Arun Mishra, J.
1. This appeal has been preferred by claimants against the award dated 29.1.1997 passed in Claim Case No. 55 of 1994 by Second Additional Motor Accidents Claims Tribunal, Gwalior.
2. The claim petition was preferred by the claimants on account of death of Anil Kumar, who died in vehicular accident on 9.10.1991. Learned Claims Tribunal has awarded compensation of Rs. 1,61,600 along with interest at the rate of 12 per cent per annum from the date of application till realisation. The vehicle was driven by Satishchand at the time of incident. It was owned by Sadhna and was insured with New India Assurance Co. Ltd. The driver was proceeded ex parte and did not appear before the learned Claims Tribunal in spite of service.
3. Written statement was filed by the insurer contending that licence held by the driver was fake. It was not issued by the R.T.O., Alwar (Rajasthan). As there is violation of terms and conditions of the insurance policy, hence insurer is not liable to pay compensation.
4. Learned Claims Tribunal has found that accident occurred due to rash and negligent driving by the driver Satishchand. The licence held by the driver was found to be fake. Insurer has been exonerated from making payment of compensation on the aforesaid ground.
5. Mr. N.D. Singhal, learned Counsel appearing on behalf of the appellants has raised only one submission that insurer ought have been held liable to make payment of compensation as it was not in the knowledge of the owner that licence held by the driver was invalid. He has placed reliance on the decisions of Apex Court in United India Insurance Co. Ltd. v. Lehru : [2003]2SCR495 and National Insurance Co. Ltd. v. Swaran Singh : AIR2004SC1531 .
6. Mr. M.P. Agrawal, learned Counsel appearing on behalf of respondent No. 3 has submitted that insurer has been rightly exonerated by learned Claims Tribunal as driver was not having valid and effective driving licence and there was violation of the terms and conditions of the insurance policy.
7. On behalf of the insurer Dr. V.K. Nirwan, NAW 1, was examined and he has stated that it was necessary that the driver should have valid driving licence. Surveyor Rajendra Kumar was appointed for examination of validity of licence. Rajendra Kumar had submitted his report and stated that driving licence was not issued by R.T.O., Alwar in the name of Satishchand. Surveyor Rajendra Kumar was also examined, he made verification in the office of R.T.O., Alwar and record of R.T.O., Alwar shows that said licence was not issued by R.T.O., Alwar. None of the witnesses of the office of R.T.O., Alwar has been examined to prove that licence was not issued. Apart from that we find that insurer cannot escape from the liability on the ground that licence was fake. It has not been established that licence if fake was in knowledge of the owner, unless and until it is established, insurer cannot escape from the liability, hence it is not substantial breach on his part as held by the Apex Court in United India Insurance Co. Ltd. v. Lehru : [2003]2SCR495 :
(17) When an owner is hiring a driver he will, therefore, have to check whether the driver has a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that insurance companies expect owners to make enquiries with R.T.Os., which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The insurance company would not then be absolved of its liability. If it ultimately turns out that the licence was fake the insurance company would continue to remain liable unless they prove that the owner-insured was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly even in such a case the insurance company would remain liable to the innocent third party, but it may be liable to recover from the insured. This is the law which has been laid down in Skandia's case 1987 ACJ 411 (SC); Sohan Lal Passi's case : AIR1996SC2627 and Kamla's case : [2001]2SCR797 . We are in full agreement with the views expressed therein and see no reason to take a different view.
8. In the case of National Insurance Co. Ltd. v. Swaran Singh : AIR2004SC1531 , the Apex Court has held that (para 102):
(iii) The breach of policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in Sub-sections 2(a)(ii) of Section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insurer was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.
9. In view of the aforesaid discussion, we hold that insurer is liable to make payment of compensation. No other ground is raised by learned Counsel for appellants.
10. Resultantly, the appeal is allowed to the aforesaid extent with no order as to costs.