The main legal point established in the judgment is the insurer's obligation to indemnify the compensation amount to the third party and the possibility of pay and recover in case of third party risks, as well as the onus on the insurance company to prove the driver's lack of a valid driving license and breach of policy conditions.

JUDGMENT :

1. This is an appeal preferred by the Iffco Tokio General Insurance Company Ltd. against the judgment and award dated 21st May 2013 passed by the Motor Accidents Claims Tribunal (for short the “M.A.C.T.”), Thane in Motor Accident Claim Application No. 965 of 2009.

2. The brief facts are that in the intervening night of 24th October 2008 to 25th October 2008, at about 00.35 hours, one Namdeo Yashwant Vishe was traveling as a pillion rider on motorcycle bearing no.MH-04-CN-9565 and one Mr.Mahesh Choudhary was riding the said motorcycle, when the motorcycle having reached opposite Bunty dhaba at Borpada village situate on Bhiwandi Wada road being driven at high and excessive speed by the rider, suddenly applied brakes, as a result of which the motorcycle skidded and Mr. Namdeo Yashwant Vishe, the pillion rider, fell down on the road. In the said accident he sustained injuries all over his body; he was taken to IGM Hospital at Bhiwandi for medical treatment, however, he succumbed to the injuries. The subject motorcycle was owned by one Mr. Mangesh Yashwant Shelar and the motorcycle was fully insured by the appellant-Insurance company. An offence of rash and negligent driving was registered against the rider of the motorcycle with the Bhiwandi Taluka Police Station.

3. The widow, minor son and the mother of the the deceased filed an application for getting compensation under Section 166 of the Motor Vehicles Act, 1988 (for short the “M. V. Act”) on account of the vehicular accidental death of Namdeo Yashwant Vishe, the pillion rider of the subject motorcycle. The claim was made against the owner of the vehicle Mr. Mangesh Yeshwant Shelar and the appellant-Insurance company. The M.A.C.T. granted compensation to the claimants holding that the appellant was liable to pay an amount of Rs.7,25,136.00 under the provisions of Section 166 of the M. V. Act.

4. It is the case of the appellant – Insurance company that although the motorcycle was validly insured with the Insurance company on the day of the accident, however, there has been a breach of the condition of the insurance policy, inasmuch as the rider of the motorcycle namely Mahesh Gajanan Chowdhary was not holding valid driving license at the time of the accident. That, he was in possession of a driving license qualified to drive a light motor vehicle, non-transport and heavy goods vehicle and not two wheeler motorcycle which is altogether a different class/category of vehicle. It is, therefore, submitted that the Insurance company was not liable to pay any compensation to the claimants or applicants as the insured/driver had committed breach of an important term and condition of the policy.

5. The respondents, though served, are not present nor represented today.

6. Mr. Nikhil Mehta, learned counsel for the appellant – Insurance company, would submit that although the Insurance company has preferred this appeal against the order of the Tribunal, primarily on the ground that the rider of the motorcycle was not holding a valid driving license at the time of the accident, which was a breach of the terms of the policy, he would submit in all fairness that after the decision of the Hon'ble Supreme Court in the case of National Insurance Company Ltd. vs. Swaran Singh and Others, (2004) 3 SCC 297, the insurer had to indemnify the compensation amount payable to the third party and the Insurance company may recover the same from the insured. Learned counsel would submit that the doctrine of pay and recover was considered by the Hon'ble Supreme Court in the case of National Insurance Company Ltd. vs. Swaran Singh and Others (supra) wherein the Supreme Court examined the liability of the Insurance company in cases of breach of policy conditions, due to disqualifications of the driver or invalid driving license of the driver and held that in case of third party risks, the insurer has to indemnify the compensation amount to the third party and the Insurance company may recover the same fr