# The New India Assurance Co. Ltd v. Smt. Vidhya Devi & Ors

- **Citation:** (2016) 4 ILRA 937
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-02-25
- **Bench:** Surya Prakash Kesarwani
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-co-ltd-v-smt-vidhya-devi-ors-43707
- **Pages:** 11

## Headnote

Motor Vehicles Act, 1988 - Sections 149(2), 166 - Motor accident claim - Liability of insurer -
Driving licence - Absence or non-production of licence - Effect.

Motor accident claim - Where the Motor Accident Claims Tribunal has recorded a categorical finding of fact
that the accident occurred without any negligence or fault on the part of the deceased driver and such finding
has not been challenged, the question as to whether the deceased driver was holding a valid driving licence or
not becomes redundant.

Driving licence - Mere non-production of driving licence by the claimants or owner of the vehicle is not
sufficient to absolve the insurer of its statutory liability, unless it is proved that the insured had wilfully and
consciously committed breach of the terms of the insurance policy by permitting a person without a valid
licence to drive the vehicle and that such breach had a nexus with the cause of the accident.

Liability of insurer - The burden to establish breach of policy conditions lies on the insurance company. In
absence of any evidence showing negligence of the driver or wilful breach on the part of the insured, the
insurer cannot avoid liability merely on technical grounds.

Appeal dismissed.
938 INDIAN LAW REPORTS ALLAHABAD SERIES
Case listed

National Insurance Co. Ltd. v. Swaran Singh, 2004 (1) TAC 321 (SC)
National Insurance Co. Ltd. v. Brij Pal Singh and United India Insurance Co. Ltd. V.
Sujata Arora

## Text

4 All. The New India Assurance Co. Ltd. Vs Smt. Vidhya Devi & Ors.

937
State Bank of Patiala v. S.K. Sharma reported AIR 1996 SC 1669 and Biecco Lawrie Ltd. v.
West Bengal reported (2009) 10 SCC 32.

24. In the present case the stand taken by respondents is that petitioner despite opportunity
given to him, did neither submit reply nor requested for oral inquiry. Even if the said statement is
assumed to be correct, obligation on the department to prove charges is not discharged.

25. In the result, writ petition is allowed. Impugned judgment dated 02.12.1998 passed by
Tribunal is hereby quashed. Impugned order of punishment i.e. removal dated 16.4.1990 is also set
aside and claim petition filed by petitioner stands allowed. Petitioner shall also be entitled to all
consequential benefits.
----------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.02.2016

BEFORE

THE HON'BLE SURYA PRAKASH KESARWANI, J.

First Appeal From Order No.- 624 Of 2016

The New India Assurance Co. Ltd. ...Appellant
Versus
Smt. Vidhya Devi & Ors. ...Respondents

Counsel for the Appellant:
Saurabh Srivastava

Motor Vehicles Act, 1988 - Sections 149(2), 166 - Motor accident claim - Liability of insurer -
Driving licence - Absence or non-production of licence - Effect.

Motor accident claim - Where the Motor Accident Claims Tribunal has recorded a categorical finding of fact
that the accident occurred without any negligence or fault on the part of the deceased driver and such finding
has not been challenged, the question as to whether the deceased driver was holding a valid driving licence or
not becomes redundant.

Driving licence - Mere non-production of driving licence by the claimants or owner of the vehicle is not
sufficient to absolve the insurer of its statutory liability, unless it is proved that the insured had wilfully and
consciously committed breach of the terms of the insurance policy by permitting a person without a valid
licence to drive the vehicle and that such breach had a nexus with the cause of the accident.

Liability of insurer - The burden to establish breach of policy conditions lies on the insurance company. In
absence of any evidence showing negligence of the driver or wilful breach on the part of the insured, the
insurer cannot avoid liability merely on technical grounds.

Appeal dismissed.
938 INDIAN LAW REPORTS ALLAHABAD SERIES
Case listed

National Insurance Co. Ltd. v. Swaran Singh, 2004 (1) TAC 321 (SC)
National Insurance Co. Ltd. v. Brij Pal Singh and United India Insurance Co. Ltd. V.
Sujata Arora

(Delivered by Hon'ble Surya Prakash Kesarwani, J.)

1. Heard Sri Saurabh Srivastava, learned counsel for the appellant.

2. This appeal has been filed challenging the award dated 27.11.2015 in M.A.C.P. No.123 of
2013 Smt. Vidhya Devi And 4 Ors. Vs. Vikas Jain and another, passed by the Motor Accident
Claim Tribunal/Additional District Judge)/Special Judge, S.C./S.T.(P.A.) Act, Badaun, awarding a
sum of Rs.3,37,000/- to the claimants-respondents on account of death of Sri Omkar (husband of
claimant-respondent No.1 and father of claimants-respondents No. 2 to 5) in an accident on
9.2.2013 caused by truck bearing registration No. H.R. 55/8341.

3. Submission of the learned counsel for the appellant is that the deceased was the driver of the
offending truck. While parking the truck he came in contact with 11000 voltage electric line which
resulted in his death. He was having no driving licence and as such no liability of the appellant
insurer could be fixed. Thus, the Tribunal committed a manifest error of law in fixing the liability
of the appellant insurance company for payment of compensation to the claimants respondents. In
support of his submission, he relied upon decision of Hon'ble Supreme Court in the case of United
India Insurance Co. Ltd. Vs. Sujata Arora and others 2013(3) T.A.C. 29 (S.C.).

4. I have carefully considered the submissions of learned counsel for the appellant.

5. Perusal of the impugned award shows that while deciding issue Nos. 1 and 2, the Tribunal
recorded a finding of fact that the claimants respondents have been successful in establishing that in
the night at Neutral Citation No. - 2016:AHC:44694 2 about 10 P.M. of 9.2.2013 when the
offending truck was being parked near Gyani Dhaba, adjacent to Chaudhary Petrol Pump, it came
in contact with hanging 11000 voltage electric line which caused death of the deceased Omkar who
was not at fault. This finding of fact has not been challenged before this Court. That apart, this is a
finding of fact recorded by the Tribunal.

6. While deciding issue Nos. 3 and 4, the Tribunal recorded a finding of fact that respondent
No.1 (widow of the deceased driver) had stated in her examination in chief that her husband Omkar
was doing the job of driving vehicle from the very beginning and he obtained the driving licence
from Kota, Bundi, Rajasthan but she did not know the driving licence number and she searched the
driving licence in her room but could not find it. It has also been recorded that the father of the
deceased was also a driver. The Tribunal also recorded a finding of fact that despite disclosure of
these facts, the appellant insurance company made no effort to verify the existence of driving
4 All. The New India Assurance Co. Ltd. Vs Smt. Vidhya Devi & Ors.

939
licence of the deceased from the Transport authorities at Kota, Bundi, Rajasthan. However, since
the driving licence could not be produced and as such, the Tribunal assumed that there was no
driving licence.

7. While deciding issue No.5, the Tribunal considered the facts of the case and evidences on
record so as to fix the liability for payment of compensation. While deciding this issue the Tribunal
recorded undisputed findings of fact that the deceased died because of coming into contact of the
truck with the hanging electric wire and there was no negligence on the part of the deceased driver.
The Insurance company has not verified the fact of issuance of driving licence of the deceased by
Transport authorities of Kota, Bundi, (Rajasthan). On these facts and in view of the law laid down
by Hon'ble Supreme Court in the case of National Insurance Co. Ltd. Vs.Swaran Singh, 2004(1)
T.A.C. 321(S.C.), the Tribunal fixed the liability of the appellant insurance 3 company to pay
compensation to the claimants-respondents.

8. It is not the case of the appellant insurance company that either the owner of the offending
truck had knowingly and wilfully permitted a driver not having a driving licence or that the insurer
made any effort to verify the fact of issuance of driving licence of the deceased by the Transport
authorities of Kota, Bundi (Rajasthan) or that there was any negligence on the part of the deceased
driver or that the deceased driver was not competent to drive the truck. The only argument pressed
before this court is that the driving licence of the deceased driver could not be produced by the
claimants respondents or the owner of the vehicle whereas the onus to prove that the deceased
possessed a valid driving licence, was on them in view of a Division Bench judgment of this court
in the case of National Insurance Co. Ltd. Vs. Brij Pal Singh and another 2003(3) TAC 849
(Alld). However, the finding recorded by the Tribunal in the impugned award that the fact
disclosed by the claimant respondent no.1 during the course of examination in chief to the effect
that driving licence of her deceased husband was issued by Transport authority of Kota Bundi,
Rajasthan, has not been disputed nor it has been disputed that there was no negligence of the
deceased driver and that he was driving the truck from long time and that he was a competent
driver. The death of the driver was not because of any breach of contract of insurance or his
negligence or fault. Consequently, the question whether the deceased driver was possessing a valid
driving licence or not, becomes redundant.

9. In the case of Swaran Singh (supra) three-judges Bench of Hon'ble Supreme Court held as
under:

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

40. In Narvinva' case (supra), a Division Bench of this Court observed :
"...The insurance company complains of breach of a term of contract which would permit it to
disown its liability under the contract of insurance. If a breach of term of contract permits a party
to the contract to not to perform the contract, the burden is squarely on that party which complains
940 INDIAN LAW REPORTS ALLAHABAD SERIES
of breach to prove that the breach has been committed by the other party to the contract. The test in
such a situation would be who would fail if no evidence is led..."

41. In Skandia's case (supra), this Court held :

"Section 96(2)(b)(ii) extents immunity to the insurance company if a breach is committed
of the condition excluding driving by a named person or persons or by any person who is not duly
licensed, or by any person who has been disqualified from holding or obtaining driving licence
during the period of disqualification. The expression "breach" is of great significance. The
dictionary meaning of "breach" is "infringement or violation of a promise or obligation" (See
Collins English Dictionary). It is, therefore, abundantly clear that the insurer will have to establish
that the insured is guilty of an infringement or violation of the promise that a person who is duly
licensed will have to be in charge of the vehicle. The very concept of infringement or violation of
the promise that the expression "breach" carries within itself induces an inference that the violation
or infringement or violation. If the insured is not at all at fault and has not done anything he should
not have done or is not amiss in any respect, how can it be conscientously posited that he has
committed a breach ? It is only when the insured himself places the vehicle in charge of a person
who dies not hold a driving licence, that it can be said that he is "guilty" of the breach of the
promise that the vehicle will be driven by a licensed driver. It must be established by the insurance
company that the breach was on the part of the insured and that it was the insured who was
guilty of violating the promise or infringement of the contract. Unless the insured is at fault and
is guilty of a breach, the insurer cannot escape from the obligation to indemnify the insured and
successfully contented that he is exonerated having regard to the fact that the promisor (the
insured) committed a breach of his promise. Not when some mishap occurs by some mischance.
When the insured has done everything within his power inasmuch as he has engaged a licensed
driver and has placed the vehicle in charge of a licensed driver, with the express or implied
mandate to drive it himself, it cannot be said that the insured is guilty of any breach."

42. In B.V. Nagaraju vs. M/s Oriental Insurance Co. Ltd. [AIR 1996 SC 2054], Punchhi,
J. speaking for the Division Bench followed Skandia (supra) and read down the exclusionary term
of the insurance policy to serve the main purpose thereof, holding :

"The National Commission went for the strict construction of the exclusion clause. The
reasoning that the extra passengers being carried in the goods vehicle could not have contributed,
in any manner, to the occurring of the accident, was barely noticed and rejected sans any plausible
account; even when the claim confining the damage to the vehicle only was limited in nature. We,
thus, are of the view in accord with the Skandia's case (AIR 1987 SC 1184), the aforesaid exclusion
term of the insurance policy must be read down so as to serve the main purpose of the policy that is
indemnify the damage caused to the vehicle, which we hereby do."

43. A contract of insurance also falls within the realm of contract. Thus, like any other
contract, the intention of the parties must be gathered from the expressions used therein.
4 All. The New India Assurance Co. Ltd. Vs Smt. Vidhya Devi & Ors.

941

52. There may be a case where an accident takes place without there being fault on the
part of the driver. In such an event, the question as to whether a driver was holding a valid
licence or not would become redundant. (See Jitendra Kumar vs. Oriental Insurance Co. Ltd. &
Anr. - J.T. 2003 (5) SC 538].

53. Skandia (supra), on the other hand, has been approved by a three-Judge Bench, when
the correctness thereof was referred to a larger Bench in Sohan Lal Passi's case (supra), wherein a
three-Judge Bench of this Court noticed the ratio propounded in Skandia's case (supra) and
observed :

"...In other words, once there has been a contravention of the condition prescribed in
sub-section (2)(b)(ii) of Section 96, the person insured shall not be entitled to the benefit of subsection (1) of Section 96. According to us, Section 96(2)(b)(ii) should not be interpreted in a
technical manner. Subsection (2) of Section 96 only enables the insurance company to defend itself
in respect of the liability to pay compensation on any of the grounds mentioned in sub-section (2)
including that there has been a contravention of the condition excluding the vehicle being driven by
any person who is not duly licensed. This bar on the face of it operates on the person insured. If the
person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not
duly licensed then only that clause shall be attracted. In a case where the person who has got
insured the vehicle with the insurance company, has appointed a duly licensed driver and if the
accident takes place when the vehicle is being driven by a person not duly licensed on the basis of
the authority of the driver duly authorised to drive the vehicle whether the insurance company in
that event shall be absolved from its liability ? The expression 'breach' occurring in Section
96(2)(b) means infringement or violation of a promise or obligation. As such the insurance
company will have to establish that the insured was guilty of an infringement or violation of a
promise. The insurer has also to satisfy the Tribunal or the Court that such violation or
infringement on the part of the insured was wilful. If the insured has taken all precautions by
appointing a duly licensed driver to drive the vehicle in question and it has not been established
that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the
insurance company cannot repudiate its statutory liability under sub-section (1) of Section 96..."

57. The proposition of law is no longer res integra that the person who alleges breach
must prove the same. The insurance company is, thus, required to establish the said breach by
cogent evidence. In the event, the insurance company fails to prove that there has been breach of
conditions of policy on the part of the insured, the insurance company cannot be absolved of its
liability. (See Sohan Lal Passi (supra)

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

60. A beneficent statute, as is well known, must receive a liberal interpretation [See
Bangalore Water Supply & Sewerage Board etc. vs. A. Rajappa and Others etc. [(1978) 2 SCC
213], Steel Authority of India Ltd. and Others vs. National Union Waterfront Workers and Others
[(2001) 7 SCC 1], ITI Ltd. vs. Siemens Public Communications Network Ltd. [(2002) 5 SCC 510],
Amrit Bhikaji Kale and Others vs. Kashinath Janardhan Trade and Another [(1983) 3 SCC 437]
and Kunal Singh vs. Union of India and Another [(2003) 4 SCC 524].

61. The liability of the insurer is a statutory one. The liability of the insurer to satisfy the
decree passed in favour of a third party is also statutory.

63. As has been held in Sohan Lal Passi (supra), the insurance company cannot shake off
its liability to pay the compensation only by saying that at the relevant point of time the vehicle was
driven by a person having no licence.
Thus, where a liability has been established by a judgment, it is not permissible to look beyond the
determination in order to establish the basis of the liability.

65. The social need of the victim being compensated as enacted by the Parliament was
the subject matter of consideration before a three-Judge Bench of this Court as early as in 1959 in
British India General Insurance Co. Ltd. vs. Captain Itbar Singh and Others [(1960) 1 SCR 168],
wherein Sarkar, J speaking for the Bench observed :

"Again, we find the contention wholly unacceptable. The Statute has no doubt created a
liability in the insurer to the injured person but the statute has also expressly confined the right to
avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and
therefore to the statute for reasons of hardship. We are furthermore not convinced that the statute
causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to
defend the action in the name of the assured and if he does so, all defences open to the assured can
then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus
avoid all hardship if any, by providing for a right to defend the action in the name of the assured
and this he has full liberty to do. Secondly, if he has been made to pay something which on the
contract of the policy he was not bound to pay, he can under the proviso to sub-s.(3) and under
sub-s. (4) recover it from the assured. It was said that the assured might be a man of straw and the
insurer might not be able to recover anything from him. But the answer to that is that it is the
insurer's bad luck. In such circumstances the injured person also would not have been able to
recover the damages suffered by him from the assured, the person causing the injuries.
4 All. The New India Assurance Co. Ltd. Vs Smt. Vidhya Devi & Ors.

943

66. Similar view has been taken in Skandia's case (supra), Sohan Lal Passi's case
(supra), Kashiram Yadav and Another vs. Oriental Fire and General Insurance Co. Ltd. and Others
[(1989) 4 SCC 128] and several others.

67. In Kamla's case (supra), a Division Bench of this Court summed up the legal position
:

"The position can be summed up thus :

The insurer and the insured are bound by the conditions enumerated in the 7 policy and
the insurer is not liable to the insured if there is violation of any policy condition. But the insurer
who is made statutorily liable to pay compensation to third parties on account of the certificate of
insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if
there was any breach of policy conditions on account of the vehicle being driven without a valid
driving licence. Learned counsel for the insured contended that it is enough if he establishes that he
made all due enquiries and believed bona fide that the driver employed by him had a valid driving
licence, in which case there was no breach of the policy condition. As we have not decided on that
contention it is open to the insured to raise it before the Claims Tribunal. In the present case, if the
Insurance Company succeeds in establishing that there was breach of the policy condition, the
Claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer
shall be allowed to recover that amount (which the insurer is directed to pay to the claimant third
parties) from the insured person."

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

72. In V. Mepherson vs. Shiv Charan Singh [1998 ACJ 601 (Del.)] the owner of the
vehicle was held not to be guilty of violating the condition of policy by willfully permitting his son
to drive the car who had no driving licence at the time of accident. In that case, it was held that the
owner and insurer both were jointly and severally liable.

73. In New India Assurance Co. Ltd. vs. Jagtar Singh and Others [1998 ACJ 1074],
Hon'ble M. Srinivasan, CJ, as His Lordship then was, dealing with the case where a duly licensed
944 INDIAN LAW REPORTS ALLAHABAD SERIES
driver was driving a vehicle but there was a dispute as to who was driving the vehicle. In that case
the court referred to the judgment in Kashiram Yadav vs. Oriental Fire & General Insurance Co.
Ltd. [1989 ACJ 1078 (SC)] and expressed its agreement with the views taken therein.

74. In National Insurance Co. Ltd. vs. Ishroo Devi and Others [1999 ACJ 615] where
there was no evidence that the society which employed the driver was having knowledge that the
driver was not holding a valid licence, it was held the insurance company is liable. The court relied
upon the decisions of this Court in Kashiram Yadav's case (supra), Skandia's case (supra) and
Sohan Lal Passi's case (supra).

When the person has been granted licence for one type of vehicle but at the relvant
time he was driving another type of vechile :

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

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

77. We have construed and determined the scope of sub-clause (ii) of subsection(2) of
section 149 of the Act. Minor breaches of licence conditions, such as want of medical fitness
certificate, requirement about age of the driver and the like not found to have been the direct cause
4 All. The New India Assurance Co. Ltd. Vs Smt. Vidhya Devi & Ors.

945
of the accident, would be treated as minor breaches of inconsequential deviation in the matter of
use of vehicles. Such minor and inconsequential deviations with regard to licensing conditions
would not constitute sufficient ground to deny the benefit of coverage of insurance to the third
parties.

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

96. The summary of our findings to the various issues as raised in these petitions are as
follows:

(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of
vehicles against third party risks is a social welfare legislation to 9 extend relief by compensation
to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance
coverage of all vehicles are with this paramount object and the provisions of the Act have to be so
interpreted as to effectuate the said object.

(ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163 A or
Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said
Act.

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

(iv) The insurance companies are, however, with a view to avoid their liability must not
only establish the available defence(s) raised in the said proceedings but must also establish
'breach' on the part of the owner of the vehicle; the burden of proof wherefor would be on them.
946 INDIAN LAW REPORTS ALLAHABAD SERIES

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

(vi) Even where the insurer is able to prove breach on the part of the insured concerning
the policy condition regarding holding of a valid licence by the driver or his qualification to drive
during the relevant period, the insurer would not be allowed to avoid its liability towards insured
unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are
found to have contributed to the cause of the accident. The Tribunals in interpreting the policy
conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to
allow defences available to the insured under section 149(2) of the Act.

(vii) The question as to whether the owner has taken reasonable care to find out as to
whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the
requirements of law or not will have to be determined in each case.

(viii) If a vehicle at the time of accident was driven by a person having a learner's
licence, the insurance companies would be liable to satisfy the decree. (ix) The claims tribunal
constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in
respect of the accidents involving death or of bodily injury or damage to property of third party
arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims
inter se between claimant or claimants on one side and insured, insurer and driver on the other. In
the course of adjudicating the claim for compensation and to decide the availability of defence or
defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes
inter se between insurer and the insured. The decision rendered on the claims and disputes inter se
between the insurer and insured in the course of adjudication of claim for compensation by the
claimants and the award made thereon is enforceable and executable in the same manner as
provided in Section 174 of the Act for enforcement and execution of the award in favour of the
claimants.

(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion
that the insurer has satisfactorily proved its defence in accordance with the provisions of section
149(2) read with sub-section (7), as 10 interpreted by this Court above, the Tribunal can direct that
the insurer is liable to be reimbursed by the insured for the compensation and other amounts which
it has been compelled to pay to the third party under the award of the tribunal. Such determination
of claim by the Tribunal will be enforceable and the money found due to the insurer from the
insured will be recoverable on a certificate issued by the tribunal to the Collector in the same
manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for
the recovery as arrears of land revenue only if, as required by subsection (3) of Section 168 of the
Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from
the date of announcement of the award by the tribunal.

(xi) The provisions contained in sub-section (4) with proviso thereunder and sub-section
(5) which are intended to cover specified contingencies mentioned therein to enable the insurer to
4 All. Satyendra Bahadur Singh @ Guddu Singh Vs State Of U.P. & Ors.

947
recover amount paid under the contract of insurance on behalf of the insured can be taken recourse
of by the Tribunal and be extended to claims and defences of insurer against insured by relegating
them to the remedy before regular court in cases where on given facts and circumstances
adjudication of their claims inter se might delay the adjudication of the claims of the victims.

For the reasons aforementioned, these petitions are dismissed but without any order as to
costs."

10. In view of the law laid down by three judges Bench of Hon'ble Supreme Court in the case
of Swaran Singh (supra), and considering the facts of the present case, I find that the judgment of
the Division Bench of this Court in the case of Brij Pal Singh(supra) and the judgment of Hon'ble
Supreme court in the case of Sujata Arora(supra) are of no help to the appellant.

11. In the case of Swaran Singh (supra) in paragraph 52 Hon'ble Supreme court has clearly
held that there may be a case where an accident takes place without there being fault on the part of
the driver. In such an event, the question as to whether the driver was holding a valid licence or not
would become redundant. In the present set of facts, the Tribunal has recorded a finding of fact that
accident occurred without any fault of the driver. This finding of fact has not been disputed before
this Court by the appellant. Thus, the question as to whether the deceased driver was holding a
valid driving licence or not, would become redundant.

12. In view of the above discussion, I do not find any merit in this 11 appeal. Consequently,
appeal fails and is hereby dismissed.

13. Statutory deposit made before this Court shall be remitted to the tribunal concerned for
adjustment.
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ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.02.2016

BEFORE

THE HON'BLE RAN VIJAI SINGH, J.

Writ C No.- 647 Of 2016

Satyendra Bahadur Singh @ Guddu Singh. Petitioner
Versus
State of U.P. & Ors. Respondents

Counsel for Petitioner:
Satyendra Narayan Singh

Counsel for Respondents: