Insurance companies remain liable for compensation to third parties despite the driver's invalid license unless there is a fundamental breach of terms.

JUDGMENT :

Pankaj Purohit, J.

1. This appeal has been preferred by the appellant - Insurance Company under section 173 of the Motor Vehicle Act, 1988 challenging the judgment and award dated 02.09.2014 passed by the MACT/District judge, Nainital, in Motor Accident Claim Petition No. 38 of 2009. By the said award, a sum of Rs.9,50,200/- along with interest at the rate of 7% per annum has been granted in favour of the claimants for the death of Vikas Sah in a motor accident, fastening the liability upon the Insurance Company with liberty to recover the amount from the owner of the offending vehicle. The challenge in the present appeal, therefore, pertains to both the question of liability and the quantum of compensation awarded.

2. The brief facts of the case are that the widow, mother and unmarried sister of the deceased Vikas Sah instituted a claim petition under Sections 166 and 140 of the Motor Vehicles Act seeking compensation to the tune of Rs.26,85,000/-. It was pleaded that on 06.05.2008, the deceased was travelling along with Master Harshit in Mahindra Jeep bearing registration No.UP 02 C 5712 for the purpose of inspecting agricultural land. When the vehicle reached near Laxmikhan on the Bhawali-Mukteshwar motor road, the jeep, driven in a rash and negligent manner by respondent-driver Mahendra Kumar @ Guddu, fell into a deep gorge. The deceased sustained grievous multiple injuries and despite being shifted to several hospitals, he succumbed to his injuries while being taken to Delhi for advanced treatment. At the time of the accident he was stated to be between 40 and 42 years of age, engaged in running a restaurant business as well as agriculture, and earning approximately Rs.15,000/- per month, on which income the claimants were wholly dependent.

3. The claimants reiterated before the Tribunal that the accident occurred solely due to the rash and negligent driving of respondent no.1 and that they had also incurred around Rs.3,75,000/- towards medical treatment prior to the death of the deceased.

4. The owner-driver, however, denied negligence and contended that the accident occurred due to a sudden mechanical failure of the vehicle, and that he too suffered serious injuries. He claimed that the jeep was duly insured on the date of the accident and, therefore, the insurer alone was liable.

5. The appellant/Insurance Company, on the other hand, denied liability asserting that there had been violation of policy conditions inasmuch as the driver was not holding a valid and effective driving licence on the date of the accident and that no statutory intimation of the accident was provided and that, therefore, the insurer stood absolved of liability. The appellant/Insurance Company has argued that once the Tribunal returned a categorical finding to the effect that the driver did not possess a valid licence on the date of the accident, it was impermissible in law to hold the insurer liable, even with a direction of recovery. According to the appellant, the driving licence of respondent No.1 had expired on 13.10.2007, whereas the accident occurred on 06.05.2008, and the licence was renewed only on 04.07.2008. This renewal having taken place after a gap of nearly nine months and admittedly after the date of accident, it is argued that the driver had no valid licence in the eye of law. It was submitted by the appellant/Insurance Company that the Tribunal ought to have completely exonerated the insurer, more so because in the connected M.A.C.P. No.155 of 2008, arising out of the same accident,