Point of Law: Section 149(2) deals with insurer's right to defend an action on account of breach of policy condition.

JUDGMENT :

The 3rd respondent insurance company preferred the above appeal assailing the award of the Motor Accidents Claims Tribunal, Tirur in O.P.(M.V.)No.963/2005, essentially aggrieved by refusal of their right of recovery from the insured, claimed on the premise that the 1st respondent driver was not duly licensed to drive the vehicle in question at the time of accident.

2. The short question involved in this Motor Accidents Claims Appeal is whether the appellant/insurance company ought to have been afforded a right to recover the compensation amount from the 2nd respondent/owner of the vehicle, since it is established that the 1st respondent/driver was not duly licensed at the time of accident. The appellant/insurance company (3rd respondent in the O.P.) took a contention that the 1st respondent had no valid licence at the time of accident to drive the car, which knocked down the victim girl, aged 7 years, who later succumbed to the injuries. The 1st respondent/driver remained ex parte. The appellant (3rd respondent in the O.P.) filed I.A.No.1434/2007 calling upon the 1st respondent/driver to produce his driving licence. Though notice was issued, the same was not served upon him. The Tribunal found that the 1st respondent was not duly licensed, inasmuch as he had not contested the proceedings. However, the Tribunal found that the 3rd respondent/insurance company (appellant herein) failed to prove that the absence of a driving licence was so fundamental, so as to have contributed to the cause of accident. In this regard, the Tribunal relied upon the judgment of the Hon'ble Supreme Court in National Insurance Company Ltd. v. Swaran Singh & others [(2004) 3 SCC 297]. The Tribunal went on to hold that the burden to prove the defence as regards violation of a policy condition is squarely upon the insurer (appellant herein) and that there is not even a plea in the written statement filed by the insurance company that the insured/owner had failed to exercise reasonable care in the matter of entrusting the vehicle to the 1st respondent; or that the insured had knowingly allowed the 1st respondent to drive the vehicle without a valid driving licence. The Tribunal further found that there exists no evidence that the absence of driving licence had caused or contributed to the accident. On such premise, the Tribunal mulcted the responsibility/liability on the appellant/insurance company, without there being a corresponding enabling direction to recover the amount from the owner/insured.

3. Heard Smt.K.S.Santhi, learned Standing Counsel for the appellant and Sri.P.K.Sajeev, learned counsel for the 2nd respondent/owner. There is no representation for the 1st respondent/driver before this Court as well.

4. Learned counsel for the appellant submitted that the appellant/insurance company cannot be compelled to adduce evidence to establish that the insured did not take adequate care and caution as regards the existence of a valid driving licence, since it is a matter purely within the knowledge of the insured. There cannot be any method available and open to the insurer to prove such a fact. Relying on Beli Ram v. Rajinder Kumar [(AIR 2020 SC 4453):(2020 (4) KLJ 989)] it is argued that, it was the victim - and not the owner of the vehicle - who is to be protected on account of the beneficial provisions of the Motor Vehicles Act, wherefore, recovery from the insured/owner of the vehicle should have been granted, once it is established that the driver of the offending vehicle had no valid driving licence at the time of the accident. Learned counsel would further contend that the initial onus of the insurance company stands discharged by establishing that the driver of the vehicle was not duly licenced at the time of accident, whereafter, the onus will shift to the owner/insured to prove that he had taken reasonable care, as regards the existence of a valid driving licence before engaging the driver. In support of the arguments raised, learned