S.K.Sen, C.J. - (1.) This appeal by the insurance company under section 173 of the Motor Vehicles Act is against the award of the Motor Accidents Claims Tribunal dated 23.10.1998 in Claim Case No. 353 of 1996.
(2.) Heard the learned counsel for the appellant.
(3.) The only point urged by the learned counsel for the appellant in support of the appeal is that the driver of the vehicle, who caused accident, had no valid licence. Such contention, in our view, is not tenable. It is well settled that the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise and the insurer has to satisfy the Tribunal or the court that such violation or infringement on the part of the insured was wilful. In this connection judgment and decision in the case of Sohan Lai Passi v. P. Sesh Reddy, 1996 ACJ 1044 (SC), may be taken note of. Para 12 of the said judgment at pp. 1051-53 of the said report appears to us to be relevant for the purpose and the same is set out hereinbelow: "(12) Now it has to be examined as to whether the insurance company can be absolved of its liability to pay the compensation in a case where the owner of the vehicle had got the vehicle insured, but the accident took place when it was being driven by a person not holding the driving licence. In the present case the accident took place when the Motor Vehicles Act, 1939, was in force. Section 96 of the Act prescribed the duty of the insurer to satisfy the judgment against persons insured in respect of third party risks (the parallel provision being section 149 in the Motor Vehicles Act, 1988). The relevant part of section 96 provided: '96. Duty of insurers to satisfy judgments against persons insured in respect of third party risks. (1) If, after a certificate of insurance has been issued under sub-section (4) of section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability. (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the court of the bringing of the proceedings, or in respect of any judgment so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely: (a) xxx xxx xxx (b) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely: xxx xxx xxx (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or xxx xxx xxx' In view of sub-section (1) of section 96 if after the certificate of insurance has been issued in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy, the insurer shall subject to the provisions of the said section pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he was the judgment debtor, in respect of the liability. (Emphasis supplied). Sub-section (2) of section 96 enjoins that notice of the proceedings in which the judgment is given, has to be given to the insurer and such insurer shall be entitled to defend the action on any of the grounds mentioned in sub-section (2) of section 96. We are concerned in the present case only with section 96 (2) (b) (ii), a condition excluding driving by any person who is not duly licensed. The question is as to whether the insurance company can repudiate its liability to pay the compensation in respect of the accident by a vehicle only by showing that at the relevant time it was being driven by a person having no licence. In the case of Skandia Insurance Co. Ltd. v. Kokila- ben Chandravadan, 1987 ACJ 411 (SC), in respect of this very defence by the insurance company, it was said: 'The defence built on the exclusion clause cannot succeed for three reasons, viz.: (1) On a true interpretation of the relevant clause which interpretation is at peace with the conscience of section 96, the condition excluding driving by a person not duly licensed is not absolute and the promisor is absolved once it is shown that he has done everything in his power to keep, honour and fulfil the promise and he himself is not guilty of a deliberate breach. (2) Even if it is treated as an absolute promise, there is substantial compliance therewith upon an express or implied mandate being given to the licensed driver not to allow the vehicle to be left unattended so that it happens to be driven by an unlicensed driver. (3) The exclusion clause has to be read down in order that it is not at war with the main purpose of the provisions enacted for the protection of victims of accidents so that the promisor is exculpated when he does everything in his power to keep the promise.' To examine the correctness of the aforesaid view this appeal was referred to a three Judges Bench, because on behalf of the insurance company, a stand was taken that when section 96 (2) (b) (ii) has provided that the insurer shall be entitled to defend the action on the ground that there has been a breach of a specified condition of the policy, i.e., the vehicle should not be driven by a person who is not duly licensed, then the insurance company cannot be held to be liable to indemnify the owner of the vehicle. In other words, once there has been a contravention of the condition prescribed in sub-section (2) (b) (ii) of section 96, the person insured shall not be entitled to the benefit of sub-section (1) of section 96. According to us, section 96 (2) (b) (ii) should not be interpreted in a technical manner. Sub-section (2) of section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in subsection (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression 'breach' occurring in section 96 (2) (b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of section 96. In the present case, far from establishing that it was the appellant who had allowed Rajinder Pal Singh to drive the vehicle when the accident took place, there is not even any allegation that it was the appellant who was guilty of violating the condition that the vehicle shall not be driven by a person not duly licensed. From the facts of the case, it appears that the appellant had done everything within his power inasmuch as he has engaged a licensed driver Gurubachan Singh and had placed the vehicle in his charge. While interpreting the contract of insurance, the Tribunals and courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds. Unless it is established on the materials on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licensed to drive the vehicle when the accident took place, the insurer shall be deemed to be a judgment-debtor in respect of the liability in view of sub-section (1) of section 96 of the Act. It need not be pointed out that the whole concept of getting the vehicle insured by an insurance company is to provide an easy mode of getting compensation by the claimants, otherwise in normal course they had to pursue their claim against the owner from one forum to the other and ultimately to execute the order of the Accidents Claims Tribunal for realization of such amount by sale of properties of the owner of the vehicle. The procedure and result of the execution of the decree is well-known." It is, therefore, settled legal position that the onus to prove whether the driver having valid licence at the time of accident was on the appellant insurer.;