The main legal point established in the judgment is the liability of the insurance company to pay compensation as statutory liability and the entitlement to recover the amount from the owner/driver based on the breach of terms and conditions of the insurance policy.

SURESH KAIT, J.

1. Instant appeal is directed against the impugned award dated 23.11.2010 passed by the ld. Tribunal, whereby while awarding the compensation in favour of the respondents / claimants, appellant was granted recovery rights of the said amount from the respondent nos. 1 & 3, owner and driver of the offending vehicle.

2. Counsel appearing on behalf of the appellant has argued only on the ground that the ld. Tribunal failed to consider the fact that in the present case, there was no driving licence and in such type of cases, the Insurance Company is not liable at all to indemnify the insured.

3. Ld. Counsel has submitted that the ld. Tribunal wrongly reached to the conclusion that the Insurance Company has failed to prove the breach of terms and conditions of the Insurance policy in accordance with the law. Therefore the impugned award is liable to be set aside and the appellant is entitled to be absolved from any responsibility.

4. He further submitted that a chargesheet was filed against respondent no. 3 in which the driver was challaned under Section 279/337 of the IPC and also under Section 3/181 of the Motor Vehicles Act. Notice under Order XII Rule 8 CPC was also sent to the owner and driver of the offending vehicle but they preferred not to appear before the ld. Tribunal.

5. To strengthen his arguments, ld. Counsel has relied upon a case decided by this Court on 17.04.2007 in bunch of matters titled lead case FAO 476/2003 New India Insurance Co. Ltd. & Ors. v. Sanjay Kumar & Ors. etc. wherein it is held as under:-

“29. Evidence on record, being the chargesheet submitted by the police, proved as Ex. R1 by the insurance company establishes that the driver of the vehicle failed to produce any driving licence before the police authorities in spite of being called upon to do so.

30. Notwithstanding that, learned Judge MACT has held that the insurance company has failed to establish that there was a breach of the conditions of the policy of insurance.

31. It would be relevant to note that neither the owner nor the driver produced any licence before the Motor Accident Claim Tribunal.

32. I therefore do not agree with the view taken by the learned Judge that the insurance company failed to prove that there was a breach of a condition of the policy of insurance which required the owner not to entrust the vehicle to a person not possessing a valid driving licence.

33. The learned Judge failed to appreciate that as per the provisions of Section 158 of the Motor Vehicles Act, 1988 every driver of a motor vehicle is legally obliged to keep with him the driving licence while driving a vehicle and produce the same required by a authority empowered to seek production of the licence. What else could the insurance company prove other than the fact that the driver failed to produce any driving licence when called upon to do so after the accident? A presumption has to be drawn that the driver possessed no licence.

34. The appeal has to succeed. As per para 84 of the decision in Swaran Singh's case (Supra), insurance company would be entitled to avoid any liability. However, I note that vide order dated 1.8.2003, the insurance company was declined any interim relief, in that, application filed by the insurance company seeking stay of execution of the award against it was declined.

35. Since the insurance company has satisfied the award vis-a-vis the claimant, I dispose of the appeal granting recovery rights to the insurance company. The insurance company would be entitled to recover the amount paid to the claimant from the owner of the vehicle insured. The insurance company would be entitled to interest @ 8% p.a. on the sum paid to the claimant with effect from the day it satisfied the award till date of recovery from the owner”

6. On perusal of the impugned award it is revealed that ld. Tribunal has recorded the statement of the appellant that as the driver of the offending vehicle was not holding any driving licence