The judgment established the principle that the insurer's liability to pay compensation is influenced by the interpretation of policy conditions, the concept of 'fundamental breach,' and the specific circumstances of the case.

1. This Appeal is filed by the Insurance Company as against the award dated 25.3.2008 passed by the Motor Accident Claims Tribunal (Subordinate Judge), Mettur, in M.C.O.P. No.17 of 2007, whereby the appellant-Insurance Company was directed to pay the compensation amount to respondent Nos.1 and 2/Claimants and permitted to recover the same from the owner of the vehicle.

2. The facts, which are necessary to decide the issue involved in the Appeal, are as follows:

(a) Respondents 1 and 2 herein are the parents of the deceased Manoj On 4.8.2005, while the said manoj was riding his TVS 50 bearing registration No.TN-27-T-0569 from his house to Mettur along with his friend, another Motor Cycle bearing registration No.TN-27-U-1619 driven by the 3rd respondent came in a rash and negligent manner from the opposite direction and dashed against the TVS 50 and as a result of which, both were thrown out of the vehicle and had sustained grievous injuries and were immediately admitted in the Government Hospital and in spite of treatment, the said Manoj died on 9.8.2005. Hence, respondent Nos.1 and 2 have made a claim for a sum of Rs.10 Lakhs as compensation for the death of the deceased Manoj as against the owner and the insurer of the Motor cycle.

(b) The said claim was resisted by the appellant-Insurance Company on the ground that at time of the accident, the rider of the Motor cycle did not at the time of the accident, the rider of the Motor cycle did not possess a valid license. Therefore, there is a violation of the Insurance Policy conditions and the appellant-Insurance Company cannot be made liable to pay the compensation.

(c) In order to prove the defence, on the side of the appellant-Insurance Company, two witnesses were examined as R.Ws.1 and 2 and the documents were marked as Exs.R-1 and R-2. By accepting the defence of the appellant-Insurance Company, the Tribunal came to the conclusion that the appellant-Insurance Company has to pay the compensation amount and recover the same from the owner of the vehicle i.e. the 3rd respondent herein since there is a violation of the policy conditions. Aggrieved over the said finding, the present Appeal is filed by the Insurance Company.

3. Learned counsel for the appellant, by relying upon the judgment reported in national Insurance Co. Ltd. v. Vidhyadhar Mahariwala and others, 2008 (6) CTC 254 (SC): 2008 ACJ 2860, would contend that the Insurance Company cannot be made liable to pay the compensation when the appellant having proved that the driving licence had expired more than two years prior to the accident. Under such circumstances, the observation when the appellant having accident. Under such circumstances, the observation made by the Insurance Company to pay the amount and to recover the same from the owner of the vehicle is not sustainable. Therefore, by setting aside the said finding, the Insurance Company has got to be directed to pay the entire compensation.

4. Per Contra, the learned counsel for the 1st and 2nd respondents/claimants would submit that in the judgment relied on by the appellant, the question of ‘Payment and recovery” was not dealt with by the Supreme Court. By inviting the attention of this Court. By inviting the attention of this Court to the catena of judgments, namely,-

New India Assurance Co, Shimla v.V.Kamala and others, 2001(4)SCC432: AIR 2001 SC1419(1);

Oriental Insurance Co. v. Zaharulnisha and others, AIR 2001 SC 2218;

National Insurance Co. Ltd. v. Annappa Irappa Nesaria and others, 2008 (3) SCC 464: AIR 2008 SC 1418 (1);

Oriental Insurance Co. Ltd. v. Mohammad Husain and another, 2005 (4) CTC 127, and

New India Assurance Co. Ltd. v. V. Bommi, 2009 (2) TN MAC 86 (DB): 2009 (5) MLJ 1349.

The Learned counsel would contend that the Insurance Company cannot deny its liability in paying the compensation on the ground of non-possession of a driving licence to drive the vehicle when there is a coverage of Insurance Police to the vehicle. Hence, the Appe