The burden of proof lies with the insurer to establish a breach of policy conditions by the insured, and the absence of a badge alone is not sufficient to exonerate the insurance company from liability. The insurer must also prove that the breach contributed to the accident in order to avoid liability.

KOSHY, J.:-

Can insurance company be exonerated from liability to pay compensation merely because driver who was driving a commercial vehicle was not having a badge? Learned single Judge noticed two divergent views expressed by a Division Bench of this Court. Hence, the matter was referred to the Division Bench. In Govindakutty Nair v. Gopalakrishnan (2000 (1) KLT 224) : (2000 AIHC 575) a Division Bench of this Court held that requirement of driver's badge is necessary to drive a transport vehicle and if the driver is not having a badge at the time of accident, insurance company is exonerated from liability. The Division Bench referred to the decision of the Apex Court in United India Insurance Company Limited v. Gian Chand and others (AIR 1997 SC 3824) and Rukmani and others v. New India Assurance Company and others (JT 1998 (7) SC 473) : (1999 AIR SCW 4712). Another Division Bench of this Court in Ramachandran v. Unnikrishnan (2006 (2) KLT SN 15, Case No. 20), held that mere absence of a badge to drive a commercial vehicle is not sufficient, but, it must be proved that it was the reason for the accident and then only insurance company can get exonerated from the liability for violation of policy conditions. The latter Division Bench followed the decision in National Insurance Co. Ltd. v. Swaran Singh (AIR 2004 SC 1531). Normally, if there are two different views expressed by two Division Benches, we are bound to refer the matter to Full Bench. But, we are of the opinion that there is no difference of opinion expressed by the Division Bench decision and on the facts of the case and on the basis of the subsequent decisions of the Apex Court. we are of the opinion that the question can be decided by us.

2. In United India Insurance Co. Ltd. v. Gian Chand and others (AIR 1997 SC 3824) referred to in Govindakutty Nair's case (2000 AIHC 575). the driver had no licence at. all. Therefore, it has no application to the question in issue. Rukmanfs case (1999 AIR SCW 4712) referred to in Govindankutty Nair's case was explained by the Supreme Court subsequently by a three-member Bench decision in Swaran Singh's case (AIR 2004 SC 1531) as follows :

"63. In Rukmani and others v. New India Assurance Co. Ltd. and others (1999 ACJ 171): (1999 AIRSCW 4712), this Court while upholding the defences available to the insurer to the effect that vehicle in question was not being driven by a person holding a licence, held that the burden of the insurer would not be discharged when the evidence which was brought on record was that the Inspector of Police in his examination-inchief merely stated: "My enquiry revealed that the respondent No. 1 did not produce the licence to drive the above said scooter. The respondent No.1 even after my demand did not submit the licence since he was not having it."

64. The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event, the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved by its liability. (See : Sohan Lal Passi v. P. Sesh Reddy and others (AIR 1996 SC 2627)).

Therefore, it can be seen that in both decisions of the Apex Court referred to in the Govindankutty Nair's case (2000 AIHC 575), mere absence of badge was not the issue considered. Govindankutty Nair's case was decided interpreting Section 96(2) of the Motor Vehicles Act, 1939. In that decision itself, it is stated that the provisions in the Motor Vehicles Act, 1988 are different. It was observed as follows:

"............ It has to be noted that a provision similar to the proviso to sub-sec. (4) of S. 149 of the Motor Vehicles Act. 1988 was not available under S. 96 of the 1939 Act Therefore, all the other decisions relied on by the learned counsel for the appellant arising in 1988 Act have no applicatio