Koshy, J.

This appeal is filed by the insurance company. Contention raised by the insurance company was that the driver of the offending vehicle insured by it had no valid driving licence. As per the charge sheet the earlier licence expired before the date of accident, that is, 5.1996. It was renewed only on 5.1996. Therefore, according to the appellant, on the date of accident, there was no driving licence. The Apex Court in Narcinva V. Kamat and another v. Alfredo Antonio Doe Martins and others (1985 ACJ 397 SC) held as follows:

"12. It is contended on behalf of the insurance company that the second appellant did not have a valid driving licence. It is the insurance company which complains that there has been a breach of one of the important terms of the contract of insurance as evidenced by the policy of insurance (the whole of which was not shown to us) and that the second appellant who was shown to be driving the vehicle at the relevant time, did not have a valid driving licence to drive the pick-up van. The insurance company complains of breach of a term of contract, which would permit it to disown its liability under the contract of insurance. If a breach of a term of contract permits a party to the contract to not to perform the contract, the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract. The test in such a situation would be who would fail if no evidence is led. The language and the format in which issue Nos.7 and 8 have been cast by the Tribunal clearly casts the burden of proof on the insurance company. Not an iota of evidence has been led by the insurance company to show that the second appellant did not have a valid driving licence to drive the vehicle."

Even if that is accepted, the driver had valid licence before the date of accident and there is no case to establish that absence of the driving licence was the cause of accident. In Jitendra Kumar v. Oriental Insurance Co. Ltd. and another ((2003) 6 SCC 420) the Apex Court held as follows:

"9. .................... The question then is: can the Insurance Company repudiate a claim made by the owner of the vehicle which is duly insured with the Company, solely on the ground that the driver of the vehicle who had nothing to do with the accident did not hold a valid licence? The answer to this question, in our opinion, should be in the negative. Section 149 of the Motor Vehicles Act, 1988 on which reliance was placed by the State Commission, in our opinion, does not come to the aid of the Insurance Company in repudiating a claim where the driver of the vehicle had not contributed in any manner to the accident.

Section 149 (2) (a) (ii) of the Motor Vehicles Act empowers the Insurance Company to repudiate a claim wherein the vehicle in question is damaged due to an accident to which driver of the vehicle who does not hold a valid driving licence is responsible in any manner. It does not empower the Insurance Company to repudiate a claim for damages which has occurred due to acts to which the driver has not, in any manner, contributed i.e., damages incurred due to reasons other than the act of the driver."

No evidence was also adduced by the insurance company to show that absence of driving licence is the cause of accident. Except relying on the police records, there is no evidence to show that even though such a charge was made that he was convicted for the offence. Burden is on the insurance company to prove that there is violation of the policy of insurance. (See: National Insurance Company Ltd. v. Swaran Singh and others - AIR 2004 SC 1531). A three-member Bench of the apex Court after extensively considering all the earlier decisions, summarised the law as follows:

"105. (i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of ac