The ICICI Lombard GeneralInsurance Company Ltd.,140, Chotta Boy Centre,Nungambakkam Road,Chennai-600 034 v. Annakkili & Ors.

be entitled to avoid his liability to any personentitled to the benefit of any such judgement or awardas is referred to in sub-section (1) or in suchjudgement as is referred to in sub-section (3) otherwisethan in the manner provided for in sub-section (2) or inthe corresponding law of the reciprocating country, asthe case may be.Explanation. – For the purposes of this section,“Claims Tribunal” means a Claims Tribunal constitutedunder section 165 and “award” means an award made bythat Tribunal under section 168.168. Award of the Claims Tribunal:–– (1) On receiptof an application for compensation made under section166, the Claims Tribunal shall, after giving notice ofthe application to the insurer and after giving theparties (including the insurer) an opportunity of beingheard, hold an inquiry into the claim or, as the casemay be, each of the claims and, subject to theprovisions of section 162 may make an award determiningthe amount of compensation which appears to it to bejust and specifying the person or persons to whomcompensation shall be paid and in making the award theClaims Tribunal shall specify the amount which shall bepaid by the insurer or owner or driver of the vehicleinvolved in the accident or by all or any of them, asthe case may be:Provided that where such application makes a claimfor compensation under section 140 in respect of thedeath or permanent disablement of any person, such claimand any other claim (whether made in such application orotherwise) for compensation in respect of such death orpermanent disablement shall be disposed of in accordancewith the provisions of Chapter X. (2) The Claim Tribunal shall arrange to delivercopies of the award to the parties concernedexpeditiously and in any case within a period of fifteendays from the date of the award.(3) When an award is made under this section, theperson who is required to pay any amount in terms ofsuch award shall, within thirty days of the date ofannouncing the award by the Claims Tribunal, deposit theentire amount awarded in such manner as the ClaimsTribunal may direct." https://hcservices.ecourts.gov.in/hcservices/

7.In exercise of the powers conferred by Sections 12, 27, 64,sub-section (14) of Section 88, Sections 110, 137, 164 and 208 readwith Section 211 of the Motor Vehicles Act, 1988 (59 of 1988), theCentral Motor Vehicles Rules, 1989 have been framed. Few provisionsfor the purpose of this case, are as follows:"8. Minimum educational qualification for drivingtransport vehicles:- The minimum educationalqualification in respect of an applicant for obtaining alicence to drive a transport vehicle shall be a pass inthe eighth standard: Provided that the minimum educational qualificationspecified in this rule shall not apply in the case of:-(i) renewal of a driving licence to drive atransport vehicle; or(ii) addition of another class of transport vehicleto the driving licence; already held before thecommencement 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 itwas omitted by G.S.R.933(E), dated 28.10.1989(w.e.f.28.10.1989)]9. Educational qualifications for drivers of goodscarriages carrying dangerous or hazardous goods:-(1) One year from the date of commencement ofCentral Motor Vehicles (Amendment) Rules, 1993, anyperson driving a goods of dangerous or hazardous natureto human life shall, in addition to being the holder of adriving licence to drive a transport vehicle, alsopossess a certificate of having successfully passed acourse consisting of following syllabus and periodicityconneted with the transport of such goods.Period of training 3 DaysPlace of trainingAt any institute recognised by the State GovernmentTraining comprises of three parts,(A) Defensive driving(B) Advanced driving skills and training https://hcservices.ecourts.gov.in/hcservices/ (C) Product safety.(Syllabi for the training is provided in the abovesaidRules)(2) The holder of a driving licence possessing theminimum educational qualification or the certificatereferred to in sub-rule (1), shall make an application inwriting on a plain paper along with his driving licenceand the relevant certificate to the licensing authorityin whose jurisdiction he resides for making necessaryentries in his driving licence and if the driving licencein Form 7, the application shall be accompanied by thefee as is referred to in Serial Number 8 of the Table toRule 32.(3) The licensing authority, on receipt of theapplication referred to in sub-rule (2), shall make anendorsement in the driving licence of the applicant tothe effect that he is authorised to drive a goodscarriage carrying goods of dangerous or hazardous natureto human life.(4) A licensing authority other than the originallicensing authority making any such endorsement shallcommunicate the fact to the original licencing authority.11. Preliminary test.—(1) Save as otherwise providedin sub-rule (2), every applicant for a learner's licenceshall present himself before the licensing authority onsuch date, place and time, as the licensing authority mayappoint, for a test and satisfy such authority that theapplicant possesses adequate knowledge and understandingof the following matters, namely:—(a) the traffic signs, traffic signals and the rulesof the road regulations made under section 118;(b) the duties of a driver when his vehicle isinvolved in an accident resulting in the death or bodilyinjury to a person or damage to property of a thirdparty; (c) the precautions to be taken while passing anunmanned railway crossing; and(d) the documents he should carry with him whiledriving a motor vehicle. https://hcservices.ecourts.gov.in/hcservices/ (1-A) In determining as to whether an applicantpossesses adequate knowledge and understanding of thematters referred to in sub-rule (1), the licensingauthority shall put to the applicant questions ofobjective type such as specified in Annexure VI.Explanation.——For the purpose of this sub-rule,"adequate knowledge" means answering correctly at least60 per cent of the questions put to him.(2) Nothing contained in sub-rule (1) shall apply tothe following class of applicants, namely:—(a) the holder of an effective driving licence, (b) the holder of a driving licence which hasexpired but five years have not elapsed,(c) the holder of a learner's licence issued orrenewed after the commencement of these rules,(d) the holder of a certificate to the effect of thepossession of adequate knowledge and understanding of thematters referred to in sub-rule (1), issued by anyinstitution recognized and notified in this regard by theState Government.15. Driving test.—(1) No person shall appear for thetest of competence to drive unless he has held alearner's licence for a period of at least 37 [thirtydays].(2) The test of competence to drive referred toin sub-section (3) of section 9 shall be conducted bythe licensing authority or such other person as may beauthorised in this behalf by the State Government in avehicle of the type to which the application relates. (3) The applicant shall satisfy the person conducting thetest that he is able to— (a) adjust rear-view mirror; (b) take suitable precautions before starting theengine; (c) move away safely and smoothly straight ahead atan angle, while at the same time engaging all gears untilthe top gear is reached; (d) to change to the lower gears quickly from thetop gear when the traffic conditions warrant such change;(e) change quickly to lower gears when drivingdownhill; (f) stop and re-start the vehicle on a steep upwardincline making proper use of the hand-brake or of thethrottle and the foot-brake without any rolling back,turn right and left corners correctly and make proper use https://hcservices.ecourts.gov.in/hcservices/ of the rear-view mirror before signalling; (g) overtake, allow to be overtaken, meet or coverthe path of other vehicles safely and take anappropriate course of the road with proper caution givingappropriate signals; (h) give appropriate traffic signals at theappropriate time, in clear and unmistakable manner byhand or by electrical indicators fitted to the vehicle; (i) change the lanes with proper signals and withdue care; (j) stop the vehicle in an emergency or otherwise,and in the latter case, bring it to rest at anappropriate course on the road safely, giving appropriatesignals; (k) in the case of vehicle having a reverse gear,driving the vehicle backwards, reverse it into a limitedopening either to the right or left under control andwith reasonable accuracy; (l) cause the vehicle to face in the oppositedirection by means of forward and reverse gears; (m) take correct and prompt action on the signalsgiven by traffic signs, traffic lights, trafficcontrollers, policemen and take appropriate action onsigns given by other road users; (n) act correctly at pedestrian crossings, which isnot regulated by traffic lights or traffic police, bygiving preference to persons crossing the roads; (o) keep well to the left in normal driving; (p) regulate speed to suit varying road and trafficconditions; (q) demonstrate general control of the vehicle byconfident steering and smooth gear changing and brakingas and when necessary; (r) make proper use of the rear-view mirror beforesignalling, beginning manoeuvring, moving away, alteringthe course to overtake, turning right or stopping; (s) use proper side when driving straight, turningright, 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, driversof other vehicles and cyclists; (v) take precautions at cross roads and on roadjunctions with regard to:—(i) adjustment of speed on approach, (ii) proper use of rear-view mirror, (iii) correct positioning of the vehicle before andafter turning to the right or left, (iv) avoidance of cutting right hand corners, https://hcservices.ecourts.gov.in/hcservices/ (v) looking right, left and right again beforecrossing or emerging; (w) concentrate in driving without his attentionbeing distracted and to demonstrate the presence of mind;(x) show courtesy and consideration for the safetyand convenience of other road users, such as pedestrians,drivers of other motor vehicles or cyclists.16. Form of driving licence.— (1) Every drivinglicence issued or renewed by a licensing authority shallbe in Form 6. (2) Where the licensing authority has the necessaryapparatus, for the issue of a laminated card type orSmart Card type driving licence, such card type or SmartCard type driving licence, as may be specified in theNotification issued by the concerned State Government orUnion Territory Administration, shall be in Form 7.(3) On and from the date of commencement of thissub-rule, every driving licence issued or renewed by thelicensing authority shall be in Form 7. (4) Every International Driving Pemit issued by alicensing authority shall be in Form 6-A and shall bevalid for a period of not more than one year from thedate of issue, as the case may be, or till the validityof the driving licence, whichever is earlier. (5) The automobile associations authorised by theState Government/ Union Territory Administration shall beallowed to issue International Driving Permit to theirown members as also others subject to counter-signatureby competent authority.17. Addition to driving licence.— (1) An applicationfor addition of another class or description of motorvehicle to the driving licence shall be made in Form 8 tothe licensing authority and shall be accompanied by— (a) an effective learner's licence and drivinglicence held by applicant; (b) in the case of an application for addition of atransport vehicle, the driving certificate in Form 5;(d) appropriate fee as specified in rule 32. (2) Theprovisions of sub-section (1), subsection (3) and sub-section (4) of section 9 shall, insofar as may be, apply https://hcservices.ecourts.gov.in/hcservices/ in relation to an application under subsection (1) asthey apply in relation to an application for the grant ofa driving licence.18. Renewal of driving licence:- (1) An applicationfor the renewal of a driving licence shall be made inForm 9 to the licensing authority having jurisdictionover the area in which the applicant ordinarily residesor carries on business and shall be accompanied by-(a) appropriate fee as specified in Rule 32.(b) three copies of the applicant's recent passportsize 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 holderof such licence to drive a transport vehicle as well asany other vehicle, then the licensing authority shall,subject to the production of medical certificate, renewsuch licence for the appropriate period as specified inisub-section (2) of Section 14.(3) Where the licensing authority renewing thedriving licence the fact of the renewal shall beintimated to the licensing authority who issued thedriving licence:Provided that in case the application is forissuance of a duplicate driving licence which has beenlost, torn or mutilated such that the identification orauthenticity of the document cannot be reasonablyestablished, the licensing authority receiving suchapplication shall on confirmation from the originalissuing authority, issue the duplicate driving licence.Provided also that if such confirmation is notreceived within 60 days, duplicate licence shall beissued, without waiting for the confirmation. 22. Endorsement by Courts.— A Court convicting aholder of a licence, for any one of the offencesspecified hereunder, shall endorse or cause to beendorsed in the driving licence, the particulars of suchconviction, namely:—(a) Driving without a licence, or without a licencewhich is effective, or without a licence applicable tothe vehicle driven (section 3)............ https://hcservices.ecourts.gov.in/hcservices/ (i) Refusing or failing within specified time toproduce licence or certificate of registration (section130).............(u) Altering a licence or using an altered licence.(v) An offence punishable with imprisonment in thecommission of which a motor vehicle was used. 23.State Register of driving licences:-(1)EachState Government shall maintain a State Register ofdriving licences in respect of driving licences issued orrenewed by the licensing authorities in the State in Form10.(2) Each State Government shall send to the Director(Transport Research), Ministry of Surface Transport, NewDelhi, a printed copy of the register referred to in sub-rule (1).FORM 10[See rule 23(1)]State Register of Driving Licence1. (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 takendriving test and the date of passing the test by theholder of the licence. 2. Name, address and other particulars of the holder ofthe 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 furtherrenewal (with details of licensing authority whichrenewed the licence.(j) Details of disqualification, fine, cancellation,etc., in relation to the holder of the driving licence. https://hcservices.ecourts.gov.in/hcservices/

8.Rule 23 of the Central Motor Vehicles Rules, mandates thateach State Government shall maintain a State Register of the DrivingLicences in respect of the Driving Licences, issued or renewed by theLicencing Authority in the State, in Form No.10. The abovesaidRegister, can be maintained by the State Government, only if theconcerned Regional Transport Officers correspondingly maintain aseparate list of driving licences issued, renewed, by them. As perthe procedure, it is expected that the same would be sent to theState Transport Commissioner and thereafter, a consolidated listwould be sent to the Government. Therefore, as mandated under rule23 of the Central Motor Vehicles Rules, a list, as per Form 10 shouldbe maintained, both in the Office of the State Transport Commissionerand the Secretary to the Government, Transport Department.25. Duration of a licence and renewal thereof.— Alicence granted in Form 11 shall be in force for a periodof five years and may be renewed on an application inForm 13 made to the licensing authority which granted thelicence not less than sixty days before the date of itsexpiry:Provided that the validity of the said licence shallbe subject to fulfilling the criteria as prescribed bythe State Government, which shall be certified by thelicensing authority or any other authority as may beprescribed for the purpose by the State Government on anannual basis.9.Before adverting to the facts of this case, it is necessaryto reproduce the issues, that were considered extensively by theHon'ble Supreme Court in National Insurance Co. Ltd., v. Swaran Singhreported in 2004 ACJ 1. In the reported judgment, the interpretationof 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 InsuranceCompanies, assailing various decisions of the Motor Accident ClaimsTribunal and High Courts. The contentions raised before the SupremeCourt by the Insurance Companies, as summaried at Paragraph 11 of thejudgment, are as follows:"(1) The insurer in terms of sub-section (2) ofSection 149 of the Act has an absolute right to raise adefence specified, inter alia, in sub-clause (ii) ofclause (a) thereof; (2) Such a right being clear and unequivocal havingregard to the judgment of this Court in NationalInsurance Company Ltd., Chandigarh v. Nicolletta Rohtagiand Others [(2002) 7 SCC 456 =2003-1-L.W. 151] must be https://hcservices.ecourts.gov.in/hcservices/ 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 inthe accident at the material point of time was driven bya 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 fordriving a particular vehicle in terms of the provisionsof Chapter II of the Motor Vehicles Act and, thus, avehicle cannot be held to be driven by a person dulylicensed therefor if: (a) he does not hold a licence;(b) he holds a fake licence; (c) he holds a licence butthe validity thereof has expired; or (d) he does nothold a licence for the type of vehicle which he wasdriving in terms of Chapter II of the Motor VehiclesAct, 1988, or (e) he holds merely a learner's licence.Reliance in this behalf has been placed on New IndiaAssurance 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 establishedin the proceedings before the Tribunal, it is bound todischarge the insurer and fix the liability only on theowner and/or the driver of the vehicle. (5) Once it is held that the insurer has been ableto establish its defence, the Tribunal or the Courtcannot direct the insurance companies to pay the awardedamount to the claimant and in turn recover the same fromthe owner and the driver of the vehicle. The decisionsof 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 andOthers [(2003) 3 SCC 338=2004-1-L.W. 5] wherein it hasbeen held that the court is entitled to issue adirection upon the insurer to satisfy the award andthereafter recover the same from the owner of thevehicle do not lay down the correct law and should beoverruled."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 twodifferent expressions ‘effective licence’ in Section 3and ‘duly licensed’ in sub-section (2) of Section 149 https://hcservices.ecourts.gov.in/hcservices/ of the Act which are suggestive of the fact that adriver once licensed, unless he is disqualified, wouldcontinue to be a duly licensed person for the purposeof Chapter XI of the Act. (ii) Thus, once a person has been duly licensedbut has not renewed his licence, the same would notcome within the purview of Section 149 and thus wouldnot constitute a statutory defence available to theinsurer in terms thereof. Only in the event of lapseof five years from the date of expiry of the licence,such statutory defence may be raised.(iii) Once a certificate of insurance is issuedin terms of the provisions of the Act, the insurer hasa liability to satisfy an award. It has been pointedthat a major departure has been made in the 1988 Actinsofar as in terms of Section 96(2)(b) of the 1939Act all the statutory defences were available in termsof sub-section (3) thereof provided that the policyconditions other than those prescribed therein had noeffect; whereas in the new Act, Section 149(2)(a)prescribes that the policy is void if it is obtainedby non-disclosure of material fact. Section 149(4)confines to only clause (b) and states that theconditions of policy except as mentioned in clause (b)of sub-section (2) are of no effect and, thus, afterthe amendment, except in cases which are covered underclause (b) of Section 149, the insurance companies areliable to pay to the third parties. In other words,the right of insurer to avoid the claim of the thirdparty would arise only when the policy is obtained bymisrepresentation of material fact and fraud and in noother case. (iv) Sub-section (1) of Section 149 makes itclear that the insurer should pay first to the thirdparties and recover the same if they are absolved onany of the grounds specified in sub-section (2)thereof. Reliance, in this connection, has been placedon BIG Insurance Co. Ltd. v. Captain Itbar Singh andOthers [AIR 1959 SC 1331] and New India AssuranceCompany v. Kamla & Others [(2001) 4 SCC 342]. (v) The burden to prove the defence raised by theinsurers as regard the question as to whether therehas been any breach of violation of policy conditionsof the insurance policy has been issued or not, wouldbe upon the insurer. https://hcservices.ecourts.gov.in/hcservices/ (vi) The breach on the part of the insured mustbe a wilful one being of fundamental condition by theinsured himself and the burden of proof, therefore,would be on the insurer. (vii) With a view to avoid its liabilities it isnot sufficient for the insurer to show that the persondriving at the time of accident was not duly licensedbut it must further be established that there was abreach on the part of the insured. Reliance, in thisconnection, has been placed on Narcinva V. Kamath andAnother v. Alfredo Antonio Doe Martins and Others[(1985) 2 SCC 574], Skandia Insurance Company Ltd. v.Kokilaben Chandevadan and Others [(1987) 2 SCC 654=100L.W. 790], Sohan Lal Passi v. P. Sesh Reddy and Others[(1996) 5 SCC 21] and United India Insurance CompanyLtd. v. Lehru & Others [(2003) 3 SCC 338=2004-1-L.W.5]."11.Before dealing with the rival contentions, the SupremeCourt traced down the history of the Motor Vehicles Act, at Paragraph16, as follows:"The intention of the Parliament became furtherevident when in the Motor Vehicles Act, 1939, a newchapter being Chapter VIIA dealing with insurance ofmotor vehicles against third party risks was introducedand the beneficent provisions contained in the MotorVehicles Act, 1939 were further made liberal by reasonof the Motor Vehicles Act, 1988 and the amendmentscarried out therein from time to time in aid of thethird party claims by way of grant of additional or newrights conferred on the road accident victims."12.While affirming that the Motor Vehicles Act, 1939 and theamended Act, 1988, as social welfare legislation and Chapter XI ofthe Motor Vehicles Act, 1988, which inter alia provides forcompulsory insurance of vehicles, in relation to the mattersspecified therefor, the Apex Court held that the provision forcompulsory insurance indisputably has been made inter-alia with aview 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 reasonof another person's wrongdoing had no right of actionagainst insurers who undertook to indemnify thewrongdoer. The first invasion of this principle tookplace by reason Third Parties (Rights against Insurers)Act, 1930. The British Parliament in the light of theaforementioned Act enacted the Road Traffic Act, 1930 https://hcservices.ecourts.gov.in/hcservices/ which has since been replaced by Road Traffic Act, 1988. 18. The Third Parties (Rights Against Insurers) Act1930 was enacted with a view to correct injusticeeffecting a statutory assignment of the rights of theassured to the injured person as prior thereto the rightof a person to be indemnified under a contract ofinsurance against claims made against him by persons whomhe might have injured was one personal to himself, andthere was no privity of any sort between the injuredperson and the insurers. The injured person had nointerest either at law or in equity in the insurancemoney, either before or after it was paid by the insurersto the assured. In a case where the assured becamebankrupt and if the injured person had not alreadyobtained judgment and levied execution of his claim fordamages his only right was to move in the bankruptcy orthe winding-up of proceedings. The beneficial provisionsof the aforementioned English statutes were incorporatedby the Parliament of India while enacting the MotorVehicles Act, 1939 which has also since been repealed andreplaced by the Motor Vehicles Act, 1988."13.Recognising different types of insurance covers issued,containing different nature of contracts of insurance, the SupremeCourtat Paragraph 19 of the judgment, held that any condition in theInsurance Policy, whereby, the rights of the third party is takenaway, is void. With reference to the dispute in the batch of cases,concerning third party rights and the policy, the Supreme Court, inits categorical terms, at Paragraph 20, held that,"Indisputably such a benefit to a third party wasprovided under the Statute keeping in view the fact thatthe conditions in the assured's policy may not be of no orlittle effect in relation to a claim by a person to whom anassured was under a compulsorily insurable liability."14.A third party right arises when a victim of an accidentsuffers bodily injury or death, as a result thereof or his propertyis 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 claimcompensation is a statutory one. He is a victim of anunforeseen situation. He would not ordinarily have ahand in it. The negligence on the part of the victimmay, however, be contributory. He has suffered owing towrongdoing of others." https://hcservices.ecourts.gov.in/hcservices/

30. ...Sub-Section (1) of Section 149 castsliability upon the insurer to pay the person entitled tothe benefit of the decree, as if he were the judgmentdebtor. Although the said liability is subject to theprovision of this Section. It prefaces with a non-obstante clause that the insurer may be entitled toavoid or cancel or may be avoided or cancelled thepolicy. Furthermore, the statute raises a legal fictionto the effect that for the said purpose, the insurerwould be deemed to be judgment debtor in respect of theliability of the insurer."15.On the question as to whether the insurer can avoid itsliability in the event if it raises as a defence, as envisaged underSection 149(2) of the 1988 Act, at Paragraph 34, the Supreme Court,has categorically held that,"It is beyond any doubt or dispute that underSection 149(2) of the Act an insurer, to whom notice ofthe bringing of any proceeding for compensation has beengiven, can defend the action or any of the groundsmentioned therein." 16.Recognising the difference between the words "effectivelicence" used in Section 3 of the Motor Vehicles Act and "dulylicenced" used in Section 149(2) of the Act, the Supreme Courtobserved that if the person does not hold effective licence, as onthe date of accident, he may be liable for prosecution in terms ofSection 181 of the Act, but since Section 149 pertains to insurance,as regards third party risk, the Apex Court, has categorically drawna distinction in the usage of the words in the abovesaid Sections,the different object and purpose and having regard to the nature ofthe social welfare legislation and introduction of the new Chapter,which deals with the insurance of the Motor accident against thethird party risk and the subsequent amendment to the Motor VehiclesAct, 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, atParagraph 37, the Apex Court, has made it clear as to how theprovision has to be construed and it is as follows:"A provision of a statute which is penal innature vis-a-vis a provision which is beneficent to athird party must be interpreted differently. It isalso well known that the provisions contained indifferent expressions are ordinarily construeddifferently."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 https://hcservices.ecourts.gov.in/hcservices/ 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 InsuranceCompanies, with a view to avoid their liability, the Apex Court, atparagraphs 42 to 45, held as follows:"42. Furthermore, the insurance company with aview to avoid its liabilities is not only required toshow that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required toestablish that there has been a breach on the part ofthe insured. By reason of the provisions contained inthe 1988 Act, a more extensive remedy has beenconferred upon those who have obtained judgment againstthe user of a vehicle and after a certificate ofinsurance is delivered in terms of Section 147(3) athird party has obtained a judgment against any personinsured by the policy in respect of a liabilityrequired to be covered by Section 146, the same must besatisfied by the insurer, notwithstanding that theinsurer may be entitled to avoid or to cancel thepolicy or may in fact have done so. The same obligationapplies in respect of a judgment against a person notinsured by the policy in respect of such a liability,but who would have been covered if the policy hadcovered the liability of all persons, except that inrespect of liability for death or bodily injury. 43. Such a breach on the part of the insurer mustbe established by the insurer to show that not only theinsured used or caused or permitted to be used thevehicle in breach of the Act but also that the damagehe suffered flowed from the breach. 44. Under the Motor Vehicles Act, holding of avalid driving licence is one of the conditions ofcontract of insurance. Driving of a vehicle without avalid licence is an offence. However, the questionherein is whether a third party involved in an accidentis entitled to the amount of compensation granted bythe Motor Accidents Claims Tribunal although the driverof the vehicle at the relevant time might not have avalid driving licence but would be entitled to recoverthe same from the owner or driver thereof. 45. It is trite that where the insurers relyingupon the provisions of violation of law by the assuredtakes an exception to pay the assured or a third party,they must prove a wilful violation of the law by the https://hcservices.ecourts.gov.in/hcservices/ assured. In some cases violation of criminal law,particularly, violation of the provisions of the MotorVehicles Act may result in absolving the insurers but,the same may not necessarily hold good in the case of athird party. In any event, the exception applies onlyto acts done intentionally or “so recklessly as todenote that the assured did not care what theconsequences of his act might be”. 19.Repeatedly, in most of the claim petitions, the InsuranceCompanies take up a defence that a contract of insurance falls withinthe realm of contract and thus, like in any other contract, theintention of the parties must be gathered from the expressions usedtherein. In most of the contracts of insurance, there is a specificcondition that the insured should not allow the vehicle to be drivenby a person, without a valid and effective driving licence andtherefore, if there is any breach of the terms and conditions of thecontract, which could be deduced from the policy, the Companies arenot 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 OrientalInsurance Co. Ltd., v. Samayanallur Primary Agricultural Co-op. Bankreported in AIR 2000 SC 10, at Paragraph 54 in Swaran Singh's case,the Supreme Court has made it clear that "The insurer's liabilityarises both from the contract as well as statute. It will,therefore, may not be proper to apply the rules for interpretation ofa contract for interpreting a statute."21.After referring to the decision in Skandia InsuranceCompany Ltd., v. Kokilaben Chandevadan and others reported in (1987)2 SCC 654 and the correctness thereof, questioned and that when thematter was referred to a Larger Bench of the Three Judges, in SohanLal Passi v. P.Sesh Reddy reported in 1996 (5) SCC 21 and Rukmani andOthers v. New India Assurance Co. Ltd., and others reported in 1999ACJ 171, at Paragraphs 62 to 64, held as follows:"62. The proposition of law is no longer resintegra that the person who alleges breach must provethe same. The insurance company is, thus, required toestablish the said breach by cogent evidence. In theevent, the insurance company fails to prove that therehas been breach of conditions of policy on the part ofthe insured, the insurance company cannot be absolvedof its liability. (See Sohan Lal Passi's case (supra) 63. Apart from the above, we do not intend to laydown anything further i.e. degree of proof which wouldsatisfy the aforementioned requirement in as much asthe same would indisputably depend upon the facts and https://hcservices.ecourts.gov.in/hcservices/ circumstances of each case. It will also depend uponthe terms of contract of insurance. Each case may posedifferent problem which must be resolved having to alarge number of factors governing the case includingconduct of parties as regard duty to inform, correctdisclosure, suppression, fraud on the insurer etc. Itwill also depend upon the fact as to who is the ownerof the vehicle and the circumstances in which thevehicle was being driven by a person having no validand effective licence. No hard and fast rule cantherefor be laid down. If in a given case there existssufficient material to draw an adverse inferenceagainst either the insurer or the insured, the Tribunalmay do so. The parties alleging breach must be held tohave succeeded in establishing the breach of conditionsof contract of insurance on the part of the insurer bydischarging its burden of proof. The Tribunal, therecannot be any doubt, must arrive at a finding on thebasis of the materials available on records. 64. In the aforementioned backdrop, the provisionsof sub-sections (4) and (5) of Section 149 of the MotorVehicles Act, 1988 may be considered as the liabilityof the Insurer to satisfy the decree at the firstinstance. "22.Having regard to the beneficent statute, which shouldreceive a liberal interpretation, the Supreme Court, at Paragraph 68of the judgment, has made it clear that the liability of the insureris statutory and he should satisfy the decree passed in favour of athird party.23.Taking note of the principles of law involved in Halsbury'sLaws of England and the decision of the Supreme Court in Sohan LalPassi's case, the Apex Court has further made it clear that theInsurance Company cannot shake off its liability to pay thecompensation only by saying that the at the relevant point of timethe vehicle was driven by a person having no licence. At Paragraph69, the Apex Court further added that,"Thus, where a liability has been established by ajudgment, it is not permissible to look beyond thedetermination in order to establish the basis of theliability."24.Considering the social need of the victim to be compensatedas enacted by Parliament, which was the subject matter in BritishIndia 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'scase, Kashiram Yadav v. Oriental Fire and Genl. Ins. Co. Ltd., [1989 https://hcservices.ecourts.gov.in/hcservices/ ACJ 1078 (SC)], Kamala's case, vis-a-vis., the submissions of thelearned counsel for the Insurance Companies that sub-Section (4) ofSection 149 deals with the situations, where the insurer in thepolicy purports to restrict the insurance of persons insured therebyby reference to any condition other than those in clause (b) of sub-Section (2) of Section 149 and in that view of the matter, noliability is covered for driving of a vehicle, without licence orfake licence, the Supreme Court, at Paragraphs 74 to 76, has observedas follows:".....The submission ignores the plain andunequivocal expression used in sub-section (2) ofSection 149 as well as the proviso appended thereto.With a view to construe a statute the scheme of the Acthas to be taken into consideration. For the saidpurpose the entire Act has to be read as a whole andthen chapter by chapter, section by section and word byword.75. Proviso appended to sub-section (4) of Section149 is referable only to sub-section (2) of Section 149of the Act. It is an independent provision and must beread in the context of Section 96(4) of the MotorVehicles Act, 1939. Furthermore, it is one thing to saythat the insurer will be entitled to avoid itsliability owing to breach of terms of a contract ofinsurance but it is another thing to say that thevehicle is not insured at all. If the submission of thelearned counsel for the petitioner is accepted, thesame would render the proviso to sub-section (4) aswell as sub-section (5) of Section 149 of the Actotiose, nor any effective meaning can be attributed tothe liability clause of the insurance company containedin 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 aliability on the insurer must also be given its fulleffect. The insurance company may not be liable tosatisfy the decree and, therefore, its liability may bezero but it does mean that it did not have initialliability at all. Thus, if the insurance company ismade liable to pay any amount, it can recover theentire amount paid to the third party on behalf of theassured. If this interpretation is not given to thebeneficent provisions of the Act having regard to itspurport and object, we fail to see a situation wherebeneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointedattention of the Court has been drawn by the learned https://hcservices.ecourts.gov.in/hcservices/ counsel for the petitioner, which is in negativelanguage may now be noticed. The said provision must beread with sub-section (1) thereof. The right to avoidliability in terms of sub-section (2) of Section 149 isrestricted as has been discussed hereinbefore. It isone thing to say that the insurance companies areentitled to raise a defence but it is another thing tosay that despite the fact that its defence has beenaccepted having regard to the facts and circumstancesof the case, the Tribunal has power to direct them tosatisfy the decree at the first instance and thendirect recovery of the same from the owner. These twomatters stand apart and require contextual reading."25.At Paragraph 77, the Supreme Court considered a case, whereadmittedly, no licence was obtained by a driver and it is as follows:"We have analysed the relevant provisions of thesaid Act in terms whereof a motor vehicle must be drivenby a person having a driving licence. The owner of amotor vehicle in terms of Section 5 of the Act has aresponsibility to see that no vehicle is driven exceptby a person who does not satisfy the provisions ofSection 3 or 4 of the Act. In a case, therefore, wherethe driver of the vehicle admittedly did not hold anylicence and the same was allowed consciously to bedriven by the owner of the vehicle by such person, theinsurer is entitled to succeed in its defence and avoidliability. The matter, however, may be different where adisputed question of fact arises as to whether thedriver had a valid licence or where the owner of thevehicle committed a breach of the terms of the contractof insurance as also the provisions of the Act byconsciously allowing any person to drive a vehicle whodid 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 amechanical 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 acase, when the person has been granted licence for one type ofvehicle, but at the relevant time of the accident, he was drivinganother type of vehicle, as follows:"81. Section 10 of the Act provides for forms andcontents of licences to drive. The licence has to begranted in the prescribed form. Thus, a licence todrive a light motor vehicle would entitle the holderthere to drive the vehicle falling within that class or https://hcservices.ecourts.gov.in/hcservices/ description.82. Section 3 of the Act casts an obligation on adriver to hold an effective driving licence for thetype of vehicle which he intends to drive. Section 10of the Act enables Central Government to prescribeforms of driving licences for various categories ofvehicles mentioned in sub-section (2) of said section.The various types of vehicles described for which adriver 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) motorvehicle of other specified description. The definitionclause in Section 2 of the Act defines variouscategories of vehicles which are covered in broad typesmentioned in sub-section (2) of Section 10. They are‘goods carriage’, ‘heavy-goods vehicle’, ‘heavypassenger motor-vehicle’, ‘invalid carriage’, ‘lightmotor-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 forcompensation for accidents, various kinds of breacheswith regard to the conditions of driving licences arisefor consideration before the Tribunal. A personpossessing a driving licence for ‘motorcycle withoutgear’, for which he has no licence. Cases may alsoarise where a holder of driving licence for ‘lightmotor 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, adecision has to be taken whether the fact of the driverpossessing licence for one type of vehicle but founddriving another type of vehicle, was the main orcontributory cause of accident. If on facts, it isfound that accident was caused solely because of someother unforeseen or intervening causes like mechanicalfailures and similar other causes having no nexus withdriver not possessing requisite type of licence, theinsurer will not be allowed to avoid its liabilitymerely for technical breach of conditions concerningdriving 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 ofthe petitioner that a fake or forged licence is as good https://hcservices.ecourts.gov.in/hcservices/ as no licence but the question herein, as noticedhereinbefore, is whether the insurer must prove thatthe owner was guilty of the wilful breach of theconditions of the insurance policy or the contract ofinsurance. In Lehru's case (supra), the matter has beenconsidered at some details. We are in general agreementwith the approach of the Bench but we intend to pointout that the observations made therein must beunderstood to have been made in the light of therequirements of law in terms whereof the insurer is toestablish wilful breach on the part of the insured andnot for the purpose of its disentitlement from raisingany defence or the owners be absolved from anyliability whatsoever. We would be dealing in somedetails with this aspect of the matter a little later."28.The case of Learner's Licence has been dealt with atParagraphs 86 and 87, which are as follows:"86. Motor Vehicles Act, 1988 provides for grantof 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 theprovisions of the said Act. It cannot, therefore, besaid that a vehicle when being driven by a learnersubject to the conditions mentioned in the licence, hewould not be a person who is not duly licensedresulting in conferring a right on the insurer to avoidthe claim of the third party. It cannot be said that aperson holding a learner's licence is not entitled todrive the vehicle. Even if there exists a condition inthe contract of insurance that the vehicle cannot bedriven by a person holding a learner's licence, thesame would run counter to the provisions of Section 149(2) of the said Act. 87. The provisions contained in the said Actprovide also for grant of driving licence which isotherwise a learner's licence. Section 3(2) and 6 ofthe Act provides for the restriction in the matter ofgrant of driving licence, Section 7 deals with suchrestrictions on granting of learner's licence. Section8 and 9 provide for the manner and conditions for grantof driving licence. Section 15 provides for renewal ofdriving licence. Learner's licences are granted underthe rules framed by the Central Gove rnment or theState Governments in exercise of their rule makingpower. Conditions are attached to the learner'slicences granted in terms of the statute. A personholding learner's licence would, thus, also come within https://hcservices.ecourts.gov.in/hcservices/ the purview of “duly licensed” as such a licence isalso granted in terms of the provisions of the Act andthe rules framed thereunder. It is now a well-settledprinciple of law that rules validly framed become partof the statute. Such rules are, therefore, required tobe read as a part of main enactment. It is also well-settled principle of law that for the interpretation ofstatute an attempt must be made to give effect to allprovisions under the rule. No provision should beconsidered as surplusage."29.Earlier, in Skandia Insurance Co. Ltd., v. Kokilabenreported in (1987) 2 SCC 654, a Two Judges Bench of the SupremeCourt, considered a question, whether the Insurance Company can avoidits liability to pay compensation, because the accident was caused bythe cleaner of the truck, who had no licence. At Paragraphs 12 to 14in Skandia's case (cited supra), the Supreme Court has elaboratelyconsidered the intention of the Legislature in engrafting Sections 96(2)(b)(ii) (now amended as Section 149(2)(b)(ii) of 1988 Act), whichare as follows:"12. The defence built on the exclusion clausecannot succeed for three reasons viz.: (1) On a true interpretation of the relevantclause which interpretation is at peace with theconscience of Section 96, the condition excludingdriving by a person not duly licensed is not absoluteand the promisor is absolved once it is shown that hehas-done everything in his power to keep, honour andfulfil the promise and he himself is not guilty of adeliberate breach. (2) Even if it is treated as an absolute promise,there is substantial compliance therewith upon anexpress or implied mandate being given to the licenseddriver not to allow the vehicle to be left unattendedso that it happens to be driven by an unlicenseddriver. (3) The exclusion clause has to be read down inorder that it is not at war with the ‘main purpose’ ofthe provisions enacted for the protection of victims ofaccidents so that the promisor is exculpated when hedoes everything in his power to keep the promise. 13.In order to divine the intention of thelegislature in the course of interpretation of therelevant provisions there can scarcely be a better testthan that of probing into the motive and philosophy of https://hcservices.ecourts.gov.in/hcservices/ the relevant provisions keeping in mind the goals to beachieved by enacting the same. Ordinarily it is not theconcern of the legislature whether the owner of thevehicle insures his vehicle or not. If the vehicle isnot insured any legal liability arising on account ofthird-party risk will have to be borne by the owner ofthe vehicle. Why then has the legislature insisted on aperson using a motor vehicle in a public place toinsure against third-party risk by enacting Section 94?Surely the obligation has not been imposed in order topromote the business of the insurers engaged in thebusiness of automobile insurance. The provision hasbeen inserted in order to protect the members of thecommunity travelling in vehicles or using the roadsfrom the risk attendant upon the user of motor vehicleson the roads. The law may provide for compensation tovictims of the accidents who sustain injuries in thecourse of an automobile accident or compensation to thedependents of the victims in the case of a fatalaccident. However, such protection would remain aprotection on paper unless there is a guarantee thatthe compensation awarded by the courts would berecoverable from the persons held liable for theconsequences of the accident. A court can only pass anaward or a decree. It cannot ensure that such an awardor decree results in the amount awarded being actuallyrecovered, from the person held liable who may not havethe resources. The exercise undertaken by the lawcourts would then be an exercise in futility. And theoutcome of the legal proceedings which by the verynature of things involve the time cost and money costinvested from the scarce resources of the communitywould make a mockery of the injured victims, or thedependents of the deceased victim of the accident, whothemselves are obliged to incur not inconsiderableexpenditure of time, money and energy in litigation. Toovercome this ugly situation the legislature has madeit obligatory that no motor vehicle shall be usedunless a third-party insurance is in force. To use thevehicle without the requisite third-party insurancebeing in force is a penal offence. The legislature wasalso faced with another problem. The insurance policymight provide for liability walled in by conditionswhich may be specified in the contract of policy. Inorder to make the protection real, the legislature hasalso provided that the judgment obtained shall not bedefeated by the incorporation of exclusion clausesother than those authorised by Section 96 and byproviding that except and save to the extent permittedby Section 96 it will be the obligation of the https://hcservices.ecourts.gov.in/hcservices/ insurance company to satisfy the judgment obtainedagainst the persons insured against third-party risk(vide Section 96). In other words, the legislature hasinsisted and made it incumbent on the user of a motorvehicle to be armed with an insurance policy coveringthird-party risks which is in conformity with theprovisions enacted by the legislature. It is soprovided in order to ensure that the injured victims ofautomobile accidents or the dependents of the victimsof fatal accidents are really compensated in terms ofmoney and not in terms of promise. Such a benignprovision enacted by the legislature having regard tothe fact that in the modern age the use of motorvehicles not with standing the attendant hazards, hasbecome an inescapable fact of life, has to beinterpreted in a meaningful manner which serves ratherthan defeats the purpose of the legislation. Theprovision has therefore to be interpreted in thetwilight of the aforesaid perspective.14. Section 96(2)(b)(ii) extends immunity to theinsurance company if a breach is committed of thecondition excluding driving by a named person orpersons or by any person who is not fully licensed, orby any person who has been disqualified for holding orobtaining a driving licence during the period ofdisqualification. The expression ‘breach’ is of greatsignificance. The dictionary meaning of ‘breach’ is‘infringement or violation of a promise or obligation’.It is therefore abundantly clear that the insurer willhave to establish that the insured is guilty of aninfringement or violation of a promise that a personwho is duly licensed will have to be in charge of thevehicle. The very concept of infringement or violationof the promise that the expression ‘breach’ carrieswithin itself induces an inference that the violationor infringement on the part of the promisor must be awilful infringement or violation. If the insured is notat all at fault and has not done anything he should nothave done or is not amiss in any respect how can it beconscientiously posited that he has committed a breach?It is only when the insured himself places the vehiclein charge of a person who does not hold a drivinglicence, that it can be said that he is ‘guilty’ of thebreach of the promise that the vehicle will be drivenby the licensed driver. It must be established by theinsurance company that the breach was on the part ofthe insured and that it was the insured who was guiltyof violating the promise or infringement of thecontract. Unless the insured is at fault and is' guilty https://hcservices.ecourts.gov.in/hcservices/ of a breach the insurer cannot escape from theobligation to indemnify the insured and successfullycontend that he is exonerated having regard to the factthat the promisor (the insured) committed a breach ofhis promise. Not when some mishap occurs by somemischance. When the insured has done everything withinhis power in as much as he has engaged a licenseddriver and has placed the vehicle in charge of alicensed driver, with the express or implied mandate todrive himself it cannot be said that the insured isguilty of any breach. And it is only in case of abreach or a violation of the promise on the part of theinsured that the insurer can hide under the umbrella ofthe exclusion clause.To construe the provision differently would be torewrite the provision by engrafting a rider to theeffect that in the event of the motor vehicle happeningto be driven by an unlicensed person, regardless of thecircumstances in which such a contingency occurs, theinsured will not be liable under the contract ofinsurance. It needs to be emphasised that it is not thecontract of insurance which is being interpreted. It isthe statutory provision defining the conditions ofexemption which is being interpreted. These musttherefore be interpreted in the spirit in which thesame have been enacted accompanied by an anxiety toensure that the protection is not nullified by thebackward-looking interpretation which serves to defeatthe provision rather than to fulfil its life aim. To dootherwise would amount to nullifying the benevolentprovision by reading it with a non-benevolent eye andwith a mind not tuned to the purpose and philosophy ofthe legislation without being informed of the truegoals sought to be achieved. What the legislature hasgiven, the court cannot deprive of by way of anexercise in interpretation when the view which rendersthe provision potent is equally plausible as the onewhich renders the provision impotent. In fact itappears that the former view is more plausible apartfrom the fact that it is more desirable. When theoption is between opting for a view which will relievethe distress and misery of the victims of accidents ortheir dependents on the one hand and the equal lyplausible view which will reduce the profitability ofthe insurer in regard to the occupational hazardundertaken by him by way of business activity, there ishardly any choice. The court cannot but opt for theformer view. Even if one were to make a strictlydoctrinaire approach, the very same conclusion would https://hcservices.ecourts.gov.in/hcservices/ 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’ doesnot cross swords with the ‘main purpose’ highlightedearlier. The effort must be to harmonize the twoinstead of allowing the exclusion clause to snipesuccessfully at the main purpose.” 30.In Sohan Lal Passi Vs. P.Sesh Reddy, reported in (1996) ACC617 (SC) = 1996 ACJ 1044 (SC) = 1996(5) SCC 21, a Three Judges Benchof the Supreme Court, considered a case wherein, a bus was driven bya cleaner, an employee of the owner, at the time of accident. Thecleaner did not have a valid licence. Being so, to avoid itsliability on the ground that there was a breach of section 96(2)(b)(ii) of the Motor Vehicles Act, 1939, inasmuch as the vehicle wasdriven by a person, who was not duly licensed, the Insurance Companyquestioned the correctness of the view taken in Skandia's case.Therefore, it was placed before a Three Judges Bench. Rejecting thecontention, the Supreme Court, at Paragraph 12, held as follows:"12. … on behalf of the insurance company, a standwas taken that when Section 96(2)(b)(ii) has providedthat the insurer shall be entitled to defend the actionon the ground that there has been breach of a specifiedcondition to the policy i.e. the vehicle should not bedriven by a person who is not duly licensed, then theinsurance company cannot be held to be liable toindemnify the owner of the vehicle. In other words, oncethere has been a contravention of the conditionprescribed in sub-section (2)(b)(ii) of Section 96, theperson insured shall not be entitled to the benefit ofsub-section (1) of Section 96. According to us, Section96(2)(b)(ii) should not be interpreted in a technicalmanner. Subsection (2) of Section 96 only enables theinsurance company to defend itself in respect of theliability to pay compensation on any of the groundsmentioned in sub-section (2) including that there hasbeen a contravention of the condition excluding thevehicle being driven by any person who is not dulylicensed. This bar on the face of it operates on theperson insured. If the person who has got the vehicleinsured has allowed the vehicle to be driven by a personwho is not duly licensed then only that clause shall beattracted. In a case where the person who has gotinsured the vehicle with the insurance company, hasappointed a duly licensed driver and if the accidenttakes place when the vehicle is being driven by a personnot duly licensed on the basis of the authority of thedriver duly authorised to drive the vehicle whether theinsurance company in that event shall be absolved from https://hcservices.ecourts.gov.in/hcservices/ its liability? The expression ‘breach’ occurring inSection 96(2)(b) means infringement or violation of apromise or obligation. As such the insurance companywill have to establish that the insured was guilty of aninfringement or violation of a promise. The insurer hasalso to satisfy the tribunal or the court that suchviolation or infringement on the part of the insured waswilful. If the insured has taken all precautions byappointing a duly licensed driver to drive, the vehiclein question and it has not been established that it wasthe insured who allowed the vehicle to be driven by aperson not duly licensed, then the insurance companycannot repudiate its statutory liability under sub-section (1) of Section 96. In the present case far fromestablishing that it was the appellant who had allowedRajinder Pal Singh to drive the vehicle when theaccident took place, there is not even any allegationthat it was the appellant who was guilty of violatingthe condition that the vehicle shall not be driven by aperson not duly licensed. From the facts of the case itappears that the appellant had done everything withinhis power in as much as he has engaged a licensed driverGurbachan Singh and had placed the vehicle in hischarge. While interpreting the contract of insurance,the tribunals and courts have to be conscious of thefact that right to claim compensation by heirs and legalrepresentatives of the victims of the accident is notdefeated on technical grounds. Unless it is establishedon the materials on record that it was the insured whohad wilfully violated the condition of the policy byallowing a person not duly licensed to drive the vehiclewhen the accident took place, the insurer shall bedeemed to-be a judgment-debtor in respect of theliability in view of sub-section (1) of Section 96 ofthe Act. It need not be pointed out that the wholeconcept of getting the vehicle insured by an insurancecompany is to provide an easy mode of gettingcompensation by the claimants, otherwise in normalcourse they had to pursue their claim against the ownerfrom one forum to the other and ultimately to executethe order of the Accidents Claims Tribunal forrealisation of such amount by sale of properties of theowner of the vehicle. The procedure and result of theexecution of the decree is-well known."31.In the abovesaid case, the Supreme Court on facts foundthat the owner of the vehicle had engaged a licenced driver. TheSupreme Court further observed that while interpreting the contractof insurance, the Tribunals and Courts have to be conscious of thefact that right to claim compensation by heirs and legal https://hcservices.ecourts.gov.in/hcservices/ representatives of the victims should not defeated on technicalgrounds, unless it is established on material on record that it wasthe insured who had wilfully violated the condition of the policy byallowing a person not duly licenced to drive a vehicle when theaccident took place.32.In the above judgment, the Supreme Court also took note ofanother decision made earlier in Kashiram Yadav Vs. Oriental Fire andGeneral 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 undisputedlyentrusted to the driver who had a valid licence. Intransit the driver stopped the vehicle and went to fetchsome snacks from the opposite shop leaving the engineon. The ignition key was at the ignition lock and not inthe cabin of the truck. The driver had asked the cleanerto take care of the truck. In fact the driver had leftthe truck in care of the cleaner. The cleaner meddledwith the vehicle and caused the accident. The questionarose whether the insured (owner) had committed a breachof the condition incorporated in the certificate ofinsurance since the cleaner operated the vehicle on thefatal occasion without driving licence. This Courtexpressed the view that it is only when the insuredhimself entrusted the vehicle to a person who does nothold a driving licence, he could be said to havecommitted breach of the condition of the policy. It mustbe established by the Insurance Company that the breachis on the part of the insured. Unless the insured is atfault and is guilty of a breach of the condition, theinsurer cannot escape from the obligation to indemnifythe insured. It was also observed that when the insuredhas done everything within his power inasmuch as he hasengaged the licensed driver and has placed the vehiclein his charge with the express or implied mandate todrive himself, it cannot be said that the insured isguilty of any breach.We affirm and reiterate the statement of law laiddown in the above case. We may also state that withoutthe knowledge of the insured, if by driver's acts oromission others meddle with the vehicle and cause anaccident, the insurer would be liable to indemnify theinsured. The insurer in such a case cannot take thedefence of a breach of the condition in the certificateof insurance." https://hcservices.ecourts.gov.in/hcservices/

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 Benchof the Supreme Court held that it is legally obligatory on theinsurer to satisfy the award, in respect of a third party risk. AtParagraph 7, held as follows:"7. Sections 146, 147, 149 and 173 are in thescheme of the Act and when read together mean: (1) itis legally obligatory to insure the motor vehicleagainst third-party risk. Driving an uninsured vehicleis an offence punishable with an imprisonment extendingup to three months or fine which may extend to Rs 1000or both; (2) policy of insurance must comply with therequirements as contained in Section 147 of the Act;(3) it is obligatory for the insurer to satisfy thejudgments and awards against the person insured inrespect of third-party risks. These are sub-sections(1) and (7) of Section 149. Grounds on which theinsurer can avoid his liability are given in sub-section (2) of Section 149."34. In New India Assurance Company Ltd., Shimla, Vs. Kamla andothers, reported in 2001 (4) SCC 342, a Two Judges Bench of theSupreme Court considered a case, as to whether the insurance companyis liable to pay compensation to a third party and at paragraphs 16to 23 and 25, summed up as follows:-"16. Chapter XI of the Act contains provisions forinsurance 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 ofa motor vehicle in a public place unless the vehicle iscovered by a policy of insurance complying with therequirements enumerated in the Chapter. Some categories ofvehicles are exempted from the aforesaid compulsion, but weare not concerned with any such category now.17. The details regarding the requirements of thepolicy including the limits of liability to be insured areenumerated in Section 147. Sub-section (3) of it statesthat a policy shall be of no effect for the purposes ofthat Chapter unless and until a certificate of insurance isissued by the insurer in the prescribed form in favour ofthe insured. It is in Section 149 that provisions, relatingto the duty of the insurer for satisfying the judgments andawards in respect of third-party claims, are incorporated.Sub-section (1) says that the insurer shall pay to theperson entitled to the benefit of a judgment or award as ifthe insurer were the judgment-debtor in respect of theliability, when any such judgment or award is obtained https://hcservices.ecourts.gov.in/hcservices/ against the insured in whose favour a certificate ofinsurance has been issued. Of course, the said liability ofthe insurer is subject to the maximum sum assured payableunder the policy.18. Section 149(2) of the Act says that noticeregarding the suit or other legal proceedings shall begiven to the insurer if such insurer is to be fastened withsuch liability. The purpose of giving such notice is toafford the insurer to be made a party in the proceedingsfor defending the action on any one of the groundsmentioned in the sub-section. Among the multiplicity ofsuch grounds the one which is relevant in this case isextracted below:“149. (2)(a) that there has been a breach of aspecified condition of the policy, being one of thefollowing conditions, namely—(ii) a condition excluding driving by a named personor persons or by any person who is not duly licensed, or byany person who has been disqualified for holding orobtaining a driving licence during the period ofdisqualification;”19. Sub-section (4) of Section 149 of the Act saysthat so much of the policy as purports to restrict theinsurance of the person insured by reference to anycondition shall “as respects such liabilities as arerequired to be covered by a policy ..., be of no effect”.The proviso to the said sub-section is important for thepurpose of considering the question involved in this caseand hence that proviso is extracted below:“Provided that any sum paid by the insurer in ortowards the discharge of any liability of any person whichis covered by the policy by virtue only of this sub-sectionshall be recoverable by the insurer from that person.”20. Similarly, in this context sub-section (5) isequally important and hence that is also extracted below:“149. (5) If the amount which an insurer becomesliable under this section to pay in respect of a liabilityincurred by a person insured by a policy exceeds the amountfor which the insurer would apart from the provisions ofthis section be liable under the policy in respect of thatliability, the insurer shall be entitled to recover theexcess from that person.” https://hcservices.ecourts.gov.in/hcservices/

21. A reading of the proviso to sub-section (4) aswell as the language employed in sub-section (5) wouldindicate that they are intended to safeguard the interestof an insurer who otherwise has no liability to pay anyamount to the insured but for the provisions contained inChapter XI of the Act. This means, the insurer has to payto the third parties only on account of the fact that apolicy of insurance has been issued in respect of thevehicle, but the insurer is entitled to recover any suchsum from the insured if the insurer were not otherwiseliable to pay such sum to the insured by virtue of theconditions of the contract of insurance indicated by thepolicy.22. To repeat, the effect of the above provisions isthis: when a valid insurance policy has been issued inrespect of a vehicle as evidenced by a certificate ofinsurance the burden is on the insurer to pay to the thirdparties, whether or not there has been any breach orviolation of the policy conditions. But the amount so paidby the insurer to third parties can be allowed to berecovered from the insured if as per the policy conditionsthe insurer had no liability to pay such sum to the insured.25. The position can be summed up thus: The insurerand insured are bound by the conditions enumerated in thepolicy and the insurer is not liable to the insured ifthere is violation of any policy condition. But the insurerwho is made statutorily liable to pay compensation to thirdparties on account of the certificate of insurance issuedshall be entitled to recover from the insured the amountpaid to the third parties, if there was any breach ofpolicy conditions on account of the vehicle being drivenwithout a valid driving licence. Learned counsel for theinsured contended that it is enough if he establishes thathe made all due enquiries and believed bona fide that thedriver employed by him had a valid driving licence, inwhich case there was no breach of the policy condition. Aswe have not decided on that contention it is open to theinsured to raise it before the Claims Tribunal. In thepresent case, if the Insurance Company succeeds inestablishing that there was breach of the policy condition,the Claims Tribunal shall direct the insured to pay thatamount to the insurer. In default the insurer shall beallowed to recover that amount (which the insurer isdirected to pay to the claimants - third parties) from theinsured person." https://hcservices.ecourts.gov.in/hcservices/

35.In Lakshmi and seven others, Vs. The National InsuranceCompany 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, thedriver did not possess any driving licence, the Company has to beexonerated. Placing reliance on New India Assurance Company v. Kamlareported in 2001 (3) LW 421 and M/s.National Insurance CompanyLimited v. Sakthi reported in 2001 (3) LAW 367, this Court held asfollows:-“It is clear that insofar as the third parties areconcerned, the insurer, namely, the Insurance Company hasto pay and settle the claim on account of the policy ofinsurance which has been issued in respect of the vehicleand the insurance company is entitled to recover such sumfrom the owner of the vehicle, the insured, if theinsurance company was not otherwise liable to pay such sumto the insured by virtue of the conditions of the contractof insurance indicated in the policy.”36.In United India Insurance Company Ltd., Vs. Lehru andothers, reported in 2003 (3) SCC 338, wherein, the insurance companysought for a prayer to avoid its liability, on the ground that thelicence of the driver of the car was a fake licence. Though aquestion whether the insurance company can avoid its liability to athird party, involved in the accident was no longer res integra andcovered by decisions, having regard to the large number of matters onthe issue, the Supreme Court restated the legal position regardingthe liability of the insurance company to pay compensation to thirdparties. While doing so, the Supreme Court, at paragraph No.12,explained the importance of insuring a vehicle against the thirdparty claims, and the need to provide compensation to third parties.At paragraph No.13, a Two Judges Bench of the Supreme Court, held asfollows:-"13. Thus Section 96 has been interpreted keepingin mind the object and purpose of the legislature inproviding for compulsory insurance. It has been heldthat the insurance company gets absolved of itsliability only if it establishes that the breach is bythe insured. It is held that if the insured is not atfault and has not done anything he should not havedone or is not amiss, then he cannot be held to havecommitted a breach. 37.On the facts of the above case, while observing that thelicence of the driver was a fake licence, referring to SkandiaInsurance Co. Ltd., v. Kokilaben reported in (1987) 2 SCC 654, SohanLal Passi v. P.Sesh reported in 1996 (5) SCC 21 and Kashiram Yadav v. https://hcservices.ecourts.gov.in/hcservices/ Oriental Fire and General Insurance Co., reported in 1989 (4) SCC 654and 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 notcorrectly decided. It is submitted that sub-section (7)of Section 149 of the Motor Vehicles Act, 1988 has notbeen noticed by this Court in Kamla case. We see nosubstance in this submission. A plain reading ofSection 149 would show that an insurance company wouldcontinue to be liable to third persons.Thus under sub-section (1) the insurance companymust pay to the person entitled to the benefit of thedecree, notwithstanding that it has become “entitledto avoid or cancel or may have avoided or cancelledthe policy”. The words “subject to the provisions ofthis section” mean that the insurance company can getout of the liability only on grounds set out inSection 149. Sub-section (7), which has been reliedon, does not state anything more or give any higherright to the insurance company. On the contrary, thewording of sub-section (7) viz. “no insurer to whomthe notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoidhis liability” indicates that the legislature wantedto clearly indicate that insurance companies must payunless they are absolved of liability on a groundspecified in sub-section (2). This is further clearfrom sub-section (4) which mandates that conditions,in the insurance policy, which purport to restrictinsurance would be of no effect if they are not of thenature specified in sub-section (2). The proviso tosub-section (4) is very illustrative. It shows thatthe insurance company has to pay to third parties butit may recover from the person who was primarilyliable to pay. The liability of the insurance companyto pay is further emphasised by sub-section (5). Thisalso shows that the insurance company must first pay,then it can recover. If Section 149 is read as a wholeit is clear that sub-section (7) is not giving anyadditional right to the insurance company. On thecontrary it is emphasising that the insurance companycannot avoid liability except on the limited groundsset out in sub-section (2).18. Now let us consider Section 149(2). Reliancehas been placed on Section 149(2)(a)(ii). As seen, inorder to avoid liability under this provision it must https://hcservices.ecourts.gov.in/hcservices/ be shown that there is a “breach”. As held in Skandiaand Sohan Lal Passi cases the breach must be on thepart of the insured. We are in full agreement withthat. 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 anaccident. The thief is caught and it is ascertainedthat he had no licence. Can the insurance companydisown liability? The answer has to be an emphatic“No”. To hold otherwise would be to negate the verypurpose of compulsory insurance. The injured orrelatives of the person killed in the accident mayfind that the decree obtained by them is only a paperdecree as the owner is a man of straw. The ownerhimself would be an innocent sufferer. It is for thisreason that the legislature, in its wisdom, has madeinsurance, at least third-party insurance, compulsory.The aim and purpose being that an insurance companywould be available to pay. The business of the companyis insurance. In all businesses there is an element ofrisk. All persons carrying on business must take risksassociated with that business. Thus it is equitablethat the business which is run for making profits alsobears the risk associated with it. At the same timeinnocent parties must not be made to suffer or loss.These provisions meet these requirements. We are thusin agreement with what is laid down in theaforementioned cases viz. that in order to avoidliability it is not sufficient to show that the persondriving at the time of accident was not duly licensed.The insurance company must establish that the breachwas on the part of the insured.19. Section 3 of the Motor Vehicles Act, 1988prohibits driving of a motor vehicle in any publicplace unless the driver has an effective drivinglicence. Further, Section 180 of the Motor VehiclesAct makes an owner or person in charge of a motorvehicle punishable with imprisonment or fine if hecauses or permits a person without a licence to drivethe vehicle. It is clear that the punishment underSection 180 can only be imposed if the owner or personin charge of the vehicle “causes or permits” drivingby a person not duly licensed. Thus there can be nopunishment if a person without a licence driveswithout permission of the owner. Section 149(2)(a)(ii)merely recognises this condition. It therefore onlyabsolves the insurance company where there is a breachby the insured. https://hcservices.ecourts.gov.in/hcservices/

20. When an owner is hiring a driver he willtherefore have to check whether the driver was adriving licence. If the driver produces a drivinglicence which on the face of it looks genuine, theowner is not expected to find out whether the licencehas in fact been issued by a competent authority ornot. The owner should then take the test of the driver.If he find that the driver is competent to drive thevehicle, he will hire the driver. We find it ratherstrange that Insurance Companies expect owners to makeenquiries with RTO's, which are spread all over thecountry, whether the driving licence shown to them isvalid or not. Thus where the owner has satisfiedhimself that the driver has a licence and is drivingcompetently there would be no breach of Section 149(2)(a)(ii). The Insurance Company would not then be aboveof liability. If it ultimately turns out that thelicence was fake the Insurance Company would continueto remain liable unless they prove that theowner/insured was aware or had notice that the licencewas fake and still permitted that person to drive. Moreimportantly even in such a case the Insurance Companywould remain liable to the innocent third party, but itmay be able to recover from the insured. This is thelaw which has been laid down in Skiandia's Sohan LalPassi's and Kamla's case We are in full agreement withthe views expressed therein and see no reason to take adifferent view."38.Reverting back to Swaran Singh's case, rejecting thecontentions of the Insurance Companies that there was a conflict ofdecisions in the Supreme Court and clarifying the decision made inLehru's case (cited supra), that the insurer can raise a defence thatthe licence is fake, the Supreme Court in Swaran Singh's case (citedsupra), has reiterated that it would be for the insurer to prove thatthe insured did not take adequate care and caution to verify thegenuineness or otherwise of the licence held by the driver. Whilesumming up, the Supreme Court, at 96, the Supreme Court, held that,"It is, therefore, evident from the discussionsmade hereinbefore that the liability of the insurancecompany to satisfy the decree at the first instance andto recover the awarded amount from the owner or driverthereof 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, 1988providing compulsory insurance of vehicles against third https://hcservices.ecourts.gov.in/hcservices/ party risks is a social welfare legislation to extendrelief by compensation to victims of accidents caused byuse of motor vehicles. The provisions of compulsoryinsurance coverage of all vehicles are with thisparamount object and the provisions of the Act have tobe so interpreted as to effectuate the said object. (ii) Insurer is entitled to raise a defence in aclaim petition filed under Section 163A or Section 166of the Motor Vehicles Act, 1988 inter alia in terms ofSection 149(2)(a)(ii) of the said Act.(iii) The breach of policy condition e.g.,disqualification of driver or invalid driving licence ofthe driver, as contained in sub-section (2)(a)(ii) ofsection 149, have to be proved to have been committed bythe insured for avoiding liability by the insurer. Mereabsence, fake or invalid driving licence ordisqualification of the driver for driving at therelevant time, are not in themselves defences availableto the insurer against either the insured or the thirdparties. To avoid its liability towards insured, theinsurer has to prove that the insured was guilty ofnegligence and failed to exercise reasonable care in thematter of fulfilling the condition of the policyregarding use of vehicles by duly licensed driver or onewho was not disqualified to drive at the relevant time. 40.As regards the question, as to who has to prove that at thetime of accident, whether the driver was duly licenced or not, toavoid the liability of the insurer and whether there was any breachon the part of the insured, whether the breach or breaches of theconditions of driving licence, is/are so fundamental to havecontributed to the accident, the Apex Court held that,(iv) The insurance companies are, however, with aview to avoid their liability must not only establishthe available defence(s) raised in the said proceedingsbut must also establish ‘breach’ on the part of theowner of the vehicle; the burden of proof wherefor wouldbe on them. (v) The court cannot lay down any criteria as tohow said burden would be discharged, in as much as thesame would depend upon the facts and circumstance ofeach case.(vi) Even where the insurer is able to prove breachon the part of the insured concerning the policycondition regarding holding of a valid licence by the https://hcservices.ecourts.gov.in/hcservices/ driver or his qualification to drive during the relevantperiod, the insurer would not be allowed to avoid itsliability towards insured unless the said breach orbreaches on the condition of driving licence is/are sofundamental as are found to have contributed to thecause of the accident. The Tribunals in interpreting thepolicy conditions would apply “the rule of main purpose”and the concept of “fundamental breach” to allowdefences available to the insured under section 149(2)of the Act. (vii) The question as to whether the owner hastaken reasonable care to find out as to whether thedriving licence produced by the driver, (a fake one orotherwise), does not fulfil the requirements of law ornot will have to be determined in each case. (viii) If a vehicle at the time of accident wasdriven by a person having a learner's licence, theinsurance companies would be liable to satisfy thedecree. (ix) The claims tribunal constituted under Section165 read with Section 168 is empowered to adjudicate allclaims in respect of the accidents involving death or ofbodily injury or damage to property of third partyarising in use of motor vehicle. The said power of thetribunal is not restricted to decide the claims inter sebetween claimant or claimants on one side and insured,insurer and driver on the other. In the course ofadjudicating the claim for compensation and to decidethe availability of defence or defences to the insurer,the Tribunal has necessarily the power and jurisdictionto decide disputes inter se between insurer and theinsured., The decision rendered on the claims anddisputes inter se between the insurer and insured in thecourse of adjudication of claim for compensation by theclaimants and the award made thereon is enforceable andexecutable in the same manner as provided in Section 174of the j Act for enforcement and execution of the awardin favour of the claimants. (x) Where on adjudication of the claim under theAct the tribunal arrives at a conclusion that theinsurer has satisfactorily proved its defence inaccordance with the provisions of section 149(2) readwith sub-section (7), as interpreted by this Courtabove, the Tribunal can direct that the insurer isliable to be reimbursed by the insured for thecompensation and other amounts which it has been https://hcservices.ecourts.gov.in/hcservices/ compelled to pay to the third party under the award ofthe tribunal. Such determination of claim by theTribunal will be enforceable and the money found due tothe insurer from the insured will be recoverable on acertificate issued by the tribunal to the Collector inthe same manner under Section 174 of the Act as arrearsof land revenue. The certificate will be issued for therecovery as arrears of land revenue only if, as requiredby sub-section (3) of Section 168 of the Act the insuredfails to deposit the amount awarded in favour of theinsurer within thirty days from the date of announcementof the award by the tribunal. (xi) The provisions contained in sub-section (4)with proviso thereunder and sub-section (5) which areintended to cover specified contingencies mentionedtherein to enable the insurer to recover amount paidunder the contract of insurance on behalf of the insuredcan be taken recourse of by the Tribunal and be extendedto claims and defences of insurer against insured byrelegating them to the remedy before regular court incases where on given facts and circumstancesadjudication of their claims inter se might delay theadjudication of the claims of the victims."41.In Oriental Insurance Co. Ltd., v. Meena Variyal reportedin 2007 ACJ 1284, the Insurance Company disputed the claim, on theground that the deceased himself had driven the vehicle and causedthe accident and therefore, the company was not liable to paycompensation. The claimant was not a third party. While dealingwith the liability of the Insurance Company under the contract ofinsurance, a Two Judges Bench of the Supreme Court, at Paragraphs 9to 11, held as follows:"It may be true that the Motor Vehicles Act,insofar as it relates to claims for compensationarising out of accidents, is a beneficent piece oflegislation. It may also be true that subject to therules made in that behalf, the Tribunal may follow asummary procedure in dealing with a claim. That doesnot mean that a Tribunal approached with a claim forcompensation under the Act should ignore all basicprinciples of law in determining the claim forcompensation. Ordinarily, a contract of insurance is acontract of indemnity. When a car belonging to anowner is insured with the insurance company and it isbeing driven by a driver employed by the insured, whenit meets with an accident, the primary liability underlaw for payment of compensation is that of the driver. https://hcservices.ecourts.gov.in/hcservices/ Once the driver is liable, the owner of the vehiclebecomes vicariously liable for payment ofcompensation. It is this vicarious liability of theowner that is indemnified by the insurance company. Athird party for whose benefit the insurance is taken,is therefore entitled to show, when he moves underSection 166 of the Motor Vehicles Act, that the driverwas negligent in driving the vehicle resulting in theaccident; that the owner was vicariously liable andthat the insurance company was bound to indemnify theowner and consequently, satisfy the award made.10.Chapter XI of the Act bears a heading,“Insurance of Motor Vehicles against third partyrisks”. The definition of “third party” is aninclusive one since Section 145(g) only indicates that“third party” includes the Government. It is Section146 that makes it obligatory for an insurance to betaken out before a motor vehicle-could be used on theroad. The heading of that Section itself is “Necessityfor insurance against third party risk”. No doubt, themarginal heading may not be conclusive. It is Sec tion147 that sets out the requirement of policies andlimits of liability. It is provided therein that inorder to comply with the requirements of Chapter XI ofthe Act, a policy of insurance must be a policy whichis issued by an authorised insurer; or which insuresthe person or classes of persons specified in thepolicy to the extent specified in sub-section (2)against any liability which may be incurred by theowner in respect of the death of or bodily injury ordamage to any property of a third party caused by orarising out of the use of the vehicle in a publicplace. 11. The object of the insistence on insuranceunder Chapter XI of the Act thus seems to be tocompulsorily cover the liability relating to theirperson or properties of third parties and in respectof employees of the insured employer, the liabilitythat may arise under the Workmen's Compensation Act,1923 in respect of the driver, the conductor and theone 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 nofinding that Mahmood Hasan, another employee of theowner was driving the vehicle. Even if he was, there isno finding of his negligence. The victim was the https://hcservices.ecourts.gov.in/hcservices/ Regional Manger of the Company that owned the car. Hewas using the car given to him by the Company for use.Whether he is treated as the owner of the vehicle or asan employee, he is not covered by the insurance policytaken in terms of the Act -- without any specialcontract -- since there is no award under the Workmen'sCompensation Act that is required to be satisfied bythe insurer. In these circumstances, we hold that theappellant - Insurance Company is not liable toindemnify the insured and is also not obliged tosatisfy the award of the Tribunal/Court and then haverecourse to the insured, the owner of the vehicle. TheHigh Court was in error in modifying the award of theTribunal 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 thecorrectness of the impugned judgments of various Courts, holding thatthe principles laid down in Swaran Singh's case (cited supra), arenot applicable even to claims other than third party claims. Afterconsidering the relevant provisions, in particular, Section 149 ofthe Motor Vehicles Act, and the Indian Law on Motor Vehicles, withreference to third party claims, a Two Judges Bench of the SupremeCourt 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". Asignificant factor which needs to be noticed is that thereis no contractual relation between the insurance companyand the third party. The liabilities and the obligationsrelatable to third parties are created only by fiction ofSections 147 and 149 of the Act. 17. The primary stand of the insurance company is thatthe person driving the vehicle did not have a valid drivinglicense. In Swaran Singh's case (supra) the followingsituations 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 ithad expired as on the date of the accident and had not beenrenewed;(iv) the license was for a class of vehicles otherthan that which was the insured vehicle;(v) the license was a learner's license. Category (i)may cover two types of situations. First, the licenseitself was fake and the second is where originally thatlicense is fake but there has been a renewal subsequentlyin accordance with law. https://hcservices.ecourts.gov.in/hcservices/

18. Chapter II contains Sections 3, 4 and 5 of theAct relating to licensing of drivers driving the motorvehicles. 19.Where the claim relates to own damage claims, itcannot be adjudicated by the insurance company. But it hasto be decided by an other forum i.e. forum created underthe Consumer Protection Act, 1985 (in short the 'CP Act').Before the Tribunal, there were essentially three partiesi.e. the insurer, insured and the claimants. On thecontrary, before the consumer forums there were two partiesi.e. owner of the vehicle and the insurer. The claimantdoes not come in to the picture. Therefore, these are caseswhere there is no third party involved. 20.............21.As noted above, there is no contractual relationbetween the third party and the insurer. Because of thestatutory intervention in terms of Section 149, the samebecomes operative in essence and Section 149 providescomplete insulation. 22.In the background of the statutory provisions,one thing is crystal clear i.e. the statute is beneficialone qua the third party. But that benefit cannot beextended to the owner of the offending vehicle. The logicof fake license has to be considered differently in respectof third party and in respect of own damage claims. 37.As noted above, the conceptual difference betweenthird party right and own damage cases has to be kept inview. Initially, the burden is on the insurer to prove thatthe license was a fake one. Once it is established thenatural consequences have to flow. 38.In view of the above analysis the followingsituations emerge:1. The decision in Swaran Singh's case (supra) has noapplication to cases other than third party risks. 2. Where originally the license was a fake one, renewalcannot cure the inherent fatality. 3 In case of third party risks the insurer has to indemnifythe amount and if so advised to recover the same from theinsured. https://hcservices.ecourts.gov.in/hcservices/

4. The concept of purposive interpretation has noapplication to cases relatable to Section 149 of the Act. 39.The High Courts/Commissions shall now considerthe matter afresh in the light of the position in law asdelineated above."43.In National Insurance Co.Ltd., Vs. Renuka Saha and others,reported in 2010 (1) TN MAC (DB) 617 (Cal), one of the contentionsraised by the National Insurance Company Ltd., was that the Tribunalhas no jurisdiction to make payment of any sum beyond the limitmentioned in Section 149(1) of the Act, i.e., "being a sum notexceeding the sum assured payable thereunder" and for this purpose,the Tribunal had a duty to first adjudicate what was the sum assuredunder the policy and since the said exercise was not done, the awardpassed by the claims Tribunal was wholly without jurisdiction. Insum and substance, the contention was that the liability of theinsurance company in respect of compensation payable for the death orbodily injury or damage to any property of the third parties is notunlimited. A cross objection was also filed by the claimants forenhancement. While adjudicating the abovesaid issue, the DivisionBench of Calcutta High Court, at paragraph No.33, held as follows:-"33. On a plain reading of the aforesaid twoSections of the Act, it is clear that so far as theliability of the Insurer towards the injury caused tothe third party is concerned, once it is establishedfrom the evidence that there exists a valid InsurancePolicy taken by the insured owner of the vehicle interms of the Act whose conditions have not beenviolated by the insured, the statutory liability of theinsurer is fixed by the Act itself as indicated below: (1) As regards its liability to paycompensation for the damage caused to theproperty of the third party due to negligence ofthe driver of the insured vehicle is concerned,it is not unlimited but is restricted to theamount specified in sub-section (b) of Section147(2) of the Act. (2) However, in case of compensation for thedeath or bodily injury of a third partytravelling as a passenger in the insured vehicledue to the accident for the negligence of itsdriver, if such third party happens to be anemployee of the insured and the death occurred orthe bodily injury sustained due to an accident incourse of his employment, the statutory liability https://hcservices.ecourts.gov.in/hcservices/ of the Insurer will be restricted to the amountpayable by the employer as specified in theWorkmen's Compensation of Act, 1923 to suchemployee and the excess balance amount payableunder the general law of compensation as fixed bythe decree or award is payable by the owner ofthe vehicles. (3) However, if the victim does not happento be one of the classes of passenger specifiedin the policy of the vehicle insured or does notcome within the purview of Section 147(1)(b) ofthe Act, the Insurer has no liability to make anycompensation as those types of persons aregratuitous passengers. (4) In case of compensation payable for thebodily injury or the death of any third party whois not a passenger of the said vehicle or who isnot an employee involved in the accident incourse of his employment as mentioned above, ifthe injury sustained or the death occurred due tothe fault of the driver of the offending insuredvehicle, the liability of the Insurer will beunlimited to the extent of the “liabilityincurred by the insured” as fixed by the judgmentor award as provided in Section 147(2)(a) of theAct. (5) The aforesaid principles will beapplicable also to the proceedings under Section163-A of the Act with this difference that theclaimants in such a situation will be entitled toget compensation even if there no fault of thedriver of the insured vehicle provided howeverthat the annual income of the victim did notexceed Rs. 40,000/-. The amount of compensationin such a proceeding will be determined inaccordance with the Second Schedule of the Actsubject to such modification as indicated by theApex Court in various decisions which have sincebecome the law of the land by virtue of Article141 of the Constitution of India. In all thecircumstances mentioned above, there may bespecial contract between the insured and theInsurer stipulating indemnification of theliability of the insured in excess of the amountof the statutory liability provided in the Act oreven in respect of the classes of passengers inaddition to those classes mentioned in Section https://hcservices.ecourts.gov.in/hcservices/ 147(1)(b) of the Act to whom the Insurer owes nostatutory liability fixed by the Act. (6) Even if the Insurer is successful inproving breach of the conditions of insurance asprovided in Section 149(2)(a)(ii) of the Act, ithas the duty to satisfy the award at the firstinstance and then to recover the amount from theinsured and for that purpose, the principles andthe guidelines indicated by the Apex Court in thecase of National Insurance Company Ltd v. SwaranSingh , 2004 (1) TN MAC 104 (SC): AIR 2004 SC1531." 44.The Bench judgments of this Court regarding non-possessionof 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 claimedcompensation. The Insurance Company disputed the liability to paycompensation, on the ground that the motorcyclist, who caused theaccident, did not possess a licence. The Tribunal passed an awardagainst the insurer. On behalf of the Insurance Company, an Officerof the Company was examined as RW.1 and he produced copy of theletters, as well as the returned covers, Exs.R1 to R4. It was alsocontended that the Traffic Police, after verification andinvestigation, charge sheeted the rider of the motorcycle, underSections 304A IPC, Section 184, 134A & B, 177 and 158 of the MotorVehicles Act, for rash and negligent driving as well as failure toproduce the driving licence. Upon considering the abovesaid documentsand the contention of the insurer that they had discharged theirburden, the Tribunal passed an award, only against the owner of themotorcycle. Being aggrieved by the same, the legal representatives,stated supra, filed an appeal before this Court, seeking for adirection to fix liability on the Insurance Company, as well as forhigher compensation. Adverting to the abovesaid facts, a DivisionBench of this Court, at Paragraph 8, held as follows:"8.It is true that the Insurance Company had sentnotice calling upon the rider of the motorcycle forproduction of driving licence. However, a perusal of theimpugned proceedings show that no steps have been taken toverify the records from the concerned authority, viz.,Regional Transport Authority to show that the rider of themotorcycle was having a valid licence or not. In theabsence of any such effort by taking summons to theconcerned authority, we are of the view that the InsuranceCompany 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, https://hcservices.ecourts.gov.in/hcservices/ other High Courts and Supreme Court."46.From the above, it could be seen that though the Company hadpleaded that notices have been sent to the rider of the motorcyclist,for production of licence, but when no efforts were taken by theCompany to verify from the Office of the Regional Transport Office, bytaking steps to summon the concerned authority, the Bench held thatthe Company has failed to discharge its burden and ultimately, setaside the judgment of the Tribunal and made the Company liable to paycompensation to the third party/claimants.47.In National Insurance Company Ltd., v. Samiyathal reportedin 2003 (1) LW 539, for the death of 'X', wife and children preferreda claim. The Insurance Company contended that the driver of theoffending vehicle insured with them, did not possess a valid drivinglicence on the date of accident and therefore, the Tribunal committedan error, fastening liability on the Company. The owner remained exparte before the Tribunal. Though the owner appeared at the appellatestage before the Division Bench of this Court, he could not give anyexplanation, as to whether, the driver possessed any licence at thetime of accident. Even in such cases, the Division Bench did notabsolve the Insurance Company from the payment of compensation to thelegal representatives of the deceased. But the company was exoneratedof its liability towards the insured and in such circumstances,granted liability to recover from the owner of the vehicle, thecompensation compelled to pay to the claimants therein. The detailsof the case is also discussed in the later paragraphs of thisjudgment.48.In United India Insurance Company Ltd., v. S.Saravananreported 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 riskis concerned, the consistent view has been, as can beseen from the above, that the insurer must pay thethird party and then take a decision whether to proceedaganist the owner. This is in consonance with thespirit of the Act. It would be the only just andreasonable course since the claimant, an intelligentyoung man, has been reduced to nothing in one moment ofnegligence. The continuous care and support he needsmust be taken note of. It is virtually a life sentencethat has been imposed on the claimant and his wife andhis children too a sentence of living death on theclaimant, and a life sentence on the wife, to care andnurture for 24 hours a dear husband, who is no morethan a vegetable now. And, to require them to proceedagainst the owner would be rubbing salt in their rawwounds. We, therefore, feel that we must ask the https://hcservices.ecourts.gov.in/hcservices/ appellant-insurance company to pay the compensation tothe claimant and recover it from the owner for hisbreach 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 aLight Motor Vehicle licence, but drove a Tourist Maxi Cab MahendraVan, which met with an accident, causing grievous injuries. Theinsurance company contended that the driver did not possess a badgeand as per the terms and conditions of policy and provisions, underthe Motor Vehicles Act, there was a breach by the owner of thevehicle in allowing a driver who did not have a badge to drive thevehicle and therefore, no liability can be fastened and that only theowner and driver of the vehicle should alone be made liable to paycompensation. On the side of the insurance company, they examined aMotor Vehicle Inspector, as RW1 and an Assistant AdministrativeOfficer of the insurance company as RW2. The Tribunal held that theinsurance company was liable to pay compensation along with the ownerand driver of the vehicle. On appeal, they submitted that a badge isrequired to drive a private transport vehicle and therefore, theTribunal has erred in fastening liability on the insurance company.Going through the provisions of the Motor Vehicles Act, whichdistinguishes different types of vehicles and the different kinds oflicences, granted in terms of provision Sections 2(14) and 2(47), aDivision Bench of this Court held that the driver was having adriving licence, that he had not obtained necessary authorisation todrive a transport vehicle and that badge was not obtained and furtherheld that there was a violation of the policy conditions. TheDivision Bench further held that the Tribunal ought not to havefastened the statutory liability upon the insurance company.However, keeping in view of the injuries sustained by the claimantand that he was reduced to a vegetable existence, the Bench wasobserved that the only just and reasonable course would be to directthe insurance company to pay compensation to the 1strespondent/claimant and recover the same from the owner for breach ofpolicy conditions. Thus, it could be seen from the above judgmentthat though the Insurance Company was able to establish that thedriver did not possess the required licence with the badge, at thetime 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. Theinsurance company resisted the claim, on the ground that the riderdid not possess a valid driving licence to drive a two wheeler whichcaused the accident. The Tribunal by relying on the decision of theApex Court in Premkumari and Others Vs. Prahlad Dev and others,reported in 2008 (1) TN MAC 115 (SC), directed the insurance companyto pay compensation to the claimants and recover the same, from the https://hcservices.ecourts.gov.in/hcservices/ owner and driver. After referring to a Division Bench judgment inUnited India Insurance Company Ltd., Vs. S.Saravanan, reported in2009 (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 theappeal, filed by the Insurance Company.Let me consider some of the cases, where the driver did notpossess any licence.51.In Velammal v. P.Kanagu reported in 2004 (1) LW 16, onaccount of rash and negligent manner by the driver of a Maxi-cab, amotorcyclist, died. Legal representatives of the deceased claimedcompensation. Though the manner of accident, was denied, the maincontention of the Insurance Company was that the driver of theMahendra Maxi Cab did not possess a valid driving licence, besides,the vehicle was not operated with fitness certificate. It was broughton record before the Claims Tribunal that the Regional TransportOfficer has levied a fine on the driver, on the basis of the report ofthe Motor Vehicles Inspector. The vehicle was impounded and released,later on. In the above back drop, the Tribunal exonerated the insurerand dismissed the claim against the insurer. On appeal by theclaimant, a Division Bench of this Court, having regard to the factthat the vehicle was covered by a policy of Insurance and since theclaim was made by a third party, held that the insurer cannot avoidits liability to pay compensation to a third party and directedrecovery, after payment to the accident victims. It could be seenfrom the judgment that though the driver had been fined for notpossessing a licence, at the time of accident, the claim of theinsurer to extricate itself from its liability to pay compensation toa 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 Benchof the Supreme Court confirmed the decision of the Claims Tribunal,rejecting the preliminary objections taken in the written statementby the Insurance Company that it is not liable to pay compensation tothe claimant therein, on the ground that the vehicle in question wasdriven without a valid and effective licence, at the time ofaccident. By an award, the Tribunal has permitted the insurancecompany to recover the amount, from the owner of the vehicle.53.In Lal Chand v. Oriental Insurance Co. Ltd., reported in2006 ACJ 2161, the driving licence of driver of the offending truckwas found as not issued by licensing authority. The owner claimed tohave seen and examined the driving licence produced by the driver,took his driving test and found that the driver was competent todrive and appointed him. The driver caused the accident, which gaveraise to a claim petition. The Claims Tribunal held that the accidenttook place due to rash and negligent driving of the driver and that https://hcservices.ecourts.gov.in/hcservices/ the owner had not committed any breach of the terms and conditions ofthe Insurance Policy and therefore, held that the Insurance Companywas liable to make the payment of compensation to the claimants.Being aggrieved by the same, the Company filed an appeal and the HighCourt modified the order passed by the Tribunal and directed that theInsurance Company to pay and then recover the compensation from theowner of the vehicle, as per law laid down by the Supreme Court in NewIndia Assurance Co. Ltd., v. Kamala reported in 2001 ACJ 843 (SC).The High court also held that the appellant had contravened the termsand conditions of the insurance policy as the driving licence was notissued by the Licencing Authority, Hyderabad. The Insurance Companyfiled an application under Section 174 of the Motor Vehicles Act forrecovery of the amount paid as compensation to the claimants. Theappellant therein filed a reply to the application, in which, heaverred that the application for recovery of the compensation paid tothe claimants by the Insurance Company is not maintainable as therights of the parties have not been determined by the civil court.However, the Tribunal held that the Insurance Company is entitled torecover the money from the appellant therein through an executionapplication and ordered to issue a certificate of recovery of theamount under Section 174 of the Motor Vehicles Act and directed, thesame be sent to the District Collector. Aggrieved by the order passedby the Tribunal, the owner of the vehicle moved the Supreme Court.Having regard to the observations made in sub-para (iii) of para 102in Swaran Singh's case, a Two Judges Bench of the Supreme Court in LalChand's case, at paragraph 11, held that the Insurance company has toprove that the insured, viz., the owner of the vehicle, was guilty ofnegligence and failed to exercise reasonable care in the matter offulfilling the conditions of the policy regarding the use of vehicle,by a duly licenced driver or one who was disqualified to drive, at therelevant point of time. On the facts of the case, the Supreme Courtfound that the owner of the vehicle had satisfied himself that thedriver 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 hiswife & guardian Dhanalakshmi and another, reported in 2006 (2) CTC563, a learned single Judges of this Court [Hon'ble Mr. JusticeV.Dhanapalan] considered a contention as to whether the insurancecompany is liable to pay compensation, when there is a lack of validdriving licence. Reiterating the legal position that the burden ison the insurance company to establish lack of licence and holdingthat the beneficial legislation has to be given effect, at paragraphNo.25, held as follows:-"25. The object of the Motor Vehicles Act, 1888, is abeneficial legislation in nature and when there is a decreepassed against the Insurance Company, it is the liabilityof the Insurance Company to satisfy the decree at the firstinstance and the liability cannot be shaken off only by https://hcservices.ecourts.gov.in/hcservices/ saying that at the relevant point of time, the vehicle wasdriven by a person having no licence. The liability of theInsurance Company to satisfy the decree passed in favour ofthe third party at the first instance and to recover theaward amount from the owner or driver thereof. The Tribunaland the Court must however exercise its jurisdiction toissue such a direction, upon consideration of the facts andcircumstances of each case and in the event such adirection has been issued despite arriving at a finding offact to the effect that the insurer has been able toestablish that the insured has committed a breach ofcontract of insurance as envisaged under sub-clause (ii) ofClause (a) and sub-section (2) of Section 149 of the MotorVehicles Act, 1988, the Insurance Company shall be entitledto realize the award amount from the owner or driver of thevehicle, as the case may be, in execution of the same awardhaving regard to the provisions of Sections 165 and 168 ofthe 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 drivermet with an accident, as it collided with a Tractor. He sustainedinjuries and succumbed to the same. An application for compensationwas filed, in terms of Section 110-A of the Motor Vehicles Act, 1939.The respondent-Insurance Company, inter alia, raised a contentionthat the driver of the said tractor did not hold a valid andeffective driving licence. Before the Claims Tribunal, the driver ofthe said Tractor, had categorically deposed that he did not know howto drive a tractor and he never even tried to learn driving of thetractor. In view of the said admission on the part of the driver,the Tribunal held that the Insurance Company is not liable to paycompensation and that the application for grant of compensation wasdismissed. Appeal preferred by the claimants before the High Courtwas also dismissed, holding that the driver and owner alone wereresponsible to pay compensation to the claimants. Against which, theclaimants preferred an appeal to the Supreme Court and the owner didnot 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 havingregard to the object for which, Sections 147 and 149of the Act had been enacted, the social justicedoctrine as envisaged in the preamble of theConstitution of India has been given due importance.The Act, however, itself provides for the cases wherethe Insurance Company can avoid its liability.Avoidance of such liability would largely depend uponviolation of the conditions of contract of insurance.Where the breach of conditions of contract is ex-facieapparent from the records, the Court will not fasten https://hcservices.ecourts.gov.in/hcservices/ the liability on the Insurance Company. In certainsituations, however, the Court while fastening theliability on the owner of the vehicle may direct theInsurance Company to pay to the claimants the awardedamount with liberty to it to recover the same from theowner.”56.Referring to the decisions in National Insurance Co. Ltd.,v. Swaran Singh and Others reported in 2004 (3) SCC 297, New IndiaAssurance Co. Ltd., v. Prabhu Lal reported in JT 2007 (13) SCC 246[a Two Judges Bench of the Supreme Court], a case, wherein, there wasno endorsement in the licence, as required under Section 3 of the Actr/w., Rule 16 of the Rules and Form No.6, Premkumari & Ors., v.Prahalad Dev & Ors., reported in 2008 (1) SCALE 531, wherein, thedriver of the vehicle did not possess any licence to drive acommercial vehicle, Oriental Insurance Co. Ltd., v. Prithvi Rajreported in 2008 (1) SCALE 727 [a Two Judges Bench of the SupremeCourt], wherein, the Junior Assistant of the Office of the JointCommissioner and Secretary, Regional Transport Authority, wasexamined, to produce the official records and establish that nodriving licence was issued to the driver, Ishwar Chandra & Ors., v.The Oriental Insurance Co. Ltd., & Ors., reported in 2007 (4) SCALE292 [a Two Judges Bench of the Supreme Court], wherein, the driverdid not have a valid licence, as the licence expired earlier, whenthe vehicle met with an accident, the Supreme Court in Sardari'scase, 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-InsuranceCompany, inter-alia, raised a contention before the Tribunal that thedriver of the vehicle Z, a minor on the date of accident, was notholding any valid and effective licence and hence, the Company isnot liable to reimburse the owner of the vehicle. The Tribunal heldthat the Company is not liable for payment of compensation. Appealunder Section 173 of the Motor Vehicles Act was allowed, on theground that wilful breach by Y, father of Z, was not proved on theground that no sane father would like to give the custody or the keysof the vehicle to a minor son, Z. The Letter patent Appeal by theInsurance Company failed. Testing the correctness of the abovejudgments, the Supreme Court, on the facts of the case, observed thatthe High Court did not advert to the provisions of Sections 4 and 5and thus, mis-directed itself in law and further observed that theHigh Court proceeded on a wrong premise that it was the InsuranceCompany to prove breach of conditions of contract of Insurance.Following the decisions in Oriental Insurance Co. Ltd., v. PrithviRaj reported in 2008(1) TNMAC 216 (SC) = 2008 (1) SCALE 727 andNational Insurance Co.Ltd., vs. Kaushalya Devi and Others, reportedin 2008 (2) TN MAC 497 (SC), the Supreme Court set aside the judgmentof the High Court and at Paragraph 17, held as follows: https://hcservices.ecourts.gov.in/hcservices/ "It is set aside accordingly and that of thelearned Tribunal is restored. However, keeping in viewthe admitted fact that as no stay has been granted bythe High Court the appellant has deposited the entireamount which has since been withdrawn by the claimant-respondent; we direct that the appellant shall beentitled to recover the amount in question from theowner 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 JudgesBench judgment of the Supreme Court, relied on by Mr.J.Chandran,learned counsel for the appellant-insurance company in C.M.A.No.3175of 2011, the owner of the vehicle was the appellant before theSupreme Court. The vehicle, insured with Oriental Insurance Company,which caused the death of cyclist, was driven by a person, aged 19years. When a claim was made by the legal heirs and representativesof the deceased, the insurance company raised a contention that sincethe driver of the Tractor, offending vehicle, was not holding a validand effective licence, it has no liability to reimburse the owner orthe driver for the damages payable by the owner of the vehicle to theclaimants. Before the Supreme Court, the appellant-owner submittedthat during the relevant time, he was holding an effective drivinglicence, as he had been granted a learner's licence earlier andtherefore, the finding of the Tribunal and the High Court,exonerating the insurance company from its liability to reimburse theowner in respect of the award amount, suffers from serious legalinfirmity. Having regard to the statutory duties imposed upon theinsurance company to reimburse the owner of the vehicle or driver asprovided in Section 149 of the Motor Vehicles Act, 1988, reliance wasalso placed on National Insurance Co.Ltd., Vs. Swaran Singh andOthers, reported in 2004 91) TN MAC 104 (SC) = 2004 (3) SCC 297, anda further contention was also made that the insurance company hasfailed to prove breach of conditions of the contract of insurance.Per contra, it was inter alia contended by the insurance company thata finding of fact having been arrived at, to the effect that theowner of the vehicle himself had driven the vehicle, the onus ofproof that he did not drive the vehicle, was upon the appellant andnot on the insurance company, when admittedly, he was the owner ofthe vehicle. In the reported judgment, FIR had been lodged againsthim. He had been charge sheeted by the investigating agency. At thetime of accident, his licence had expired. Though the appellant madea plea that he was not driving the vehicle at the time of accidentand one Diwan Singh was the driver, he did not prove the same, byexamining the said Diwan Singh. The Tribunal held that he was notholding any valid and effective licence. On the abovesaid facts, atparagraph Nos.21 and 22, the Supreme Court held as follows:-“The question as to whether the appellant was holdinga valid licence or not was within his knowledge. The https://hcservices.ecourts.gov.in/hcservices/ driver was to show that he held licence in respect of thevehicle for which he had filed an application. Filing ofan 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 dulylicenced, 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 boundto reimburse him in terms of the Contract of Insurance.”59In the abovesaid judgment, the Bench comprising of TwoJudges observed that the fact as to whether the driver had a validand effective licence on the date of accident, is within the specificknowledge and that the burden of proof would be on the driver. Withdue 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 isfor the insurer to establish that at the time of accident, the driverof the offending vehicle did not possess a valid and effectivedriving licence. Further, in the reported judgment, on the facts ofthe case, it is evident that he was the owner-cum-driver of theTractor, which caused the accident and when he had failed to examineDiwan Singh, said to have driven the vehicle, at the time ofaccident, and in such circumstances, the Supreme Court held that thefact whether the driver did possess the licence or not, was withinhis knowledge and the burden is on the propounder of the case toprove the same.60.In National Insurance Co. Ltd. v. Tharabai reported in 2009(2) TNMAC 353, a pedestrian was knocked down by a Kinetic Hondamotorcycle. The claim was resisted by the Insurance Company, on thegrounds inter-alia that the vehicle was driven by a person without avalid licence. It was also contended that the particulars of licencefurnished by the claimant in his claim form differed from the onemaintained by the concerned Regional Transport office. Before theClaims Tribunal, an official from the Regional Transport Office,Madras City (Central), was examined as RW.1, to prove that thelicence produced by the owner was found to be not genuine.Nevertheless, the Tribunal directed the Insurance Company to pay thecompensation. On facts and scrutiny of the licence particulars, thisCourt (Hon'ble Mr. Justice S.Palanivelu), found that the driver ofthe vehicle did not possess a valid licence, at the time of accident.A contention was also raised by the respondent/claimant that theowner of the vehicle was not charge-sheeted under Section 3 of theMotor Vehicles Act. Rejecting the said contention, this Courtfurther held that merely because there was no charge sheet, it couldnot be concluded that the owner was possessing a valid licence. Onthe facts of the case, this Court held that when ample evidence hasbeen let in by RW.1, an official from the Regional Transport Office, https://hcservices.ecourts.gov.in/hcservices/ failure on the part of the police to lay a charge sheet against theowner of the vehicle under Section 3 of the Motor Vehicles Act wouldnot come to the rescue of the owner. In the above reported judgment,the owner of the vehicle had entered appearance, defended the claimand let in evidence and it was also a case, wherein documentaryevidence has been let by the Insurance Company through an official ofthe RTO Office, to prove that there was no licence, at the time ofaccident.61.In Oriental Insurance Co. Ltd., v. Angad Kol reported in2009 (11) SCC 356, heirs and legal representatives of one Genda Bai,who died in an accident, which took place on 31.10.2004, claimedcompensation, contending inter alia that her death was caused due tothe injuries sustained in the accident, when she was knocked down bya Mini Door Auto. Disputing the liability to pay compensation, theappellant-Insurance Company raised a plea that the driver did notpossess a valid and effective licence. However, the Tribunal,fastened the liability on the Insurance Company and quantified thecompensation at Rs.1,83,000/-. The claimants sought for enhancement.The Company filed a Cross Objection. A Division Bench of the MadhyaPradesh High Court enhanced the compensation and dismissed the Cross-Objection. Testing the correctness of the judgment, on thecontention that the Insurance Company is not liable to paycompensation, after considering the statutory provisions and the needfor a particular kind of licence, a Two Judges Bench of the SupremeCourt, at Paragraph 19, held that, "Interest of justice would be subserved, if we, inexercise of our jurisdiction under Article 142 of theConstitution while directing the insurance company todeposit the balance amount before the Tribunal withliberty to the claimants to withdraw the same giveright to the appellant to recover the said amount fromthe 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 topay compensation to the injured or legal representatives of thedeceased, if the driver of the offending vehicle did not possess therequired licence to operate the vehicle, depending upon the class ofthe vehicle, yet in the interest of justice, directed the InsuranceCompany to pay and recover.63.The relevant portion of the judgment in New India AssuranceCo. Ltd., v. Prabhu Lal reported in AIR 2008 SC 614 and considered inAngad Kol's case is extracted hereunder: "37. The argument of the Insurance Company isthat at the time of accident, Ram Narain had no validand effective licence to drive Tata 709. Indisputably, https://hcservices.ecourts.gov.in/hcservices/ Ram Narain was having a licence to drive light motorvehicle. The learned Counsel for the InsuranceCompany, referring to various provisions of the Actsubmitted that if a person is having licence to drivelight motor vehicle, he cannot drive a transportvehicle unless his driving licence specificallyentitles him so to do (Section 3). Clauses (14), (21),(28) and (47) of Section 2 make it clear that if avehicle is "light motor vehicle", but falls under thecategory of transport vehicle, the driving licence hasto be duly endorsed under Section 3 of the Act. If itis not done, a person holding driving licence to plylight motor vehicle cannot ply transport vehicle. Itis not in dispute that in the instant case, Ram Narainwas having licence to drive light motor vehicle. Thelicence was not endorsed as required and hence, hecould not have driven Tata 709 in absence of requisiteendorsement and the Insurance Company could not beheld liable.38. We find considerable force in the submissionof the learned Counsel for the Insurance Company. Wealso find that the District Forum considered thequestion in its proper perspective and held that thevehicle driven by Ram Narain was covered by thecategory of transport vehicle under Clause (47) ofSection 2 of the Act. Section 3, therefore, requiredthe driver to have an endorsement which would entitlehim to ply such vehicle. It is not even the case ofthe complainant that there was such endorsement andRam Narain was allowed to ply transport vehicle. Onthe contrary, the case of the complainant was that itwas Mohd. Julfikar who was driving the vehicle. To us,therefore, the District Forum was right in holdingthat Ram Narain could not have driven the vehicle inquestion."64.In Cholamandalam MS General Insurance Co. Ltd., v. Veerasamyreported in 2010 (2) CTC 423, after considering the decisions inNational Insurance Co. Ltd. v. Annappa Irappa Nessaria and othersreported in 2008 (1) TN MAC 200 (SC), National Insurance Co. Ltd., v.Vidhyadhar Mahariwala and others reported in 2008 ACJ 2860, New IndiaAssurance 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 AIR2001 SC 2218, another learned Judges of this Court (Hon'ble Mr.Justice R.Subbiah), at Paragraph 10, held that, https://hcservices.ecourts.gov.in/hcservices/ "10. A reading of the said judgments would showthat if there is a fundamental breach in respect ofthe defence available to the insured under Section 149(2) of the Act, the insurer can repudiate theirliability to pay the compensation. So far as the non-possession of the driving licence is concerned,it isonly a breach of policy condition and it cannot besaid that it is not a breach of defence available tothe insured under Section 149(2) of the Act and undersuch circumstances, I do not find any error in theobservation made by the Tribunal in directing theInsurance Company to pay the compensation and torecover 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 theappellant, in the said judgment, the question of"Payment and recovery" was not dealt with, I am notinclined to accept the submission made by the learnedcounsel for the appellant."65.In New India Insurance Company Ltd., Thiruchirapalli, Vs.Kavitha and six others, reported in 2010 (6) CTC 739, the insurancecompany challenged the award on the ground that there was a violationof policy condition, since the driver of the vehicle did not have avalid driving licence. Following the decision of this Court inB.M., New India Assurance Company Ltd., Vs. Muralikrishnan, reportedin 2010 (3) MLJ 271, and the decision of this Court in The Manager,United India Insurance Company Ltd., Vs. Tmt.P.Muthamani, reported in2010 (1) TN MAC 486, a learned single Judge [Hon'ble Mrs. JusticeChitra Venkataraman] of this Court, at paragraph No.7, held asfollows:-"7. As already pointed out, the only questionraised herein is the breach of policy conditions. Asfar as the registration is concerned, that learnedCounsel appearing for the Respondents pointed out thatconsidering the decision of this Court in B.M., NewIndia Assurance Co. Ltd. v. Muralikrishnan , 2010 (3)MLJ 271, which followed the decision of the Apex Courtin and National Insurance Co. Ltd. v. Swaran Singh ,2004 (1) TN MAC 104 (SC) : AIR 2004 SC 1531, theconcept of pay and recover still holds good and noexception could be taken to the decision of theTribunal holding that the Insurance Company isresponsible to make payment. That even in the case ofpolicy violation, this Court in the decision reportedin The Manager, United India Insurance Company Ltd. v.Tmt. P. Muthamani , 2010 (1) TN MAC 486, referring to https://hcservices.ecourts.gov.in/hcservices/ the decision of the Apex Court in Swaran Singh's case(cited supra), pointed out that the mere absence of anendorsement, per se would be dilute the liability ofthe Insurance Company. In the circumstances, thecompensation has to be made by the Insurance Company atthe first instance and has to be made by the InsuranceCompany at the first instance and thereafter, they haveto recover the same from the owner of the vehicle. Thesaid line of reason envisages the fact that in theMotor Vehicles Act, being a beneficial provision, theaim and purpose of the same cannot be defeated by theInsurance Company by raising a technical plea. Even inthe case of violation to the policy condition, thevictim of the accident being an innocent person, it isnecessary to see that the innocent persons do notsuffer an injury or a loss by reason of mere policyviolation. The injured person or the relatives of theperson killed in the accident should not be allowed togo with the mind that the decree obtained by them ismerely a paper decree and that on a technical plea, theowner or the Insurance Company would not escape fromthe 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 paycompensation, on the ground that the driver did not possess a validdriving licence and therefore, there was a violation of policycondition. This Court [Hon'ble Mr. Justice P.R.Shivakumar], atParagraphs 6 and 7, held as follows:"6. The second ground alleged is that this Courtcommitted an apparent error in arriving at a conclusionthat in a case wherein the driver/rider of the vehicleinvolved in the accident was proved to hold no validdriving license, the insured can be directed toshoulder the liability of the owner of the vehicle withpermission to recover the amount after such paymentfrom the insured on the ground that there was violationof a policy condition. The learned counsel for theapplicant submits that the said view was taken by thisCourt in ignorance of a judgment of the Hon'ble SupremeCourt in Oriental Insurance Company v. Meena Variyal ,2007 (2) TN MAC 9 (SC): AIR 2007 SCC 1609. The facts ofthe said case are different from the facts of the caseon hand. The other cases decided by the Supreme Courtincluding, National Insurance Company Limited v. BatjitKaur and others , 2004 (1) TN MAC 1 (SC) : 2004 ACJ 428and New India Assurance Company Limited v. Asha Rani ,2004 (2) TN MAC 387 (SC) : 2003 ACJ 1 (SC) and also a https://hcservices.ecourts.gov.in/hcservices/ Division Bench of this Court are to the effect that theliability of the Insurer towards the third party shallbe intact even if there was a violation of a conditionof the insurance contract between the owner and theInsurer. The reason assigned therein was that thecompulsory scheme of insurance was introduced tobenefit the poor victims who may not be able to recovercompensation from the owner of such offending vehicleswho may even be a person having meager resources fromwhich the compensation could not be collected. Adistinction was also made in the judgment regarding theliability of the Insurer in case of a no coverage of aparticular person from the violation of the conditionof contract of insurance giving a right to the Insurerto rescind the contract. In the first case the Insurerwill not be liable at all as there was no contractcovering the risk involved to that person. In thesecond one, the Insurer shall have only a right torescind the contract, but however, the Insurer'sliability towards the third party victim shall beintact. In such cases the insurer shall have the rightto seek recovery from the insured based on violation ofthe policy condition. Such a view was taken followingthe earlier judgment of the Supreme Court as well asthe judgment of a Division Bench of this Court. 7. The judgment now sought to be relied on by thelearned counsel for the applicant is one which dealtwith the liability of the Insurer in respect of deathof a person who acted as the driver of the vehicleinvolved in the accident and who did not possess avalid driving licence at the time of accident. ThereinHon'ble Supreme Court held that the Insurer was notliable because it was of the view that the victimhimself knew that he was driving the vehicle without avalid driving licence and thus in violation of acondition of contract of insurance. The saidproposition cannot be extended to other cases ofabsence of driving licence. Otherwise, the verybeneficial legislation which seeks to protect theinterest of poor victims, for no fault of their part,will be defeated by a syndicate that may be made by theInsurer and the owner wherein the owner may not haveany other asset out of which the compensation can berecovered. That could be the intention of thelegislature also. All these points were discussed indetail in the judgment which is now sought to bereviewed. Therefore, this Court comes to the conclusionthat this Application for review had to fail evenregarding the second ground raised in the Application." https://hcservices.ecourts.gov.in/hcservices/

67.In ICICI Lambard General Insurance Company Ltd., vM.Rakkathal reported in 2010 (1) TNMAC 123, in an accident, apedestrian died. The claim of the legal representatives was disputedon the ground that the driver of the offending vehicle, Tractor, didnot possess a valid licence and therefore, there is no liability topay compensation. The Tribunal passed an award, holding that theInsurance Company is not liable to pay compensation. However,directed them to pay and recover from the owner of the vehicleChallenging the same, the Company filed the appeal and inter-aliacontended that the principle of pay and recover, is not applicable tocases, wherein, the driver had no valid licence, at the time ofaccident. 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 SwaranSingh's case states the five instances that could becovered under section 149(2)(a)(ii) of the Motor VehiclesAct and "no licence" is one among the five. Para 4 of thejudgment is extracted hereunder:"4. Defences raised by the petitionercompany in the claim petitions purported to bein terms of Section 1492(a)(ii) of the MotorVehicles Act, 1988(hereinafter referred to as'the Act') were: (a) driving licence producedby the driver or owner of the vehicle was afake one;(b) driver did not have any licencewhatsoever; (c) licence, although was grantedto the concerned driver but on expiry thereof,the same had not been renewed; (d) licencegranted to the drivers being for one class ordescription of vehicle but the vehicleinvolved in the accident was of differentclass or description; and (e) the vehicle inquestion was driven by a person having alearner's licence."16. Therefore, the Swaran Singh's case took intoaccount five instances that could be covered underSection 149(2)(a)(ii) of the Motor Vehicles Act. Eachinstance was discussed and paragraphs 77 to 80 relates tothe instance of "no licence". In fact, prior to para77,the heading is given as, "when admittedly no licencewas obtained by a driver".68.Having regard to the plea that the Supreme Court in SwaranSingh's case, did not consider a case of "no licence", at Paragraph https://hcservices.ecourts.gov.in/hcservices/ 18, the learned Judge has observed that, "Hence, the attempt made bythe appellant to exclude the category of "no licence" from Section149(2)(a)(ii)is of no substance. While accepting the submission ofthe claimants therein, regarding the liability of the InsuranceCompany to satisfy the award, the learned Judge, at Paragraphs 20 and21, further added as follows:"20. Further, as rightly contended by the learnedcounsel for the respondents 1 to 5, in para 102(X), theHonourable Apex Court has categorically held that incase, where the Insurance company satisfactorily provedits defence in accordance with Section 149(2) of theMotor Vehicles Act, the Tribunal could direct theinsured to reimburse the compensation to the insurer byapplying the principle of pay and recover. Para 102(x)is extracted hereunder:-"(x) Where on adjudication of the claimunder the Act the Tribunal arrives at aconclusion that the insurer hassatisfactorily proved its defence inaccordance with the provisions of Section 149(2) read with sub-section(7), as interpretedby this Court above, the Tribunal can directthat the insurer is liable to be reimbursedby the insured for the compensation and otheramounts which it has been compelled to pay tothe third party under the award of theTribunal. Such determination of the claim bythe Tribunal will be enforceable and themoney found due to the insurer from theinsured will be recoverable on a certificateissued by the Tribunal to the Collector inthe same manner under Section 174 of the Actas arrears of land revenue. The certificatewill be issued for the recovery as arrears ofland revenue only if, as required by sub-section (3) of Section 168 of the Act theinsured fails to deposit the amount awardedin favour of the insurer within thirty daysfrom the date of announcement of the award bythe Tribunal.69.In National Insurance Company Ltd., v. Lakshmi reported in2011 (1) TNMAC 276, rejecting the contention that the driver did notpossess a valid and effective driving licence, which amounts toviolation of police condition and therefore, the Insurance Company isnot liable to pay compensation, the Hon'ble Mr. JusticeN.Kirubakaran, has ordered 'pay and recovery'. https://hcservices.ecourts.gov.in/hcservices/

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 twowheeler, Scooter bearing Registration No.DAI 1835, with his son,Shashank Jain, as pillion rider. When they had reached the SDM'sOffice, Geeta Colony, Delhi, a motorcycle, bearing RegistrationNo.DL-7S-G-3282, being driven in a very rash and negligent manner,tried to overtake the scooter and in that process, struck against thescooter with great force, as a result whereof the deceased and hisson were thrown on to the road and the deceased succumbed to thefatal injuries sustained by him. Two claims were made by the widow,two daughters and one son of the deceased. A separate claim wasfiled by another son. They were jointly tried. The Tribunal passedan award, directing the insurer to satisfy the award and recover theamount from the owner of the motor cycle. Challenging the awardbefore the Delhi High Court, it was contended by the owner of themotorcycle that the rider was a minor on the date of accident andtherefore, there is a violation of the provisions of Motor VehiclesAct, 1988. Insofar as the manner of accident, the finding attainedfinality. The High Court confirmed the order of the Claims Tribunaland that the review petition filed was also dismissed. Before theSupreme Court, it was contended that as the motor cycle was driven bya minor, he was solely responsible for the accident. Before theClaims Tribunal, the owner of the vehicle deposed that while he wasat his residence, he received a telephonic message informing that hisnephew, Jatin had met with an accident and that when the key of themotorcycle was on the Dining table of his house, without hisknowledge and consent, Jatin had taken away the keys of the motorcycle, which was involved in the accident. On the abovesaid facts,the owner submitted that the Claims Tribunal erred in directingrecovery from him. Per contra, the National Insurance Companycontended that the fact that the minor driver did not possess a validdriving licence had been clearly established, and therefore, theinsurance company had rightly been relieved from the liability to paycompensation and that such liability has been correctly fixed on theowner, namely, Jawahar Singh. While disbelieving the evidence of theowner that the minor had walked into his house and taken away the keyof the motor cycle without any intimation, the Supreme Court, havingregard to the fact that the driver was a minor and it was theresponsibility of the owner that the vehicle was not misused and thattoo by a minor, who had no licence to drive the same, held that theMotor Accidents Claims Tribunal quite rightly has saddled theliability for payment of compensation on the owner of the vehicle andaccordingly, directed the insurance company to pay the award amountto the claimants and thereafter, recover the same from the owner.71.Thus it could be seen that in the latest judgment, thoughthe negligence was on the rider of the motor cycle and even though hedid not possess a valid licence at the time of accident, a Two JudgesBench of the Supreme Court directed the insurance company to pay the https://hcservices.ecourts.gov.in/hcservices/ compensation to the legal representatives of the deceased andthereafter, 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 ClaimsTribunal/Courts to pay compensation to the injured/legalrepresentatives of the deceased/third parties and thereafter, torecover the said amount from the insured has been sustained by theSupreme Court, giving effect to the statutory provisions of thebeneficent legislation, insofar as granting relief to a third partyvictim is concerned, who is not expected to run around the corridorsof the Courts/Tribunals to realise the award against the insured. Athird party injured victim or the legal representatives of thedeceased, who had already lost their breadwinner, as the case may be,would be both physically and mentally, shattered and only to providea just and reasonable compensation, to be paid by the InsuranceCompanies, provision for compulsory insurance has been made under theMotor Vehicles Act and the compensation awarded can always berecovered from the insured, if willful or reckless breach on the partof the insured is proved, if any of the defences under 149(2) ispleaded and proved in the manner known to law.Let me consider some of the decisions, where the driver did notpossess 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 claimcontenting inter alia that the Van driver involved in the accident,possessed only a licence to drive Auto rickshaw and not the requiredlicence to drive the vehicle in question. A learned Single Judge ofthis Court [Hon'ble Justice M. Karpagavinayakam], held that it isthe burden of the insurance company to prove that the driver did nothave the required licence to drive, such vehicle and that on thefacts and circumstances of the above case, held that the burden wasnot 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 fordriving a light motor vehicle drove a Jeep, used it as a taxi. Thevehicle met with an accident, as a result whereof, a girl aged about12 years died and her legal representatives made a claim forcompensation before the Motor Accidents Claims Tribunal. The ownerdid not appear before the Claims Tribunal. The claimants were from apoor background. The driver had a LMV licence, but he did notpossess a licence to drive a commercial licence. The Tribunalproceeded on the basis of Kamla's case (cited supra). The HighCourt, without going into the aspect of liability, dismissed theappeal filed by the Insurance Company, as not maintainable. Onfurther appeal by the Insurance Company, the Supreme Court, at https://hcservices.ecourts.gov.in/hcservices/ Paragraph 12 of the judgment in Kusum Rai's case, held that the ownerwould be liable for payment of compensation in a case, where thedriver was not having a licence at all. It was further held that itwas the obligation of the owner to take adequate care to see that thedriver had appropriate licence to drive the vehicle. The Apex Courtalso noticed an earlier decision in Malla Prakasa Rao v. Malla Janakiand others reported in 2004 (3) SCC 343, wherein, it has been heldthat,"(1) It is not disputed that the drivinglicence of the driver of the vehicle had expired on20-11-1982 and the driver did not apply for renewalwithin 30 days of the expiry of the said licence, asrequired under Section 11 of the Motor Vehicles Act,1939. It is also not disputed that the driver of thevehicle did not have driving licence when theaccident took place. According to the terms of thecontract, the Insurance Company has no liability topay any compensation where an accident takes placeby a vehicle, driven by a driver without a drivinglicence. In that view of the matter, we do not findany merit in the appeal."75.On the facts of the case, a two Judges Bench of the SupremeCourt in Kusum Rai's case, by observing that the legalrepresentatives should not be pushed to another round of litigation,particularly, when they found it difficult to secure the presence ofthe owner of the vehicle in exercise of their jurisdiction underArticle 136 of the Constitution of India, directed the appellantinsurance company to pay the compensation to the claimants andthereafter, recover from the owner in the same manner as provided inOriental Insurance Co.Ltd., Vs. Nanjappan and Others, reported in2005 SCC (Cri) 148.76.In New India Assurance Co.Ltd., Vs. Roshanben RahemanshaFakir 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 threewheeler which was not meant to be used to drive a transport vehicle.It was owned by one 'X'. The Tribunal noticing the description ofthe class of vehicle i.e., Autorikshaw Delivery Van, not meant to beused for private purpose, but as a commercial vehicle and through thecertificate of insurance also showed that the vehicle was a goodscarrying public carrier, within the meaning of Rule 51 of the CentralMotor Vehicles Rules, 1989 and even after considering the plea ofthe appellant insurance company that the driver of the said vehiclewas not a holder of a valid and effective licence, negatived the pleaof the Company that it was not liable to reimburse the claim of theclaimants. The High Court dismissed the appeal summarily. TheSupreme Court, after considering Swaran Singh's case (cited supra)and National Insurance Company Ltd., Vs. Annappa Irappa Nesaria andothers, reported in 2008 (1) TN MAC 200 (SC) = 2008 (1) SCALE 642, https://hcservices.ecourts.gov.in/hcservices/ held that the judgment of the High Court cannot be sustained.Setting aside the same and in exercise of Their powers under Article142 of the Constitution of India, a Two Judges Bench of the ApexCourt directed the appellant insurance company to satisfy the awardin favour of the claimants and recover the same from the owner of thevehicle.77.In Oriental Insurance Co.Ltd., Vs. Zaharulnisha and Others,reported in 2009 (1) TN MAC 419 (SC) = 2008 (12) SCC 385, the driverhaving a licence to drive a heavy motor vehicle drove a Scooter andcaused the accident. The licence possessed by him was for differentclass of vehicle and on the facts of this case, a Two Judges Bench ofthe Supreme Court held that the insurer cannot be made liable to paycompensation.78.In Nagamani & Another v. Singaravelu & Another reported in2009 (2) TNMAC 77, legal representatives of the deceased, thirdparty, claimed compensation. The Insurance Company raised a pleathat the driver of the offending lorry was not in possession of avalid driving licence to drive the vehicle, carrying hazardous goodsand that he possessed only a licence to drive heavy goods vehicle.Before the Claims Tribunal, the Insurance Company examined theInvestigator of the Company and a Junior Assistant of RegionalTransport Officer, in support of their contention. The Tribunalpassed an award, against the owner of the vehicle. On the appealpreferred by the claimants, a learned Single Judge of this Court(Hon'ble Mr. Justice M.Venugopal), held that it is suffice to pointout that the offending lorry driver was not in possession of thelicence or endorsement to drive hazardous goods vehicle andtherefore, 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 on11.06.2007, much earlier to Saravanan's case (cited supra), which wasdecided 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 thethird party, the Insurance Company contended that the driver did notpossess the licence with specific endorsement for driving heavyvehicle, JCB and therefore, they should be exonerated. Rejecting thesame, the Hon'ble Mr. Justice B.Rajendran, has directed the InsuranceCompany to pay compensation to the accident victims and recover thesame from the owner.Some of the decisions, where the driver did not renew hislicence, are as follows. 81.In Eshwar Chandra and others v. The Oriental InsuranceCompany Ltd., reported in 2007 (4) SCALE 292, licence of the driver https://hcservices.ecourts.gov.in/hcservices/ expired. On the date of accident, the application for renewal oflicence was not filed by the driver within the prescribed period andunder such circumstances, a Two Judges Bench of the Supreme Courtconfirmed the view of the High Court that the driver had no validlicence and the direction issued by the High Court to the InsuranceCompany 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 wastravelling in a truck with his buffalos, it was hit by a tractortrolly. He sustained injuries and died in the hospital. InsuranceCompany disputed the liability on the ground that the driver of theTractor did not have any valid and effective driving licence on thedate of accident. The Tribunal held that driver was having a validlicence only for the period from 11.02.1990 and 10.02.1993 and againfrom 07.02.1996 to 07.02.1999. Indisputably, the driver did not haveany valid licence during the period 11.02.1993 and 08.02.1999. TheTribunal held that the Insurance Company cannot be exonerated fromits liability. On appeal, the High Court held that the compensationamount shall be paid by the Insurance Company with liberty to recoverfrom the driver and owner. On further appeal by the aggrieved owner,a Two Judges Bench of the Supreme Court observed that the question asto whether the owner of a vehicle had taken care to inform himself,as to whether the driver entrusted to drive the vehicle was having alicence or not, is essentially a question of fact. However, noticingthat on the date of accident, the driver did not hold any licence andthat the same was only renewed subsequently, following the decisionin Swaran Singh's case (cited supra), rejected the plea made in theappeal that the renewal of licence should be taken effect from theretrospective date. Ultimately, taking note of the decisions inIshwar Chandra's case (cited supra), held that there was no infirmityin the impugned judgment of the High Court. In the above judgment,it could be noticed that though on the date of accident, there was nolicence, the decision of the High Court, directing pay and recover,has been sustained.83.In Oriental Insurance Co.Ltd., Vs.Prithvi Raj, reported in2008 (1) TN MAC 216 (SC) = 2008 (2) SCC 338, the respondent thereinpreferred a claim before the Himachal Pradesh State Consumer DisputesRedressal Commission, alleging that a Mini Bus owned by him met withan accident, during the period, when the insurance cover/policyissued by the appellant insurance company was in force. Though theaccident was reported to the insurance company, the claim made withthem was not settled on the ground that the driver of the offendingvehicle did not have a valid and effective driving licence. Therespondent/complainant took a stand that there was a renewal of thedriving licence which was valid and legal and therefore, the claimshould not have been repudiated. The State Commission rejected theplea categorically holding that there was no valid licence issued bythe Regional Transport Authority, Hyderabad. On appeal, the National https://hcservices.ecourts.gov.in/hcservices/ Commission accepted the contention that the licencing authority atHyderabad had not issued any licence as claimed, yet, in view of thefact that there was a renewal at Tinsukia, the National Commissionheld that the claim ought not to have been refused by the insurancecompany. When the matter reached the Supreme Court, following thedecisions in Swaran Singh's case and Narain Dhut's case, the ApexCourt held as follows:-"In the instant case, the State Commission hascategorically found that the evidence on record clearlyestablished that the licensing authority had not issuedany license, as was claimed by the Driver and therespondent. The evidence of Shri A.V.V. Rajan, JuniorAssistant of the Office of the Jt. Commissioner &Secretary, RTA, Hyderabad who produced the officialrecords clearly established that no driving license wasissued to Shri Ravinder Kumar or Ravinder Singh in orderto enable and legally permit him to drive a motorvehicle. There was no cross examination of the saidwitness. The National Commission also found that therewas no defect in the finding recorded by the StateCommission in this regard.11. It appears that pursuant to the orders dated14.07.2005 passed by this Court, the entire amountawarded was deposited in this Court. Since, we have heldthat 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 appellantinsurance company has no liability to pay the compensation andfurther ordered that the amount deposited should be returned to theinsurance company with accrued interest if any. Reading of thejudgment makes it abundantly clear that the Supreme Court reiteratedits earlier decision that statute being beneficial one qua thirdparty and it is created by fiction of law under Section 147 and 149of the Motor vehicles Act, but held that the logic of fake licencehas to be construed differently in respect of third party and inrespect of own damage claims. In the above judgment, as the claim waswith respect to damages to the vehicle, relief was denied to theclaimant.85.In National Insurance Co.Ltd Vs. Vidhyadhar Mahariwala andothers, reported in 2008 (2) TN MAC 369 (SC) = 2008 (12) SCC 701,decided on 01.09.2008, licence expired on 14.12.2003, renewed on16.05.2005, and the accident occurred on 11.06.2004, when there wasno licence. The Tribunal awarded compensation on the ground thatduring the intervening period, the driver was not incompetent or https://hcservices.ecourts.gov.in/hcservices/ disqualified to drive the vehicle. The High Court on appeal, heldthat merely because there was a gap of renewal of driving licencethat cannot be a ground for exoneration. A Two Judges Bench of theApex Court, while setting aside the order of the High Court, directedthe claimant therein, to recover the amount from the insured.86.The Apex Court in the above reported judgment hasconsidered one aspect of the matter that the driver did not have thelicence, on the day, when the accident occurred. However, the otheraspect as to whether the insurer is liable to satisfy the award, asper Section 149(4) and (5) of the Motor Vehicles Act to a third partyand recover the same from the insured has not been dealt with. Asstated supra, in the earlier portion of the judgment in the presentappeals, this Court has extracted the decisions of the Supreme Courtin Swaran Singh, Lehru and other decisions, wherein, the Apex Courthas reiterated that the liability of the insurance company to paycompensation to the third party or the dependants of the deceased isstatutory in nature, considering the beneficial nature of thelegislation.87.In New India Assurance Co. Ltd. v. Anbalagan reported in2009 (2) TNMAC 345, a scooterist met with an accident on 27.03.2002,when the vehicle collided with a Tractor. The Insurance Companydisputed the claim on the ground that that the driver of the Tractordid not possess a valid licence. Ex.P5 – Xerox copy of the Licenceproduced before the Claims Tribunal, revealed that the licence todrive light motor vehicle was given for the period between 23.02.2000and 24.02.2003 and there was no endorsement to drive a heavy goodsvehicle or tractor. Though it was mentioned therein that the licenceobtained to drive tractor or trailor was valid upto 12.08.1986, therewas nothing to show that afterwards, it was renewed by a competentauthority. 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 validand effective licence on hand, the Insurance Company cannot be heldliable 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 thedriver to drive heavy goods vehicle was not in existence on the dateof accident and of the fact that the owner not stepping into thewitness box to say anything in this regard, then the InsuranceCompany could not be made liable, a learned Single Judge of thisCourt (Hon'ble Justice S. Palanivelu), allowed the appeal filed bythe Insurance Company and exonerated the Company from payment ofcompensation. Insofar as the amount already withdrawn by theclaimant from the deposit made by the Company, liberty has been givento the Insurance Company to realise the part of compensation from theowner of the vehicle. The claimant was also directed to realise thebalance of compensation from the owner of the vehicle. https://hcservices.ecourts.gov.in/hcservices/

88.Though Anbalagan's case (cited supra) has been decided on05.08.2009, the judgment of the Division Bench in Saravanan (citedsupra) 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. JusticeP.K.Misra, learned Single Judge of this Court considered an issue, asto whether the Insurance Company can be exonerated of its liability topay compensation, when the driver of the offending vehicle did notpossess a valid and effective driving licence. In that case, insupport of the contention, the Company relied on a decision inNational Insurance Co. Ltd., v. Vidhyadhar Mahariwala and othersreported in 2008 ACJ 2860. In the aforesaid decision of the SupremeCourt, the accident took place on 11.06.2004 and that the drivinglicence was valid for a period between 29.12.2002 to 28.12.2003 and itwas again renewed from 16.05.2005. The High Court, keeping in view ofthe fact that previously there was a valid driving licence and thatsuch licence was also renewed after the accident had taken place,fastened the liability on the Insurance Company. But on appeal, theSupreme Court in Vidyadhar Mahariwala's case (cited supra) observedthat during the interregnum period, there being no driving licence andtherefore, the Company was not liable.90.While testing the correctness of the impugned order of theTribunal, in Muralikrishnan's case (cited supra), the abovesaidlearned Single Judge of this Court, observed as follows:"In these circumstances, I don't think it can be saidthat the Supreme Court has laid down as an inexorableprinciple when there is no valid driving licence, theprinciple when there is no valid driving licence, theprinciple of Section 149(4) cannot be applied. On theother hand there are several decisions of the SupremeCourt which categorically recognises the underlyingfacility in section 149(4) by giving direction regardingpay and recovery when there was absence of valid drivinglicence."91.In United India Insurance Co. Ltd., v. K.G.Vimala reportedin 2010 (3) MLJ 584 = 2010 (1) TNMAC 340, the licence of the driverof the offending vehicle had expired two years prior to the accident.The Company sought for exoneration. The Tribunal has directed theInsurance Company to pay the compensation to the accident victim andrecover 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 ofthe driving licence was only a breach of policy condition and not aviolation of Section 149(2)(a)(ii) of the Act, viz., a conditionexcluding driving by a named person or persons or by any person who https://hcservices.ecourts.gov.in/hcservices/ is not duly licenced, or by any person who has been disqualified forholding or obtaining a driving licence during the period ofdisqualification, held that there was no error in the order of theTribunal.Some of the cases, where the licence was found to be fake orduplicate, are given below,92.In National Insurance Co.Ltd., vs. Kaushalya Devi andOthers, reported in 2008 (2) TN MAC 497 (SC), the deceased was foundto be a gratuitous passenger in a Truck, which met with an accident.The Tribunal granted an award, notwithstanding the objections of theinsurance company that the driver did not possess any valid andeffective driving licence to drive the Truck. The High Court foundthat the endorsement permitting the driver to drive Heavy GoodsVehicle was ante-dated and the licence was not existing, on the dateof accident. Further, the driver had only a licence to drive a LightMotor Vehicle and as the owner did not step into the witness box, theHigh Court held that the insurance company was not liable to paycompensation. While upholding the said judgment, the Supreme Courtheld that if the compensation amount deposited by the insurancecompany had since been withdrawn by the 1st respondent, it would beopen to the insurance company to recover the same in the mannerspecified by the High Court, but, if the same had not been withdrawn,the deposited amount may be refunded to the insurance company and theproceedings for realisation of the amount may be initiated againstthe owner of the vehicle. In the abovesaid judgment, the SupremeCourt, on facts found that the deceased was not the owner of anygoods which were carried in the Truck and that he was travelling inthe Truck for the purpose, other than the one for which, he wasentitled to travel in a public carriage goods vehicle. 93.In the abovesaid reported judgment, while allowing theappeal filed by the insurance company, the Supreme Court has alsotaken 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) hasno 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 toindemnify the amount and if so advised, to recover thesame from the insured.4)The concept of purposive interpretation has noapplication to cases relatable to Section 149 of theAct. https://hcservices.ecourts.gov.in/hcservices/

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 awritten statement, denying the claim and pleaded that the driver ofthe offending vehicle did not have a valid and effective drivinglicence on the date of accident. Accepting the plea of the insurancecompany, the claims Tribunal exonerated the insurance company fromits liability to pay compensation. On appeal filed by the claimantschallenging 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 themerits of the case, age and income of the deceased, enhanced thecompensation and directed the owner and driver of the vehicle to paycompensation. The review petition filed by the claimants has alsobeen dismissed.95.Perusal of the above reported judgment shows that a sum ofRs.50,000/- with interest had been paid to the appellants/claimants.In view of the judgment of the High Court, recovery proceedings wereinitiated by the insurance company for refund of the amount paid tothe appellants/claimants. Though Two Judges Bench of the SupremeCourt upheld the factual finding of the Tribunal that the driver washolding a duplicate licence on the date of accident and in view of anorder granting stay of the recovery proceedings initiated by theinsurance company for refund, made it clear the appellants/claimantsneed not repay the said amount inspite of the conclusion, which wasin favour of the insurance company. However, the Apex Courtpermitted the insurance company to recover the said amount from theowner of the vehicle in the same manner as was directed inNanjappan's case. The Supreme Court permitted theappellants/claimants to proceed and recover the rest of the amountfrom the owner and driver of the vehicle. In this case, there was aclear finding that the driver had a duplicate (Fake) licence, at thetime of accident.Let me consider some of the cases, where the driver had onlylearner's licence,96.In Branch Manager, Oriental Insurance Company Ltd., v.S.Kadarshaw Rowther reported in 2004 (2) TNMAC 13 (DB), parents ofthe deceased claimed compensation. Resisting the claim, theInsurance Company took a plea that the driver of the vehicle, did notpossess a valid licence and thus, violated the terms and conditionsof the policy. It was also contended that the vehicle was stolen bysome miscreants and they murdered the driver. However, he had alearner's licence (LLR) at the time of accident. RW.1, owner of thevehicle, deposed that the deceased was not authorised or permitted todrive the car nor there was any acceptable evidence that the driverwas prevented by the employer. In the abovesaid circumstances, https://hcservices.ecourts.gov.in/hcservices/ having regard to the admitted plea that the deceased was having a LLRand placing reliance on a decision in National Insurance CompanyLtd., v. Swaran Singh reported in 2004 (1) ACJ 1, a Division Bench ofthis Court [Hon'ble Mr. Justice P. Sathasivam and Hon'ble Mr. JusticeS.R.Singharavelu] held that the Insurance Company cannot escape fromits 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 theowner of the vehicle, as to whether the Insurance Company can avoidits liability, if the driver of the insured vehicle was having onlyLLR licence at the time of accident. After referring to the decisionin Swaran Singh's case (cited supra), the Division Bench, atParagraph 10, held that, "In view of the above recent Apex Courtdecision, we are of the view that the Insurance Company cannot avoidliability to the third party on the ground that the driver of theinsured vehicles has got only a learner's licence at the time ofaccident and it cannot be stated that the owner has also committedbreach of policy condition." In the above reported judgment, theDivision Bench has directed that the amount deposited by theappellant as a condition for filing the appeal should be refunded,while issuing further directions to the Insurance Company to pay thecompensation to the accident victims.98.In Mahamooda and others v. United India Insurance CompanyLtd., reported in 2004 (13)SCC 684, the vehicle was driven by aperson, having LLR and the Tribunal fixed the liability on theInsurance Company. Following Swaran Singh's case, a Two Judges Benchof the Supreme Court directed the appellant-Insurance Company todeposit the compensation with the Tribunal, if the Company hadalready withdrawn the amount, after the judgment of the High Court. 99.In National Insurance Company Ltd., v. Dhanalakshmireported in 2006 (1) TNMAC 343, the offending vehicle was driven bythe 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 hadany lorry driver, duly licenced, beside him, when he was driving thelorry and whether he had 'L' plates, both in front and rear side ofthe vehicle, at the time of accident. Even though it was found thatthere was violation of Rule 3 of the Central Motor Vehicles Rules,1989, a learned Single Judge of this Court [Hon'ble Mr. JusticeA.C.Arumuga Perumal Adityan], held that the Insurance Company isstill liable to pay compensation and recover the same from the ownerof the vehicle.100.Motor Vehicles Act 1988, recognizes different kinds ofinsurance. Comprehensive , third party, coverage for employees in agoods vehicle and such other policies under the Public LiabilityInsurance Act, 1991 (6 of 1991). https://hcservices.ecourts.gov.in/hcservices/

101.Third party insurance is also known as ‘Act Policy’, whichis compulsory as per Section 146 of the Motor Vehicles Act, whichreads that no person shall use, except as a passenger, or cause orallow 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 bythat person or that other person, as the case may be, a policy ofinsurance complying with the requirements of Chapter XI of the MotorVehicles Act. The section provides for a proviso and explanation,extracted supra. 102.Certain provisions of the Motor Vehicles Act requireconsideration to understand the scheme and object of the MotorVehicles Act,"3. Necessity for driving licence:- (1) No personshall drive a motor vehicle in any public place unlesshe holds an effective driving licence issued to himauthorising him to drive the vehicle; and no personshall so drive a transport vehicle other than a motorcab or motor cycle hired for his own use or rented underany scheme made under sub-section (2) of section 75unless his driving licence specially entitles him so todo.(2) The conditions subject to which sub-section (1)shall not apply to a person receiving instructions indriving a motor vehicle shall be such as may beprescribed by the Central Government.4. Age limit in connection with driving of motorvehicles:- (1) No person under the age of eighteen yearsshall drive a motor vehicle in any public place:Provided that a motor cycle with engine capacitynot exceeding 50cc may be driven in a public place by aperson after attaining the age of sixteen years.(2) Subject to the provisions of Section 18, noperson under the age of twenty years shall drive atransport vehicle in any public place.(3) No learner's licence or driving licence shallbe issued to any person to drive a vehicle of the classto which he has made an application unless he iseligible to drive that class of vehicle under thissection.5. Responsibility of owners of motor vehicles forcontravention of sections 3 and 4. - No owner or person https://hcservices.ecourts.gov.in/hcservices/ in charge of a motor vehicle shall cause or permit anyperson who does not satisfy the provisions of section 3section 4 to drive the vehicle.6. Restrictions on the holding of driving licences.- (1) No person shall, while he holds any drivinglicence for the time being in force, hold any otherdriving licence except a learner’s licence or a drivinglicence issued in accordance with the provisions ofsection 18 or a document authorising, in accordance withthe rules made under section 139, the person specifiedtherein to drive a motor vehicle.(2) No holder of a driving licence or a learner’slicence shall permit it to be used by any other person.(3) Nothing in this section shall prevent alicensing authority having the jurisdiction referred toin sub-section (1) of section 9 from adding to theclasses of vehicles which the driving licence authorisesthe holder to drive.10. Form and contents of licences to drive:- (1)Every learner's licence and driving licence, except adriving licence issued under Section 18, shall be insuch form and shall contain such information as may beprescribed by the Central Government.(2) A learner's licence or, as the case may be,driving licence shall also be expressed as entitling theholder to drive a motor vehicle of one or more of thefollowing 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 description11. Additions to driving licence. - (1) Any personholding a driving licence to drive any class ordescription of motor vehicles, who is not for the timebeing disqualified for holding or obtaining a drivinglicence to drive any other class or description of motorvehicles, may apply to the licensing authority havingjurisdiction in the area in which he resides or carrieson his business in such form and accompanied by suchdocuments and with such fees as may be prescribed by the https://hcservices.ecourts.gov.in/hcservices/ Central Government for the addition of such other classor description of motor vehicles to the licence.(2) Subject to such rules as may be prescribed bythe Central government, the provisions of section 9shall apply to an application under this section as ifthe said application were for the grant of a licenceunder that section to drive the class or description ofmotor vehicles which the applicant desires to be addedto his licence.14. Currency of licences to drive motor vehicles-(1) A learner’s licence issued under this Act shall,subject to the other provisions of this Act, beeffective for a period of six months from the date ofissue of the licence. (2) A driving licence issued or renewed under thisAct shall – (a) in the case of a licence to drive a transportvehicle, be effective for a period of three years :Provided that in the case of licence to drive atransport vehicle carrying goods of dangerous orhazardous nature be effective for a period of one yearand renewal thereof shall be subject to the conditionthat the driver undergoes one day refresher course ofthe prescribed syllabus ; and (b) in the case of any other licence - (i) if the person obtaining the licence, eitheroriginally or on renewal thereof, has not attained theage 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 fromthe date of such issue or renewal ; or (B) until the date on which such person attains theage 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 issueor, as the case may be, renewal thereof, be effective,on payment of such fee as may be prescribed, for aperiod of five years from the date of such issue orrenewal :Provided that every driving licence shall,notwithstanding its expiry under this sub-section, https://hcservices.ecourts.gov.in/hcservices/ continue to be effective for a period of thirty daysfrom such expiry.15.Renewal of driving licence:- (1) Any licensingauthority may, on application made to it, renew adriving licence issued under the provisions of this Actwith effect from the date of its expiry:Provided that in any case where the application forthe renewal of a licence is made more than thirty daysafter the date of its expiry, the driving licence shallbe renewed with effect from the date of its renewal:Provided further that where the application is forthe renewal of a licence to drive a transport vehicle orwhere in any other case the applicant has attained theage of forty years, the same shall be accompanied by amedical certificate in the same form and in the samemanner as is referred to in sub-section (3) of Section8, and the provisions of sub-section (4) of Section 8shall, so far as may be, apply in relation to every suchcase as they apply in relation to a learner's licence.(2) An application for the renewal of a drivinglicence shall be made in such form and accompanied bysuch documents as may be prescribed by the CentralGovernment.(3) Where the application for the renewal of adriving licence is made previous to, or not more thanthirty days after the date of its expiry, the feepayable for such renewal shall be such as may beprescribed by the Central Government in this behalf.(4) Where the application for the renewal of adriving licence is made more than thirty days after thedate of its expiry, the fee payable for such renewalshall be such amount as may be prescribed by the CentralGovernment:Provided that the fee referred to in sub-section(3) may be accepted by the licensing authority inrespect of an application for the renewal of a drivinglicence made under this sub-section if it is satisfiedthat the applicant was prevented by good and sufficientcause from applying within the time specified in sub-section (3):Provided further that if the application is mademore than five years after the driving licence has https://hcservices.ecourts.gov.in/hcservices/ ceased to be effective, the licensing authority mayrefuse to renew the driving licence, unless theapplicant undergoes and passes to its satisfaction thetest of competence to drive referred to in sub-section(3) of Section 9.(5) Where the application for renewal has beenrejected, the fee paid shall be refunded to such extentand in such manner as may be prescribed by the CentralGovernment.(6) Where the authority renewing the drivinglicence is not the authority which issued the drivinglicence it shall intimate the fact of renewal to theauthority which issued the driving licence.103.The Motor Vehicles Act read in entirety is a comprehensivecode, prescribing different classes of vehicles for which differentkind of licence is required. Criteria has been fixed for getting alearner's licence, regular licence and for addition of licence,depending upon the class of vehicle, categorisation of different kindof vehicle, etc. 104.Reading of the provisions would make it clear that theconditions set out are to prevent accidents for want of skill indriving the kind of vehicle, without appropriate licence. Publicsafety is the paramount consideration. The Act also provides forsuspension or revocation and for such other matters. Penalprovisions are also provided for violation of certain provisions.When the interpretation of Section 149(2)(a)(ii) vis-a-vis theproviso appended to sub-sections (4) and (5) of the Motor VehiclesAct, 1988, came up for consideration before the Supreme Court inSwaran Singh's case, considering the beneficial enactment, there is acategorical pronouncement by the Supreme Court, that the rights ofthe third party to claim compensation is statutory. When thestatutory provisions are interpreted with a declaration that theinsurer has to pay the compensation to a third party and recover, isit open to the insurers to harp on the ground that they are boundonly by the terms of contract? In this context, this Court deems itfit to consider Section 23 of the Contract Act, which reads asfollows:"23. What considerations and objects are lawful,and what not:- The consideration or object of anagreement is lawful, unless-it is forbidden by law; oris of such a nature that, if permitted, it woulddefeat the provisions of any law; oris fraudulent; orinvolves or implied injury to the person orproperty of another; or the Court regards it as immoral, https://hcservices.ecourts.gov.in/hcservices/ or opposed to public policy.In each of these cases, the consideration or objectof an agreement is said to be unlawful. Every agreementof which the object or consideration is unlawful, isvoid."105.As per the abovesaid Section, a contract of insurance isexecuted between the insurer and insured. As per the terms andconditions of the contract, the insurer promises to indemnify theinsured, in the event of any liability that may be fastened on theinsured (owner), as per Section 147 of the Act. For the promise heldout by the insurer to indemnify, the insured, not only has to makethe payment, by way of premium, but he has to abide by the terms andconditions of the policy and also the provisions of the statute. Theinsurance company is not directly liable to pay compensation to theperson, who has suffered a bodily injury or the legal representativesof the deceased, on account of the accident, the liability tocompensate the third party is that of the insured and that theinsurer merely indemnifies him. Thus, indisputably the contract ofinsurance is purely between the insurer and the insured and that thethird party is not a privy to the same. In the event of anyviolation of statutory provisions or policy conditions by theinsured, it would be open to the insurer to repudiate the contract ofinsurance to the insured or contend that inasmuch as, there is abreach or violation of the statutory provision and therefore, thereis no obligation for the insurer to indemnify the insured, for anyloss sustained by the insured, in the event of any liability fastenedon the insured and required to be indemnified under Section 147 ofthe Motor Vehicles Act. But the insurer cannot avoid its payment ofcompensation to a third party victim.106.At this juncture, the expression in Section 149(4) of theAct, "notwithstanding that the insurer may be entitled to avoid orcancel or may have avoided or cancelled the policy, the insurershall, subject to the provisions of this section, pay to the personentitled to the benefit of the decree" assumes greater significanceand should be given due importance to give effect to the divineintention of the legislature. Section 146 of the Act mandatescompulsory insurance, in respect of third parties and all otherpolicies are optional. If the insured opts for a different kind ofpolicy and seeks for protection, subject to the terms and conditionsof that policy, he can always take a policy, in addition tocompulsory insurance. The object of compulsory insurance is to grantrelief to third party victims and in all other cases, the insurer hasno obligation to indemnify the insured, unless a specific policy istaken by the insured. If the insured commits a breach, in respect ofthird party claims, he cannot seek for indemnification by the insurerfor 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 insurercan contend that he is not liable to indemnify the insured. Section https://hcservices.ecourts.gov.in/hcservices/ 149(1), (4) and (5) have been incorporated in the statute only togrant relief to third party victims, by making payment and then torecover from the owner of the vehicle. If the contentions of theInsurance Companies that they should be totally exonerated frompayment to third party victims, inspite of compulsory insurancecover, are to be accepted, then there is no necessity for thelegislature to incorporate the words "Pay and Recover". The argumentof the Insurance Companies, in my humble view is against thestatutory provisions. Section 149(2) of the Act cannot beinterpreted 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 beredundant. 107.In this context, it is relevant to extract Clause (i) ofthe Summary of Findings of the Supreme Court to the various issuesraised in Swaran Singh's case. It states that Chapter XI of theMotor Vehicles Act, 1988, providing compulsory insurance of vehiclesagainst third party risks in a social welfare legislation to extendthe relief of compensation to victims of accident caused by use ofmotor vehicles. The provisions of compulsory insurance coverage ofall vehicles are with this paramount object and the provisions of theAct have to be so interpreted as to effectuate the said object.108.In Swaran Singh's case, the Supreme Court in the summary offinding starts with a specific note of giving effect to thebeneficent statute to grant relief to third parties. As extracted inthe earlier paragraphs of this judgment from various decisions, theApex Court has made it clear that the divine intention of thelegislature, its scope, interpretation with reference to the contractof insurance in more than one places and categorically held thatpayment of compensation to third party is statutory. Though theSupreme Court in Clause (iii) of the judgment in the Summary ofFindings, has held that the insurer is entitled to raise a defence ina claim petition filed under Section 163A or Section 166 of the MotorVehicles Act, inter alia in terms of Section 149(2)(a)(ii) of thesaid Act in Clause (iii) of the summary, has made it clear that thebreach of the policy conditions, e.g., disqualification of driver orinvalid driving licence of the driver, as contained in sub-section(2)(a)(ii) of Section 149 have to be proved to have been committed bythe insured for avoiding liability by the insurer. The Supreme Courthas also made it clear that mere absence, fake or invalid drivinglicence or disqualification of the driver for driving at the relevanttime, are not in themselves defences available to the insurer againsteither the insured or the third parties. If the compensation to bepaid to the injured, third party or the legal representatives of thedeceased is statutory and in the light of the extensive considerationas to the interpretation of the statutory provisions, Section 149(2)(a)(ii) vis-a-vis the provision appended to sub-sections 4 and 5 ofthe Motor Vehicles Act, 1988, i.e., with reference to the defences https://hcservices.ecourts.gov.in/hcservices/ available to the insurance company, this Court is of the view that inmatters pertaining to the alleged breach under Section 149(2)(a)(ii)of the Act, the dispute to be adjudicated by the Courts/Tribunalsshould be inter se dispute, as to whether the insurer can claimexoneration of its liability to the insured, as to whether there wasany breach of policy condition or statutory provisions of the MotorVehicles Act, so that they can avoid their liability towards theinsured or in other words, not to indemnify the insured, as per thecontract of insurance, for the reason that the third party is notprivy to the contract, and where his case is covered by a compulsoryinsurance and that is why the Supreme Court at Clause (iii), has heldthat mere absence, fake or invalid driving licence ordisqualification of the driver at the relevant time, are not inthemselves defences available to the insurer against the insured orthird parties.109.It could be noticed that the Apex Court, while interpretingthe provisions, is also cautious in stating that to avoid theinsurer's liability towards the insured, the insurer has to provethat the insured was guilty of negligence and failed to exercisereasonable care in the matter of fulfulling the conditions of policy,regarding use of vehicles by a duly licenced driver or one who wasnot disqualified to drive at the relevant time. Liability to theinsured arises out of a contract of insurance between the insured andthe insurer with a legal obligation to indemnify the insured or not,as per the contract of insurance, subject to proof of breach ofpolicy conditions or statutory provisions of the Motor Vehicles Act,if the insured consciously or recklessly allowed a person who doesnot possess a licence to drive the vehicle. That is why, at Clause(vi) of the Summary of Findings, the Supreme Court has further heldthat even if the insurer is able to prove breach on the part of theinsured concerning the policy condition regarding holding of validlicence by the driver or disqualification to drive during therelevant period, the insurer would not be allowed to avoid itsliability towards insured, unless the said breach or breaches of theconditions of the driving licence is/are so fundamental, as are foundto have contributed to the cause of the accident.110.Here again, it could be noticed that even if there was abreach, the Supreme Court has made it clear that the avoidance ofliability could be only towards the insured. It has also made itclear that the Tribunals in interpreting the policy conditions wouldapply the 'rule of main purpose' and the concept of 'fundamentalbreach' to allow the defences available to the insurer under Section149(2) of the Act.111.Reading of Clause (xi) makes it clear that the above clausegives a right to the insurer to raise all the defences that arepermissible under Section 147 read with Section 149 of the MotorVehicles Act, which includes negligence i.e., if not proved against https://hcservices.ecourts.gov.in/hcservices/ the driver of the offending vehicle, there is no need for the companyto pay compensation, provided the claim is made under Section 166 ofthe Act. The claim can be defended by the Company, if fraud isplayed on the insurance company, disqualification from holding thelicence and all other grounds that are permissible under law, boththe insurer and the insured can defend. The Tribunal has the powerto adjudicate and decide all inter se disputes stated supra, whichare only illustrative, between the claimants and the insurer. TheTribunal is also empowered to adjudicate the inter se disputesbetween the insured and the insurer, regarding its liability towardsthe insured, i.e., their legal obligation to indemnify the insuredunder the contract of insurance. If the insurer establishes a breachas explained by the Apex Court, then it would be exonerated of itsliability towards the insured, but by no stretch of imagination, itcan claim exoneration from payment of compensation to the injured,third party or the legal representatives of the deceased. Havingconsidered the interpretation of Section 149(2)(a)(ii) vis-a-vis theprovision to sub-section 4 and 5 of the Motor Vehicles Act,extensively, the Supreme Court has not excluded the liability of theinsurer to third parties. Therefore, when the Insurance Companieshave a statutory duty or obligation to pay compensation to thirdparty victims, opposing their claim solely on the ground of nonpossession of licence, by the driver of the vehicle, at the time ofaccident, in my view, would be contrary to statutory provision andthe decisions of the Supreme Court. At best, the insurer can onlyseek for exoneration of its liability towards the insured and notagainst the third party. Clause X of the Summary of Findings inSwaran Singh's case (cited supra) also makes it clear that where onadjudication of the claim under the Act, the Tribunal arrives at aconclusion that the insurer has satisfactorily proved its defence inaccordance with the provisions of Section 149(2) read with sub-section (7) as interpreted by the Supreme Court, the Tribunal candirect that the insurer is liable to be reimbursed by the insured forthe compensation and other amounts which the Insurance Companies arecompelled to pay to the third party under the award of the Tribunal.112.In a claim petition before the Claims Tribunal, theinsurance company fails to lead reliable and cogent evidence tosupport its contentions regarding breach of policy conditions orstatutory provisions of the Motor Vehicles Act and also the fact thatthe insured has consciously allowed a driver, who had no licence todrive the vehicle and thus, guilty of negligence or non fulfillmentof conditions of policy regarding use of the vehicle by a dulylicenced driver, their liability to the insured to indemnify underthe Contract of insurance, cannot be avoided. The inevitableconclusion would be that the liability is compulsory to the thirdparty, as it is statutory. https://hcservices.ecourts.gov.in/hcservices/

113.Predicaments of the insurer to prove its defence of nolicence, fake licence, etc., is also one of the arguments placedbefore this Court. In most of the cases, owners and drivers of theoffending vehicle, do not respond to the letters of the insurers,seeking licence particulars from them or they do not appear before theClaims Tribunal or they do not file their written statements/counter,even though they are if represented by lawyer or after filing of thecounter/written statement, they remain ex parte.114.In a given case, when the owner and the driver, both remainex parte and not produced the original driving licence and notsatisfied the insurance company that the driver was having validdriving licence,the company has to prove that the driver was not in apossession of the driving licence, at the time of accident, but it isthe grievance of the Insurance Companies that there is no prescribedmethod or yardstick, regarding proof.115.In most of the claims, only the insured and insurer aremade as parties, although under Section 168 of the Motor VehiclesAct, the Claims Tribunal is empowered to specify the amount, whichshall be paid by the insurer or owner or driver of the vehicleinvolved in the accident or by all or any of them, as the case maybe. In most of the claims made under Section 166 of the Act, theinsured remains ex parte and an application is taken out by theInsurance Companies, under Section 170 of the Motor Vehicles Act,seeking permission to contest the claim on all or any of the groundthat are available to the person, against whom, the claim has beenmade.116.If the driver has not been made as a party in the claimpetition, but the owner alone has been made as a party, in additionto the Insurance Company, on receipt of summons and if the ownerappears before the claims tribunal and asserts that he had verifiedas to whether the driver was duly licensed to drive the vehicle, itis for the Insurance Company to prove that the driver did not possessany licence and also to prove that the owner has consciously allowedthe vehicle to be driven by the owner, by such person, who has nolicence or the required licence, valid and effective licence, etc.,and if the Courts/Tribunals arrive at a conclusion on evidence thatthe Insurance Company with a view to avoid its liability, hasestablished the defence of breach on the part of the owner of thevehicle, then the insurer could succeed in its defence to avoid itsliability towards the insured under the contract of insurance. Inmost of the claim petitions, though the owner is made as a partyrespondent, invariably, it could be noticed that he remains exparte,in which case, the breach of policy condition, viz., disqualificationof the driver or invalid driving licence of the driver, etc., ascontained in sub-section 2(a)(ii) of Section 149 of the MotorVehicles Act or for the matter as to whether the driver had any validand effective licence, to drive that particular kind of vehicle at https://hcservices.ecourts.gov.in/hcservices/ the time of accident or not, has to be proved by the InsuranceCompany and also the breach of the policy conditions or statutoryprovisions, for avoiding the liability towards the insured. Where onadjudication of the claim under the Act, the Tribunal arrives at aconclusion that the insurer has satisfactorily proved its defence inaccordance with the provisions of section 149(2) read with sub-section (7), as interpreted by the Courts, the Tribunal can directthat the insurer is liable to be reimbursed by the insured, for thecompensation and other amounts, which the insurer has been compelledto pay to a third party under the award of the tribunal. Invariablyin most of the cases, the Insurance Companies engage theirinvestigating officers, who collect information and lead evidence todispute the manner of accident and to avoid their liability to paycompensation to a third party victim. Mere tendering of evidencethrough an Investigating Officer, by filing a report, would notamount to establishing their defence under Section 149(2)(ii), unlessthe insurer establishes non-possession of licence, by letting indocumentary evidence, through an official from the RTO office, withinwhose jurisdiction, the driver ordinarily resides. Report by theInvestigation officer cannot be given any credence, for proving themanner of accident or for that matter, there was no licence at thetime of accident or to prove that there was willful breach on thepart of the insured, unless the insurance companies examine thosepersons examined by the Investigator, otherwise, the report would bebased on information, collected from persons, who are not allowed tobe cross examined by the claimants or the owner or driver or both, ifthey enter appearance and defend the manner of accident or for thatmatter, even the licence aspect. Even if the owner or driver remainabsent, the report would be mere collection of some information andit is not a direct evidence. It could be even based on hearsay. 117.In some cases, the Insurance Companies addresses theconcerned Regional Transport Office, to furnish the licenceparticulars of the driver and they let in evidence through theofficials of the Licencing Authority, to prove that the driver didnot possess licence to drive the vehicle or that kind of licence todrive 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 RegionalTransport Office and evidence is let in through him or hisrepresentative. In all the above cases, invariably, it would be thecontention of the Insurance Companies that by production ofdocumentary evidence, i.e., any document in the form of a letter,obtained from the Regional Transport Office or examination of anofficial from the Regional Transport Office that they have dischargedthe initial burden of proof, that the driver of the offending vehicledid not possess a valid licence and that a contention is also raisedthat the Insurance Companies cannot be mulcted with the liability topay compensation, to a third party victim. https://hcservices.ecourts.gov.in/hcservices/

118.The owner of a motor vehicle in terms of Section 5 of theAct has a responsibility to see that no vehicle is driven except by aperson who does not satisfy the provisions of Sections 3 or 4 of theAct. At this juncture, it is relevant to extract Rule 375 of theTamil Nadu Motor Vehicles Rules, which mandates that, "no owner of amotor vehicle shall cause or allow any person to function as a driveror conductor unless the owner has in his possession a record inwriting of the name and address of the driver or conductor as setforth in his licence, the number of licence, the validity of thelicence and also the classes of vehicles authorised to be driven bythe driver and the name of the authority by which it was issued".When the driver of the vehicle did not possess any licence and thatthe vehicle was allowed consciously to be driven by the owner of thevehicle by such person, the insurer is entitled to succeed in itsdefence and avoid liability to the insured.119.The question as to whether the owner has taken a reasonablecare to find out, as to whether the driving licence produced by thedriver is a fake one or for the matter that, the owner of the vehiclehas committed a breach of the contract of insurance, consciously byallowing the vehicle to be driven by a person, who did not possessany licence, depends upon the facts and circumstances of each caseand in that context, this Court is of the view that mere writingletters to the owner or the driver of the vehicle to furnish thelicence particulars or to produce the licence, by itself is notsufficient proof of evidence, to establish lack of licence or breachon the part of the owner of the vehicle. If notices are refused orevaded by the driver or owner, as the case may be, or by both, it isalso the duty of the Insurance Companies to summon the official fromthe Regional Transport Authority, to produce the licence particulars,if any, or produce any record from the Regional Transport Officer'sOffice. If steps are not taken by the Insurance Companies to summonthe abovesaid official, then it can be safely concluded that nodiligent steps have been taken to discharge their initial burden.When the Insurance Companies let in evidence, through a RTO or hisrepresentative and produce the licence particulars, then theCourt/Tribunals can arrive at a reasonable conclusion that theCompanies have discharged their burden of proof, as to the fact thatthe driver did not possess any licence at the time of accident, likein 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 madeas a party to the claim petition and if they fail to appear beforethe claims Tribunal, recourse should be made to ascertain the licenceparticulars from the Regional Transport Officer's Office. If thedriver has not been made as a party to the claim petition, theInsurance Companies can always take out an application to implead himas a party respondent, so that, the Tribunal, on adjudication can fixthe responsibility on the owner, driver and the insurer, as the case https://hcservices.ecourts.gov.in/hcservices/ may be, as per Section 168 of the Motor Vehicles Act. Let me now consider some of the decisions, as to how the Courtshave considered the evidence let in by the Companies to dischargetheir burden, regarding non-possession of licence of any kind,licence for a different kind of vehicle, etc., and the burden ofproof of breach of policy conditions or statutory provisions of theAct.121.In M/s.National Insurance Company Ltd., Gobichettipalayamv. Thulasi reported in 1994 (1) LW 567, a Division Bench of thisCourt comprising of Hon'ble Justice Srinivasan and Abdul Hadi,considered a case, where the driver of the offending vehicle wasissued with a driving licence by the Assistant Licencing Authorityonly from 08.07.1986 to 07.07.1991, marked as Ex.B2. The applicationfor licence was made, 5 days after the accident, which occurred on03.07.1986. The licence was issued on 10.07.1986, w.e.f. 08.07.1986.The Motor Vechicles Inspector's Report was produced, wherein, it wasmentioned that the licence was produced before the Inspector. Theoriginal Motor Vehicles report has been received from the CriminalCourt. Liability has been fastened on the owner of the paycompensation. In the appeal before the Bench, the claimant hascontended that the insurer had not examined any witness anddischarged its burden to bring it under the exception clause.Rejecting the contention, the Bench has raised a question andanswered as follows:"How can the insurer examine any person who canassert from his personal knowledge that the driver ofthe vehicle had no driving licence at the relevant time?We should not forget that both the owner of the vehicleand the driver will in their own interests do their bestto defeat the case of the insurer. The best evidencethat can be adduced by the insurer is the relevantrecord only and it is placed before the Court. Oncethat is done the burden shifts on to the person whowants to prove the positive, viz., that the driver had alicence."122.It could be seen from the above judgment, there was apositive assertion by the Motor Vehicle's Inspector, who had recordedin his report that a licence was produced and that the details of thesame have been specifically noted down by him. Therefore, in suchcircumstances, the Division Bench, rejecting the plea of theclaimant, regarding examination of any witness on the side of theInsurance Company, has observed that the best evidence to provewhether the driver did possess a licence or not, at the time ofaccident, is the record and not the examination of the owner ordriver. From the above judgment, it could be deduced that even if theowner or the driver is summoned for examination, it is the https://hcservices.ecourts.gov.in/hcservices/ observation of the Division Bench that they would only try to defeatthe case of the insurer and therefore, the Bench has given importanceonly to the record, produced before the Claims Tribunal.123.The concerned Regional Transport Officer, within whosejurisdiction, the driver ordinarily resides, as per the addressfurnished in the claim petition, would be competent to ascertain fromthe records maintained by him to speak, as to whether, the driver, atthe time of accident, did possess a licence or not. Mere sendingnotices to the owner or the driver of the vehicle does not amount toproof of no licence or the kind of licence required to drive, etc.In this context, it is worthwhile to consider a judgment of the ApexCourt in Narcinva V. Kamat v. Alfredo Antonio Doe Martins and othersreported in 1985 ACJ 397, wherein, the Insurance Company pleaded thatthe 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 answeredthe issue in favour of the company, stating that it had dischargedthe burden of proving non-possession of licence and breach by theowner. The High Court confirmed the decision. On appeal by theowner, the Supreme Court considered, as to whether the driver of theoffending vehicle is under any obligation to furnish evidence andwhether the Insurance Company has discharged its burden. The onlyevidence available before the Claims Tribunal was that during cross-examination of the driver, a question was posed to him, as to whetherhe would produce the driving licence and since he had failed toproduce the same, the Company pleaded that an adverse inferenceshould be drawn against the driver. Considering the said plea, theSupreme Court at Paragraphs 14 and 15, held as follows:"The last question is whether he had a validdriving licence. The High Court has not recorded aclear cut finding on this point. The finding of theTribunal is more evasive then the one by the HighCourt. Mr.Sharma did not dispute that the secondappellant had driving licence. His grievance is that hehaving failed to produce the same when called upon todo so in the cross examination, an adverse inference bedrawn against him that he did not have a valid licenceto drive a pick-up van. The submission fails to carryconviction with us. The burden to prove that there wasbreach of the contract of insurance was squarely placedon the shoulders of the insurance company. It could notbe said to have been discharged by it by a merequestion in cross- examination. The second appellantwas under no obligation to furnish evidence so as toenable the insurance company to wriggle out itsliability under the contract of insurance. Further theR.T.A. which issues the driving licence keeps a recordof the licences issued and renewed by it. The insurance https://hcservices.ecourts.gov.in/hcservices/ company could have got the evidence produced tosubstantiate his allegation. Applying the test whowould fail if no evidence is led, the obvious answerthe insurance company. To sum up, the insurance company failed to provethat there was a breach of the term of the contract ofinsurance as evidenced by the policy of insurance onthe ground that the driver who was driving the vehicleat the relevant time did not have a valid drivinglicence. Once the insurance company failed to provethat aspect, its liability under the contract ofinsurance remains intact and unhampered and it wasbound to satisfy the award under the comprehensivepolicy of insurance."124.Thus, in the light of the above decision, it could beinferred that even if the insurer sends any notice to the driver toproduce the particulars of licence, still he is not under anyobligation to furnish any evidence and in such circumstances, merecausing of notice to the owner or driver, would not lead to aconclusion that the insurer has discharged its burden to prove non-possession of licence or for that matter, an adverse inference couldbe drawn, for not furnishing the details. In the reported judgment,the driver was examined and even then, the Supreme Court observedthat evidence from the Regional Transport Authority is the bestevidence.125.It is also worthwhile to consider a case in United IndiaFire and General Insurance Co. Ltd., v. Surindarsinh Gurasinhreported in AIR 1981 Guj. 237, wherein, a Division Bench of theBombay High Court, considered the contentions of the appellant-Insurance Company that they have made sufficient pleadings, regardinglack of licence and in that case, when a suggestion was made duringcross-examination, the witness examined on behalf of the owner of thevehicle, denied the suggestion that he had no personal knowledge asto whether the driver had any licence, at the time of accident and insuch circumstances, the company pleaded that it has no obligation topay compensation and that the owner alone should be mulcted with theliability. Rejecting the contentions of the appellant-InsuranceCompany that an adverse inference should be drawn against the driver,the Division Bench held as follows:"The appellant sought to sustain its ill-foundedsubmission on the basis of certain observations in GopalKrishnaji v. Mohamed Haji Latif, AIR 1968 SC 1413 to theeffect that the Court ought to draw an adverse inferencewhen a party in Possession of best evidence which wouldthrow light on the issues in controversy withholds thesame and that such adverse inference can be drawn again https://hcservices.ecourts.gov.in/hcservices/ such party notwithstanding that the onus of proof didnot lie on him. We do not think any assistance can bederived by the appellant from the observations in theaforesaid decision, in-view of the fact that whileconsidering the position of an insurer in the context ofthe provisions of Ss. 95 and 96 of the Motor VehiclesAct, 1939 and the limited defences available to theinsurer in a proceeding under the said Act, the SupremeCourt has in unequivocal terms held that it is the dutyof the insurer to substantiate the plea that the vehiclewas driven by a person who was not duly licensed andthat a mere averment to that effect in in the WrittenStatement and a mere suggestion to a party in thatbehalf in cross-examination is not sufficient todischarge the said duty. When there is a direct judgmentof the Supreme Court governing the matter and deliveredin a proceeding arising under this very statute it isnot open to have recourse to certain observations 'in ajudgment delivered in a different context."126.In Karan Singh v. Manoharlal reported in 1989 ACJ 177, theInsurance Company disowned its liability on the ground that theperson who drove the motorcycle, did not possess a licence. Thedriver was not examined. The Insurance Company gave notice to theowner. But the driving licence was not produced. The InsuranceCompany did not call for any record from the Regional TransportAuthority or any other evidence was let in to establish that thedriver had no driving licence. Following Narcinva V. Kamat's case(cited supra), the Madhya Pradesh High Court, held that the InsuranceCompany failed to discharge its burden by leading legal evidence. AtParagraphs 8 to 10, the Court held as follows:"8. Admittedly, in the present case, the driver ofthe vehicle has not been examined though a notice dated25-1-78 to produce document i.e. driving licence, wasserved on the counsel for the non-applicants No. 1 and2, but no driving licence was produced in response tothe notice. There is no evidence on record either ofthe 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, inresponse to the notice of the Insurance Company, he didnot contact Manoharlal and produce his licence beforethe Insurance Company. He also admitted that he cannotgive the number and the date of issue of licence infavour of Manoharlal. Except this, there is no otherevidence led by the Insurance Company to substantiateits contention. The Apex Court in the case of Narcinva https://hcservices.ecourts.gov.in/hcservices/ V.Kamat v. Alfredo Antonio Doe Martins, 1985 ACJ 397(SC), observed that when the Insurance Companycomplains of a breach of the term of contract, whichwould permit it to disown its liability under thecontract of insurance, the burden is squarely on theInsurance Company to prove that the breach has beencommitted by the other party to the contract. The restin such a situation would be 'who would fail, if nosuch evidence is led'. With this principle of law inview, the evidence has to be judged. Merely non-production of licence or non-examination of the driverof the vehicle is not enough nor any adverse inferencecan be drawn against the person holding that because ofnon-examination of the driver or non-production of thelicence, the burden is discharged by a mere question incross examination nor the owner is under any obligationto furnish the evidence so as to enable the InsuranceCompany not to riggle out its liability under thecontract of insurance. However, the RTA who issues thedriving licence, keeps record of the licence issued andrenewed by him and the Insurance Company could have gotthe evidence produced to substantiate its defence. Notonly, this, no enquiries were made by the InsuranceCompany from the RTA concerned regarding the fact ofissue of a driving licence to Manohar Lal. Hence, itwould not give rise to an adverse inference aboutrespondent No. 1 being an unauthorised driver (see theDivision Bench case of this Court reported inShajadibai v. Babookhan, Vol. 1, 1988 ACC 24 (Supra).9. The contention of the learned Counsel for theInsurance Company was that notice to produce thedriving licence was given during the trial and inresponse to that notice, the driving licence was notproduced. Therefore, the Tribunal was right in raisingan adverse inference. By this notice, at the most, theInsurance Company wanted a disclosure or discovery ofthe document. Under order 11 CPC, the object of such adiscovery is' to save expenses and time to shorten thelitigation. The Tribunal did not pass any order forproduction of documents but a discretion as envisagedUnder Order 11 Rule 12 CPC or Under Order 11 Rules 14CPC was not exercised by issuing an order fordiscovery. Hence, the Tribunal was wrong in raising anadverse inference and it cannot be said, in suchcircumstances, that the Insurance Company was not boundto produce any legal evidence to discharge the burden.As stated earlier, the object of notice is to save timeand expenses only, the cost or the expenses of suchevidence could have been imposed on the owner or the https://hcservices.ecourts.gov.in/hcservices/ driver of the vehicle and nothing more, if in responseto the notice, the licence was not produced, theInsurance Company ought to have called for the recordof the R.T.A. or could have produced other evidence.10. From the above discussion, I am of the opinionthat the Insurance Company has not discharged itsburden by leading legal evidence and the Tribunal waswrong in arriving at a finding and in absolving theInsurance Company under the umbrella of exclusionclause that the respondent No. 1 was not holding anyvalid 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 tohave driven the vehicle, without a licence. The Tribunal absolvedthe company from payment of compensation. Before the High Court, itwas contended that the Claims Tribunal erred in drawing an adverseinference 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 lowerTribunal in drawing an adverse inference against thenon-applicant No. 2 is clearly erroneous in view of thefact that whenever the insurance company takes a pleathat the driver of the accident vehicle was not holdinga valid licence at the time of the accident, it is forthe insurance company to prove that fact by bringing therelevant documents, i.e., the extracts from the R.T.A.or a certificate to the effect that the person drivingthe vehicle at the time of the accident was not issued alicence at all. The Supreme Court in the case ofNarcinva V. Kamat v. Alfredo Antonio Doe Martins andothers reported in 1985 ACJ 397, has held that wheneverthe insurance company pleads a breach of the conditionof policy by pleading that the driver had no drivinglicence at the time of the accident the onus is on theinsurance company to prove that fact. The insurancecompany cannot contend that only because the driverfailed to produce the licence when asked to do so in thecross-examination an adverse inference should be drawnagainst the driver. The onus is always on the insurancecompany to prove that the driver had no driving licenceto escape liability. Mere non-production of the licenceby the driver does not exonerate the insurance company.Therefore, the insurance company was held liable toindemnify the award. The driver is under no obligationto furnish evidence so as to enable the insurance https://hcservices.ecourts.gov.in/hcservices/ company to wriggle out of its liability under thecontract of insurance. Further the R.T.A. which issuesthe driving licence keeps a record of the licencesissued and renewed by it. The insurance company couldhave got the evidence produced to substantiate itsallegation. The Supreme Court applying the aforesaidtest had held that in the absence of the evidence aboutthe non-holding of licence by the driver it is theinsurance company which has to fail."128.Even assuming that the driver or the owner of the offendingvehicle insured with the Company, is charge sheeted under Sections 3and 5 r/w. 181 of the Motor Vehicles Act, that would not ipso factoamount to proof that he did not possess any valid and effectivedriving licence, because, even during trial, the accused therein, byproducing licence, if any, or for any other valid reasons, has achance of acquittal. When the prosecution has to prove the charge,beyond all reasonable doubt, the Claims Tribunal cannot record anypositive finding on the charge. However, if any record is producedbefore the Claims Tribunal, from the Regional Transport Officer, whomaintains the licence particulars, then it would be an authenticpiece of evidence. Again, filing of a charge sheet alone would notgive rise to any conclusion that the insured committed a breach, byconsciously and recklessly allowing the driver, who did not possess alicence to drive the vehicle. It is for the Claims Tribunal toarrive at a reasonable conclusion on the basis of oral anddocumentary evidence adduced before it. If no rebuttal evidence islet in by the owner, then the Claims Tribunal may consider, as towhether there is a specific plea of breach of policy condition orstatutory provisions and whether any evidence has been let in by thecompany to substantiate, breach.129.When the insurance company can be said to have dischargedits initial burden of proving that the driver of the vehicle had nolicence, has been considered by the Division Bench of this Court inG.Nagendra Devi and others Vs. Mosses 2)National Insurance CompanyLimited, 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 failsto verify the records from the concerned authority (R.T.A), as towhether the rider of the motor cycle was having a valid licence ornot, then the insurance company cannot be said to have discharged itsburden and proved that the rider of the vehicle did not possess avalid licence and in such circumstances, the Company is liable to paycompensation. Mere pleadings in the counter affidavit or writtenstatement by the insurers before the Claims Tribunal, that theinsured has committed breach of policy conditions or statutoryprovisions of the Motor Vehicles Act, alone is not sufficient toprove that they have discharged their burden of proof of non-possession of licence or breach/breaches, so fundamental to have https://hcservices.ecourts.gov.in/hcservices/ contributed to the cause of the accident, so as to avoid itsliability to the insured. Thus, it could be seen from the line ofjudgments stated supra, that despite pleadings and leading oralevidence by the Insurance Companies, the Supreme Court and HighCourts have recognised only an authentic evidence from the office ofthe concerned Regional Transport Office, to speak about the fact, asto whether the driver did possess licence or not, at the time ofaccident. The proof required and given credence by Courts is in theform of record and not mere oral evidence. 130.In National Insurance Company Ltd., v. Samiyathal reportedin 2003 (1) LW 539, for the death of 'X', wife and children preferreda claim. The Insurance Company contended that the driver of theoffending vehicle insured with them, did not possess a valid drivinglicence on the date of accident and therefore, the Tribunal committedan error, fastening liability on the Company. Before the ClaimsTribunal, the Company examined an officer, working in the RegionalOffice of the Insurance Company, who deposed that as per the policyconditions, liability to the third parties is restricted. To provethat the driver did not possess a valid licence to drive the offendingvehicle, 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 letteraddressed to the driver to produce his licence, which remainedunserved. The returned cover was marked as Ex.R3. A similar letterhas also been sent to the owner of the lorry, informing him about thenon-production of driving licence by the driver and of the violationof the policy condition. The owner refused to receive the registeredletter, which was also marked as Ex.R4. The returned cover was markedas Ex.R5. However, before the Claims Tribunal, RW.1, Official fromthe Insurance Company admitted that the Company did not take any stepsto ascertain the licence particulars, from the Regional Officer, as towhere the lorry driver was issued with any driving licence, to drivethe lorry. As stated supra, the notice to the driver was unserved andthat the owner had refused to receive the notice. The owner did notrepresent before the Tribunal. However, before the High Court, theowner was represented by a counsel. There was explanation orinformation regarding the stand taken by the Insurance Company, viz.,the driver did not possess the valid driving licence and in suchcircumstances, a Division Bench of this Court, accepting thecontention of the Insurance Company that they had discharged theirinitial burden in proving that the driver did not possess a drivinglicence and that the owner did not furnish any explanation before theHigh Court, through he was represented by a counsel, held that theInsurance has to pay and recover the compensation amount from theinsured. It could be seen from the above judgment that before theDivision Bench, the owner could not offer any explanation, regardingpossession of any licence and even in such circumstances, there was nototal exoneration of the Insurance Company from payment ofcompensation to the claimant, but the Company was exonerated of itsliability to the insured and liberty has been granted for recovery. https://hcservices.ecourts.gov.in/hcservices/

131.In Punam Devi and another Vs. Divisional Manager, New IndiaAssurance Co.Ltd., and others, reported in AIR 2004 SC 1742 = 2004(3) SCC 386 = 2004 (1) TN MAC 214 (SC), the Supreme Court held thatwhen the insurer failed to prove that the driver has no licence, theinsurance 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 friendV.Ramalingam, reported in 2004 (1) TN MAC (DB) 459, the insurancecompany sought to avoid its liability on the ground that the driverof the offending vehicle did not possess a valid licence to drive thevehicle. They also examined a Branch Assistant from the office ofthe Regional Transport Office as well as an officer from theinsurance company and let in evidence to prove that the company sentnotices to the owner of the vehicle, calling upon him to produce theRC Book and driving licence. The act of the owner of the vehicle innot producing the licence and not sending any reply to the notice,coupled with the fact of letting in evidence, through the official ofthe concerned Regional Transport Office, has been construed to havethe effect that the insurance company has discharged its burden andeven in such case, following the judgment of the Supreme Court in NewIndia Assurance Company, Shimla Vs. Kamla and others, reported in2001 (3) L.W 421, a Division Bench of this Court only directed theinsurance company to pay compensation to the accident victims andthereafter, recover the same from the insured and that the Companywas not absolved of its liability to pay compensation to a thirdparty.133.In Om Prakash Goyal Vs. Bhikhari Dhanwar and others,reported in 2008 (1) TN MAC 15 (DB) (Jharkand.), the insurancecompany took a defence in the written statement that the driver didnot have a valid driving licence. In support of their case, thecompany marked Ex.'A' is a letter issued by the Investigator,National Insurance Company, informing to the licencing authority thaton investigation, it was found that the driving licence in favour ofthe driver was never issued by the Licencing Authority, Murshidabad.Ex.'B' was a letter issued from the office of the LicensingAuthority, District Murshidabad, Motor Vehicles Department informingthe Investigator that no such licence was issued in favour of thedriver. Neither the owner examined himself nor the driving licence ofthe driver was produced. The owner of the vehicle didnot depose thatthe vehicle was entrusted to the driver after verifying the drivinglicence or even on bona fide belief that the driver was holding avalid driving licence. In the abovesaid circumstances, the DivisionBench of the Jharkand High Court headed by Hon'ble Mr. JusticeM.Y.Iqbal, held as follows:- https://hcservices.ecourts.gov.in/hcservices/ "In absence of any iota of evidence from the side ofthe owner of the vehicle and on the basis of evidenceadduced by the Insurance Company it can safely be concludedthat the driver was not holding valid driving licence andthat the owner did not entrust the vehicle to the driverbonafidely to drive the same. We do not find any error inthe impugned judgment whereby the Tribunal directed theInsurance Company to pay the compensation amount to theclaimant and recover the same from the owner of the vehicle"What could be deduced from the Division Bench judgment of JharkhandHigh Court is that the evidence adduced by the Insurance Company wasfound to be sufficient only to exonerate its liability to indemnifythe insured alone.134. In United India Insurance Co.Ltd., Kovilpatti, Vs. RamiahThevar and Muthusamy, reported in 2008 (1) TN MAC 123, the driver ofthe Auto did not have a badge to drive motor vehicle. The drivinglicence was marked. However, the Tribunal by observing that theconcerned official from the Regional Transport Office was notexamined to prove that the Auto driver was not permitted to drive thevehicle without badge, held that the insurance company was jointlyand severally liable to pay compensation, without giving liberty torecover the amount from the owner after satisfying the award.Testing the correctness of the same and having regard to the factualfinding recorded by the Tribunal, on the basis of Ex.P3 DrivingLicence, that the driver had no authorisation or badge to drive apublic carrier, the Hon'ble Mr. Justice G.Rajasuria, a learned singleJudge of this Court, following the decision of the Apex Court inSwaran Singh's case, directed the appellant insurance companytherein, 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 examinedbefore the Claims Tribunal, Ex.P3 – Driving Licence was available toarrive at a conclusion, as to whether, the driver possessed therequired licence or not.135. In National Insurance Co. Ltd., v. Geeta Bhat reported in2008 ACJ 1498 = 2008 (12) SCC 426, a passenger travelling in a threewheeler, died, when the vehicle was hit by a truck. The InsuranceCompany raised a defence that the driving licence possessed by thedriver of the truck was fake. An official of the concerned LicencingAuthority was summoned, but no one turned out. The Insurance Companybrought on record, evidence to the effect that on an investigationmade by its own investigator, it was found that there was no licencein the name of the driver. The Tribunal found that the InsuranceCompany has failed to lead evidence in support of its defence andaccordingly, fastened the liability. The appeal filed by theInsurance Company was also dismissed by the High Court. The ApexCourt held that even assuming that the licence of the driver was fake, https://hcservices.ecourts.gov.in/hcservices/ the Insurance Company is liable to make the payment to the third partyand 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 MadrasHigh Court considered a case, where the Insurance Company, to avoidits liability, submitted that inspite of receipt of a legal noticesent to the owner of the vehicle and its driver, they have not chosento give any reply, as to whether the driver did or did not possess avalid licence and RW.2 therein, an official from the RTO Office,Dindigul, deposed that no document was available in the Office, withregard to licence number of the driver. On the basis of the aboveevidence let in by the Company, a learned Single Judge, by observingthat if really the driver/owner of the vehicle, had possessed anylicence at the time of accident, definitely, the owner of the vehicleand his driver, would have given a suitable reply to Ex.R3 – LegalNotice and a relevant document would be available in the office of theRegional Transport office, Dindigul and in the abovesaidcircumstances, further observed that it was quite clear that theInsurance Company had discharged his burden to the effect that thedriver/owner did not possess any licence on the date of accident. 137.Though in the present appeals, one of the arguments, placedbefore this Court is that when the owner of the vehicle/driver, didnot choose to sent a reply to the notice sent by the appellant-Insurance Companies, calling for furnishing of the licenceparticulars, adverse inference should be drawn against them, as perSection 114(g) of the Indian Evidence Act, it could be seen from theabove judgment that the learned Single Judge, has taken into accountthe cumulative effect of the failure on the part of the owner/driverin choosing to send any reply to the letters, as well as the evidencelet in by an official of the Regional Transport Office, Dindigul,wherein, he had categorically deposed that no document was availablein the Office. The conclusion of the learned Judge that the driverdid not possess the driving licence has not been reached solely onthe basis of the returned covers.138.Though the learned Single Judge [Hon'ble Mr. JusticeA.Selvam], in V.Chandran's case (cited supra), by referring toParagraph 108 in National Insurance Company Ltd., v. Swaran Singh andothers reported in 2004 (1) TNMAC 104 (SC) = 2004 (3) SCC 297, andthe decision of the Apex Court in Sardari and others v. Sushil Kumarand others reported in 2008 (1) TNMAC 294 (SC) = 2008 ACJ 1307, hasobserved that the judgment in Swaran Singh's case, cannot be treatedas precedent in all type of cases and it could be applied only withregard to the cases, considered in Swaran Singh (cited supra) andapplied the latin maxim "stare decisis, stare decisis et non quietamovere", which means "to stand by things decided, and not to disturbsettled points and ultimately exonerated the Insurance Company frompayment of compensation to the accident victims therein, this Court https://hcservices.ecourts.gov.in/hcservices/ deems it fit to extract, as to how the judgment rendered by a ThreeJudges Bench in Swaran Singh's case, has been considered a Two JudgesBench 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 Lordshipsobserved as follows:"18.A three Judges Bench of this Court in NationalInsurance Company Ltd., v. Swaran Singh [(2004) 3 SCC 297]has extensively dealt with the meaning, application andinterpretation of various provisions, including Ss.3(2), 4(3), 10(2) and 149 of the MV Act. In paragraph 47 of thejudgment, the learned Judges have held that if a person hasbeen given a licence for a particular type of vehicle asspecified therein, he cannot be said to have no licence fordriving another type of vehicle which is of the samecategory but of different type. As for example, when aperson is granted a licence for driving a light motorvehicle he can drive either a car or a jeep and it is notnecessary that he must have driving licence both for car andjeep separately. In paragraph 48, it is held as under:"Furthermore, the insurance company with aview to avoid its liabilities is not onlyrequired to show that the conditions laid downunder Section 149(2)(a) or (b) are satisfied butis further required to establish that there hasbeen a breach on the part of the insured. Byreason of the provisions contained in the 1988Act, a more extensive remedy has been conferredupon those who have obtained judgment against theuser of a vehicle and after a certificate ofinsurance is delivered in terms of Section 147(3). After a third party has obtained a judgmentagainst any person insured by the policy inrespect of a liability required to be covered bySection 145, the same must be satisfied by theinsurer, notwithstanding that the insurer may beentitled to avoid or to cancel the policy or mayin fact have done so. The same obligation appliesin respect of such a liability but who would havebeen covered if the policy had covered theliability of all persons, except that in respectof liability for death or bodily injury."139.At Paragraphs 19 to 20 in Zaharulnisha's case (citedsupra), the Bench, explaining as to how Swaran Singh's case, has beenconsidered, further held that, https://hcservices.ecourts.gov.in/hcservices/

19.The judgment proceeds to hold that under the MVAct, holding of a valid driving licence is one of theconditions of contract of insurance. Driving of a vehiclewithout a valid licence is an offence. However, the questionherein is whether a third party involved in an accident isentitled to the amount of compensation granted by the MotorAccidents Claims Tribunal although the driver of the vehicleat the relevant time might not have a valid driving licencebut would be entitled to recover the same from the owner ordriver thereof. It is trite that where the insurers, relyingupon the provisions of violation of law by the assured, takean exception to pay the assured or a third party, they mustprove a wilful violation of the law by the assured. In somecases, violation of criminal law, particularly violation ofthe provisions of the MV Act, may result in absolving theinsurers but, the same may not necessarily hold good in thecase of a third party. In any event, the exception appliesonly to acts done intentionally or "so recklessly as todenote that the assured did not care what the consequencesof his act might be". The provisions of sub- sections (4)and (5) of Section 149 of the MV Act may be considered as tothe liability of the insurer to satisfy the decree at thefirst instance. The liability of the insurer is a statutoryone. The liability of the insurer to satisfy the decreepassed in favour of a third party is also statutory. 20. The learned judges having considered the entirematerial and relevant provisions of the MV Act and conflictof decisions of various High Courts and this Court on thequestion of defences available to the insurance companies indefending the claims of the victims of the accident arisingdue to the harsh and negligent driving of the vehicle whichis insured with the insurance companies, proceeded to recordthe summary of findings.....21. In the light of the above-settled proposition oflaw, the appellant-insurance company cannot be held liableto pay the amount of compensation to the claimants for thecause of death of Shukurullah in road accident which hadoccurred due to rash and negligent driving of scooter by RamSurat who admittedly had no valid and effective licence todrive the vehicle on the day of accident. The scooterist waspossessing driving licence of driving HMV and he was drivingtotally different class of vehicle which act of his is inviolation of Section 10(2) of the MV Act. 22.In the result, the appeal is allowed to thelimited extent and it is directed that the appellant-insurance company though not liable to pay the amount ofcompensation, but in the nature of this case it shall https://hcservices.ecourts.gov.in/hcservices/ satisfy the award and shall have the right to recover theamount deposited by it along with interest from the owner ofthe vehicle, viz. respondent No.8, particularly in view ofthe fact that no appeal was preferred by him nor has hechosen to appear before this Court to contest this appeal.This direction is given in the light of the judgments ofthis Court in National Insurance Co. Ltd., v. Baljit Kaurand others [(2004) 2 SCC 1] and Deddappa and Others v.Branch Manager, National Insurance Co. Ltd., [(2008) 2 SCC595]."140.In New India Assurance Company Ltd., Viridhunagar, throughits Manager, Vs. Muniuapandi and five others, reported in 2010 (1)TNMAC 571, the appellant insurance company resisted the claim of thelegal representatives of the deceased, on the ground that the driverof the vehicle did not possess a valid driving licence. Theappellant insurance company issued a notice to the owner as well asrider of the motor cycle, calling upon them to produce the copy ofthe driving licence. The said notice was marked before the ClaimsTribunal. However, the notice was returned as unserved. Even inEx.R1 Motor Vehicle's Inspector's Report, filed before the ClaimsTribunal, it was mentioned that the rider did not produce the drivinglicence. The owner of the vehicle remained ex parte. In theabovesaid circumstances, the Tribunal drew an adverse inferenceagainst the owner and concluded that the driver did not have validlicence at the time of accident. The Tribunal ordered to pay thecompensation to the legal representatives of the deceased and recoverthe same from the owner of the vehicle. This Court upheld thedecision of the Tribunal. Nevertheless, it could be seen from theabove judgment that though an adverse inference has been drawnagainst the owner of the vehicle, on the basis of the informationcontained in the Motor Vehicles Report, the third party interest hasbeen protected. 141.At this juncture, with due respect, it is the humbleopinion of this Court that for mere non-production of the licence atthe time of verification done by the Motor Vehicles Inspector wouldnot 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 RegionalTransport Officer, within whose jurisdiction, the driver resides andwhen 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 Companyresisted the claim, by stating that the driver did not possess avalid and effective driving licence, at the time of accident. Theinsurer issued notices to the insured, owner of the vehicle, whichwere returned. Accepting the contention of the Insurance Companythat they had discharged the burden of proof of breach of conditions https://hcservices.ecourts.gov.in/hcservices/ of the policy, the Tribunal exonerated the Insurance Company from itsliability. The claimants approached this Court, by filing an appeal.Exs.R2 to R4 were copies of the notices sent to the owner. Perusalof the reported judgment of this Court shows that all the envelopescontaining notices were returned with an endorsement “insufficientaddress”. Ex.R5 is the Investigating Officer's report and RW.1 isthe Investigating officer. On the basis of oral testimony of RW.1,the Insurance Company has submitted that they had discharged theirburden, establishing that the driver of the vehicle, did not possessa valid licence. Noticing an endorsement in Ex.R4 made by theconcerned authority of the postal department, stating that severalreminders were sent, but inspite of that, the addressee did notchoose to receive the letter, a learned Single Judge of this Court(Hon'ble Mr. Justice T.Mathivanan) held that it should be deemed thatnotices were duly served on the owner of the vehicle and hence, cameto a conclusion that the Insurance Company has discharged the burdento prove that the insured had committed a breach of policy condition.143.In a given case, where there is clear admission of guilt ofnon-possession of a licence before the competent criminal Court, bythe driver himself and if a judgment is rendered thereon, it could bea material evidence let in, on behalf of the Insurance Company tocontend that they have discharged their initial burden of proof ofnon-possession of licence, but reading of the judgment of the SupremeCourt in Swaran Singh's case and other judgments, extracted in theearlier portions of this judgment, would not lead to definiteconclusion that the insured was guilty of negligence and failed toexercise due care regarding the use of the vehicle and that it wasthe owner of the vehicle has committed breach of policy conditionsand the provision of the Act, by consciously allowing a person, todrive a vehicle, when did not hold any licence.144.In the present appeals, one of the arguments advanced by thelearned Counsel for the Insurance Companies is that in Swaran Singh'scase, the Supreme Court has not at all considered a case of nolicence. The said argument is fallacious and liable to be rejected.Let me now revert back to the summary of submissions of the learnedcounsel for the Insurance Companies in Swaran Singh's case, atParagraph 4 of the said judgment, the Apex Court has considered thedefences raised by the Insurance Companies purported to be in terms ofSection 149(2)(a)(ii) of the Motor Vehicles Act, 1988 and they are asfollows: (a) driving licence produced by the driver or owner of thevehicle was a fake one; (b) driver did not have any licencewhatsoever; (c) licence, although was granted to the concerned driverbut on expiry thereof, the same had not been renewed; (d) licencegranted to the drivers being for one class or description of vehiclebut the vehicle involved in the accident was of different class ordescription; and (e) the vehicle in question was driver by a personhaving 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 https://hcservices.ecourts.gov.in/hcservices/ cannot be held to be driven by a person duly licensed therefor, if hedoes not hold a licence. 145.In Laxmi Narain Dhut's case (cited supra), the Apex Courtreiterated, as to whether, no licence has been considered or not andat Paragraph 19 of the judgment, held as follows:"19. The primary stand of the insurance company isthat the person driving the vehicle did not have a validdriving license. In Swaran Singh's case (supra) thefollowing 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 butit had expired as on the date of the accident and had notbeen renewed; (iv)the license was for a class of vehicles otherthan 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 whereoriginally that license is fake but there has been arenewal subsequently in accordance with law." 146.Rules relating to authorisation and test under the TamilNadu Motor Vehicles Rules:7. Application for authorisation.— The holder of adriving licence may, at any time, apply to the licensingauthority in Form LTVA for the grant of an authorisationto drive a transport vehicle. Such application shall beaccompanied by the driving licence and appropriate fee asspecified in the Table under rule 49.8. Licensing authority may make enquiries.— Upon thereceipt of an application for an authorisation to drive atransport vehicle, the licensing authority may make suchenquiries as may be reasonably necessary to establish theidentity of the applicant and to ascertain that theapplicant is not disqualified or liable to bedisqualified for holding a driving licence.9. Summoning of applicant.— The authority to whichapplication is made under rule 7 may, if it thinks fit bynotice in writing summon the applicant to appear beforeit at such time and place as the authority may appoint toexamine the applicant's knowledge of the provisions ofthe Act and the rules regarding the duties and functions https://hcservices.ecourts.gov.in/hcservices/ of a driver of a transport vehicle.10.Issue of authorisation.— The LicensingAuthority granting an authorisation to drive a transportvehicle shall allot a Badge number sign the drivinglicence accordingly and return the same to the holderthereof and shall if it is not the authority which issuedthe licence at the same time, send intimation in formLTV'to the authority by which the driving licence wasissued.12.Authorisation by owner.— Every driver of atransport vehicle shall, in addition to the drivinglicence, carry an authorisation issued by the owner ofthe vehicle in the prescribed form AVT.13. Testing officer.— The test of competence todrive as set forth in the rules prescribed by the CentralGovernment under sub-section (3) of section 9 shall beconducted by the licensing authority or by a personauthorised by such authority.14.Driving test.-— Subject to sub-section (6) ofsection 9, the applicant shall produce a serviceablevehicle of the class to which the application refers andpresent himself for the test at such time and place asmay be specified by the licensing authority or thetesting officer.FORM LTVA.Form of application for Authorisation to drive atransport vehicle.(See rule 7.)ToThe Licensing Authority,I apply for authorisation to drive a transport vehiclewithin the State of Tamil Nadu. I have experience indriving 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): https://hcservices.ecourts.gov.in/hcservices/ Present address :Date : 19 Signature or thumb-impression ofapplicant:* To be filled in if applicant holds a driving licence.FORM LTVForm of intimation of grant of an authorisation to drivea transport vehicle.(See rule 10.) ToThe Licensing Authority,An authorisation to drive a transport vehiclehas been issued by me on (date) in respect ofdriving licence No. dated the issued byyou in favour ofName of holder: Father's name : Permanent address of holder: Present address of holder: Date : 19FORM AVT.Form of authorisation to be carried by a driver of atransport 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 issuedand renewed the licence.6. Registration number of vehicle (need not be given inthe case of ten or more transport vehicles owned by asingle operator).7. Name and address of the owner of the vehicle. https://hcservices.ecourts.gov.in/hcservices/ I hereby declare that the particulars furnished above aretrue.Signature of the driving licence holder.This is to authorise that the above driver has beenengaged by me to drive any one of the transport vehiclesbelonging to me.Place : (Signature of the owner of the vehicle) Date : 19Witness (with clear address)—(1)(2)147.When a person is duly licenced under Section 10 to drive aLight Motor Vehicle not exceeding 7500 k.g. in weight, it couldreasonably be presumed that he has the same skill to drive atransport vehicle of the same weight, and when such a transportvehicle can also be a public service vehicle, as defined underSection 2(35) of the Motor Vehicles Act, whether the insurancecompany could claim for exoneration from its liability to paycompensation to a third party, merely because, the licence does notbear the endorsement as required under rule 16(3) of the Act.Certainly, the driver knows to drive the kind of vehicle, but theonly deficiency is that there is no endorsement or authorisation by acompetent authority to drive a commercial vehicle. In my humbleview, in such circumstances, breach of the condition specified inSection 149(2)(a)(ii) of the Motor Vehicles Act, would not be sofundamental, to be the cause for the accident, to avoid the insurer'sliability to pay compensation to a third party, as observed inParagraph 102 Clause (vi) in Swaran Singh's case. Again, it is forthe insurance company to establish wilful breach of policy conditionson the part of the insurer to award its liability towards the insured.148.For illustration, if an Ambassador Car or Maruti Van or anyother vehicle of the same class, is used as a private car for carryingthe same number of persons, as permitted in the RegistrationCertificate, to any place within the State or anywhere in the Country,as the driver is duly authorised to drive far off place, for ownpurpose, either driven by a owner cum driver or a paid driver, he doesnot require any badge or authorisation from the competent authority ofthe Motor Vehicles Department and if the same class vehicle is used asa Taxi, for hire or reward, he is required to have a badge. Therewill not be any change in the skill of driving. In suchcircumstances, whether non-possession of authorisation by thecompetent authority or badge or endorsement in the licence, which is https://hcservices.ecourts.gov.in/hcservices/ considered as a violation of policy condition, under the terms andconditions of the policy, when the same kind of vehicle is used forhire or reward, a breach of policy condition, would be so fundamental,to have caused the accident, thereby, the insurer can avoid itsliability to pay compensation to a third party, when there is nospecial skill or expertise required to drive the same kind of vehicle.Again, this Court is only recording its humble views and does notexpress any opinion about the judgments, extracted above.149.In a given case, where the driver of the offending vehiclehas not renewed his licence on the date of accident. Here again, thedriver has been all along driving that kind of vehicle, dulylicenced, but during the interregnum period, his licence has not beenrenewed and in such circumstances, it can be said that, it is a caseof no valid and effective licence. But whether the driver can besaid to be disqualified from obtaining or holding a driving licence,and whether the insurer can avoid its liability to pay compensationto a third party and whether non-renewal of the licence would sofundamental to be the cause for the accident? However, whilerecording my humble views, this Court is aware and has also extractedthe decisions of the Supreme Court, where during the interregnumperiod, when there was no renewal of licence, insurance companieshave been exonerated of their liability to pay compensation. 150.Perusal of the rules for getting an endorsement, shows thatwhenever a private transport licence is granted, after a specifiedperiod, it does not require any special test nor it could be presumedthat the endorsement has increased the efficiency or expertise of thedriving skill of the licencee. Even in the absence of anyendorsement, he would still be competent to drive the same kind ofvehicle, with the same laden weight, but, for obtaining authorisationfrom the competent authority or in otherwords, an endorsement to bemade in the licence, to drive a private transport vehicle or in agoods carriage vehicle, the driver has to satisfy the prescribedexperience, under the Central Motor Vehicles Rules. 151.As per Rule 8 of the Central Motor Vehicle Rules, to obtaina licence, for driving a transport vehicle, one has to possessminimum educational qualification of a pass of 8th Standard. From thereading of the rules relating to addition of licence or badge todrive a kind of vehicle, it could be presumed that prescription ofminimum educational qualification, ability to read and write, atleastone Indian language out of those specified in the VII Schedule of theConstitution of India, as provided for in Rule 9 of the Central MotorVehicles Rules, period of experience, after obtaining the basiclicence, for that kind of vehicle, whether light motor vehicle orheavy motor vehicle, or goods vehicle carrying hazardous goods, asthe case may be, could be for the reason that such licencee, whencarrying passengers for hire or reward in a Transport vehicle, orgoods, in the case of goods carrying vehicle, as stated supra, should https://hcservices.ecourts.gov.in/hcservices/ possess sufficient experience and minimum educational qualification,as per Rule 8 of the Central Motor Vehicles Rules, and that he shouldbe in a position to communicate, when he carries goods or passengers,either within the State or outside the State, as the holder oflicence is authorised to drive that kind of vehicle, through out theCountry. After all, it should be borne in mind, the traffic signalsare uniform, throughout the country. Only in the case of goodscarrying dangerous and hazardous goods, which are hazardous nature,endangering human life, special qualifications are prescribedregarding, (a) Defensive driving, (b) Advanced driving skills andtraining and (c) Product safety.152.Let me now consider some of the offences enumerated underthe Motor Vehicles Act, relating to licences.180. Allowing unauthorised persons to drivevehicles:- Whoever, being the owner or person in chargeof a motor vehicle, causes or permits, any other personwho does not satisfy the provisions of Section 3 orsection 4 to drive the vehicle shall be punishable withimprisonment for a term which may extend to threemonths, or with fine which may extend to one thousandrupees, or with both.181. Driving vehicles in contravention of section 3or section 4:- Whoever drives a motor vehicle incontravention of section 3 or section 4 shall bepunishable with imprisonment for a term which may extendto three months, or with fine which may extend to fivehundred rupees, or with both.182. Offences relating to licences.— (1) Whoever,being disqualified under this Act for holding orobtaining a driving licence drives a motor vehicle in apublic place or in any other place, or applies for orobtains a driving licence or, not being entitled to havea driving licence issued to him free of endorsement,applies for or obtains a driving licence withoutdisclosing the endorsement made on a driving licencepreviously held by him shall be punishable withimprisonment for a term which may extend to threemonths, or with fine which may extend to five hundredrupees or with both, and any driving licence so obtainedby him shall be of no effect.153.In the case of an offence committed by a driver underSection 182 of the Motor Vehicles Act, the owner may not be in aposition to verify as to whether the driver has obtained a licence,by adopting any such method, as stated in Section 182 of the Act andthe owner may bona fidely believe that the driver possess a driving https://hcservices.ecourts.gov.in/hcservices/ licence. If the police or any other competent authority comes toknow of any dubious method that the driving licence has been obtainedillegally, there is every likelihood of seizure, in which event,unless the owner is aware of the same or put on notice by the driveror by that authority, who seizes the licence, the owner cannot beheld responsible for non-production of licence, when called for bythe Motor Vehicles Inspector for inspection, when the vehicle isinvolved in the accident. One cannot except that the driver woulddisclose his fraudulent method in getting a licence, to the owner.Whether in such cases, can the owner be said to have breached theterms and conditions of the policy conditions? There are otheroffences relating to licences under the Motor Vehicles Act, such as,Section 183 – Driving at excessive speed, etc. Section 184 – Drivingdangerously, Section 185 – Driving by a drunken person or by a personunder the influence of drugs, Section 186 – Driving when mentally orphysically unfit to drive, Section 187 – Punishment for offencesrelating to accident, Section 188 – Punishment for abetment ofcertain offences, Section 189 – Racing and trials of speed, Section190 – Using vehicle in unsafe condition and such other offences underthe Motor Vehicles also.154.Let me now consider some of the provisions, empowering thePolice to demand production of driving licence, other certificates,powers of the Police Officer to impound documents under certaincircumstances, under the Motor Vehicles Act and also the duty of theowner of the Motorvehicle to give information, 130. Duty to produce licence and certificate ofregistration:- (1) The driver of a motor vehicle inany public place shall, on demand by any policeofficer in uniform, produce his licence forexamination:Provided that the driver may, if his licence hasbeen submitted to, or has been seized by, any officeror authority under this or any other Act, produce inlieu of the licence a receipt or other acknowledgementissued by such officer or authority in respect thereofand may prescribe to the police officer making thedemand.155.Reading of the abovesaid provisions makes it clear that ifthe licence has been submitted by the driver or has been seized, byany officer or authority, under the Motor Vehicles Act or any otherAct, a receipt may be issued acknowledging submission or seizure andin which case, if the driver of the vehicle, on demand, by any policeofficer, may produce that receipt or acknowledgment issued by suchofficer or any acknowledgment issued by such officer or authority inrespect thereof, that his licence has already been seized, and insuch circumstances, in the event of an accident, if the owner of the https://hcservices.ecourts.gov.in/hcservices/ vehicle is called upon to produce the licence, he may not be in aposition to produce the same, before the Motor Vehicles Inspector orthe Claims Tribunal, unless, he is personally aware of the seizure.The driver, whose licence has been seized by the Police, for any ofthe enumerated offences, may not even disclose the said fact to theowner. Instances may be, drunken driving or dangerous driving and soon and so forth. No materials have been produced by the InsuranceCompanies to substantiate, as to whether in the abovesaidillustrative cases, the owner of the vehicle will be put on notice,by the Police Officer, or any other competent authority under theMotor Vehicles Act or any other Acts, empowering seizure of licence.In the abovesaid circumstances, if the Vehicle is involved in anyaccident, can it be said that merely because, the owner could notproduce the licence at the time of verification, by the MotorVehicles Inspector, there was no licence at all?133. Duty of owner of motor vehicle to giveinformation:- The owner of a motor vehicle, the driveror conductor of which is accused of any offence underthis Act shall, on the demand of any police officerauthorised in this behalf by the State Government,give all information regarding the name and addressof, and that the licence held by, the driver orconductor which is in his possession or could byreasonable diligence be ascertained by him.158. Production of certain certificates, licenceand permit in certain cases. – (1) Any person drivinga motor vehicle in any public place shall, on being sorequired by a police officer in uniform authorised inthis 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 thecertificate of fitness referred to in section 56 andthe permit, relating to the use of the vehicle. (2) If, where owing to the presence of amotorvehicle in a public place an accident occursinvolving death or bodily injury to another person,the driver of the vehicle does not at thetime producethe certificate, driving licence, and permit referredto in sub-section (1) to a police officer, he shallproduce the said certificates, licence and permit atthe police station at which he makes the reportrequired by section 134.---------------------------- https://hcservices.ecourts.gov.in/hcservices/ (6) As soon as any information regarding anyaccident involving death or bodily injury to anyperson is recorded or report under this section iscompleted by a police officer, the officer-in-chargeof the Police station shall forward a copy of the samewithin thirty days from the date of recording ofinformation or, as the case may be, on completion ofsuch report to the Claims Tribunal having jurisdictionand a copy thereof to the concerned insurer, andwhere a copy is made available to the owner, he shallalso 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, causingan accident, does not produce the licence to the Police Officer, runsaway from the scene of occurrence, and if a demand is made to theowner of the vehicle to produce the licence, either by the Police orby the Motor Vehicles Inspector at the time of inspection of thevehicle, along with other documents, the owner may not be in aposition to produce the licence, unless, he retains a copy of thelicence or the particulars and in which case, can it be said that thevehicle was driven without any licence, duly issued?179. Disobedience of orders, obstruction andrefusal of information:- (1) Whoever wilfully disobeysany direction lawfully given by any person orauthority empowered under this Act to give suchdirection, or obstructs any person or authority in thedischarge of any functions which such person orauthority is required or empowered under this Act todischarge, shall, if no other penalty is provided forthe offence be punishable with fine which may extendto five hundred rupees.(2) Whoever, being required by or under this Actto supply any information, wilfully withholds suchinformation or gives information which he knows to befalse or which he does not believe to be true, shall,if no other penalty is provided for the offence, bepunishable with imprisonment for a term which mayextend to one month, or with fine which may extend tofive hundred rupees, or with both.206. Power of police officer to impounddocument:- (1) Any police officer or other personauthorised in this behalf by the State Government may,if he has reason to belive that any identificationmark carried on a motor vehicle or any licence,permit, certificate of registration, certificate ofinsurance or other document produced to him by the https://hcservices.ecourts.gov.in/hcservices/ driver or person in charge of a motor vehicle is afalse document within the meaning of section 464 ofthe Indian Penal Code, 1860 (45 of 1860) seize themark or document and call upon the driver or owner ofthe vehicle to account for his possession of or thepresence in the vehicle of such mark or document.(2) Any police officer or other person authorisedin this behalf by the State Government may, if he hasreason to believe that the driver of a motor vehiclewho is charged with any offence under this Act mayabscond or otherwise avoid the service of a summons,seize any licence held by such driver and forward itto the Court taking cognizance of the offence and thesaid Court shall on the first appearance of suchdriver before it, return the licence to him inexchange for the temporary acknowledgement given undersub-section (3).(3) A police officer or other person seizing alicence under sub-section (2) shall give to the personsurrendering the licence a temporary acknowledgementtherefor and such acknowledgement shall authorise theholder to drive until the licence has bee returned tohim or until such date as may be specified by thepolice officer or other person in the acknowledgement,whichever is earlier:Provided that if any Magistrate, police officeror other person authorised by the State Government inthis behalf is, on an application made to him,satisfied that the licence cannot be, or has not beenreturned to the holder thereof before the datespecified in the acknowledgement for any reason forwhich 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 tosuch date as may be specified in the acknowledgement.157.Reading of the abovesaid provision makes it clear that if apolice officer, for the reasons, stated supra, seizes the licence,for any of the offences enumerated under the Motor Vehicles Act, asstated supra or for any other offences under any other Act, and ifthe concerned Magistrate or the Police Officer, or other competentperson, as the case may be, extend the period of authorisation todrive the vehicle, till such date, as may be specified in theacknowledgement, without returning the licence to the holder, and ifthe vehicle driven by him is involved in an accident, whether theowner would be held liable for non-production of licence, unless, hehas personal knowledge of seizure by the Police or the competent https://hcservices.ecourts.gov.in/hcservices/ authority, under any other Act? Can there be any definite conclusionthat there was no driving licence at all, at the time of accident,because the owner cannot produce the licence, at the time ofverification by the Motor Vehicles Inspector. No doubt, as per Rule376 of the Central Motor Vehicles Rules, the owner is required tomaintain the licence particulars, but if he is unable to produce thesame to the Inspector, at the time of verification or to the ClaimsTribunal, in my view, non-production alone cannot be the only basisfor reaching a conclusion that the vehicle was driven without a validand effective licence. Production of the licence particulars andpossession of licence are entirely different.158.Provisions under the Motor Vehicles Act and the Tamil NaduMotor Vehicles Rules, empowering certain officers to inspect thevehicles 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 isinvolved, any person authorised in this behalf by theState Government may, on production if so required ofhis authority, inspect the vehicle and for thatpurpose may enter at any reasonable time any premiseswhere the vehicle may be, and may remove the vehiclefor examination : Provided that the place to which the vehicle isso removed shall be intimated to the owner of thevehicle and the vehicle shall be returned [aftercompletion of the formalities to the owner, driver orthe person in charge of the vehicle within twenty-four hours.159.The relevant provision under the Tamil Nadu Motor VehiclesRules, empowering the officers to inspect the vehicles, involved inthe accident, is Rule 377, which states that, “Magistrates, anyinspecting officer of the Transport Department and Police Officersnot below the rank of Sub-Inspector are authorised to inspect anymotor vehicle involved in an accident and for that purpose to enterat any reasonable time any premises where the vehicle may be kept andto 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 FormAIR. Column Nos.6 and 7 of the prescribed Form deal with the nameand address of the driver and the particulars of the driving licence,if available, respectively. Thus it could be seen that as per theformat provided under the Central Motor Vehicles Rules, the MotorVehicles Inspector, at the time of examination of the vehicle,involved in the accident, has to verify the name and address of thedriver, driving particulars, if available, fitness certificate, https://hcservices.ecourts.gov.in/hcservices/ validity, etc., In some of the claim petitions, reliance is beingplaced on the entries made by the Motor Vehicles Inspector's report,with reference to Column Nos.6 and 7, wherein, the Motor VehiclesInspector, after verification, would make an entry that the licenceparticulars are not available or not produced. As stated supra, ifthe police officer seizes or impounds the licence of the driver ofthe vehicle, for contravention of any statutory provisions, mentionedin Rule 22 of the Central Motor Vehicles Rules or if the licence isseized by any officer or authority under any other Act, as providedfor under Section 130 of the Motor Vehicles Act, then the owner ofthe vehicle, who is called upon to produce the licence particulars ofthe driver, may not be in a position to furnish the same, if he doesnot retain a copy of the driving licence or the driving particulars,as required to be maintained by him under Rule 376 of the Tamil naduMotor Vehicles Rules. In some cases, the driver would have beencharge sheeted for violation of certain provisions, relating tolicence, not involving any accident, in which case, the Police wouldhave already seized the original licence of the driver and that theowner may not be in a position to produce the same before the MotorVehicles Inspector, if it had been already produced by the Police toa Court of competent jurisdiction for making necessary endorsementfor conviction, as provided under Rule 22 of the Central MotorVehicles Rules.161.There may be a case, where the owner would have evenverified the licence particulars and returned the same, to thedriver, without maintaining a copy thereof. There may be a case,where the owner, on perusal of the licence, would have bona fidelybelieved that it was not a fake one. There may be a case, aftercausing the accident, the driver may abscond. In all the abovesaidillustrative cases, a definite conclusion cannot be reached that thedriver did not possess a licence or valid and effective licence orlicence 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 therecannot any definite conclusion that the driver did not possess anylicence at all. For not furnishing necessary information as calledfor by the Police Officer or the inspecting authority, as the casemay be, the owner may be charged under Section 179 of the Act,depending upon the facts of each case. Therefore, to ascertain as towhether the driver did possess the licence or not, at the time ofaccident, the best and direct evidence that could be obtained is onlyfrom the Regional Transport Officer, within whose jurisdiction, thedriver resides and as per the address provided in the claim petition.The contention of the Insurance Companies that it may not be possiblefor the insurer to verify from each and every Regional TransportOffices in the State, is one aspect, that could be accepted, but whenRule 23 of the Central Motor Vehicles Rules, mandates maintenance ofa State Register in Form 10, as stated supra, then the insurer canalso ascertain from the Government or the Transport Commissioner, who https://hcservices.ecourts.gov.in/hcservices/ is expected to maintain a consolidated list of licence particulars.The rule is in existence for a long time. Hence, this Court is ofthe considered view that mere entry in the Motor Vehicles Inspector'sreport, regarding non-production of licence, cannot be the conclusiveproof that the driver did not hold any licence at all, to avoid itsliability to the third party.162.Driving licence is a public document as defined in Section74 of the Evidence Act and therefore, no formal proof is required toprove such document. Therefore, production of particulars of licencefrom the Office of the RTO or the abovesaid authorities, who is boundto maintain the records, assumes importance than the oral testimony.In a given case, where the driver possess licence for one class ordescription of the vehicle, but the vehicle involved in the accidentis of a different class or description, the insurer has to takeappropriate steps to ascertain from the office of the RTO or theauthorities, who maintain the particulars, as to whether the driverwas in possession of the required licence to drive the vehicle at thetime of accident.163.In view of the decisions of the Supreme Court, avoidance oftheir liability can be only to the insured, for which, the companymust establish breach on the part of the insured, as explained by theSupreme Court. Mere fact that the driver did not possess the drivinglicence at the time of accident would not be a defence to avoidliability of an award passed in favour of a third party, for thereason that payment of compensation is compulsory and statutory underthe statute.164.The defences available to the insurance company to avoidits liability to the insured are provisions enabling the insurer toprove that the insured was guilty of negligence regarding use ofvehicle by a duly licenced driver. In which case, if the companiesprove breach of policy, they are entitled to realise the award amountfrom the owner of the vehicle. If no steps are taken by the insurerto lead evidence in support of the plea that the driver was holding avalid driving licence, at the time of accident, they cannot be saidto have discharged the statutory liability caused upon them forpayment of compensation to the insured. Mere pleadings in thecounter affidavit or written statement by the insurers, allegingbreach of violation of statutory provisions of the Motor VehiclesAct, by itself would not amount to proof that they have dischargedtheir burden to avoid their statutory liability in respect of thirdparty claim. They have to lead reliable and cogent evidence tosubstantiate 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 havethe effect of exonerating the insurer from the statutory liabilitycast upon them to pay compensation to a third party victim, but it isalways open to the insurer to get the amount recovered from the https://hcservices.ecourts.gov.in/hcservices/ insured, in the same proceedings.165.Liability of the insurance company to pay compensation tothird party victim being statutory, the provisions of Section 149(1)(4) and (5) have to be read as security for the third parties, butthe statutory provision also provides the right to take appropriatedefences permissible under law, to realise the amount paid from theinsurer. Courts have also held that the liability of the insurancecompany to satisfy the award being statutory and if the same isinhibited by imposing any condition in the policy, it would runcontrary to the statute. 166.A combined reading of Sections 146, 147 and 149 of the Actleads to only one conclusion that it is the thumb rule that once itis proved that an accident is covered by a compulsory insurance, itis for the insurer to prove that it comes within an exception toavoid its liability to indemnify the insured. It is well settledproposition of law that a person who alleges breach, must prove thesame. In the absence of any material on record to prove that thereis a breach of the conditions of driving licence by the owner, sofundamental to have contributed to the accident, the liability of theinsurance company to indemnify the owner, cannot be absolved.167.As stated supra, in Lehru's case (cited supra), Skandha'scase (cited supra) and Swaran Singh's case (cited supra), the SupremeCourt has held that the contract of insurance company between theinsured and the company, has to be interpreted, giving effect to thestatutory provision, Section 147 and 149(4) and (5) of the Act,though it is always open to the insurer to take a defence underSection 149(2)(b)(ii). Therefore, the contention of the Companiesthat the contract of insurance binds the parties, the insured and theinsurer and that there is no obligation to pay compensation to athird party, is no longer res integra and such plea cannot beaccepted.168.As of today, there are three Division Bench judgments ofour High Court, after Swaran Singh and other judgments. There arejudgments of the learned single Judges, barring a few, to the effectthat once the vehicle is covered under a contract of insurance and ifthe accident has occurred during its validity, resulting in injury ordeath to a third party, the award has to be satisfied in terms ofSection 149(4) and (5) and thereafter, can be recovered from theinsured in the same proceedings, provided if the Insurance Companiesestablish that the driver did not possess a valid driving licence andthat there was a wilful breach on the part of the insured. 169.In National Insurance Co. Ltd., v. Parvathneni and anotherreported in 2009 (2) TNMAC 241 (SC), there was no valid insurancecoverage for the vehicle, on the date of accident. It was contendedby the Insurance Company that it is not liable to pay compensation. https://hcservices.ecourts.gov.in/hcservices/ The High Court directed compensation to the claimants, with libertyto the Insurance Company therein to recover the same from the owner.In such circumstances, on appeal, having regard to the earlierdecisions, 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) SCC56] (VIDE Para 13) and New India Insurance Co. v. Darshan Devi[(2008) 7 SCC 416] (VIDE Para 21), wherein, in exercise of powersunder Article 142 of the Constitution of India, the Apex Court hasdirected the Insurance Company to pay and recover it from the ownerof the vehicle, the Apex Court Bench dealing with Parvathneni's case,felt that Article 142, does not cover such type of cases andtherefore, directed that the papers may be placed before the Hon'bleChief Justice of India, for constituting a larger bench to decide thefollowing questions,(1) If the Insurance Company can prove that itdoes not have any liability to pay any amount in law tothe claimants under the Motor Vehicles Act, 1988 or anyother enactment, can the Court yet compel it to pay theamount in question giving it liberty to later onrecover the same from the owner of the vehicle?(2) Can such a direction be given under Article142 of the Constitution, and what is the scope ofArticle 142? Does Article 142 permit the Court tocreate a liability where there is none?170.Perusal of the judgment in Parvathneni's case, does notshow that it was the case of no licence. But, it was a case, wherethere was no insurance coverage on the date of accident. But the ApexCourt, having felt that as to whether Article 142 could be exercised,has referred the matter to a Larger Bench. At this juncture, thisCourt poses a question to itself that when Section 149(4) and (5) ofthe Act themselves empower the Claims Tribunal to order pay andrecover from the owner, whether the power exercised by them can besaid 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 wasadvanced by the Insurance Companies that Article 142 cannot beexercised by the lower Courts as well as by the High Court, havingregard to the fact that the said issue has been referred to a LargerBench in Pavarthneni's case, this Court, after considering the legalposition 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 vehiclebearing Registration No.TN 25 F 0898, insured with the https://hcservices.ecourts.gov.in/hcservices/ appellant-Insurance Company has been produced beforethis Court. Perusal of the same, shows that thevalidity of the driving licence was was between26.09.2005 and 25.09.2025 and that he was authorised todrive a light motor vehicle through out India. Asper 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 "lightmotor vehicle" as contained in Section 2(21) of theMotor Vehicles Act, 1988 and the Central Motor VehicleRules, 1989, the Supreme Court held that if a driverhad a valid licence to drive a light motor vehicle,prior to the amendment issued in G.S.R.No.221(E), witheffect from 28.03.2001, which includes a light goodsvehicle as well. As the amendment made in the ruleswas held to have prospective operation, the SupremeCourt observed that the driver ought to have appliedfor a licence so as to enable him to drive a vehicle ofa different type. Therefore, on the facts of thiscase, it was held that the driver did not possess avalid and effective licence to drive a Mini Door Auto.20.In the instant case, the driver had a licenceto drive a light motor vehicle from 26.09.2005. Theaccident has occurred on 04.06.2006, when a Mini DoorAuto bearing Registration No.TN 25 F 0898, belonging tothe second respondent, dashed against a padestrian, athird party, who succumbed to injuries and died on07.06.2006. As stated supra, the judment in NationalInsurance Company Ltd., v. Annappa Irappa Nessaria andothers reported in 2008 (1) TN MAC 200 (SC), theSupreme Court held that the amendment relating tocategorisation and type of the vehicle, has come intoeffect by the introduction of G.S.R.No.221(E) from28.03.2001 and therefore, it is prospective in nature.In the case on hand, it is not disputed that the driverdid not possess the driving licence, at the time ofaccident. In view of the binding effect of theDivision 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 behalfof the appellant-Insurance Company, as held in SwaranSingh's case and in the case of United India InsuranceCo. Ltd., v. S.Saravanan reported in 2009 (5) MLJ 715and considering the material on record, the InsuranceCompany is liable to pay compensation to the thirdparty victim and then recover the same from the insuredin the same proceedings before the Tribunal." https://hcservices.ecourts.gov.in/hcservices/

172.No doubt, it could be seen from the judgments of theSupreme Court that there is some divergence of opinion, regardingfastening liability on the Insurance Companies, when the accidentoccurred resulting in injury or death of a third party, when thelicence is not renewed, as per the statutory provision. The licenceis not effective on the date, when the accident occurs, but thisCourt in its humble opinion feels that whether can it be said thatthe driver was not competent or become disqualified to hold a drivinglicence. The driver was already holding a driving licence, notrenewed in time, but can it be said that there was absence of skillto drive the vehicle, as he had already been duly granted licence andwhether non-renewal is so fundamental to have contributed to thecause of the accident, during the relevant period, except to theextent of reaching a conclusion that he did not possess an effectivelicence, at the time of accident. Therefore, as observed by theSupreme Court that while interpreting the statutory provisions inSwaran Singh's case, the Tribunals have to apply the rule and conceptof "fundamental breach", when considering the defences available tothe insurer under Section 149 (2) of the Act.173.Though the Supreme Court as well as this Court, has timeand again, rejected the plea of Insurance Companies, challenging theliability, fastened on them, by the Tribunals/High Courts, holdingthat sufficient evidence has not been let in, by producing thedetails, such as, licence or documentary evidence from the RegionalTransport Office, ignoring the well settled principles of law,invariably appeals are being filed on the same issues. In theabovesaid circumstances, this Court is of the view that it ishightime that in the event of filing appeals, the Insurance Companiesshould take a appropriate decision, as to whether the payment ofcompensation by the Claims Tribunal should be protracted, under thedecree granted to the third parties, fastening liability even in acase, where supporting evidence has not let in, by them, dischargingtheir burden to prove that the vehicle was driven without a licenceor 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 onlyunnecessarily delay the payment of compensation to the injured orlegal representative of the deceased, besides interest, fastened onthe Company, till the deposit is not made, within one month from thedate of receipt of the award, as per Section 168 of the MotorVehicles Act. The Supreme Court in Swaran Singh's case has alsoconsidered this aspect.175.Till the reference made in Parvathaneni's case, is decidedby a larger bench of Supreme Court, to maintain uniformity in claimcases, where there is no licence for the driver to drive the vehicleat the time of accident, the compensation has to be paid by theInsurance Company to the third party victim, who is not aware as to https://hcservices.ecourts.gov.in/hcservices/ whether the driver of the offending vehicle possess licence of anykind, requisite and valid driving licence to drive that particularkind of vehicle or renewed the licence, after the accident and othersituations considered in Swaran Singh's case. 176.In C.M.A.No.2126 of 2009, it is the case of therespondents/claimants, that on 13.11.2006, when the deceased, Issac,was riding a Motorcycle, bearing Registration No.TN 20 U 4360, fromICF to his residence, another Motorcycle, bearing Registration No.TN01 AB 7727, driven in a rash and negligent manner, dashed against themotorcycle, driven by the deceased. He sustained fatal injuries anddied in the hospital. The offending vehicle was insured with theappellant-Insurance Company, who disputed the manner of accident andalso pleaded that the rider of the motorcycle insured with them,first respondent before the Claims Tribunal, did not possess adriving licence, at the time of accident. 177.The respondents/claimants let in evidence to prove themanner of accident and marked four documents. RW.1 was theInvestigator of the appellant-Insurance Company. He deposed that onenquiry, he found that the vehicle involved in the accident was ownedby one Mr.P.Sudhakar, insured. Ex.R1 – Summons and Ex.R2 – Lawyer'sNotice were marked on the side of the appellant-Insurance Company.RW.1 has also deposed that owner of the two-wheelder, bearingRegistration No.TN 01 AB 7727, had given a letter to him, statingthat he had given the vehicle to his son, Kumar, on the date ofaccident. Kumar did not possess a valid licence. The letter writtenby the insured has been marked as Ex.B3. Notice to the claimants'lawyer to produce the driving licence and RC book of Kumar has alsobeen marked as Ex.B4. The Investigating Report has been marked asEx.B5. 178.On the above oral and documentary evidence, the appellant-Insurance Company has submitted that they have discharged theirburden of proof that the driver of the offending vehicle did notpossess any valid driving licence, though they have taken steps forproduction of licence of the driver, through the owner. However, theTribunal, 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 outsummons through Court. On the notice sent by the Insurance Companyto the Claimant's lawyer, the Tribunal has observed that by nostretch of imagination, neither the claimants nor their counsel canbe driven from pillar to post to prove the driving licence of theowner or driver of the offending vehicle and it is the duty of theInsurance Company, who is equipped with all sophisticated machineriesto prove that the owner or driver of the vehicle was not holding avalid driving licence at the time of accident. Holding that theInsurance Company has failed to prove the same and not taken anyefforts, the Tribunal has rejected the reliance placed on the report https://hcservices.ecourts.gov.in/hcservices/ of the Investigator. Nevertheless, the Claims Tribunal has directedthe appellant-Insurance Company to pay compensation to the claimantsand recover the same from the owner of vehicle, by initiatingappropriate 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 groundthat the Tribunal has erred in not exonerating on the appellant-Insurance Company, on the ground that the rider of the offendingvehicle had no driving licence, at the time of accident, this Courtis not inclined to accept the same for the sole reason that thefinding of the Tribunal that the appellant-Insurance Company hasfailed to prove that the driver of the offending vehicle had no validlicence, at the time of accident, cannot be said to be manifestlyillegal or contrary to the settled principles of law. Indisputably,the appellant-Insurance Company has not taken any steps to ascertainthe fact, as to whether the driver had any licence, from theconcerned Regional Transport Office. Mere sending letters to theowner of the offending vehicle or to claimants' lawyer, is notsufficient to dislodge the burden. However, pay and recover has beenordered by the Tribunal. In the absence of any appeal being filed bythe owner of the vehicle and brought to the notice of this Court,there is no manifest illegality in the award and for the abovesaidreasons, the appeal is dismissed.180.In C.M.A.No.3534 of 2011, it is the case of the legalrepresentatives of the deceased that on 17.04.2006, when the deceasedwas travelling as a pillion rider in a Motorcycle, bearingRegistration No.TN 07 AA 5169, the rider had lost control of thevehicle and dashed against a Central Median. Both the rider andpillion rider sustained serious injuries and died. The LegalRepresentatives of the pillion ridder claimed compensation ofRs.16,00,000/-. 181.Resisting the claim, the appellant-Insurance Companysubmitted that the accident occurred only due to the rash andnegligent driving of the rider of the motorcycle. In the additionalaffidavit, they also submitted that the appellant-Insurance Companyis not liable to pay compensation, as the vehicle was driven withouta valid and effective licence, at the time of accident. Yet anothercontention raised by the Company was that the deceased, who travelledas a Pillion Rider, was not covered under the Policy, as additionalpremium was not paid. 182.Before the Claims Tribunal, one of the claimants, wife ofthe deceased and the eye-witness has been examined as Pws.1 and 2respectively. The appellant-Insurance Company examined a SeniorAssistant from the Regional Transport Office, Ayyanavaram, as RW.1.RW.2 is the Senior Assistant, Regional Transport Office, Anna Nagar, https://hcservices.ecourts.gov.in/hcservices/ who deposed that their Officers have not issued any licence to oneBalaji, said to have been driven the offending vehicle. Exs.R1 andR2 produced before Claims Tribunal are the reports of the RegionalTransport Officer, Chennai Central. RW.3 is the Senior Executiveworking in the Office of the appellant-Insurance Company. Ex.R3 isthe copy of the Legal Notice issued to the owner of the vehicle andEx.R4 is the returned RPAD cover sent to the first respondent-Insured. Ex.R5 – Acknowledgement Cards, Ex.R6 – Reply legal noticeby the learned counsel for the claimants, Ex.R7 – Copy of theInsurance particulars and Ex.R8 – Investigation Report have beenmarked. 183.Upon perusal of Ex.R4, returned RPAD cover, sent to thefirst respondent, the Tribunal has observed that there was no suchperson in the address given by the first respondent. Further,enquires have been made by the Investigating Officer, in the nearbyshops and houses and nobody has identified such a person in theaddress. Thus, the Tribunal, on appreciation of the oral testimonyof RW.4, Investigating Officer and his report, Ex.R8, observed thatthe appellant-Insurance Company has issued a policy for the offendingvehicle in the name of the first respondent, without properlyascertaining the address particulars of the owner of the vehicle. 184.The Claims Tribunal has further observed that it not opento the Insurance Company to blame the claimant for non-production ofthe Insurance particulars. However, on the basis of the documentaryevidence, produced by the Company, held that they had proved theviolation of policy condition, at the time of accident. Followingthe judgment in Bajaj Allianz General Insurance Co. Ltd., Pune v.Manimozhi reported in 2010 (4) LW 742 (DB), the Claims Tribunal heldthat the Company as well as the owner of the vehicle, as jointly andseverally liable to pay compensation and granted liberty to recoverthe same from the owner. 185.Here again, the challenge in this appeal is that theTribunal has failed to appreciate that the Company has taken allpossible steps to prove that the driver did not possess any licenceat the time of accident and that therefore, the Company ought to havebeen exonerated from payment of compensation for the violation ofpolicy condition, when they have let in evidence through an officialof the Regional Transport Office. Payment of compensation by theInsurance 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 isstatutory, 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 hasgranted liberty to recover the amount from the insured, this Court isnot inclined to interfere with the same. https://hcservices.ecourts.gov.in/hcservices/

186.In C.M.A.No.3175 of 2011, it is the case of the dependantsof the deceased that on 19.04.2007, when the deceased was travellingas a pillion rider in a Motorcycle, bearing Registration No.TN 20 AV7129, on a 200 Feet Road, near Korattur Agraharam road junction, alorry bearing Registration No.TN 32 4048, insured with the appellant-Insurance Company, dashed against a motorcycle, due to which, thedeceased sustained multiple injuries and died on the spot. To avoidthe liability to pay compensation, the appellant-Insurance Companysubmitted that the driver of the lorry did not possess a validdriving licence and that the licence expired on the date of accident.They also examined RW.1, Assistant Licencing Authority and markedEx.B1 – Copy of the Certificate issued by him. Ex.B2 is the copy ofthe final report filed by the Inspector of Police and upon perusal ofthe same, the Claims Tribunal has found that the driver had a licenceto drive light motor vehicle with badge, and authorised to drive atransport vehicle and that the same has already expired on18.11.1999. As the deceased was a third party, the Tribunal heldthat the Insurance Company has to pay compensation amount to thedependents and recover from the owner, through an executionproceeding in the same claim petition. 187.Challenge in this appeal is with regard to the liability ofthe Company to pay compensation on the ground, inter alia, thathaving considered the report of the Assistant Licencing Authority,Ex.B1 and Ex.B2, Final report filed by the Inspector of Police, whichrevealed that the driving licence of the driver of the offendingvehicle expired on 18.11.1999 and that it was not renewed, till thedate of accident, i.e., on 19.04.2007, for the past 8 years andtherefore, the Tribunal ought to have exonerated the InsuranceCompany from its liability to pay compensation to the third party,following the decision made in 2009 TNMAC 487, wherein, it has beenheld that as per Section 106 of the Evidence Act, the drivinglicence, which is under the special knowledge of the driver and theowner who has the duty to verify the existence of licence, failed todischarge their burden and in such circumstances, the Company oughtto have been exonerated. In the light of the discussion and for thereasons stated supra, total exoneration of the Insurance Company frompayment of compensation to a third party cannot be ordered. However,pay and recover ordered is sustained.188.Insofar as quantum of compensation is concerned, theTribunal, in the absence of any proof of age, on the basis of theentry in Ex.P3 – Post-Mortem Certificate, fixed the age of thedeceased at 22 yeas, at the time of accident. Determination of ageon the basis of Ex.P3 – Post-Mortem Certificate cannot be said to befaulty, in view of the judgment in Fakeerappa v. Karnataka CementPipe Factory reported in 2004 (4) LW 20 and The Managing Director,Tamilnadu State Transport Corporation, Madurai v. Mary [2005 (5) CTC515]. 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 https://hcservices.ecourts.gov.in/hcservices/ Certificate. Considering the avocation pleaded that the deceasedwas a labourer, the Tribunal has fixed his notional monthly income atRs.4,500/-. Appying '13' multiplier and after deducting 1/3rdtowards Personal and Living Expenses of the deceased, the Tribunalawarded a sum of Rs.4,68,000/- towards loss of contribution to thefamily. 189.Challenging the quantum of compensation, it is thecontention of the appellant-Insurance Company that the Tribunal erredin fixing the monthly income at Rs.4,500/- and since the deceased wasa Bachelor, the Tribunal ought to have deducted 50% towards Personaland Living expenses of the deceased for the purpose of computingdependency compensation. Except the above, there is no otherchallenge, insofar as the method of assessment is concerned. 190.There is no dispute that the widowed mother is the onlylegal heir. The deceased was stated to be a labourer. Even takingit for granted, that the claimant or the deceased, owned any place ofliving, a small tenement or any other place or even a rented place,there are certain basic and periodical payments to be made andexpenses to be incurred by any family, for a simple and notextravagant living, such as, payment of electricity charges, watercharges, 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 theabovesaid heads, the price of essential commodities, livingcondition, 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 bepresumed that, as the only male earning member of the family,comprising of just two of them, the deceased would have contributed aminimum Rs.100/- per day, after deducting 1/3rd towards his personaland living expenses. As regards the contention that 50% ought tohave been deducted towards the personal and living expenses of thedeceased, 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 onlybreadwinner and support. At the time of accident in the year 2007,she was aged 49 years and by the time, when the claim petitionculminated into an award on 30.05.2011, she was 53 years old. Topull on for the rest of her lifetime, she has to get herself engaged,as a servantmaid or engage in any small business, like flower vendingor any other business to eak out her livelihood. Any amount ofcompensation awarded by the Claims Tribunal is not equivalent to theloss of her son, as she is left alone, and for the rest of her life https://hcservices.ecourts.gov.in/hcservices/ time, she has to be dependent on her relatives for moral and physicalsupport. In these days, one cannot expect monetary support.Considering all these aspects, this Court is of the view that thepercentage of deduction to be made, as per Sarala Verma's case, ifmade would considerably reduce the quantum of compensation to theaged widow. The compensation awarded under the other heads, isreasonable.193.Considering the principles of law in R.D.Hattangadi vs.Pest Control (India) Pvt. Ltd and others reported in 1995 ACJ 366 andDivisional Controller, KSRTC v. Mahadeva Shetty & Another reported in2004 (1) TNMAC (SC) 534, this Court is of the view that the widowedmother cannot be said to have been granted a bonanza, or she couldhave ever thought of making a profit out of the loss of her son. Inview of the above, this Court is not inclined to reduce the quantumof compensation. Perusal of the award shows that no compensation hasbeen 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 compensationfor the death of the sole breadwinner, Mr.Dhandapani, who was aretired Junior Assistant in Tamil Nadu Electricity Board, and paidRs.5,000/- per month, towards pension. According to them, he wasalso engaged in business. The accident occurred on 13.09.2006, whenan Auto Rickshaw bearing registration No.TN-23-AA-6707, belonging toone Ms.Keerthy, the 4th respondent herein, driven in a rash andnegligent manner, insured with the appellant insurance company,dashed against the deceased, who was walking on the extreme left sideof the road. He sustained grievous injuries and succumbed to thesame, inspite of treatment in Government Hospital, Tiruppattur. Acriminal case has also been registered against the driver of the AutoRickshaw. Legal representatives claimed compensation ofRs.5,00,000/-. Resisting the claim, the appellant insurance companydenied the manner of accident. Inter alia, they opposed the claim,on the ground that the driver of the Auto Rickshaw was not having anydriving licence at the time of accident and hence, there was aviolation of policy condition and consequently, the insurance companyis not liable to pay compensation. They disputed the quantum ofcompensation claimed under various heads. 195.The Tribunal, on evaluation of pleadings and evidence foundthat the driver of the Auto Rickshaw was responsible for theaccident. To avoid the liability to pay compensation, on the groundof violation of policy that the Auto Rickshaw was driven by anunlicenced person, the appellant insurance company examined RW3 aJunior Assistant from the office of the Motor Vehicle Inspector, whohas deposed that upon perusal of the particulars, he came to knowthat on 13.09.2006, no licence was granted. He has also deposed thatEx.P10 Licence, produced before the Claims Tribunal, was issued onlyon 29.10.2009 for a Two-wheeler and Car. In the cross examination, https://hcservices.ecourts.gov.in/hcservices/ he has deposed that he was not aware as to whether the driver wasgiven any licence in the year 2006. RW1 Driver, on the basis ofEx.R1 Judgment of the Judicial Magistrate No.I, filed a proofaffidavit, stating that the Criminal Court has acquitted him of thecharges, finding that he did not drive the offending vehicle on13.09.2006. However, admitted that the police has registered a caseagainst him. RW2, Investigating Officer of the appellant insurancecompany, deposed that his investigation revealed that RW1 drove theAuto Rickshaw. Ex.R2 is the Investigating Officer's Report. Inaddition to the above, the appellant insurance company marked Ex.P5Notice dated 09.09.2009 sent by the company to the owner of the AutoRickshaw and Ex.P6 is the postal acknowledgment. They also markedEx.P7 Postal Acknowledgment, for service of notice on RW1 Driver.However, the driver had denied driving of the Auto Rickshaw by way ofreply in Ex.P8. The claims Tribunal, by observing that if RW1 driverhad any valid licence on the date of accident, he could have producedthe same before the Tribunal, to discharge his burden and in theabsence of the above and considering the evidence on record, heldthat RW1 Driver had driven the vehicle without any licence andfollowing a decision of this Court reported in 2009 (5) L.W. 399,directed the appellant insurance company to pay the compensation tothe claimants and recover the same from the owner for his breach ofpolicy condition.196.Assailing the correctness of the finding, fasteningliability on the appellant insurance company to pay compensation,Mr.C.Ramesh Babu, learned counsel for the appellant insurancecompany, submitted that when admittedly, the Claims Tribunal foundthat the driver of the Auto Rickshaw had no licence to drive the sameon the date of accident, it should be construed that there was aclear breach of terms and conditions on the part of the owner of thevehicle and in such circumstances, the owner of the vehicle aloneought to have been made liable to pay compensation to therespondents/claimants. He further submitted that by letting inevidence through RW3, a Junior Assistant from the office of the MotorVehicle Inspector and marking Ex.R10 Licence, issued to the driver todrive Motor Cycle and Car, only on 29.10.2009, much later in point oftime, than the date of accident i.e., 13.06.2009, the insurer hasdischarged its burden of proof that there was a clear breach of termsand conditions on the part of the owner and therefore, the companycannot be mulcted with any liability to pay compensation to therespondents/claimants and on the other hand, there should have been atotal exoneration. The submission cannot be accepted for the reasonthat even if the breach is proved, the insurance company is liable topay compensation to a third party victim and recover the same fromthe 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 theInsurance Company, in respect of C.M.A.No.3806 of 2011, placed https://hcservices.ecourts.gov.in/hcservices/ 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 thatthe 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 theMotor Vehicles Act, 1988, has not been considered. 198.In CMA.No.100 of 2012, it is the case of therespondent/claimant that when he was riding a motor cycle (TVS PEP)bearing registration No.TN-03-A-9855, another motor cycle bearingregistration No.TN-04-AE-0828, insured with the appellant insurancecompany, knocked him down. He claimed compensation against the ownerand the insurer, respondents 1 and 2, before the Claims Tribunal.Apart from denying the manner of accident, the insurer has submittedthat the owner has failed to produce the vehicle records and thedriving licence of the vehicle, bearing Registration No.TN 04 AE0828, for their verification and hence, they are unable to know as towhether the owner had any insurable interest in the vehicle. Theyfurther submitted that it is for the claimant and the owner of thevehicle to furnish the driving particulars. As per the claimpetition, the name and address of the person, in-charge of thevehicle at the time of accident was one Mr.Jegadeesan, No.3, ThathaMuthiappan Street, Parrys, Chennai-600 001.199.On the abovesaid grounds, they disputed the liability topay compensation. To avoid the liability for payment of compensationto the third party, the company contended that the rider of theoffending vehicle was not having any driving licence, which isevident from Ex.R1 Copy of Charge Sheet, in which, he had beencharged under Section 3 read with 181 of the Motor Vehicles Act. Acontention has also been raised that though a notice to the owner aswell as the rider of the offending vehicle was issued to produce thedriving licence, both of them have not responded and hence there is aviolation of policy condition, for which, the insurance company isnot liable to pay compensation. RW1 Administrative Officer attachedto the appellant insurance company has been examined to prove that anotice was sent. The Company has marked the notice and the postalAcknowledgment Card. As usual, the owner remained ex parte.Observing that the insurance company had taken steps to prove thatthe rider of the motor cycle did not possess a driving licence, atthe time of accident, the Claims Tribunal directed the appellantinsurance company to pay compensation to the claimant at the firstinstance and thereafter, recover from the same from the owner of thevehicle, without filing any separate petition. The compensation hasbeen 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 https://hcservices.ecourts.gov.in/hcservices/ that the Claims Tribunal ought to have exonerated the insurancecompany 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 topay”, and that the Tribunal has no power to give direction to pay andthen recover from the owner as such power under Articles 136 and 142of the Constitution of India is vested only with the Supreme Court.Learned counsel for the appellant also submitted that the driver ofthe motor cycle insured with them has been charge sheeted underSection 3 read with Section 181 of the Motor Vehicles Act and byproducing Ex.R2 Acknowledgment Card for the notice sent to the owner,calling upon him to furnish the licence particulars, the company hasdischarged his burden of proof that there was no licence at the timeof accident. Mere production of Ex.R1 Charge Sheet and Ex.R2Acknowledgment Card, to proof that a notice was sent to the owner orthe driver as the case may be, for furnishing licence particulars ofthe driver of the offending vehicle insured with the appellantinsurance company, does not amount to prove that the driver did notpossess valid driving licence. Admittedly, the appellant insurancecompany has not called for any details from the concerned RTO withinwhose jurisdiction the driver of the offending vehicle resides northey have taken any steps to summon the RTO, the competent authoritywho maintains the licence particulars of the driver, whose address isfurnished at Column No.16A of the claim petition. Even then, theTribunal has permitted to recover the compensation amount from theowner. In the absence of any appeal preferred by the owner of thevehicle, there is no manifest illegality.201.In CMA.No.179 of 2012, that on 10.06.2007, when therespondent/claimant was walking along Madhavaram Redhillls Road nearVadaperumbakkam, he was hit by a motor cycle bearing registrationNo.TN-20-AX-6546 from behind. He sustained injuries and claimedcompensation against the owner and the insurer. The appellantherein, inter alia submitted that the driver of the abovesaid motorcycle did not possess any valid driving licence at the time ofaccident. A charge sheet has been laid under Sections 279 and 338IPC read with Sections 3 and 181 of the Motor Vehicles Act, andtherefore, there is a violation of terms and conditions of policy andhence the appellant is not liable to pay any compensation. Withoutprejudice to the above, they disputed the age, nature of injuries,period of treatment and the quantum of compensation claimed undervarious heads.202.In support of the contention that the insurance company isnot liable to pay compensation to the third party pedestrian, on theground of violation of policy condition that the motor cycle, insuredwith them was driven by the driver, without any licence, theInsurance Company examined RW1 Assistant Manager attached to itsoffice, who deposed that as per Investigator's report, the rider ofthe offending vehicle was charged under Sections 79 and 338 IPC read https://hcservices.ecourts.gov.in/hcservices/ with Sections 3 and 181 of the Motor Vehicles Act, and pleaded guiltybefore the Criminal Court and paid a fine of Rs.1,500/-. It was alsohis evidence that a legal notice was sent to the owner, as well asthe rider of the vehicle to produce the driving licence, but both ofthem did not respond. Ex.R1 Legal Notice sent to the owner and riderof the motor cycle bearing registration No.TN-20-AX-6546. Ex.R2Returned Covers were marked. The Tribunal, on evaluation ofpleadings and evidence and following a Division Bench judgment ofthis Court 2010 (4) L.W. 742, directed the company to make thepayment and thereafter, recover from the insured. The said directionfastening liability on the insurance company to pay compensation isassailed in this appeal, on the ground that when the company has letin evidence through RW1-Assistant Manager, to prove that they hadissued a notice to the owner and driver of the offending vehicle andalso marked Ex.R1 Copy of the letter sent to owner withAcknowledgement Card, Ex.R2 Letter sent to the owner and rider, withreturned covers and also deposed that as per the investigatingofficer's report, the driver of the motor cycle has been chargesheeted for the offences stated supra, the Tribunal ought to haveexonerated the appellant insurance company from its liability to paycompensation to the third party, on the ground that the owner of thevehicle had handed over the motor cycle to a person who did notpossess a valid and effective licence and thus violated the terms andconditions of policy. The abovesaid contention cannot becountenanced in law, in view of the detailed discussion.203.In the result, the Civil Miscellaneous Appeals aredismissed. No costs. Consequently, connected Miscellaneous Petitionsare closed.204. The appellant-Insurance Companies are directed to pay thecompensation amount to the respective claimants, by depositing theamounts in each of the appeals, with proportionate accrued interestand costs, less the amount already deposited, within a period of four(4) weeks from the date of receipt of a copy of this order, andrecover the same from the owner of the offending vehicles, byinitiating recovery proceedings. 205.Before parting with the case, this Court sincerelyappreciates 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 theInsurance Companies, who have made elaborate submissions. 206.This Court also deems it fit to extract the observationsmade 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 onceagain record. in clear and emphatic terms our https://hcservices.ecourts.gov.in/hcservices/ disapproval of the conduct of a nationalized InsuranceCompany in bringing an appeal in such a cause beforethis Court. It is high time that such Companies, whonow are limbs of the State, appreciated theirresponsibility in the context of a welfare legislationenacted by the Parliament of our socialist republic,with a view to providing a speedy remedy for awardingjust compensation to unfortunate victims of motoraccidents. It is, indeed, open to such Companies tobring appeals which raise substantial questions of law,but to bring appeals on frivolous issues, which arecovered by judgments including those. of the SupremeCourt, is not what is expected of such Companies in thenew role which they have now assumed." Sd/ Asst.Registrar //True Copy// Sub.Asst.RegistrarskmTo1. 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.1 cc to Mr. K.Varadha Kamaraj, Advocate, Sr.No.7757/121 cc to Mr.C.Ramesh Babu , Advocate, Sr.No.7737/121 cc to Mr.V.Jeevagirdharan , Advocate, Sr.No.7871/121 cc to Mr.G.Udayasankar , Advocate, Sr.No.7741/121 cc to Mr.D.Baskaran , Advocate, Sr.No.7952/121 cc to Mr.M.Swamikannu , Advocate, Sr.No.8000/121 cc to Mr.M.B.Gopalan , Advocate, Sr.No.7827/12C.M.A.Nos.2126 of 2009, 3175, 3534, 3806 of 2011 and 100 and 179 of 2012 and connected Miscellaneous Petitionsnr(co)pmk.25.6.2012