ORIENTAL INSURANCE CO LTD Vs. NARAYANAN

JUDGEMENT

(1.) This appeal has been preferred by the insurance company aggrieved by the direction of the Tribunal to honour the insurance claim and to recover the same from the insured. The Tribunal found that as on the date of the accident on 21.10.1992 the policy was live but not the driving licence of the rider of the scooter. Counsel for the appellant submitted that after having found that there is violation of policy and that the rider is having no licence the Tribunal is not justified in directing payment by the insurance company and then to recover from the insured. The counsel placed reliance on the decision of the Apex Court in United India Insurance Co. Ltd. v. Gian Chand, 1997 ACJ 1065 (SC), wherein the Apex Court held that when the insured had handed over the vehicle for being driven by an unlicensed driver, the insurance company should be exonerated from the liability to meet the claims of third party who might have suffered on account of the vehicular accident caused by such unlicensed driver.

(2.) Counsel for the respondent placed reliance on the recent decision of the Supreme Court in New India Assurance Co. Ltd. v. Kamla, 2001 ACJ 843 (SC) and submitted that even though there is violation of policy since vehicle is insured the insurer is bound to compensate the injured and to recover the amount from the insured. Admittedly, in this case the vehicle is insured. Therefore, statutory liability of the insurance company to pay compensation to third party cannot be disputed. Insurance company wanted to disown the statutory liability on the plea that there is violation of the policy. We are of the view since vehicle has already been insured the mere fact that there is violation of policy would not absolve insurance company in honouring commitment of the third parties are concerned. Apex Court in Kamla's case (supra) was dealing with the question of a fake driving licence. The court after examining section 149 (2) held that when a valid insurance policy has been issued in respect of a vehicle as evidenced by a certificate of insurance the burden is on the insurer to pay to third parties, whether or not there has been any breach or violation of the policy conditions. But the amount so paid by the insurer to third parties can be allowed to be recovered from the insured if as per the policy conditions the insurer had no liability to pay such sum to the insured.

(3.) We are of the view the above dictum laid down by the Apex Court is squarely applicable to the facts of this case. Facts reveal that the driver had no licence at the time of the accident but admittedly the vehicle is insured. Under such circumstances the insurance company is bound to honour the statutory commitment of compensating the victim. They cannot take up the stand that since there is violation of conditions of policy they need not discharge the statutory liability. Therefore, the Tribunal is right in its findings. We are, therefore, of the view that the insurance company is bound to honour the statutory liability of honouring commitment to the third parties. After honouring commitment they can recover the amount from the insured. We find no infirmity in the order of the Tribunal. Appeal, therefore, lacks merits and the same is dismissed. Appeal dismissed.