The insurance company is liable to pay compensation to third parties who suffer injuries or death due to an accident involving an insured vehicle, even if the policy conditions are breached, as per the provisions of Sections 95(5) and 96(1) of the Motor Vehicles Act.

( 1 ) THIS judgment shall govern the disposal of M. A. No. 358 of 1997 (Bapu v. Karan Singh) and M. A. No. 357 of 1997 (Ram Narayan v. Karan Singh) as they arise out of the same accident.

( 2 ) THE facts of the case, in brief, are that on 16. 5. 1994 tractor-trolley No. MP11-3164 and MP-11-4769 owned and driven by respondent/non-applicant No. 1 karan Singh and insured with respondent/ non-applicant No. 2, insurance company and tractor No. MP-11-7220 driven by radhe Shyam were carrying barat party. The deceased Daryao, son of appellant-claimant Nos. 1 and 2 and father of appellant Nos. 3 to 5, and Sangita, daughter of appellant-claimant Ram Narayan, were travelling in the tractor No. MP-11-7220. Near Talen Valley, Daryao and Sangita alighted from the tractor of Radhe Shyam for urination. Radhe Shyam proceeded with his tractor asking them to come in the tractor of Karan Singh which was coming behind. After sometime Karan Singh came there driving his tractor in rash and negligent manner, it turned turtle and crushed daryao and Sangita, as a result of which they died on the spot. The deceased Daryao was working as humrnal (coolie) in Indore and was earning Rs. 35,000 per year. The parents, his sons and daughters filed Claim case No. 167 of 1996 claiming compensation of Rs. 10,60,000 and Ram Narayan, his wife and sons have filed Claim Case no. 168 of 1996 seeking compensation of rs. 4,60,000 for the death of Sangita. The respondent No. 2, inter alia, pleaded that karan Singh, the owner of the tractor committed breach of the insurance policy as he carried passengers in the tractor. According to insurance company Daryao Singh andSangita were travelling in the tractor of Karan Singh and they fell down due to rash and negligent driving of the tractor. Karan Singh also had no valid driving licence, therefore, it was not liable to pay compensation. The learned Tribunal held that the accident occurred due to rash and negligent driving of tractor No. MP-11-3164 by Karan Singh, as a result of which daryao Singh and Sangita sustained injuries and died. It further held that Karan singh committed breach of the terms and conditions of the policy by carrying barat party in his tractor, therefore, insurance company was not liable to pay compensation. The Tribunal awarded compensation of Rs. 1,22,200 for the death of Daryao singh and Rs. 52,000 for the death of sangita to be paid by Karan Singh. Being aggrieved of the amount of compensation and absolving of insurance company, the l. Rs. of deceased Daryao filed M. A. No. 358 of 1997 and L. Rs. of deceased Sangita filed M. A. No. 357 of 1997. Respondent no. 1 filed cross-objections.

( 3 ) MR. S. M. Jain, learned counsel for the appellants, submitted that the learned tribunal committed error in holding that the deceased Daryao Singh and Sangita were travelling in Karan Singh's tractor and they fell down therefrom and sustained injuries. He submitted that the evidence on record clearly proves that both of the deceased persons were travelling in the tractor driven by Radhe Shyam. They got down from the tractor of Radhe Shyam to ease themselves and after urination they were waiting for the tractor of Karan Singh who came there driving his tractor rashly and negligently. It turned turtle and struck against Daryao and Sangita, as a result of which they died. He, therefore, contended that the deceased were not travelling as passengers in the offending tractor. They were third party and, therefore, the insurance company was liable to pay compensation. Mr. Jain further submitted that the insurance company entered in compromise with other occupants of this tractor and paid them compensation. Mr. D. D. Vyas, learned AAG for respondent No. 1, Karan singh, submitted that the tractor was insured with respondent No. 2, therefore, it was liable to pay compensation. On the other hand, Mr. Dandwate, learned counsel for insurance company supported the impugned award.

( 4 ) WE considered the arguments advanc