NATIONAL INSURANCE COMPANY Vs. ATWARI DEVI AND OTHERS

JUDGEMENT

(1.) This order will dispose of FAO Nos. 1728 and 1972 of 1999 as the same arise out of a common award passed by the Motor Accident Claims Tribunal, Patiala.

(2.) Indisputably, the driver of the offending vehicle did not possess a valid driving licence on the date of accident i.e. 26th February, 1997. The Insurance Company has appealed to this Court against the liability fastened on it by the Tribunal. The Tribunal has awarded compensation of Rs. 10 lakhs to the widow and the four minor children of the deceased Mithu. It is not necessary to traverse the entire facts mentioned in the impugned award dated 6th April, 1999 passed by the Motor Accident Claims Tribunal, Patiala (for short "the Tribunal"). As per the impugned award, the liability has been fastened on the Insurance Company and nothing has been said as far as the owner and the driver of the offending vehicle are concerned regarding their liability whether joint or several. The Tribunal had found that the driving licence at the time of accident was not a valid one as it had expired. The licence was valid upto to 20th October, 1988, but was subsequently renewed from 4th March, 1999 to 16th October, 2000 while the accident had taken place before the renewal. While concluding the issue on facts, the Tribunal relied on the judgments in Ramphool v. Krishna Makkar, 1988 (2) 94 PLR 561 and Ramesh Chand v. United India Insurance Company, 1997 (3) PLR 426. Applying the ratio of these two judgments, the Tribunal fastened the liability on the Insurance Company.

(3.) Mr. Pardeep Goyal, learned counsel appearing for the Insurance Company has relied on a decision of the Supreme Court in National Insurance Company Limited v. Jarnail Singh and others, 2007(15) SCC 28 to show that the reasoning of the Tribunal in fastening liability on the Insurance Company without the driver holding a valid driving licence was not correct view on law. A similar situation arose in that case. The driver did not hold a valid and effective driving licence on the date of accident as it had expired. There is no dispute that the policy stipulated a condition that the vehicle would not be driven by any person without a valid driving licence. This meant that the condition in the policy had been violated. While holding thus, the Supreme Court enunciated the legal position as far as Section 149 (2)(a)(ii), (5) and 15 (1) of the Motor Vehicles Act, 1988 are concerned that when the driver did not hold a valid driving licence on the date of accident, there is breach of the condition of the contract of insurance, nonetheless the Insurance Company is liable to pay compensation to the third party on the strength of valid insurance policy issued in respect of the vehicle. The Supreme Court held that the remedy of the insurer when there was breach or violation of the policy condition was to recover the amount from the insured. Applying the principle in Jarnail Singh (supra) the liability of the Insurance Company in this case cannot be obliterated by the fact that respondent No. 6, the driver did not hold a valid driving licence while driving the vehicle owned by the owner, respondent No. 7 which was insured against risk to third party.