G. P. MITTAL, J.

1. In these Appeals a common question of law falls for consideration i.e. whether in case of a willful or intentional breach of the terms of the policy by the Insured in terms of Section 149 (2) (a) (ii) of the Motor Vehicles Act (the Act), would the Insurer still be liable to satisfy the award of compensation in favour of third parties and avail the right to recover the same from the Insured or whether Insurer would not be so liable, leaving the third party to enforce the award against the Insured/owner and driver of the offending vehicle?

2. It is urged by the learned counsel for the Insurers (the Insurance Companies) that once a willful breach is established, the Insurer can avoid the liability to pay even to third parties. In support of their argument, reliance is placed on Malla Prakasarao v. Malla Janaki & Ors.(2004) 3 SCC 343, National Insurance Company Limited v. Kusum Rai & Ors., (2006) 4 SCC 250; National Insurance Company Limited v. Vidhyadhar Mahariwala & Ors., (2008) 12 SCC 701; Ishwar Chandra & Ors. v. The Oriental Insurance Company Limited & Ors., (2007) 10 SCC 650; and Premkumari & Ors. v. Prahalad Dev & Ors., (2008) 3 SCC 193.

3. On the other hand, learned counsel for the Claimants and owners urge that irrespective of the breach of the terms of policy, the Insurance Company cannot avoid its liability as far as the third party liability is concerned and where the breach is not willful, the Insured is not liable at all and the Insurer is under obligation to satisfy the judgments and awards. Reliance is placed on Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21, New India Assurance Co., Shimla v. Kamla and Ors., (2001) 4 SCC 342, United India Insurance Company Ltd. v. Lehru & Ors., (2003) 3 SCC 338, National Insurance Company Limited v. Swaran Singh & Ors., (2004) 3 SCC 297, Oriental Insurance Co. Ltd. v. Zaharulnisha and Ors., (2008) 12 SCC 385, National Insurance Company Limited v. Geeta Bhat & Ors., 2008 (12) SCC 426, and National Insurance Company Limited v. Laxmi Narain Dhut, (2007) 3 SCC 700.

4. Before I advert to the facts of each case, I shall try to analysize the law on the subject as there appears to be a conflict in some of the decisions of the Supreme Court. Section 146 of the Act prohibits any person from using or allowing another person from using any motor vehicle in a public place unless there is in force, in relation to the use of the vehicle by that person or that other person, a policy of insurance complying with the requirements of Chapter XI.

5. In the case of United India Insurance Company Ltd. v. Lehru & Ors., (2003) 3 SCC 338, the Supreme Court went into the object and philosophy of obtaining an insurance policy by every person, using a motor vehicle in public place in respect to the third party risk. The Supreme Court observed that the provision of Section 96 (2) (b) (ii) of the Act of 1938 is in parimateria to Section 149 (2) (a) (ii) of the Act and referred to Skandia Insurance Company Limited v. Kokilaben Chandravadan,(1987) 2 SCC 654 and quoted with approval the following observations:-

"12. The defence built on the exclusion clause cannot succeed for three reasons, viz.,: MAC APP 329/2010. Page 5 of 70

(1) On a true interpretation of the relevant clause which interpretation is at peace with the conscience of Section 96, the condition excluding driving by a person not duly licensed is not absolute and the promisor is absolved once it is shown that he has done everything in his power to keep, honour and fulfil the promise and he himself is not guilty of a deliberate breach.

(2) Even if it is treated as an absolute promise, there is substantial compliance therewith upon an express or implied mandate being given to the licensed driver not to allow the vehicle to be left unattended so that it happens to be driven by an unlicensed driver.

(3) The exclusion clause has to be 'read down' in order that it is not at war with the 'main purpose' of the provisions enacte