Defences raised by the Petitioner company in the claim petitions purported to be in terms of Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act') were : (a) driving licence produced by the driver or owner of the vehicle was a fake one; (b) driver did not have any licence whatsoever; (c) licence, although was granted to the concerned driver but on expiry thereof, the same had not been renewed; (d) licence granted to the drivers being for one class or description of vehicle but the vehicle involved in the accident was of different class or description; and (e) the vehicle in question was driven by a person having a learner's licence. -2015 S.C.(2004) MSKLAWREPORTS


 

SUMMARY OF FINDINGS : 
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 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.
(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 interpreted by this Court above, the
Tribunal can direct that the insurer is liable to be reimbursed by the
insured for the compensation and other amounts which it has been
compelled to pay to the third party under the award of the tribunal. 
Such determination of claim by the Tribunal will be enforceable
and the money found due to the insurer from the insured will be
recoverable on a certificate issued by the tribunal to the Collector
in the same manner under Section 174 of the Act as arrears of land
revenue.  The certificate will be issued for the recovery as arrears
of land revenue only if, as required by sub-section (3) of Section
168 of the Act the insured fails to deposit the amount awarded in
favour of the insurer within thirty days from the date of
announcement of the award by the tribunal.
(xi) The provisions contained in sub-section (4) with proviso
thereunder and sub-section (5) which are intended to cover
specified contingencies mentioned therein to enable the insurer to
recover amount paid under the contract of insurance on behalf of
the insured can be taken recourse of by the Tribunal and be
extended to claims and defences of insurer against insured by
relegating them to the remedy before regular court in cases where
on given facts and circumstances adjudication of their claims inter
se might delay the adjudication of the claims of the victims.



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

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