What is the liability of an Insurance Company under Section 149/149(2)(a)(ii) of the Motor Vehicles Act, 1988 when the driver’s licence is alleged to be fake? How to interpret the breach requirement under Section 149(2)(a)(ii) and when can the insured be deemed to have breached the policy? What are the obligations of the owner/insured and the insurer regarding recovery of amounts where the insurer pays compensation despite questions about a driver’s licence?

Key Points: - (!) Section 149(1) requires insurer to pay to the third-party claimant notwithstanding possible avoidance of policy, subject to Section 149(2) grounds. - (!) Section 149(2) lists defenses, including breach of a specified condition such as driving by a non-duly licensed person. - (!) - (!) The breach must be by the insured; mere driving by an unlicensed person (e.g., thief) does not automatically absolve the insurer if the insured was not at fault or did not breach. - (!) - (!) Read-down approach: exclusion clauses should be harmonized with protection of victims; insurer’s breach must be established by the insured’s fault. - (!) - (!) In cases where insured engaged a licensed driver and placed vehicle in charge, the insurer cannot escape liability unless the insured wilfully violated the condition. - (!) - (!) Sub-sections clarify the grounds and interpretation of notice and defense rights for insurers; sub-section (7) does not grant additional rights beyond sub-section (2). - (!) - (!) Sub-sections outline that the insurer must pay then recover from the liable party, with provisions on recourse and material facts. - (!) Conclusion: Appeal dismissed; insurer liable unless proven breach by insured; costs awarded.

What is the liability of an Insurance Company under Section 149/149(2)(a)(ii) of the Motor Vehicles Act, 1988 when the driver’s licence is alleged to be fake?

How to interpret the breach requirement under Section 149(2)(a)(ii) and when can the insured be deemed to have breached the policy?

What are the obligations of the owner/insured and the insurer regarding recovery of amounts where the insurer pays compensation despite questions about a driver’s licence?