Hon’ble Rajes Kumar, J.—Heard Sri V.K. Birla, learned counsel for the appellant and Sri R.K. Porwal, learned counsel appearing on behalf of the respondents. Despite the service of notice on respondent No. 3, no one appears on behalf of the respondent No. 3.

This is an appeal by the Insurance Company, insures of Metador Toyota, bearing registration No. U.P. 78/B-3606 against the order of the Tribunal dated 4.4.1994 awarding compensation ar Ts.16,000/- alongwith interest @ 12% arises from the claim petition filed by Sri Abdul Karim claiming compensation for the expenses incurred in the treatments and other losses.

2. It was the case of the claimants that on 9.7.1991 when Abdul Karim, alongwith his daughter Km. Najma, had gone to meet his elder daughter Smt. Shakeela, in her in-laws house, in village Nandpur, P.S. Phaphund, District Etawah, while returning from village Nandpur they were waiting for bus at Kakor Buzurg on Dibiyapur Auraiya Road and were sitting at a distance of about 5-6 steps away from the road under a tree near a cycle repairing shop. At about 9-30 a.m. Metador Toyota, bearing registration No. U.P. 78/B-3603 reached at the spot which was being driven rashly and negligently, dashed with a box kept at the cycle repairing shop and also dashed Abdul Karim and his daughter Km. Najma-deceased as a result Abdul Karim and his daughter Km. Najma received grievous injuries alongwith other persons standing over there. The driver of the vehicle Sri Rajesh alias Bhanoo left the vehicle and ran away from the spot. The claimant Abdul Karim and his daughter were taken to Dibiyapur Hospital where Km. Najma succumbed to her injuries on reaching at the hospital.

3. It was the case of the claimant that he was having a good health and was about 45 years of age at the time of his accident and was doing agricultural work efficiently. According to the claimant, his monthly income from the agricultural work was Rs. 1200/-. The claimant claimed an amount of Rs. 68,400/- as total compensation including Rs. 25,000/- as pecuniary loss and further Rs. 25,000/- for pains and sufferings. The Tribunal, however, awarded compensation at Rs. 16,000/- alongwith interest @ 12%.

4. Learned counsel for the appellant submitted that the claimants and owner of the vehicle failed to discharge the burden to prove that the driver of the vehicle possessed the valid driving licence. He further submitted that the interest awarded is excessive.

Now coming to the question that whether the claim of the insurance company that since there was breach of contract as the owner of the vehicle was not able to produce the valid driving licence of the driver, the insurance company is not liable to indemnify the owner of the vehicle as the burden lies upon the owner of the vehicle to prove that driver possessed the valid driving licence.

Reliance is placed on the various decisions.

5. In the case of Oriental Insurance Company Limited v. Meena Variyal and others, 2007 (2) TAC 417, Apex Court has held that ordinarily contract of insurance is a contract of indemnity. When a car belonging to an owner is insured with the insurance company and it is being driven by a driver employed by the insured, when it meets with an accident, the primary liability under law for payment of compensation is that of the driver. Once the driver is liable, the owner of the vehicle becomes vicariously liable for payment of compensation. It is this vicarious liability of the owner that is indemnified by the insurance company and, therefore, the claimant should implead the driver of the vehicle as party.

6. In the case of New India Assurance Co. Ltd. v. Mandar Madhav Tambe, 1996 ACJ 253 (SC), two Judges Bench of the Apex Court held that exclusion clause in the insurance policy makes it clear that the insurance company, in the event of an accident, would be liable only if the vehicle was being driven by a person holding a valid driving licence of a permanent driving licence ‘other than a learn