Insurers are statutorily liable to pay compensation to third parties despite breaches of policy conditions unless the insured's negligence is proven to be fundamental.

1. Heard finally.

2. The only point that arises for determination in this appeal is whether learned Additional Motor Accidents Claims Tribunal, Bilaspur (henceforth 'the Tribunal') was justified in passing the award of pay and recover against the appellant insurer after recording a finding that the driver of the offending vehicle did not possess a driving licence.

3. It is not in dispute in this appeal that claimant - respondent No. 1, a pedestrian, who was knocked down by the motor cycle No. CG 11 - B 6166 driven by respondent No. 2 is a third party, whose risk was statutorily covered by the insurer under the policy of insurance.

4. Shyamlal Kurmi, respondent No. 3, the owner of the offending vehicle motor cycle No. CG 11 - B 6166 and Ghanshyam Kaushik, respondent No. 2, the driver did not contest the application filed by the claimant - respondent No. 1, under S.166 of the Motor Vehicles Act, 1988 (henceforth 'the Act') for compensation on the ground of permanent disability suffered due to being hit by the motor cycle driven by Ghanshyam Kaushik.

5. The Claims Tribunal recorded a specific finding in para 14 that Ghanshyam Kaushik, respondent No. 2, driver of the offending vehicle did not possess a driving licence on the date of accident. Placing reliance on New India Assurance Co. Ltd. v. Jyotsna Patra , 2006 (1) TAC 502 and Pushpabai v. Padumnath Mali , 2005 (5) MPHT 36 and considering the fact that the offending vehicle was insured by appellant, it passed an order of pay and recover against the appellant without recording any finding as to whether liability to pay compensation rested with the appellant insurance company or not.

6. Mr. Dashrath Gupta, learned counsel appearing for the appellant insurer argued that the Tribunal had no jurisdiction to pass an order of pay and recover against the insurer even in a case of third party risk having been covered by the insurer, if it was established that due to a fundamental breach of the essential condition of the policy, i.e., the offending vehicle having been driven by a person not possessing a valid and effective driving licence the insurer could avoid liability under S.149 (2) (a) (ii) of the Act. Reliance was placed on United India Insurance Co. Ltd. v. Anubai Gopichand Thakare, 2008 ACJ 213 (Bombay), in which it was held that when a direction of pay and recover is given to meet the ends of justice by the Apex Court of India, it is given in exercise of the extraordinary jurisdiction of the Apex Court under Art.136 and Art.142 of the Constitution of India, which is not available to the Tribunal or even the High Court. Reliance was also placed on a decision rendered by the Apex Court in Sardari v. Sushil Kumar , 2008 ACJ 1307 (SC).

7. On the other hand, Mr. Gautam Khetrapal, learned counsel appearing for claimant - respondent No. 1 placed heavy reliance on New India Assurance Co. Ltd. v. Kamla , 2001 ACJ 843 (SC); National Insurance Co. Ltd. v. Swaran Singh , 2004 ACJ 1 (SC) and National Insurance Co. Ltd. v. Laxmi Narain Dhut , 2007 ACJ 721 (SC), while contending that the Supreme Court has, in those cases, upheld the jurisdiction of the Tribunal to direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of Tribunal. Since in the present case, there is no dispute that claimant - respondent No. 1 was a third party being a pedestrian, who was dashed by the offending vehicle driven by respond