paragraphs 18 to 22, Their Lordships observed as follows: "18. A three Judges Bench of this Court in National Insurance Company Ltd., v. Swaran Singh [(2004) 3 SCC 297] has extensively dealt with the meaning, application and interpretation of various provisions, including Ss.3(2), 4(3), 10(2) and 149 of the MV Act. In paragraph 47 of the judgment, the learned Judges have held that if a person has been given a licence for a particular type of vehicle as specified therein, he cannot be said to have no licence for driving another type of vehicle which is of the same category but of different type. As for example, when a person is granted a licence for driving a light motor vehicle he can drive either a car or a jeep and it is not necessary that he must have driving licence both for car and jeep separately. In paragraph 48, it is held as under: "Furthermore, the insurance company with a view to avoid its liabilities is not only required to show that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured. By reason of the provisions contained in the 1988 Act, a more extensive remedy has been conferred upon those who have obtained judgment against the user of a vehicle and after a certificate of insurance is delivered in terms of Section 147(3). After a third party has obtained a judgment against any person insured by the policy in respect of a liability required to be covered by Section 145, the same must be satisfied by the insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy or may in fact have done so. The same obligation applies in respect of such a liability but who would have been covered if the policy had covered the liability of all persons, except that in respect of liability for death or bodily injury."

139. At Paragraphs 19 to 20 in Zaharulnisha's case (cited supra), the Bench, explaining as to how Swaran Singh's case, has been considered, further held that,

19. The judgment proceeds to hold that under the MV Act, holding of a valid driving licence is one of the conditions of contract of insurance. Driving of a vehicle without a valid licence is an offence. However, the question herein is whether a third party involved in an accident is entitled to the amount of compensation granted by the Motor Accidents Claims Tribunal although the driver of the vehicle at the relevant time might not have a valid driving licence but would be entitled to recover the same from the owner or driver thereof. It is trite that where the insurers, relying upon the provisions of violation of law by the assured, take an exception to pay the assured or a third party, they must prove a wilful violation of the law by the assured. In some cases, violation of criminal law, particularly violation of the provisions of the MV Act, may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done intentionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be". The provisions of sub- sections (4) and (5) of Section 149 of the MV Act may be considered as to the liability of the insurer to satisfy the decree at the first instance. The liability of the insurer is a statutory one. The liability of the insurer to satisfy the decree passed in favour of a third party is also statutory.

20. The learned judges having considered the entire material and relevant provisions of the MV Act and conflict of decisions of various High Courts and this Court on the question of defences available to the insurance companies in defending the claims of the victims of the accident arising due to the harsh and negligent driving of the vehicle which is insured with the insurance companies, proceeded to record the summary of findings.....

21. In the light of the above-settled proposition of law, the appellant-insurance company cannot be held liable to pay the amount of compensation to the claimants for the cause of death of Shukurullah in road accident which had occurred due to rash and negligent driving of scooter by Ram Surat who admittedly had no valid and effective licence to drive the vehicle on the day of accident. The scooterist was possessing driving licence of driving HMV and he was driving totally different class of vehicle which act of his is in violation of Section 10(2) of the MV Act.

22. In the result, the appeal is allowed to the limited extent and it is directed that the appellant-insurance company though not liable to pay the amount of compensation, but in the nature of this case it shall satisfy the award and shall have the right to recover the amount deposited by it along with interest from the owner of the vehicle, viz. respondent No.8, particularly in view of the fact that no appeal was preferred by him nor has he chosen to appear before this Court to contest this appeal. This direction is given in the light of the judgments of this Court in National Insurance Co. Ltd., v. Baljit Kaur and others [(2004) 2 SCC 1] and Deddappa and Others v. Branch Manager, National Insurance Co. Ltd., [(2008) 2 SCC 595]."

140. In New India Assurance Company Ltd., Viridhunagar, through its Manager, Vs. Muniuapandi and five others, reported in 2010 (1) TNMAC 571, the appellant insurance company resisted the claim of the legal representatives of the deceased, on the ground that the driver of the vehicle did not possess a valid driving licence. The appellant insurance company issued a notice to the owner as well as rider of the motor cycle, calling upon them to produce the copy of the driving licence. The said notice was marked before the Claims Tribunal. However, the notice was returned as unserved. Even in Ex.R1 Motor Vehicle's Inspector's Report, filed before the Claims Tribunal, it was mentioned that the rider did not produce the driving licence. The owner of the vehicle remained ex parte. In the abovesaid circumstances, the Tribunal drew an adverse inference against the owner and concluded that the driver did not have valid licence at the time of accident. The Tribunal ordered to pay the compensation to the legal representatives of the deceased and recover the same from the owner of the vehicle. This Court upheld the decision of the Tribunal. Nevertheless, it could be seen from the above judgment that though an adverse inference has been drawn against the owner of the vehicle, on the basis of the information contained in the Motor Vehicles Report, the third party interest has been protected.

141. At this juncture, with due respect, it is the humble opinion of this Court that for mere non-production of the licence at the time of verification done by the Motor Vehicles Inspector would not lead to an inference that he did not possess any licence at all. At best, non-production may give rise to a presumption and not proof, which can be ascertained only from the records of the Regional Transport Officer, within whose jurisdiction, the driver resides and when his address is given in the claim petition.

142. In Hamayur Bevi v. S.Ganesan reported in 2011 (6) MLJ 367, a cyclist was knocked down by a lorry. The Insurance Company resisted the claim, by stating that the driver did not possess a valid and effective driving licence, at the time of accident. The insurer issued notices to the insured, owner of the vehicle, which were returned. Accepting the contention of the Insurance Company that they had discharged the burden of proof of breach of conditions of the policy, the Tribunal exonerated the Insurance Company from its liability. The claimants approached this Court, by filing an appeal. Exs.R2 to R4 were copies of the notices sent to the owner. Perusal of the reported judgment of this Court shows that all the envelopes containing notices were returned with an endorsement insufficient address. Ex.R5 is the Investigating Officer's report and RW.1 is the Investigating officer. On the basis of oral testimony of RW.1, the Insurance Company has submitted that they had discharged their burden, establishing that the driver of the vehicle, did not possess a valid licence. Noticing an endorsement in Ex.R4 made by the concerned authority of the postal department, stating that several reminders were sent, but inspite of that, the addressee did not choose to receive the letter, a learned Single Judge of this Court (Hon'ble Mr. Justice T.Mathivanan) held that it should be deemed that notices were duly served on the owner of the vehicle and hence, came to a conclusion that the Insurance Company has discharged the burden to prove that the insured had committed a breach of policy condition.

143. In a given case, where there is clear admission of guilt of non-possession of a licence before the competent criminal Court, by the driver himself and if a judgment is rendered thereon, it could be a material evidence let in, on behalf of the Insurance Company to contend that they have discharged their initial burden of proof of non-possession of licence, but reading of the judgment of the Supreme Court in Swaran Singh's case and other judgments, extracted in the earlier portions of this judgment, would not lead to definite conclusion that the insured was guilty of negligence and failed to exercise due care regarding the use of the vehicle and that it was the owner of the vehicle has committed breach of policy conditions and the provision of the Act, by consciously allowing a person, to drive a vehicle, when did not hold any licence.

144. In the present appeals, one of the arguments advanced by the learned Counsel for the Insurance Companies is that in Swaran Singh's case, the Supreme Court has not at all considered a case of no licence. The said argument is fallacious and liable to be rejected. Let me now revert back to the summary of submissions of the learned counsel for the Insurance Companies in Swaran Singh's case, at Paragraph 4 of the said judgment, the Apex Court has considered the defences raised by the Insurance Companies purported to be in terms of Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 and they are as follows: (a) driving licence produced by the driver or owner of the vehicle was a fake one; (b) driver did not have any licence whatsoever; (c) licence, although was granted to the concerned driver but on expiry thereof, the same had not been renewed; (d) licence granted to the drivers being for one class or description of vehicle but the vehicle involved in the accident was of different class or description; and (e) the vehicle in question was driver by a person having a learner's licence. At Paragraph 11(3)(a) of the judgment, one of the issues raised before the Apex Court was that a vehicle cannot be held to be driven by a person duly licensed therefor, if he does not hold a licence.

145. In Laxmi Narain Dhut's case (cited supra), the Apex Court reiterated, as to whether, no licence has been considered or not and at Paragraph 19 of the judgment, held as follows:

"19. The primary stand of the insurance company is that the person driving the vehicle did not have a valid driving license. In Swaran Singh's case (supra) the following situations were noted:

(i) the driver had a license but it was fake;

(ii) the driver had no license at all;

(iii)the driver originally had a valid license but it had expired as on the date of the accident and had not been renewed;

(iv)the license was for a class of vehicles other than that which was the insured vehicle;

(v) the license was a learner's license.

Category (i) may cover two types of situations. First, the license itself was fake and the second is where originally that license is fake but there has been a renewal subsequently in accordance with law."

146. Rules relating to authorisation and test under the Tamil Nadu Motor Vehicles Rules:

7. Application for authorisation. The holder of a driving licence may, at any time, apply to the licensing authority in Form LTVA for the grant of an authorisation to drive a transport vehicle. Such application shall be accompanied by the driving licence and appropriate fee as specified in the Table under rule 49.

8. Licensing authority may make enquiries. Upon the receipt of an application for an authorisation to drive a transport vehicle, the licensing authority may make such enquiries as may be reasonably necessary to establish the identity of the applicant and to ascertain that the applicant is not disqualified or liable to be disqualified for holding a driving licence.

9. Summoning of applicant. The authority to which application is made under rule 7 may, if it thinks fit by notice in writing summon the applicant to appear before it at such time and place as the authority may appoint to examine the applicant's knowledge of the provisions of the Act and the rules regarding the duties and functions of a driver of a transport vehicle.

10. Issue of authorisation. The Licensing Authority granting an authorisation to drive a transport vehicle shall allot a Badge number sign the driving licence accordingly and return the same to the holder thereof and shall if it is not the authority which issued the licence at the same time, send intimation in form LTV'to the authority by which the driving licence was issued.

12. Authorisation by owner. Every driver of a transport vehicle shall, in addition to the driving licence, carry an authorisation issued by the owner of the vehicle in the prescribed form AVT.

13. Testing officer. The test of competence to drive as set forth in the rules prescribed by the Central Government under sub-section (3) of section 9 shall be conducted by the licensing authority or by a person authorised by such authority.

14. Driving test.- Subject to sub-section (6) of section 9, the applicant shall produce a serviceable vehicle of the class to which the application refers and present himself for the test at such time and place as may be specified by the licensing authority or the testing officer.

FORM LTVA.

Form of application for Authorisation to drive a transport vehicle.

(See rule 7.)

To

The Licensing Authority,

I apply for authorisation to drive a transport vehicle within the State of Tamil Nadu. I have experience in driving motor vehicle for a period of years.

I forward herewith the driving licence held by me No. District issued by the licensing Authority of

Name of applicant (in block letters or clear script):

Present address :

Date : 19 Signature or thumb-impression of applicant:

* To be filled in if applicant holds a driving licence.

FORM LTV

Form of intimation of grant of an authorisation to drive a transport vehicle.

(See rule 10.)

To

The Licensing Authority,

An authorisation to drive a transport vehicle has been issued by me on (date) in respect of driving licence No. dated the issued by you in favour of

Name of holder:

Father's name :

Permanent address of holder:

Present address of holder:

Date : 19

FORM AVT.

Form of authorisation to be carried by a driver of a transport vehicle.

(See rule 12.)

1. Name :

2. Father's name :

3. Date of birth :

4. Residential address :

5. Number and date of D.L. and the authority who issued and renewed the licence.

6. Registration number of vehicle (need not be given in the case of ten or more transport vehicles owned by a single operator).

7. Name and address of the owner of the vehicle.

I hereby declare that the particulars furnished above are true.

Signature of the driving licence holder.

This is to authorise that the above driver has been engaged by me to drive any one of the transport vehicles belonging to me.

Place : (Signature of the owner of the vehicle)

Date : 19

Witness (with clear address)

(1)

(2)

147. When a person is duly licenced under Section 10 to drive a Light Motor Vehicle not exceeding 7500 k.g. in weight, it could reasonably be presumed that he has the same skill to drive a transport vehicle of the same weight, and when such a transport vehicle can also be a public service vehicle, as defined under Section 2(35) of the Motor Vehicles Act, whether the insurance company could claim for exoneration from its liability to pay compensation to a third party, merely because, the licence does not bear the endorsement as required under rule 16(3) of the Act. Certainly, the driver knows to drive the kind of vehicle, but the only deficiency is that there is no endorsement or authorisation by a competent authority to drive a commercial vehicle. In my humble view, in such circumstances, breach of the condition specified in Section 149(2)(a)(ii) of the Motor Vehicles Act, would not be so fundamental, to be the cause for the accident, to avoid the insurer's liability to pay compensation to a third party, as observed in Paragraph 102 Clause (vi) in Swaran Singh's case. Again, it is for the insurance company to establish wilful breach of policy conditions on the part of the insurer to award its liability towards the insured.

148. For illustration, if an Ambassador Car or Maruti Van or any other vehicle of the same class, is used as a private car for carrying the same number of persons, as permitted in the Registration Certificate, to any place within the State or anywhere in the Country, as the driver is duly authorised to drive far off place, for own purpose, either driven by a owner cum driver or a paid driver, he does not require any badge or authorisation from the competent authority of the Motor Vehicles Department and if the same class vehicle is used as a Taxi, for hire or reward, he is required to have a badge. There will not be any change in the skill of driving. In such circumstances, whether non-possession of authorisation by the competent authority or badge or endorsement in the licence, which is considered as a violation of policy condition, under the terms and conditions of the policy, when the same kind of vehicle is used for hire or reward, a breach of policy condition, would be so fundamental, to have caused the accident, thereby, the insurer can avoid its liability to pay compensation to a third party, when there is no special skill or expertise required to drive the same kind of vehicle. Again, this Court is only recording its humble views and does not express any opinion about the judgments, extracted above.

149. In a given case, where the driver of the offending vehicle has not renewed his licence on the date of accident. Here again, the driver has been all along driving that kind of vehicle, duly licenced, but during the interregnum period, his licence has not been renewed and in such circumstances, it can be said that, it is a case of no valid and effective licence. But whether the driver can be said to be disqualified from obtaining or holding a driving licence, and whether the insurer can avoid its liability to pay compensation to a third party and whether non-renewal of the licence would so fundamental to be the cause for the accident? However, while recording my humble views, this Court is aware and has also extracted the decisions of the Supreme Court, where during the interregnum period, when there was no renewal of licence, insurance companies have been exonerated of their liability to pay compensation.

150. Perusal of the rules for getting an endorsement, shows that whenever a private transport licence is granted, after a specified period, it does not require any special test nor it could be presumed that the endorsement has increased the efficiency or expertise of the driving skill of the licencee. Even in the absence of any endorsement, he would still be competent to drive the same kind of vehicle, with the same laden weight, but, for obtaining authorisation from the competent authority or in otherwords, an endorsement to be made in the licence, to drive a private transport vehicle or in a goods carriage vehicle, the driver has to satisfy the prescribed experience, under the Central Motor Vehicles Rules.

151. As per Rule 8 of the Central Motor Vehicle Rules, to obtain a licence, for driving a transport vehicle, one has to possess minimum educational qualification of a pass of 8th Standard. From the reading of the rules relating to addition of licence or badge to drive a kind of vehicle, it could be presumed that prescription of minimum educational qualification, ability to read and write, atleast one Indian language out of those specified in the VII Schedule of the Constitution of India, as provided for in Rule 9 of the Central Motor Vehicles Rules, period of experience, after obtaining the basic licence, for that kind of vehicle, whether light motor vehicle or heavy motor vehicle, or goods vehicle carrying hazardous goods, as the case may be, could be for the reason that such licencee, when carrying passengers for hire or reward in a Transport vehicle, or goods, in the case of goods carrying vehicle, as stated supra, should possess sufficient experience and minimum educational qualification, as per Rule 8 of the Central Motor Vehicles Rules, and that he should be in a position to communicate, when he carries goods or passengers, either within the State or outside the State, as the holder of licence is authorised to drive that kind of vehicle, through out the Country. After all, it should be borne in mind, the traffic signals are uniform, throughout the country. Only in the case of goods carrying dangerous and hazardous goods, which are hazardous nature, endangering human life, special qualifications are prescribed regarding, (a) Defensive driving, (b) Advanced driving skills and training and (c) Product safety.

152. Let me now consider some of the offences enumerated under the Motor Vehicles Act, relating to licences.

180. Allowing unauthorised persons to drive vehicles:- Whoever, being the owner or person in charge of a motor vehicle, causes or permits, any other person who does not satisfy the provisions of Section 3 or section 4 to drive the vehicle shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to one thousand rupees, or with both.

181. Driving vehicles in contravention of section 3 or section 4:- Whoever drives a motor vehicle in contravention of section 3 or section 4 shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to five hundred rupees, or with both.

182. Offences relating to licences. (1) Whoever, being disqualified under this Act for holding or obtaining a driving licence drives a motor vehicle in a public place or in any other place, or applies for or obtains a driving licence or, not being entitled to have a driving licence issued to him free of endorsement, applies for or obtains a driving licence without disclosing the endorsement made on a driving licence previously held by him shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to five hundred rupees or with both, and any driving licence so obtained by him shall be of no effect.

153. In the case of an offence committed by a driver under Section 182 of the Motor Vehicles Act, the owner may not be in a position to verify as to whether the driver has obtained a licence, by adopting any such method, as stated in Section 182 of the Act and the owner may bona fidely believe that the driver possess a driving licence. If the police or any other competent authority comes to know of any dubious method that the driving licence has been obtained illegally, there is every likelihood of seizure, in which event, unless the owner is aware of the same or put on notice by the driver or by that authority, who seizes the licence, the owner cannot be held responsible for non-production of licence, when called for by the Motor Vehicles Inspector for inspection, when the vehicle is involved in the accident. One cannot except that the driver would disclose his fraudulent method in getting a licence, to the owner. Whether in such cases, can the owner be said to have breached the terms and conditions of the policy conditions? There are other offences relating to licences under the Motor Vehicles Act, such as, Section 183  Driving at excessive speed, etc. Section 184  Driving dangerously, Section 185  Driving by a drunken person or by a person under the influence of drugs, Section 186  Driving when mentally or physically unfit to drive, Section 187  Punishment for offences relating to accident, Section 188  Punishment for abetment of certain offences, Section 189  Racing and trials of speed, Section 190  Using vehicle in unsafe condition and such other offences under the Motor Vehicles also.

154. Let me now consider some of the provisions, empowering the Police to demand production of driving licence, other certificates, powers of the Police Officer to impound documents under certain circumstances, under the Motor Vehicles Act and also the duty of the owner of the Motorvehicle to give information,

130. Duty to produce licence and certificate of registration:- (1) The driver of a motor vehicle in any public place shall, on demand by any police officer in uniform, produce his licence for examination:

Provided that the driver may, if his licence has been submitted to, or has been seized by, any officer or authority under this or any other Act, produce in lieu of the licence a receipt or other acknowledgement issued by such officer or authority in respect thereof and may prescribe to the police officer making the demand.

155. Reading of the abovesaid provisions makes it clear that if the licence has been submitted by the driver or has been seized, by any officer or authority, under the Motor Vehicles Act or any other Act, a receipt may be issued acknowledging submission or seizure and in which case, if the driver of the vehicle, on demand, by any police officer, may produce that receipt or acknowledgment issued by such officer or any acknowledgment issued by such officer or authority in respect thereof, that his licence has already been seized, and in such circumstances, in the event of an accident, if the owner of the vehicle is called upon to produce the licence, he may not be in a position to produce the same, before the Motor Vehicles Inspector or the Claims Tribunal, unless, he is personally aware of the seizure. The driver, whose licence has been seized by the Police, for any of the enumerated offences, may not even disclose the said fact to the owner. Instances may be, drunken driving or dangerous driving and so on and so forth. No materials have been produced by the Insurance Companies to substantiate, as to whether in the abovesaid illustrative cases, the owner of the vehicle will be put on notice, by the Police Officer, or any other competent authority under the Motor Vehicles Act or any other Acts, empowering seizure of licence. In the abovesaid circumstances, if the Vehicle is involved in any accident, can it be said that merely because, the owner could not produce the licence at the time of verification, by the Motor Vehicles Inspector, there was no licence at all?

133. Duty of owner of motor vehicle to give information:- The owner of a motor vehicle, the driver or conductor of which is accused of any offence under this Act shall, on the demand of any police officer authorised in this behalf by the State Government, give all information regarding the name and address of, and that the licence held by, the driver or conductor which is in his possession or could by reasonable diligence be ascertained by him.

158. Production of certain certificates, licence and permit in certain cases.  (1) Any person driving a motor vehicle in any public place shall, on being so required by a police officer in uniform authorised in this behalf by the State Government, produce -

(a) the certificate of insurance;

(b) the certificate of registration;

(c) the driving licence; and

(d) in the case of a transport vehicle also the certificate of fitness referred to in section 56 and the permit, relating to the use of the vehicle.

(2) If, where owing to the presence of a motorvehicle in a public place an accident occurs involving death or bodily injury to another person, the driver of the vehicle does not at thetime produce the certificate, driving licence, and permit referred to in sub-section (1) to a police officer, he shall produce the said certificates, licence and permit at the police station at which he makes the report required by section 134. --------------

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(6) As soon as any information regarding any accident involving death or bodily injury to any person is recorded or report under this section is completed by a police officer, the officer-in-charge of the Police station shall forward a copy of the same within thirty days from the date of recording of information or, as the case may be, on completion of such report to the Claims Tribunal having jurisdiction and a copy thereof to the concerned insurer, and where a copy is made available to the owner, he shall also within thirty days of receipt of such report, forward the same to the Claims Tribunal and insurer.

156. In a given case, where the driver of the vehicle, causing an accident, does not produce the licence to the Police Officer, runs away from the scene of occurrence, and if a demand is made to the owner of the vehicle to produce the licence, either by the Police or by the Motor Vehicles Inspector at the time of inspection of the vehicle, along with other documents, the owner may not be in a position to produce the licence, unless, he retains a copy of the licence or the particulars and in which case, can it be said that the vehicle was driven without any licence, duly issued?

179. Disobedience of orders, obstruction and refusal of information:- (1) Whoever wilfully disobeys any direction lawfully given by any person or authority empowered under this Act to give such direction, or obstructs any person or authority in the discharge of any functions which such person or authority is required or empowered under this Act to discharge, shall, if no other penalty is provided for the offence be punishable with fine which may extend to five hundred rupees. (2) Whoever, being required by or under this Act to supply any information, wilfully withholds such information or gives information which he knows to be false or which he does not believe to be true, shall, if no other penalty is provided for the offence, be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both.

206. Power of police officer to impound document:- (1) Any police officer or other person authorised in this behalf by the State Government may, if he has reason to belive that any identification mark carried on a motor vehicle or any licence, permit, certificate of registration, certificate of insurance or other document produced to him by the driver or person in charge of a motor vehicle is a false document within the meaning of section 464 of the Indian Penal Code, 1860 (45 of 1860) seize the mark or document and call upon the driver or owner of the vehicle to account for his possession of or the presence in the vehicle of such mark or document. (2) Any police officer or other person authorised in this behalf by the State Government may, if he has reason to believe that the driver of a motor vehicle who is charged with any offence under this Act may abscond or otherwise avoid the service of a summons, seize any licence held by such driver and forward it to the Court taking cognizance of the offence and the said Court shall on the first appearance of such driver before it, return the licence to him in exchange for the temporary acknowledgement given under sub-section (3). (3) A police officer or other person seizing a licence under sub-section (2) shall give to the person surrendering the licence a temporary acknowledgement therefor and such acknowledgement shall authorise the holder to drive until the licence has bee returned to him or until such date as may be specified by the police officer or other person in the acknowledgement, whichever is earlier: Provided that if any Magistrate, police officer or other person authorised by the State Government in this behalf is, on an application made to him, satisfied that the licence cannot be, or has not been returned to the holder thereof before the date specified in the acknowledgement for any reason for which the holder is not responsible, the Magistrate, police officer or other person, as the case may be, may extend the period of authorisation to driver to such date as may be specified in the acknowledgement.

157. Reading of the abovesaid provision makes it clear that if a police officer, for the reasons, stated supra, seizes the licence, for any of the offences enumerated under the Motor Vehicles Act, as stated supra or for any other offences under any other Act, and if the concerned Magistrate or the Police Officer, or other competent person, as the case may be, extend the period of authorisation to drive the vehicle, till such date, as may be specified in the acknowledgement, without returning the licence to the holder, and if the vehicle driven by him is involved in an accident, whether the owner would be held liable for non-production of licence, unless, he has personal knowledge of seizure by the Police or the competent authority, under any other Act? Can there be any definite conclusion that there was no driving licence at all, at the time of accident, because the owner cannot produce the licence, at the time of verification by the Motor Vehicles Inspector. No doubt, as per Rule 376 of the Central Motor Vehicles Rules, the owner is required to maintain the licence particulars, but if he is unable to produce the same to the Inspector, at the time of verification or to the Claims Tribunal, in my view, non-production alone cannot be the only basis for reaching a conclusion that the vehicle was driven without a valid and effective licence. Production of the licence particulars and possession of licence are entirely different.

158. Provisions under the Motor Vehicles Act and the Tamil Nadu Motor Vehicles Rules, empowering certain officers to inspect the vehicles involved in an accident and an offence, are as follows:

136. Inspection of vehicle involved in accident. When any accident occurs in which a motor vehicle is involved, any person authorised in this behalf by the State Government may, on production if so required of his authority, inspect the vehicle and for that purpose may enter at any reasonable time any premises where the vehicle may be, and may remove the vehicle for examination : Provided that the place to which the vehicle is so removed shall be intimated to the owner of the vehicle and the vehicle shall be returned [after completion of the formalities to the owner, driver or the person in charge of the vehicle within twenty-four hours.

159. The relevant provision under the Tamil Nadu Motor Vehicles Rules, empowering the officers to inspect the vehicles, involved in the accident, is Rule 377, which states that, Magistrates, any inspecting officer of the Transport Department and Police Officers not below the rank of Sub-Inspector are authorised to inspect any motor vehicle involved in an accident and for that purpose to enter at any reasonable time any premises where the vehicle may be kept and to remove the vehicle for examination.

160. As per Section 378 of the Tamil Nadu Motor Vehicles Rules, the Form of the Motor Vehicles Inspector's report is provided in Form AIR. Column Nos.6 and 7 of the prescribed Form deal with the name and address of the driver and the particulars of the driving licence, if available, respectively. Thus it could be seen that as per the format provided under the Central Motor Vehicles Rules, the Motor Vehicles Inspector, at the time of examination of the vehicle, involved in the accident, has to verify the name and address of the driver, driving particulars, if available, fitness certificate, validity, etc., In some of the claim petitions, reliance is being placed on the entries made by the Motor Vehicles Inspector's report, with reference to Column Nos.6 and 7, wherein, the Motor Vehicles Inspector, after verification, would make an entry that the licence particulars are not available or not produced. As stated supra, if the police officer seizes or impounds the licence of the driver of the vehicle, for contravention of any statutory provisions, mentioned in Rule 22 of the Central Motor Vehicles Rules or if the licence is seized by any officer or authority under any other Act, as provided for under Section 130 of the Motor Vehicles Act, then the owner of the vehicle, who is called upon to produce the licence particulars of the driver, may not be in a position to furnish the same, if he does not retain a copy of the driving licence or the driving particulars, as required to be maintained by him under Rule 376 of the Tamil nadu Motor Vehicles Rules. In some cases, the driver would have been charge sheeted for violation of certain provisions, relating to licence, not involving any accident, in which case, the Police would have already seized the original licence of the driver and that the owner may not be in a position to produce the same before the Motor Vehicles Inspector, if it had been already produced by the Police to a Court of competent jurisdiction for making necessary endorsement for conviction, as provided under Rule 22 of the Central Motor Vehicles Rules.

161. There may be a case, where the owner would have even verified the licence particulars and returned the same, to the driver, without maintaining a copy thereof. There may be a case, where the owner, on perusal of the licence, would have bona fidely believed that it was not a fake one. There may be a case, after causing the accident, the driver may abscond. In all the abovesaid illustrative cases, a definite conclusion cannot be reached that the driver did not possess a licence or valid and effective licence or licence applicable to that kind of vehicle at the time of accident, merely because, the owner of the vehicle could not produce the same, at the time of verification by the Motor Vehicles Inspector and there cannot any definite conclusion that the driver did not possess any licence at all. For not furnishing necessary information as called for by the Police Officer or the inspecting authority, as the case may be, the owner may be charged under Section 179 of the Act, depending upon the facts of each case. Therefore, to ascertain as to whether the driver did possess the licence or not, at the time of accident, the best and direct evidence that could be obtained is only from the Regional Transport Officer, within whose jurisdiction, the driver resides and as per the address provided in the claim petition. The contention of the Insurance Companies that it may not be possible for the insurer to verify from each and every Regional Transport Offices in the State, is one aspect, that could be accepted, but when Rule 23 of the Central Motor Vehicles Rules, mandates maintenance of a State Register in Form 10, as stated supra, then the insurer can also ascertain from the Government or the Transport Commissioner, who is expected to maintain a consolidated list of licence particulars. The rule is in existence for a long time. Hence, this Court is of the considered view that mere entry in the Motor Vehicles Inspector's report, regarding non-production of licence, cannot be the conclusive proof that the driver did not hold any licence at all, to avoid its liability to the third party.

162. Driving licence is a public document as defined in Section 74 of the Evidence Act and therefore, no formal proof is required to prove such document. Therefore, production of particulars of licence from the Office of the RTO or the abovesaid authorities, who is bound to maintain the records, assumes importance than the oral testimony. In a given case, where the driver possess licence for one class or description of the vehicle, but the vehicle involved in the accident is of a different class or description, the insurer has to take appropriate steps to ascertain from the office of the RTO or the authorities, who maintain the particulars, as to whether the driver was in possession of the required licence to drive the vehicle at the time of accident.

163. In view of the decisions of the Supreme Court, avoidance of their liability can be only to the insured, for which, the company must establish breach on the part of the insured, as explained by the Supreme Court. Mere fact that the driver did not possess the driving licence at the time of accident would not be a defence to avoid liability of an award passed in favour of a third party, for the reason that payment of compensation is compulsory and statutory under the statute.

164. The defences available to the insurance company to avoid its liability to the insured are provisions enabling the insurer to prove that the insured was guilty of negligence regarding use of vehicle by a duly licenced driver. In which case, if the companies prove breach of policy, they are entitled to realise the award amount from the owner of the vehicle. If no steps are taken by the insurer to lead evidence in support of the plea that the driver was holding a valid driving licence, at the time of accident, they cannot be said to have discharged the statutory liability caused upon them for payment of compensation to the insured. Mere pleadings in the counter affidavit or written statement by the insurers, alleging breach of violation of statutory provisions of the Motor Vehicles Act, by itself would not amount to proof that they have discharged their burden to avoid their statutory liability in respect of third party claim. They have to lead reliable and cogent evidence to substantiate their contention regarding breach of policy condition, so as to claim exoneration from their liability towards the insured. Violation of terms and conditions of policy by itself would not have the effect of exonerating the insurer from the statutory liability cast upon them to pay compensation to a third party victim, but it is always open to the insurer to get the amount recovered from the insured, in the same proceedings.

165. Liability of the insurance company to pay compensation to third party victim being statutory, the provisions of Section 149(1) (4) and (5) have to be read as security for the third parties, but the statutory provision also provides the right to take appropriate defences permissible under law, to realise the amount paid from the insurer. Courts have also held that the liability of the insurance company to satisfy the award being statutory and if the same is inhibited by imposing any condition in the policy, it would run contrary to the statute.

166. A combined reading of Sections 146, 147 and 149 of the Act leads to only one conclusion that it is the thumb rule that once it is proved that an accident is covered by a compulsory insurance, it is for the insurer to prove that it comes within an exception to avoid its liability to indemnify the insured. It is well settled proposition of law that a person who alleges breach, must prove the same. In the absence of any material on record to prove that there is a breach of the conditions of driving licence by the owner, so fundamental to have contributed to the accident, the liability of the insurance company to indemnify the owner, cannot be absolved.

167. As stated supra, in Lehru's case (cited supra), Skandha's case (cited supra) and Swaran Singh's case (cited supra), the Supreme Court has held that the contract of insurance company between the insured and the company, has to be interpreted, giving effect to the statutory provision, Section 147 and 149(4) and (5) of the Act, though it is always open to the insurer to take a defence under Section 149(2)(b)(ii). Therefore, the contention of the Companies that the contract of insurance binds the parties, the insured and the insurer and that there is no obligation to pay compensation to a third party, is no longer res integra and such plea cannot be accepted.

168. As of today, there are three Division Bench judgments of our High Court, after Swaran Singh and other judgments. There are judgments of the learned single Judges, barring a few, to the effect that once the vehicle is covered under a contract of insurance and if the accident has occurred during its validity, resulting in injury or death to a third party, the award has to be satisfied in terms of Section 149(4) and (5) and thereafter, can be recovered from the insured in the same proceedings, provided if the Insurance Companies establish that the driver did not possess a valid driving licence and that there was a wilful breach on the part of the insured.

169. In National Insurance Co. Ltd., v. Parvathneni and another reported in 2009 (2) TNMAC 241 (SC), there was no valid insurance coverage for the vehicle, on the date of accident. It was contended by the Insurance Company that it is not liable to pay compensation. The High Court directed compensation to the claimants, with liberty to the Insurance Company therein to recover the same from the owner. In such circumstances, on appeal, having regard to the earlier decisions, in National Insurance Co. Ltd., v. Yellamma & Another [(2008) 7 SCC 527], Samundra Devi v. Narendra Kaur [(2008) 9 SCC 100] (VIDE Para 16), Oriental Insurance Co. v. Brij Mohan [2007 (7) SCC 56] (VIDE Para 13) and New India Insurance Co. v. Darshan Devi [(2008) 7 SCC 416] (VIDE Para 21), wherein, in exercise of powers under Article 142 of the Constitution of India, the Apex Court has directed the Insurance Company to pay and recover it from the owner of the vehicle, the Apex Court Bench dealing with Parvathneni's case, felt that Article 142, does not cover such type of cases and therefore, directed that the papers may be placed before the Hon'ble Chief Justice of India, for constituting a larger bench to decide the following questions, (1) If the Insurance Company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act, 1988 or any other enactment, can the Court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle? (2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142? Does Article 142 permit the Court to create a liability where there is none?

170. Perusal of the judgment in Parvathneni's case, does not show that it was the case of no licence. But, it was a case, where there was no insurance coverage on the date of accident. But the Apex Court, having felt that as to whether Article 142 could be exercised, has referred the matter to a Larger Bench. At this juncture, this Court poses a question to itself that when Section 149(4) and (5) of the Act themselves empower the Claims Tribunal to order pay and recover from the owner, whether the power exercised by them can be said to be contrary to the statute?

171. However, in The Divisional Manager, National Insurance Co. Ltd., v. A.Usha reported in 2010 (2) TNMAC 27, though an argument was advanced by the Insurance Companies that Article 142 cannot be exercised by the lower Courts as well as by the High Court, having regard to the fact that the said issue has been referred to a Larger Bench in Pavarthneni's case, this Court, after considering the legal position that binding precedence would be as per the existing law, operating the field, held as follows: "In the case on hand, copy of the driving licence, dated 26.09.2005 of the driver of the offending vehicle bearing Registration No.TN 25 F 0898, insured with the appellant-Insurance Company has been produced before this Court. Perusal of the same, shows that the validity of the driving licence was was between 26.09.2005 and 25.09.2025 and that he was authorised to drive a light motor vehicle through out India. As per the judgment in National Insurance Company Ltd., v. Annappa Irappa Nessaria and others reported in 2008 (1) TN MAC 200 (SC), having regard to the definition "light motor vehicle" as contained in Section 2(21) of the Motor Vehicles Act, 1988 and the Central Motor Vehicle Rules, 1989, the Supreme Court held that if a driver had a valid licence to drive a light motor vehicle, prior to the amendment issued in G.S.R.No.221(E), with effect from 28.03.2001, which includes a light goods vehicle as well. As the amendment made in the rules was held to have prospective operation, the Supreme Court observed that the driver ought to have applied for a licence so as to enable him to drive a vehicle of a different type. Therefore, on the facts of this case, it was held that the driver did not possess a valid and effective licence to drive a Mini Door Auto.

20. In the instant case, the driver had a licence to drive a light motor vehicle from 26.09.2005. The accident has occurred on 04.06.2006, when a Mini Door Auto bearing Registration No.TN 25 F 0898, belonging to the second respondent, dashed against a padestrian, a third party, who succumbed to injuries and died on 07.06.2006. As stated supra, the judment in National Insurance Company Ltd., v. Annappa Irappa Nessaria and others reported in 2008 (1) TN MAC 200 (SC), the Supreme Court held that the amendment relating to categorisation and type of the vehicle, has come into effect by the introduction of G.S.R.No.221(E) from 28.03.2001 and therefore, it is prospective in nature. In the case on hand, it is not disputed that the driver did not possess the driving licence, at the time of accident. In view of the binding effect of the Division Bench and to have uniformity in the decisions, relating to the cases, where non-possession of licence, fake licence, etc., is taken as the defence on behalf of the appellant-Insurance Company, as held in Swaran Singh's case and in the case of United India Insurance Co. Ltd., v. S.Saravanan reported in 2009 (5) MLJ 715 and considering the material on record, the Insurance Company is liable to pay compensation to the third party victim and then recover the same from the insured in the same proceedings before the Tribunal."

172. No doubt, it could be seen from the judgments of the Supreme Court that there is some divergence of opinion, regarding fastening liability on the Insurance Companies, when the accident occurred resulting in injury or death of a third party, when the licence is not renewed, as per the statutory provision. The licence is not effective on the date, when the accident occurs, but this Court in its humble opinion feels that whether can it be said that the driver was not competent or become disqualified to hold a driving licence. The driver was already holding a driving licence, not renewed in time, but can it be said that there was absence of skill to drive the vehicle, as he had already been duly granted licence and whether non-renewal is so fundamental to have contributed to the cause of the accident, during the relevant period, except to the extent of reaching a conclusion that he did not possess an effective licence, at the time of accident. Therefore, as observed by the Supreme Court that while interpreting the statutory provisions in Swaran Singh's case, the Tribunals have to apply the rule and concept of "fundamental breach", when considering the defences available to the insurer under Section 149 (2) of the Act.

173. Though the Supreme Court as well as this Court, has time and again, rejected the plea of Insurance Companies, challenging the liability, fastened on them, by the Tribunals/High Courts, holding that sufficient evidence has not been let in, by producing the details, such as, licence or documentary evidence from the Regional Transport Office, ignoring the well settled principles of law, invariably appeals are being filed on the same issues. In the abovesaid circumstances, this Court is of the view that it is hightime that in the event of filing appeals, the Insurance Companies should take a appropriate decision, as to whether the payment of compensation by the Claims Tribunal should be protracted, under the decree granted to the third parties, fastening liability even in a case, where supporting evidence has not let in, by them, discharging their burden to prove that the vehicle was driven without a licence or effective licence, as the case may be, in the manner stated supra.

174. If no evidence has been let in before the Claims Tribunal, in the manner, as indicated, preferring an appeal would only unnecessarily delay the payment of compensation to the injured or legal representative of the deceased, besides interest, fastened on the Company, till the deposit is not made, within one month from the date of receipt of the award, as per Section 168 of the Motor Vehicles Act. The Supreme Court in Swaran Singh's case has also considered this aspect.

175. Till the reference made in Parvathaneni's case, is decided by a larger bench of Supreme Court, to maintain uniformity in claim cases, where there is no licence for the driver to drive the vehicle at the time of accident, the compensation has to be paid by the Insurance Company to the third party victim, who is not aware as to whether the driver of the offending vehicle possess licence of any kind, requisite and valid driving licence to drive that particular kind of vehicle or renewed the licence, after the accident and other situations considered in Swaran Singh's case.

176. In C.M.A.No.2126 of 2009, it is the case of the respondents/claimants, that on 13.11.2006, when the deceased, Issac, was riding a Motorcycle, bearing Registration No.TN 20 U 4360, from ICF to his residence, another Motorcycle, bearing Registration No.TN 01 AB 7727, driven in a rash and negligent manner, dashed against the motorcycle, driven by the deceased. He sustained fatal injuries and died in the hospital. The offending vehicle was insured with the appellant-Insurance Company, who disputed the manner of accident and also pleaded that the rider of the motorcycle insured with them, first respondent before the Claims Tribunal, did not possess a driving licence, at the time of accident.

177. The respondents/claimants let in evidence to prove the manner of accident and marked four documents. RW.1 was the Investigator of the appellant-Insurance Company. He deposed that on enquiry, he found that the vehicle involved in the accident was owned by one Mr.P.Sudhakar, insured. Ex.R1  Summons and Ex.R2  Lawyer's Notice were marked on the side of the appellant-Insurance Company. RW.1 has also deposed that owner of the two-wheelder, bearing Registration No.TN 01 AB 7727, had given a letter to him, stating that he had given the vehicle to his son, Kumar, on the date of accident. Kumar did not possess a valid licence. The letter written by the insured has been marked as Ex.B3. Notice to the claimants' lawyer to produce the driving licence and RC book of Kumar has also been marked as Ex.B4. The Investigating Report has been marked as Ex.B5.

178. On the above oral and documentary evidence, the appellant-Insurance Company has submitted that they have discharged their burden of proof that the driver of the offending vehicle did not possess any valid driving licence, though they have taken steps for production of licence of the driver, through the owner. However, the Tribunal, on evaluation of evidence, observed that the appellant-Insurance Company, did not take any pains to examine Mr.P.Sudhakar, insured, first respondent before the Claims Tribunal, by taking out summons through Court. On the notice sent by the Insurance Company to the Claimant's lawyer, the Tribunal has observed that by no stretch of imagination, neither the claimants nor their counsel can be driven from pillar to post to prove the driving licence of the owner or driver of the offending vehicle and it is the duty of the Insurance Company, who is equipped with all sophisticated machineries to prove that the owner or driver of the vehicle was not holding a valid driving licence at the time of accident. Holding that the Insurance Company has failed to prove the same and not taken any efforts, the Tribunal has rejected the reliance placed on the report of the Investigator. Nevertheless, the Claims Tribunal has directed the appellant-Insurance Company to pay compensation to the claimants and recover the same from the owner of vehicle, by initiating appropriate proceedings.

179. Though the finding, fastening liability on the appellant-Insurance Company, is assailed in this appeal by Mr.K.S.Narasimhan, learned counsel for the appellant-Insurance Company, on the ground that the Tribunal has erred in not exonerating on the appellant-Insurance Company, on the ground that the rider of the offending vehicle had no driving licence, at the time of accident, this Court is not inclined to accept the same for the sole reason that the finding of the Tribunal that the appellant-Insurance Company has failed to prove that the driver of the offending vehicle had no valid licence, at the time of accident, cannot be said to be manifestly illegal or contrary to the settled principles of law. Indisputably, the appellant-Insurance Company has not taken any steps to ascertain the fact, as to whether the driver had any licence, from the concerned Regional Transport Office. Mere sending letters to the owner of the offending vehicle or to claimants' lawyer, is not sufficient to dislodge the burden. However, pay and recover has been ordered by the Tribunal. In the absence of any appeal being filed by the owner of the vehicle and brought to the notice of this Court, there is no manifest illegality in the award and for the abovesaid reasons, the appeal is dismissed.

180. In C.M.A.No.3534 of 2011, it is the case of the legal representatives of the deceased that on 17.04.2006, when the deceased was travelling as a pillion rider in a Motorcycle, bearing Registration No.TN 07 AA 5169, the rider had lost control of the vehicle and dashed against a Central Median. Both the rider and pillion rider sustained serious injuries and died. The Legal Representatives of the pillion ridder claimed compensation of Rs.16,00,000/-.

181. Resisting the claim, the appellant-Insurance Company submitted that the accident occurred only due to the rash and negligent driving of the rider of the motorcycle. In the additional affidavit, they also submitted that the appellant-Insurance Company is not liable to pay compensation, as the vehicle was driven without a valid and effective licence, at the time of accident. Yet another contention raised by the Company was that the deceased, who travelled as a Pillion Rider, was not covered under the Policy, as additional premium was not paid.

182. Before the Claims Tribunal, one of the claimants, wife of the deceased and the eye-witness has been examined as Pws.1 and 2 respectively. The appellant-Insurance Company examined a Senior Assistant from the Regional Transport Office, Ayyanavaram, as RW.1. RW.2 is the Senior Assistant, Regional Transport Office, Anna Nagar, who deposed that their Officers have not issued any licence to one Balaji, said to have been driven the offending vehicle. Exs.R1 and R2 produced before Claims Tribunal are the reports of the Regional Transport Officer, Chennai Central. RW.3 is the Senior Executive working in the Office of the appellant-Insurance Company. Ex.R3 is the copy of the Legal Notice issued to the owner of the vehicle and Ex.R4 is the returned RPAD cover sent to the first respondent-Insured. Ex.R5  Acknowledgement Cards, Ex.R6  Reply legal notice by the learned counsel for the claimants, Ex.R7  Copy of the Insurance particulars and Ex.R8  Investigation Report have been marked.

183. Upon perusal of Ex.R4, returned RPAD cover, sent to the first respondent, the Tribunal has observed that there was no such person in the address given by the first respondent. Further, enquires have been made by the Investigating Officer, in the nearby shops and houses and nobody has identified such a person in the address. Thus, the Tribunal, on appreciation of the oral testimony of RW.4, Investigating Officer and his report, Ex.R8, observed that the appellant-Insurance Company has issued a policy for the offending vehicle in the name of the first respondent, without properly ascertaining the address particulars of the owner of the vehicle.

184. The Claims Tribunal has further observed that it not open to the Insurance Company to blame the claimant for non-production of the Insurance particulars. However, on the basis of the documentary evidence, produced by the Company, held that they had proved the violation of policy condition, at the time of accident. Following the judgment in Bajaj Allianz General Insurance Co. Ltd., Pune v. Manimozhi reported in 2010 (4) LW 742 (DB), the Claims Tribunal held that the Company as well as the owner of the vehicle, as jointly and severally liable to pay compensation and granted liberty to recover the same from the owner.

185. Here again, the challenge in this appeal is that the Tribunal has failed to appreciate that the Company has taken all possible steps to prove that the driver did not possess any licence at the time of accident and that therefore, the Company ought to have been exonerated from payment of compensation for the violation of policy condition, when they have let in evidence through an official of the Regional Transport Office. Payment of compensation by the Insurance Company to a third party or the dependents of the deceased, cannot be avoided when right of recovery from the insured is given. Besides, payment of compensation to a third party victim is statutory, as per Sections 147 and 149 of the Motor Vehicles Act, 1988. The owner of the vehicle has not challenged the findings, regarding breach of policy conditions. As the claims Tribunal has granted liberty to recover the amount from the insured, this Court is not inclined to interfere with the same.

186. In C.M.A.No.3175 of 2011, it is the case of the dependants of the deceased that on 19.04.2007, when the deceased was travelling as a pillion rider in a Motorcycle, bearing Registration No.TN 20 AV 7129, on a 200 Feet Road, near Korattur Agraharam road junction, a lorry bearing Registration No.TN 32 4048, insured with the appellant-Insurance Company, dashed against a motorcycle, due to which, the deceased sustained multiple injuries and died on the spot. To avoid the liability to pay compensation, the appellant-Insurance Company submitted that the driver of the lorry did not possess a valid driving licence and that the licence expired on the date of accident. They also examined RW.1, Assistant Licencing Authority and marked Ex.B1  Copy of the Certificate issued by him. Ex.B2 is the copy of the final report filed by the Inspector of Police and upon perusal of the same, the Claims Tribunal has found that the driver had a licence to drive light motor vehicle with badge, and authorised to drive a transport vehicle and that the same has already expired on 18.11.1999. As the deceased was a third party, the Tribunal held that the Insurance Company has to pay compensation amount to the dependents and recover from the owner, through an execution proceeding in the same claim petition.

187. Challenge in this appeal is with regard to the liability of the Company to pay compensation on the ground, inter alia, that having considered the report of the Assistant Licencing Authority, Ex.B1 and Ex.B2, Final report filed by the Inspector of Police, which revealed that the driving licence of the driver of the offending vehicle expired on 18.11.1999 and that it was not renewed, till the date of accident, i.e., on 19.04.2007, for the past 8 years and therefore, the Tribunal ought to have exonerated the Insurance Company from its liability to pay compensation to the third party, following the decision made in 2009 TNMAC 487, wherein, it has been held that as per Section 106 of the Evidence Act, the driving licence, which is under the special knowledge of the driver and the owner who has the duty to verify the existence of licence, failed to discharge their burden and in such circumstances, the Company ought to have been exonerated. In the light of the discussion and for the reasons stated supra, total exoneration of the Insurance Company from payment of compensation to a third party cannot be ordered. However, pay and recover ordered is sustained.

188. Insofar as quantum of compensation is concerned, the Tribunal, in the absence of any proof of age, on the basis of the entry in Ex.P3  Post-Mortem Certificate, fixed the age of the deceased at 22 yeas, at the time of accident. Determination of age on the basis of Ex.P3  Post-Mortem Certificate cannot be said to be faulty, in view of the judgment in Fakeerappa v. Karnataka Cement Pipe Factory reported in 2004 (4) LW 20 and The Managing Director, Tamilnadu State Transport Corporation, Madurai v. Mary [2005 (5) CTC 515]. The accident has occurred on 19.04.2007. The only claimant-Mother, is a widow and aged about 49 years, as per Ex.P4  Legal Heir Certificate. Considering the avocation pleaded that the deceased was a labourer, the Tribunal has fixed his notional monthly income at Rs.4,500/-. Appying '13' multiplier and after deducting 1/3rd towards Personal and Living Expenses of the deceased, the Tribunal awarded a sum of Rs.4,68,000/- towards loss of contribution to the family.

189. Challenging the quantum of compensation, it is the contention of the appellant-Insurance Company that the Tribunal erred in fixing the monthly income at Rs.4,500/- and since the deceased was a Bachelor, the Tribunal ought to have deducted 50% towards Personal and Living expenses of the deceased for the purpose of computing dependency compensation. Except the above, there is no other challenge, insofar as the method of assessment is concerned.

190. There is no dispute that the widowed mother is the only legal heir. The deceased was stated to be a labourer. Even taking it for granted, that the claimant or the deceased, owned any place of living, a small tenement or any other place or even a rented place, there are certain basic and periodical payments to be made and expenses to be incurred by any family, for a simple and not extravagant living, such as, payment of electricity charges, water charges, expenses to be incurred towards food, shelter, clothing, health and other expenses. In the case on hand, a sum of Rs.100/- per day, has been taken, as loss of contribution to the family. Considering the expenditure likely to be incurred, under the abovesaid heads, the price of essential commodities, living condition, Rs.100/- taken as loss of contribution to the family, cannot be said to be on the higher side, warranting revision.

191. The sole claimant-mother of the deceased, in the accident, had already lost her husband and therefore, it could reasonably be presumed that, as the only male earning member of the family, comprising of just two of them, the deceased would have contributed a minimum Rs.100/- per day, after deducting 1/3rd towards his personal and living expenses. As regards the contention that 50% ought to have been deducted towards the personal and living expenses of the deceased, as per Sarala Verma's case, then the loss of contribution, works out of Rs.3,51,000/-.

192. The dependent is a widow and she has lost the only breadwinner and support. At the time of accident in the year 2007, she was aged 49 years and by the time, when the claim petition culminated into an award on 30.05.2011, she was 53 years old. To pull on for the rest of her lifetime, she has to get herself engaged, as a servantmaid or engage in any small business, like flower vending or any other business to eak out her livelihood. Any amount of compensation awarded by the Claims Tribunal is not equivalent to the loss of her son, as she is left alone, and for the rest of her life time, she has to be dependent on her relatives for moral and physical support. In these days, one cannot expect monetary support. Considering all these aspects, this Court is of the view that the percentage of deduction to be made, as per Sarala Verma's case, if made would considerably reduce the quantum of compensation to the aged widow. The compensation awarded under the other heads, is reasonable.

193. Considering the principles of law in R.D.Hattangadi vs. Pest Control (India) Pvt. Ltd and others reported in 1995 ACJ 366 and Divisional Controller, KSRTC v. Mahadeva Shetty & Another reported in 2004 (1) TNMAC (SC) 534, this Court is of the view that the widowed mother cannot be said to have been granted a bonanza, or she could have ever thought of making a profit out of the loss of her son. In view of the above, this Court is not inclined to reduce the quantum of compensation. Perusal of the award shows that no compensation has been awarded under the heads, loss of estate and transportation. Hence, the award is sustained.

194. In C.M.A.No.3806 of 2011, wife and son claimed compensation for the death of the sole breadwinner, Mr.Dhandapani, who was a retired Junior Assistant in Tamil Nadu Electricity Board, and paid Rs.5,000/- per month, towards pension. According to them, he was also engaged in business. The accident occurred on 13.09.2006, when an Auto Rickshaw bearing registration No.TN-23-AA-6707, belonging to one Ms.Keerthy, the 4th respondent herein, driven in a rash and negligent manner, insured with the appellant insurance company, dashed against the deceased, who was walking on the extreme left side of the road. He sustained grievous injuries and succumbed to the same, inspite of treatment in Government Hospital, Tiruppattur. A criminal case has also been registered against the driver of the Auto Rickshaw. Legal representatives claimed compensation of Rs.5,00,000/-. Resisting the claim, the appellant insurance company denied the manner of accident. Inter alia, they opposed the claim, on the ground that the driver of the Auto Rickshaw was not having any driving licence at the time of accident and hence, there was a violation of policy condition and consequently, the insurance company is not liable to pay compensation. They disputed the quantum of compensation claimed under various heads.

195. The Tribunal, on evaluation of pleadings and evidence found that the driver of the Auto Rickshaw was responsible for the accident. To avoid the liability to pay compensation, on the ground of violation of policy that the Auto Rickshaw was driven by an unlicenced person, the appellant insurance company examined RW3 a Junior Assistant from the office of the Motor Vehicle Inspector, who has deposed that upon perusal of the particulars, he came to know that on 13.09.2006, no licence was granted. He has also deposed that Ex.P10 Licence, produced before the Claims Tribunal, was issued only on 29.10.2009 for a Two-wheeler and Car. In the cross examination, he has deposed that he was not aware as to whether the driver was given any licence in the year 2006. RW1 Driver, on the basis of Ex.R1 Judgment of the Judicial Magistrate No.I, filed a proof affidavit, stating that the Criminal Court has acquitted him of the charges, finding that he did not drive the offending vehicle on 13.09.2006. However, admitted that the police has registered a case against him. RW2, Investigating Officer of the appellant insurance company, deposed that his investigation revealed that RW1 drove the Auto Rickshaw. Ex.R2 is the Investigating Officer's Report. In addition to the above, the appellant insurance company marked Ex.P5 Notice dated 09.09.2009 sent by the company to the owner of the Auto Rickshaw and Ex.P6 is the postal acknowledgment. They also marked Ex.P7 Postal Acknowledgment, for service of notice on RW1 Driver. However, the driver had denied driving of the Auto Rickshaw by way of reply in Ex.P8. The claims Tribunal, by observing that if RW1 driver had any valid licence on the date of accident, he could have produced the same before the Tribunal, to discharge his burden and in the absence of the above and considering the evidence on record, held that RW1 Driver had driven the vehicle without any licence and following a decision of this Court reported in 2009 (5) L.W. 399, directed the appellant insurance company to pay the compensation to the claimants and recover the same from the owner for his breach of policy condition.

196. Assailing the correctness of the finding, fastening liability on the appellant insurance company to pay compensation, Mr.C.Ramesh Babu, learned counsel for the appellant insurance company, submitted that when admittedly, the Claims Tribunal found that the driver of the Auto Rickshaw had no licence to drive the same on the date of accident, it should be construed that there was a clear breach of terms and conditions on the part of the owner of the vehicle and in such circumstances, the owner of the vehicle alone ought to have been made liable to pay compensation to the respondents/claimants. He further submitted that by letting in evidence through RW3, a Junior Assistant from the office of the Motor Vehicle Inspector and marking Ex.R10 Licence, issued to the driver to drive Motor Cycle and Car, only on 29.10.2009, much later in point of time, than the date of accident i.e., 13.06.2009, the insurer has discharged its burden of proof that there was a clear breach of terms and conditions on the part of the owner and therefore, the company cannot be mulcted with any liability to pay compensation to the respondents/claimants and on the other hand, there should have been a total exoneration. The submission cannot be accepted for the reason that even if the breach is proved, the insurance company is liable to pay compensation to a third party victim and recover the same from the owner, which right has already been given by the insured. Hence, no interference is called for.

197. Though Mr.C.Ramesh Babu, learned counsel appearing for the Insurance Company, in respect of C.M.A.No.3806 of 2011, placed reliance on a Three Judges Bench judgment in Malla Prakasa Rao's case (cited supra), reported in 2004 (3) SCC 343, it is to be noted that the said case has been decided much earlier to Swaran Singh's case (cited supra), wherein, the interpretation to Section 149(2)(A)(ii) vis-a-vis the proviso appended to sub-sections (4) and (5) of the Motor Vehicles Act, 1988, has not been considered.

198. In CMA.No.100 of 2012, it is the case of the respondent/claimant that when he was riding a motor cycle (TVS PEP) bearing registration No.TN-03-A-9855, another motor cycle bearing registration No.TN-04-AE-0828, insured with the appellant insurance company, knocked him down. He claimed compensation against the owner and the insurer, respondents 1 and 2, before the Claims Tribunal. Apart from denying the manner of accident, the insurer has submitted that the owner has failed to produce the vehicle records and the driving licence of the vehicle, bearing Registration No.TN 04 AE 0828, for their verification and hence, they are unable to know as to whether the owner had any insurable interest in the vehicle. They further submitted that it is for the claimant and the owner of the vehicle to furnish the driving particulars. As per the claim petition, the name and address of the person, in-charge of the vehicle at the time of accident was one Mr.Jegadeesan, No.3, Thatha Muthiappan Street, Parrys, Chennai-600 001.

199. On the abovesaid grounds, they disputed the liability to pay compensation. To avoid the liability for payment of compensation to the third party, the company contended that the rider of the offending vehicle was not having any driving licence, which is evident from Ex.R1 Copy of Charge Sheet, in which, he had been charged under Section 3 read with 181 of the Motor Vehicles Act. A contention has also been raised that though a notice to the owner as well as the rider of the offending vehicle was issued to produce the driving licence, both of them have not responded and hence there is a violation of policy condition, for which, the insurance company is not liable to pay compensation. RW1 Administrative Officer attached to the appellant insurance company has been examined to prove that a notice was sent. The Company has marked the notice and the postal Acknowledgment Card. As usual, the owner remained ex parte. Observing that the insurance company had taken steps to prove that the rider of the motor cycle did not possess a driving licence, at the time of accident, the Claims Tribunal directed the appellant insurance company to pay compensation to the claimant at the first instance and thereafter, recover from the same from the owner of the vehicle, without filing any separate petition. The compensation has been computed at Rs.1,01,500/- with interest @ 7.5% per annum.

200. Placing reliance on the judgments in 2004(1)TNMAC 104(SC), 2008 (1) TNMAC 294 (SC), 2009(1) TNMAC 487 (SC), 2010 (1) TNMAC 65, CMA No.591 of 2008, 2010 (1) TNMAC 65 and 2011 (2) MLJ 207, Mr.D.Bhaskaran, learned counsel for the insurance company submitted that the Claims Tribunal ought to have exonerated the insurance company from any liability to pay compensation. According to him, when the Supreme Court 2009 (2) TNMAC 241 (SC), clearly observed that when a person has no liability to pay it cannot be compelled to pay, and that the Tribunal has no power to give direction to pay and then recover from the owner as such power under Articles 136 and 142 of the Constitution of India is vested only with the Supreme Court. Learned counsel for the appellant also submitted that the driver of the motor cycle insured with them has been charge sheeted under Section 3 read with Section 181 of the Motor Vehicles Act and by producing Ex.R2 Acknowledgment Card for the notice sent to the owner, calling upon him to furnish the licence particulars, the company has discharged his burden of proof that there was no licence at the time of accident. Mere production of Ex.R1 Charge Sheet and Ex.R2 Acknowledgment Card, to proof that a notice was sent to the owner or the driver as the case may be, for furnishing licence particulars of the driver of the offending vehicle insured with the appellant insurance company, does not amount to prove that the driver did not possess valid driving licence. Admittedly, the appellant insurance company has not called for any details from the concerned RTO within whose jurisdiction the driver of the offending vehicle resides nor they have taken any steps to summon the RTO, the competent authority who maintains the licence particulars of the driver, whose address is furnished at Column No.16A of the claim petition. Even then, the Tribunal has permitted to recover the compensation amount from the owner. In the absence of any appeal preferred by the owner of the vehicle, there is no manifest illegality.

201. In CMA.No.179 of 2012, that on 10.06.2007, when the respondent/claimant was walking along Madhavaram Redhillls Road near Vadaperumbakkam, he was hit by a motor cycle bearing registration No.TN-20-AX-6546 from behind. He sustained injuries and claimed compensation against the owner and the insurer. The appellant herein, inter alia submitted that the driver of the abovesaid motor cycle did not possess any valid driving licence at the time of accident. A charge sheet has been laid under Sections 279 and 338 IPC read with Sections 3 and 181 of the Motor Vehicles Act, and therefore, there is a violation of terms and conditions of policy and hence the appellant is not liable to pay any compensation. Without prejudice to the above, they disputed the age, nature of injuries, period of treatment and the quantum of compensation claimed under various heads.

202. In support of the contention that the insurance company is not liable to pay compensation to the third party pedestrian, on the ground of violation of policy condition that the motor cycle, insured with them was driven by the driver, without any licence, the Insurance Company examined RW1 Assistant Manager attached to its office, who deposed that as per Investigator's report, the rider of the offending vehicle was charged under Sections 79 and 338 IPC read with Sections 3 and 181 of the Motor Vehicles Act, and pleaded guilty before the Criminal Court and paid a fine of Rs.1,500/-. It was also his evidence that a legal notice was sent to the owner, as well as the rider of the vehicle to produce the driving licence, but both of them did not respond. Ex.R1 Legal Notice sent to the owner and rider of the motor cycle bearing registration No.TN-20-AX-6546. Ex.R2 Returned Covers were marked. The Tribunal, on evaluation of pleadings and evidence and following a Division Bench judgment of this Court 2010 (4) L.W. 742, directed the company to make the payment and thereafter, recover from the insured. The said direction fastening liability on the insurance company to pay compensation is assailed in this appeal, on the ground that when the company has let in evidence through RW1-Assistant Manager, to prove that they had issued a notice to the owner and driver of the offending vehicle and also marked Ex.R1 Copy of the letter sent to owner with Acknowledgement Card, Ex.R2 Letter sent to the owner and rider, with returned covers and also deposed that as per the investigating officer's report, the driver of the motor cycle has been charge sheeted for the offences stated supra, the Tribunal ought to have exonerated the appellant insurance company from its liability to pay compensation to the third party, on the ground that the owner of the vehicle had handed over the motor cycle to a person who did not possess a valid and effective licence and thus violated the terms and conditions of policy. The abovesaid contention cannot be countenanced in law, in view of the detailed discussion.

203. In the result, the Civil Miscellaneous Appeals are dismissed. No costs. Consequently, connected Miscellaneous Petitions are closed.

204. The appellant-Insurance Companies are directed to pay the compensation amount to the respective claimants, by depositing the amounts in each of the appeals, with proportionate accrued interest and costs, less the amount already deposited, within a period of four (4) weeks from the date of receipt of a copy of this order, and recover the same from the owner of the offending vehicles, by initiating recovery proceedings.

205. Before parting with the case, this Court sincerely appreciates the assistance provided by Mr.K.S.Narasimhan, Mr.J.Chandran, Mr.Vijayaraghavan, Mr.N.Manoharan, Mr.S.Arun Kumar, Mr.D.Bhaskaran, Mr.Ramesh Babu, learned counsel appearing for the Insurance Companies, who have made elaborate submissions.

206. This Court also deems it fit to extract the observations made in United India Fire and General Insurance Co. Ltd., v. Surindarsinh Gurasinh reported in AIR 1981 Guj. 237, as follows:

"Before parting with the matter, we must once again record. in clear and emphatic terms our disapproval of the conduct of a nationalized Insurance Company in bringing an appeal in such a cause before this Court. It is high time that such Companies, who now are limbs of the State, appreciated their responsibility in the context of a welfare legislation enacted by the Parliament of our socialist republic, with a view to providing a speedy remedy for awarding just compensation to unfortunate victims of motor accidents. It is, indeed, open to such Companies to bring appeals which raise substantial questions of law, but to bring appeals on frivolous issues, which are covered by judgments including those. of the Supreme Court, is not what is expected of such Companies in the new role which they have now assumed."

skm

To

1. The Motor Accident Claims Tribunal,

(Fast Track Court No.IV) at Poonnamallee.

2. The Motor Accident Claims Tribunal, (II Judge),

Small Causes Court, Chennai.

3. The Motor Accident Claims Tribunal,

(Court of Small Causes), Chennai.

4. The Motor Accident Claims Tribunal,

(Additional District and Sessions Court cum

Fast Track Court) at Tirupattur.

5. The Motor Accident Claims Tribunal,

(Court of Small Causes No.VI), Chennai.

6. The Motor Accident Claims Tribunal,

(VI  Court of Small Causes),

Chennai