DIVISION BENCH

29. At this stage, it would be expedient to notice the conspectus of law emerged from the judgments of Honble the Supreme Court and High Courts cited at the Bar.

i. The act of insurance is not a private legislation and bargain between the employer and employees but a public Act based in favour of third person to compel the owner of the vehicle to reimburse the sufferer, provided protection to the third person i.e. the road users as is obvious and appears from the whole purview and intention of the legislation was the only remedy for breach of statutory duty, should not be only fine rather on the construction of statute. It can be inferred that the person injured by breach of the statute has a right to recover damages from the one committing it.

ii. Insurer can undertake to cover the risk beyond that provided by the Statute or the limits by entering into a special contract.

iii. The Statute provides defence to the insurer;

iv. No insurer is entitled to avoid his liability or benefits of the judgment to any person other than the one provided by the statute i.e. Section 149 of the Act.

v. Where the insured has done everything within his power, it cannot be said that the insurer is guilty of any breach;

vi. Where an act is done with the knowledge of the insured, the insurer would be liable to indemnify the insured. In such a situation the insurer cannot take the defence of breach of conditions of the certificate of insurance. The burden of proof of the violation of the policy or the breach of contract is on the insurer. It must be established by the insurer that the breach is on the part of the insured. Unless insured is at fault and is guilty of breach of conditions, the insurer cannot escape the liability to indemnify the insured.

vii. No conditions imposed beyond the statutory conditions provided for can be enforced;

viii. Courts are required to interpret the law and not to make new one. In the same constraint the condition that the insurer should be protected against fraudulent action of the insurance it being an institution in public sector would suffer irreparable loss, was rejected, inter-alia, observing that the insurer had a remedy to recover from the insured. Otherwise the provisions of the Motor Vehicles Act, making the company liable being beneficial one, has been purposely engrafted in the Statute for the efficacious remedy so that award could be satisfied would be rendered negatory and the very object could stand defeated.

ix. It has been repeatedly observed that clauses of policy should receive interpretation not only consistent with the intent of the parties to the contract but also to further the object of the statute particularly when it is in printed form and issued in usual course;

x. The exclusion clause 147 of the Act, provides with respect to the persons who are not duly licensed or persons who have been disqualified as mentioned therein to be within it to the policy to be specific; terms do admit a position that the drivers who are once licensed and are not disqualified are not specifically excluded. It was preferred to interpret the terms of policy in the light of the purpose of the statute which makes the provision for indemnifying the case involving third party in the accidents and for satisfying the claims arising therefrom in favour of the party affected rather than particularly noting that intention on the Legislation to make insurance compulsory as to safeguard the interest of third party who is quite innocent and who incurs the risk from the hazards of negligent drivers. To hold otherwise, would render the object of compulsory insurance, the risk of third party as negatory.

xi. Insurance companies were held liable where drivers once hold the licences and are not disqualified.

xii. The exclusion clause for payment as well as the provisions of the Act, has to be read down in order to achieve the main purpose of the provisions enacted for the protection of the victims of the acci