By the Court.—The Oriental Insurance Company Ltd. has filed this appeal through Shri Suresh Panjwani, Advocate challenging an award dated 20.4.1999 of the Motor Accident Claims Tribunal, Faizabad in Claim Petition No. 47 of 1994, Achchelal and another v. Shatrughan Singh and others, awarding compensation of Rs. 1,20,000/- to the unfortunate father and mother for having lost their 7 year old son, crushed by Ambassador Car No. DBD 9119 insured by the appellant.

2. Shri Nand Lal Maurya, PW-1, the eye-witness, who was sitting outside his house on a cot close to the place of accident had witnessed the accident on 11.2.1994 at 11.30 p.m.; PW-2, Ram Ujagar, a chance witness, walking near the side of the road for getting a hair cut, deposed that he had heard some noise, and reached the spot at 11.30 p.m. He found the deceased child Sunil lying in a crushed state on the western pavement of the street. The PW-3 Daya Ram also deposed that he was sitting with Nand Lal outside his house, when he saw the accident.

3. DW-1 Heera Prasad, the driver of the Ambassador car stated that, when he was about 10-15 mtrs. from the incident driving at a speed of 10-20 km. per hour, he saw that a child was being punished and beaten by a stick by his mother. The child suddenly rushed towards the street and came in front of the car. There were people on both the sides of the road and that the car was positioned between the two speed breakers.

4. The Tribunal did not believe the statement of the driver on the reasoning that if the car was at such a slow speed, the driver could have stopped it on seeing the child rushing across the street. The Tribunal held that the accident was caused due to the negligence of the car driver.

5. The Insurance Company defended the claim on the ground that driver of the vehicle was not having a valid licence. Shri Rajesh Kumar, DW-2, a surveyor reported that the driving licence was issued on 27.4.1984 and was valid upto 23.7.1987. It was renewed thereafter on 2.9.1988 to 1.9.1991 and again from 3.9.1995 to 2.2.1998. The accident happened on 11.2.1994 and thus on the date of accident the driver was not having a valid licence. The Tribunal held that the renewal of the licence relates back to the date of its expiry, and makes the licence valid for the period, when it was not in force and thus the insurance company is liable to indemnify the owner of the vehicle.

6. On the quantum of compensation, the Tribunal relied upon the judgment in Sujan Pal Singh v. Chandan Singh, AIR 1998 MP 280, in which the compensation for death of 10 year old child was worked out at Rs. 48,000/-. In C.K. Subermania Iyer v. T. Kunhikuttan Nair, AIR 1970 SC 376, the compensation of Rs. 6,000/- for eight year old child was found to be sufficient. At that time under Section 140 of the Motor Vehicles Act the compensation of Rs. 25,000/- was provided, which was increased to Rs. 50,000/-. The Tribunal awarded Rs. 25,000/- for loss of the son to his parents; Rs. 5,000/- for last rites, and applying multiple of 15 for the loss of dependency of Rs. 6,000/- per annum at the rate of Rs. 500/- per month for helping his parents and selling vegetables, the Tribunal worked out the gross amount of compensation at Rs. 1,20,000/-.

7. Learned counsel for the insurance company would submit that renewal of licence does not validate the licence for period in between when the licence was not renewed, and thus the insurance company cannot be made liable to pay the amount of compensation.

8. In National Insurance Co. Ltd. v. Swarn Singh, (2004) 3 SCC 297, the difference between the words ‘duly licensed’ in Sections 149 (2) and the words ‘effective licence’ under Section 3 of the Motor Vehicles Act, 1988 were explained by the Supreme Court. Under the Act the holding of valid driving licence is one of the condition of the contract of insurance. The driving of a vehicle without valid licence is also an offence. The Supreme Court held that whereas in Section 3 the words used are