The main legal point established in the judgment is that an insurer can only avoid liability under the Motor Vehicles Act, 1988 if it can prove a fundamental breach of policy conditions by the insured and that the breach contributed to the cause of the accident.

K.B.K. Vasuki, J.

This appeal is, on consent, disposed of at the admission stage. This appeal is filed by respondent No. 2, insurer, against the award of compensation of Rs. 5,95,000/- made in favour of the claimants-respondent Nos. 1 to 3 for the death of one Dhanam in the accident occurred at 10.15 p.m. on 31.5.2009 near Gopalpatti Karuppu Kovil on Dindigul-Natham Main Road due to head-on collision of two autos owned by respondent Nos. 1 and 3 and insured with respondent Nos. 2 and 4.

2. The Tribunal, after due analysis of the materials placed before the same, found that the driver of the respondent No. 1's auto is responsible for the accident and that the auto driver was having licence only to drive light motor vehicle and the auto in question was used for transport purpose and the auto driver drove the vehicle without any badge or endorsement to drive particular type of vehicle, as such, he is not duly licensed to drive the vehicle and on the basis of such finding, directed the award of compensation to be satisfied by the respondent No. 2, insurer, on behalf of the respondent No. 1, insured, at the first instance with right given to the respondent No. 2, insurer, to recover the same from the insured by initiating execution proceedings in the same claim petition.

3. The present appeal is filed by the insurer against the direction for payment made against the insurer by applying the doctrine of pay and recover theory. It is argued by the learned counsel for the appellant that the act of the respondent No. 1, owner, in permitting his driver to drive the vehicle at the time of the accident without proper and effective driving licence amounts to basic and fundamental breach of terms and conditions of the policy of insurance and on the strength of exclusion clause in the policy of insurance, the insurer ought to have been totally exonerated from the liability to answer the award and ought not to have been directed to answer the award. It is his contention that pay and recover principle is not applicable to the instant case.

4. The main point that arises for consideration herein is as to whether the direction issued to the insurer for payment of award with right given to the same to recover it from the insured on the ground that the driver of the offending vehicle was, on the date of the accident, not duly licensed to drive the vehicle in question and the licence possessed by him was only to drive light motor non-transport vehicle without any endorsement to drive transport vehicle is sustainable? The same is already dealt with by the larger Bench of the Supreme Court in the judgment in National Insurance Co. Ltd. Vs. Swaran Singh and Others, (2004) 3 SCC 297, and the same is referred to by the Apex Court in the subsequent judgments and also followed by our High Court.

5. The Hon'ble Supreme Court, in the batch of cases referred to above, had an occasion to deal with the question of law relating to section 149(2)(a)(ii) vis-a-vis the proviso to sub-sections (4) and (5) of section 149 of the Motor Vehicles Act. In all these cases, the insurance company raised the defence in terms of section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 relating to non-possession of driving licence by the driver or possession of fake licence, expired licence, licence to drive for one class and description of vehicle and drivers having learner's licence and not duly licensed, etc. The Hon'ble Apex Court having detailed analysis of factual and legal aspects in respect of each defence so raised under separate caption has in para 102 summarised its findings on various issues. For better appreciation, para 102 of the Hon'ble Supreme Court judgment is extracted hereunder:

(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 accidents caused by use of motor vehicles. The provisions of compulsory insurance coverag