The burden of proof on the insurer to establish the insured's fundamental violation of policy conditions and the application of the principle of 'pay' and 'recovery' depending on the facts of the case.

JUDGMENT :

(Prayer: Civil Miscellaneous Appeal filed under Section 173 of the Motor Vehicles Act, 1988, against the judgment and decree dated 11.02.2015 made in M.C.O.P.No.334 of 2011, on the file of the Motor Accidents Claims Tribunal (I Additional District and Sessions Judge), Vellore.)

(The case has been heard through video conference)

1. This appeal is by preferred by the Insurance Company. Aggrieved by the award passed by the Tribunal holding that the Insurance Company is liable to indemnify the insured, who has violated the policy condition as well as statute by driving the motor vehicle without license, the present appeal is filed.

2. Mr.M.Suresh, 21 years old studying in an Engineering College final year student. On 04.10.2008, borrowed his friends new unregistered two wheeler Hero Honda Splendor and proceeding towards Arni along the Arni to Arcot Road. At about 8.00 p.m., near Kamaraj Statute at Arni, a TATA SUMO bearing Registration No.TN-07-F-9798, dashed against the two wheeler and caused the accident. Two wheeler rider Mr.Suresh sustained multiple injuries and got admitted in the hospital. The doctor, who examined him after recovery from the injuries had issued disability certificate, wherein, it is recorded that the accident victim suffer dislocation of right hip joint, malunion of fracture of left fibula and malunion of compound fracture of left humerus with restricted left shoulder joint movements.

3. Claim Petition seeking compensation for a sum of Rs.15,00,000/- against the TATA SUMO vehicle owner and its insurer was contested by the Insurance Company. The insurer denied the liability to indemnify on the ground of policy violation by the insured. According to the appellant/insurer, the offending vehicle owned by one Sivakumar S/o.Venkatesan. He was the driver at the time of accident. He had no valid driving license to drive the four wheeler. Hence, for fundamental violation of the policy condition, the insured is not indemnified.

4. The Tribunal, however held the insurer liable to compensate and awarded a sum of Rs.2,70,700/- with 7.5% interest.

5. In this Appeal, the main point canvassed by the learned counsel for the Appellant/Insurance Company is that, before the Tribunal the insurer has demonstrated through oral evidence of R.W-1 and documentary evidence R-3 to R-5 that the driver of the offending vehicle (TATA SUMO) had no valid driving licence. Ex.R-3 to Ex.R-5 are the letter send to Sivakumar, the owner cum driver of the vehicle to produce his driving license and the returned RPAD postal cover. On his failure to produce the driving license, the insurer examined R.W-2 Mr.Varadhan, the Official from R.T.O, Vellore and marked Ex.R-5 to prove that the R.T.O in the jurisdiction of the driver residence has not issued any Driving License to the offending vehicle driver. In spite of proving the violation of policy condition by the insured, the Tribunal has erroneously fastened the liability on the Insurance Company contrary to facts and law laid down by the Constitutional Bench in National Insurance Company Vs. Swaran Singh reported in (2004 (1) ACJ 1).

6. The Learned Counsel appearing for the claimant/1st respondent herein, would submit that, in case of policy conditions violations such as fake driving license, expired Driving License etc., the Courts have ordered pay and recovery since it is impossible for poor accident victims to run after the individuals. In this case, if the driver of the offending vehicle is not in possession of a valid driving license, then, the Court may exercise its power to order pay and recovery.

7. The learned counsel for the appellant countering the above submission would state that, the principle of pay and recovery is not the rule but only an exception. The principle of pay and recovery will apply only in cases which fall under sub-section (4) and (5) of Section 149 of the Motor Vehicles Act. When the defense of the insurer is under Sub-section (2) of Section 149 of the Motor Vehicle Act