The insurance company, which is fastened with the liability to pay compensation in respect of a deceased workman, is in appeal.

2. The facts are as follows.-

The respondents 1 to 4 represent the deceased workman. The workman had died in an accident involving a Tempo Trax which was being driven by him. He was employed by respondent 5, who was the owner of the vehicle and the said vehicle was insured with the appellant. The claim for compensation was resisted by the appellant mainly on the ground that the workman did not possess a valid and effective driving licence at the time of accident and hence the appellant was absolved of liability under the policy of insurance. The contention having been negatived by the Commissioner for Workmen's Compensation, the present appeal.

3. Sri A.M. Venkatesh, Counsel for the appellant submits that the admitted fact is that the workman was holding a licence to drive light motor vehicles and the same was effective from 28-11-1995 to 28-11-2000. The licence was not renewed. The accident had occurred on 8-4-2001. The driver was hence not only not licensed to drive a Tempo, as he had held a licence to drive only light motor vehicles but he did not even hold a valid and effective driving licence as on the date of accident. The insured having knowingly engaged the workman who did not possess a valid and effective driving licence as on the date of accident, there was a breach of the policy conditions. He would submit that in terms of Section 3 of the Motor Vehicles Act, 1988, no person can drive a vehicle unless he holds an effective driving licence and the phrase "effective driving licence" in this context, has been explained by the Supreme Court as being a valid licence both as regards the period and type of vehicle. He would therefore contend that the licence should have effective force on the date of accident. The reasoning of the Court below that the deceased was not disqualified from holding a licence or in having obtained renewal thereof and therefore the issue was not material, is without basis and wholly unreasonable.

4. It is contended that the liability having been fastened on the insurance company in several decided cases, even when there was a breach of policy condition by the insured is in respect of cases involving third party claims. In the instant case the driver is not a third party and the claim was hence at best to be satisfied by the insured and not the appellant.

5. Sri Venkatesh would seek to place reliance on the following authorities.-

National Insurance Company Limited, Bangalore v. Ningamma and Others 1. This was a case where a passenger in a bus gets off at an intermediary stop to make a purchase and is knocked down by the very bus he was travelling on. The question that arose ,was whether he should be treated as a passenger on the bus or as a third party to determine the liability of the insurer. It was held that he was a third party - since he was not in the vehicle. By the same token of reasoning, Sri Venkatesh would contend, conversely, that a driver of the vehicle could not be termed a "third party" just as a passenger cannot be termed a "third party".

New India Assurance Company, Bijapur v. Smt. Kusum and Others2. In this case, the Court, while dealing with the liability of the insurer in terms of Section 147(1)(b) of the Motor Vehicles Act, 1988 and in answering the question whether gratuitous passengers travelling in a jeep would be "third parties", the Court held that a policy issued under Section 147 only covers a third party risk and a gratuitous passenger could not be considered as a third party.

New India Assurance Company Limited v. Narayan Dhar Swain and Another3. Dealing with the question whether a driver is a "third party" for purposes of Section 147 of the Act, held, that the expression "third party" has been used in a particular sense and it does not include a person connected or associated with the offending vehicle in the capacity of owner, passenger in