The main legal point established in the judgment is that the insurer can avoid its liability only if the conditions specified in Section 149(2) of the Motor Vehicles Act are satisfied and not otherwise. The court emphasized that the statutory liability of the insurer for third party risk cannot be overridden by the terms of the contract of insurance between the parties.

M. Y. EQBAL, J.

( 1 ) THESE two appeals have been referred to Full Bench for testing the correctness of two decisions of this court, one by Division Bench in the case of Bholla Nath Yadav v. Hemwati, 2003 (1) JCR 105 (Jhr) and the other by a learned single Judge in Oriental Insurance Co. Ltd. v. Jashmani Kongari, 2003 ACJ 155 (Jharkhand ).

( 2 ) FACTS which have given rise to the present controversy may be stated: the deceased along with other persons were travelling by bus on the relevant date of accident. The deceased was sitting on the roof of the bus. When the bus reached near Jaruadih More, several mango trees were spread towards road and the deceased who was on the roof of the bus, sustained grievous head injury. Deceased was taken to hospital and subsequently he died. In another case, the deceased was travelling on the roof of the bus. Because of rash and negligent driving the deceased fell down from the bus and succumbed to injuries.

( 3 ) THE respondent insurance company, on being noticed, appeared and filed written statement taking a defence that the vehicle was insured against third party risk under which insurer is not liable to pay compensation as there was a serious and fundamental breach of specified condition of policy. According to the respondents, the vehicle was insured for carrying specified number of passengers inside the bus. It was contended that carrying passengers on the rooftop of the bus is violation of the conditions of permit as also the terms and conditions of the policy of insurance, which completely exonerate the insurer from any liability.

( 4 ) THE CLalms Tribunal has come to a finding that the insured has violated the condition of permit as well as the terms and conditions of policy of insurance and, therefore, the insurance company is not liable to pay compensation to the clalmants. Hence, these appeals by the appellant owner.

( 5 ) THE Division Bench took notice of two conflicting decisions of this court, one rendered by single Judge in the case of Oriental Insurance Co. Ltd. v. Jashmani Kon-gari, 2003 ACJ 155 (Jharkhand), wherein it was held that the insurance company cannot be held liable and other decision rendered by the Division Bench in the case of Bholla Nath Yadav v. Hemwati, 2003 (1) JCR 105 (Jhr), wherein it was held that the insurance company shall be held liable for payment of compensation. In view of the aforesaid two conflicting decisions and also conflicting decisions of different High courts, the matter has been referred to the full Bench for answering the question as to whether the insurance company can take such defence for disowning the liability for payment of compensation.

( 6 ) MR. S. N. Lal, learned counsel appearing for the appellant owner of the vehicle, drew our attention to section 149 of Motor vehicles Act, 1988 and submitted that the insurer can defend the action only on the grounds mentioned in the said section and no other defences are available to it. Learned counsel further submitted that violation of Chapter VIII of the Act of 1988 may be an offence under Motor Vehicles Act, but it does not ipso facto constitute a breach for which the insurance company can be exonerated from its liability. The learned counsel put heavy reliance on the decisions of the Supreme Court and Karnataka High court in the cases of United India Insurance Co. Ltd. v. Doddapapaiah, 2001 ACJ 1418 (Karnataka); State of Maharashtra v. Nanded Parbhani, Z. L. B. M. V. Operator sangh, AIR 2000 SC 725 and National insurance Co. Ltd. v. Nicolletta Rohtagi, 2002 ACJ 1950 (SC ). Mr. Lal then submitted that travelling on the rooftop of the bus or violation of section 123 of the Act will not, in any way, deprive the defendants of payment of compensation. In this connection, learned counsel relied upon decisions of various High Courts: New India Assurance Co. Ltd. v. Punjab Government, 1990 acj 415 (Pandh); Radhey Shyam Agarwal v. Gayatri Devi, 1998 ACJ 1177 (MP) and bholla Nath Yadav v.