Divisional Manager, New India Assurance Company Ltd., Ongole Vs. Tumu Gurava Reddy and Others - Court Judgment

Excerpt:
(i) motor vehicles - statutory liability - section 149 of motor vehicles act, 1988 - conditions stipulated in insurance agreement - burden lies on insurance company to prove breach of such conditions by insurer - neither intention to violate conditions nor owner's knowledge regarding absence of valid license for driver proved - held, denial of liability by insurance company not permitted. (ii) absolute liability - section 149 of motor vehicles act, 1988 - whether insurance company liable for no-fault liability by insurer paying no premium for such purpose - held, insurance company absolutely liable irrespective of fault or no fault liability by insurer. - - the concurrent findings of the tribunal as well as the learned single judge of this court are that the vehicle at the relevant.....ordert. ch. surya rao, j.1. the insurer, the new india assurance company through its divisional manager, ongole, preferred all these appeals against the common order passed by the learned single judge of this court (reported in : 1998(5)ald600 , divisional manager, new india assurance company ltd. v. tumu gurava reddy).2. all these claims arise out of a single accident. some of the claimants are the injured and some are the legal representatives of the deceased who died a premature death in the accident that occurred on 18-2-1995. the 1st respondent herein is the owner of the vehicle viz., the tractor attached with a trailer bearing no.ap-27/ t-4173 and ap-27/t-4174 respectively that was involved in the accident.3. briefly stated the facts are thus: about 23 persons were sitting in the.....

Judgment:
ORDER

T. CH. Surya Rao, J.

1. The insurer, the New India Assurance Company through its Divisional Manager, Ongole, preferred all these Appeals against the common order passed by the learned single Judge of this Court (reported in : 1998(5)ALD600 , Divisional Manager, New India Assurance Company Ltd. v. Tumu Gurava Reddy).

2. All these claims arise out of a single accident. Some of the claimants are the injured and some are the legal representatives of the deceased who died a premature death in the accident that occurred on 18-2-1995. The 1st respondent herein is the owner of the vehicle viz., the Tractor attached with a Trailer bearing No.AP-27/ T-4173 and AP-27/T-4174 respectively that was involved in the accident.

3. Briefly stated the facts are thus: About 23 persons were sitting in the trailor of the tractor at the relevant time, and they were being taken to attend to the cooli work in the agricultural fields of the 1st respondent, owner of the vehicle. On account of the rash and negligent driving ofthe driver of the tractor the unfortunate accident occurred when the tractor was proceeding on the left bank of Nagarjuna Sagar Canal. Some, out of the 23 coolies, died instantaneously and some sustained injuries in that accident. All the claims have been preferred under Section 140 of the Motor Vehicles Act (for short 'the Act') under no fault liability. The 1st respondent resisted the claims pleading inter alia in his counter that he was also sitting in the trailor along with the coolies, and the connecting link between the tractor and the trailor had given away and the trailor had been detached and had fallen into the canal. The appellant-insurer resisted the claims on the premise that all the persons who were sitting in the trailor were fare paying passengers and the 1st respondent owner used the vehicle in contravention of the condition embodied in the policy for the purpose other than agricultural and forestry purposes and the driver who was said to have driven the tractor at the relevant time did not possess a valid driving licence.

4. The Motor Accidents Claims Tribunal after conducting enquiry passed individual Awards holding that the owner and insurer were jointly and severally liable to pay the compensation. However, the Tribunal directed that the amounts already paid by the owner shall be deducted. The learned single Judge of this Court dismissed all the Appeals filed by the insurer. The concurrent findings of the Tribunal as well as the learned single Judge of this Court are that the vehicle at the relevant time was used for agricultural and forestry purposes and the unfortunate persons who were found sitting in the trailor attached to the ill-fated tractor were coolies being transported to the place of work for agricultural purposes and the driver who was actually driving the vehicle in question did not possess a valid driving licence.

5. The learned Standing Counselfor the insurer has sought to contendbefore us that in the wake of the concurrentfinding that the licence possessed by thedriver was a fake licence, obviously, theowner has committed breach of thecondition embodied in the policy and thatabsolves the insurer from any liability.He has sought to further contend thatthe liability of the insurer arises underChapter XI of the Act for fault liability andthe insurer has no liability under Chapter Xof the Act for no fault liability. Thelearned Counsel appearing for the claimantshas tried to support the common judgmentpassed by the learned single Judge of thisCourt.

6. To appreciate the respective contentions, it is expedient in the first instance to consider the relevant provisions of the Act dealing with Insurance of Motor Vehicles against third party risks. Chapter XI of the Act is the relevant chapter. Sections 145, 146, 147 and 149 are the relevant sections in this Chapter. While Section 145 deals with the definitions in the Chapter, Section 146 covers the necessity for insurance against third party risk, Section 147 enumerates the requirements of policies and limits of liability and Section 149 ordains the duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.

7. Section 149 insofar as is relevant for the present purpose may be extracted hereunder, thus:

'(1) If, after a certificate of insurance has been issued under sub-section (3) of Section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as it required to be covered by a policy under clause (b) of subsection (1) of Section 147 (being a liability covered by the terms of thepolicy or under the provisions of Section 163-A 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, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award 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) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:--

(i) a condition excluding the use of the vehicle--

(a) ......

(b) ......

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d)......

(ii) a condition excluding driving by a named person 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

(iii) ......

(b) ......

(3)......

(4)......

(5)......

(6) ......

(7)......

8. A perusal of the above section shows that the insurer can validly defend the proceedings initiated against it on the premise that the owner of the vehicle has committed breach of the condition by entrusting his vehicle to a person who is riot duly licensed. This section therefore extends immunity to the Insurance Company if a breach is committed of the condition embodied in the policy. The expression 'breach' is of great significance. The expression 'breach' occurring in Section 149 of the Act means 'infringement or violation of a promise or obligation'. The dictionary meaning of the expression 'breach' is 'infringement or violation of a promise or obligation'. The very concept of infringement or violation of the promise that the expression 'breach' carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. As such, the Insurance Company will have to establish that the injured was guilty of infringement or violation of a promise. The insurer has also to satisfy the Tribunal that such violation or infringement on the part of the insured was wilful. If the insured hastaken all precautions by appointing a duly licensed driver to drive the vehicle in question the Insurance Company cannot escape its statutory liability. It is only when the insured himself placed the vehicle incharge of a person who does not hold a driving licence that it can be said that he is guilty of the breach of the promise that the vehicle will be driven by a licensed driver. Unless the insured is at fault and guilty of breach, the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor committed a breach of his promise. The burden is, therefore, upon the insurer to establish that the owner of the vehicle is guilty of wilful breach of the condition embodied in the policy. In fact, it is the conspectus of the dicta enunciated by the Apex Court in Skandia Insurance Co. Ltd., v. Kokilaben Chandravadan, AIR 1987 SC 1184, which is the leading judgment on the point; Kashiram Yadav v. Oriental Fire and Genera! Insurance Co., : [1989]3SCR811 and Sohan Lal Passi v. P. Sesh Reddy, : AIR1996SC2627 , the three classic judgments on the point. The Apex Court in Skandia Insurance Co. Ltd's case (supra), held in Para 12 at Page 1189 thus:

'12. 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 fulfill 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 expressor 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.'

Relying upon its own judgment in Skandia Insurance Co. Ltd, (supra), the Apex Court in Kashiram Yadav's case (supra), reiterated the view that it is only when the insured himself entrusted the vehicle to a person who does not hold a driving licence, he could be said to have committed breach of the condition of the policy and it must be established by the Insurance Company that the breach is on the part of the insured and when the insured has done everything within his power it cannot be said that he is guilty of any breach.

9. The correctness of the proposition laid down by the Apex Court in Skandia Insurance Co. Ltd., (supra), was questioned before the Apex Court in Sohan Lal Passi v. P. Sesh Reddy, (supra). The matter has been referred to a three Judge Bench. The Bench held ultimately that they were in respectful agreement with the view expressed in the case of Skandia Insurance Co. Ltd., (supra). The relevant finding of the Supreme Court at Page 2633 may be extracted hereunder, thus--

'This Court expressed the view that it is only when the insured himself entrusted the vehicle to a person who does not hold a driving licence, he could be said to have committed breach of the condition of the policy. It must be established by the Insurance Company that the breach is on the part of the insured. Unless theinsured is at fault and is guilty of a breach of the condition, the insurer cannot escape from the obligation to indemnify the insured.''

'We are in respectful agreement with the 'view expressed in the case of Skandia Insurance Co. Ltd., v. Kokilaben Chandravadan, (supra).'

10. From the excerpts extracted above, it is obvious that the burden is upon the appellant to establish that the insured has committed wilful breach of the condition embodied in the policy by entrusting the vehicle to a driver who was not duly licensed. It being pure question of fact shall have to be proved by adducing evidence alinude and shall be decided with reference to the facts and circumstances of that case.

11. We will not proceed to consider the evidence available on record on the point to see to what extent the appellant has been able to discharge the burden cast upon it. The concurrent finding of the Tribunal as well as the learned single Judge of this Court is that the licence possessed by the driver who was said to have been driving the vehicle at the relevant time was indeed a fake licence. We have perused the evidence available on record and we entirely agree with the said finding. In view of the concurrent finding of the Tribunal and of the learned single Judge of this Court that the licence possessed by the driver was a fake licence, it might ostensibly appear that there has been breach of the condition embodied in the policy to the effect that the vehicle shall be entrusted to a duly licensed driver. But the intrinsic value of the evidence adduced on either side and is available on record and the effect of the totality of the circumstances emanating therefrom has to be considered by the Courts. The driver Bala Raju has been examined before the Tribunal in all the cases. It is emergingfrom his evidence that he worked as a driver in APSRTC from 1977 to 1987 and he was suspended when he had committed a minor accident while driving the bus of the Corporation, and that in the departmental enquiry he had been ordered to be removed from the service, and therefore, he preferred an appeal against the said order which is pending in the High Court. This oral testimony of the driver is buttressed by the documentary evidence Ex.X1 letter dated 21-1-1997. Ex.X1 is a letter dated 21-1-1997 addressed by the Depot Manager, Giddalur of APSRTC to the Counsel of the owner of the vehicle Sri B. Hanuma Reddy. This document has been marked as Ex.Xl in OP No.124 of 1995 through the driver of the vehicle Bala Raju, who has been examined as RW3. Ex.X1 remained uncontroverted in the cross-examination of the witness. This document bears out the oral testimony of the driver. What is obvious from this oral and documentary evidence is that the driver Bala Raju worked as a driver in the APSRTC for a decade and he was suspended when he committed a minor accident. The xerox copy of the license has been marked as Ex.B4. Ex facie the document cannot be said to be a forged document. The insurer further led oral and documentary evidence to show that a team of Officers were deputed to Bangalore for conducting investigation and the investigation ultimately disclosed that the licence of the driver Bala Raju was not genuine. The innate circumstances emerging from the evidence on record that the said Bala Raju was employed by the APSRTC and worked therein for nearly a decade and the fact that the insurer deputed its Officers to Bangalore for conducting investigation which eventually disclosed that the licence purported to have been issued by the authority at Bangalore was in fact a fake licence would negate the contention of the learned Standing Counsel for the Insurer that there has been wilful breach of the condition. Having taken all pains in adducing the relevant evidence to show that the licencepossessed by the driver Bala Raju is not genuine, the insurer could not show that the owner of the Tractor having knowledge of the said fact employed the driver and thereby wilfully committed breach of the condition embodied in the policy in regard thereto. The intrinsic value of the evidence emanating from the record certainly exculpates the 1st respondent owner from the guilty of breach of condition. The 1st respondent cannot legitimately be expected to conduct an enquiry before employing the driver in the wake of the fact that he worked for nearly a decade in APSRTC that the licence possessed by him in fact is genuine licence or not. The attendant circumstances will not warrant any inference that the 1st respondent had every reason to believe that the licence possessed by the driver was a fake licence. For the above reasons we arc of the clear view under the facts and circumstances of this case that the insurer failed to establish that the 1st respondent owner of the vehicle committed a wilful breach of the promise by entrusting the vehicle to a driver having had the knowledge that the licence possessed by the driver was a fake licence. Of course, as afore discussed, it is a pure question of fact and is to be considered with reference to the facts and circumstances of each case, although the burden is upon the insurer to prove the same.

12. Coming to the other contention of the learned Standing Counsel for the appellants that the liability of the Insurance Company arising out of Chapter XI of the Act is only in respect of fault liability, it is expedient here to consider the purpose in enacting the relevant provisions under Chapter X of the Act and the conditions that eventually lead to pass such a Legislation. The Supreme Court in State of Haryana v. Smt. Darshana Devi, : [1979]3SCR184 , recommended the Parliament to make a law in regard to 'no fault liability1. Again in Bishan Devi v. Sirbaksh Singh, : [1980]1SCR300 , reiterated its recommendationsmade in its earlier judgment in the followinglines:

'Now that insurance against third party is compulsory and motor insurance is nationalised and transport itself is largely by State Undertakings, the principle of no fault liability and on the spot settlement of claims should become national policy.'

In Motor Owner's Insurance Company Ltd.. v. Jadavji Keshavji Modi and others, : [1982]1SCR860 , a Three Judge Bench of the Apex Court held that four years ago that Court sounded a warning and a reminder and the observations of the Highest Court of the country shall not become a mere pious wish. The Court further held as follows:

'These observations are still languishing in the cold storage of pious wishes. With the emergence of the General Insurance Corporation which has taken over general insurance business of all kinds, including motor vehicles' insurance, it should be easy to give statutory recognition to the State's obligation to compensate victims of road accidents promptly, adequately and without contest.'

Pursuant to these repeated pronouncements of the Apex Court, the Parliament ultimately passed the Motor Vehicles (Amendment) Act, 1982 and Chapter VII-A consisting of Sections 92-A to 92-E had come to be incorporated in the old Act of 1939. Chapter X consisting of Sections 140 to 144 in the New Act is in pan materia with the corresponding provisions in the old Act. The provisions under the Amending Act 47 of 1982 came into effect on 1-10-1982. To give effect to these provisions the amending Act has made certain consequential changes to some of the cognate sections viz., Sections 93, 100, 110-A 110-AA, 110B and 110-CC of the old Act. UnderSection 93 of the old Act the definition of liability' had come to be incorporated under clause (ba). An explanation had also come to be incorporated to Section 110. Section 145 of the new Act is akin to Section 93 of the old Act. Section 165 is akin to Section 110-A of the old Act. Section 145 seeks to define certain words in Chapter XI. Clause (c) Section 145 defines the word 'liability' as follows:

'145. Definitions:

(a) ......

(b) ......

(c) 'liability', wherever used in relation to the death of or bodily injury to any person, includes liability in respect thereof under Section 140.

(d) ......

(e) ......

(f) ......

(g) ......

The Explanation appended to Section 165 is to the following effect:

165. Claims Tribunals:

(1) ......

Explanation :--For the removal of doubts, it is hereby declared that the expression 'claims for compensation in respect of accidents involving the death of or bodily injury to, person arising out of the use of motor vehicles' includes claims for compensation under Section 140 (and Section 163A).'

The Andhra Pradesh Motor Vehicles Rules, 1964 have also been suitably amended by incorporating the relevant rules. Those rules have been superseded by the Andhra Pradesh Motor Vehicles Rules, 1989 passed under New Act.Relevant Rules have been made to give effect to the provisions of Sections 140 to 144 of the Act under the new Rules also. Chapter XI of the Rules contain the relevant rules in respect of the establishment of Claims Tribunal and the procedure to be followed. Rule 476 is the relevant rule which envisages the application for claim under Chapter X of the Act. Clause 5 of this Rule is relevant to be considered here:

'(5) Presence of owner and insurer not necessary to award the claim after notice :--The Claims Tribunal shall give notice to the owner and insurer, if any of the motor vehicle involved in the accident, directing them to appear on a date not later than 10 days from the date of issue of notice. The date so fixed for such appearance shall also be not later than 15 days from the receipt of the claim application. The Claims Tribunal shall state in such notice, that in case they fail to appear on such appointed date, the Tribunal will proceed ex parte on the presumption that they have no contention to make against, the award of compensation.'

Clause 6 reads as follows:

'(6) Award of claim :--The Claims Tribunal shall obtain whatever information necessary from the Police, Medical and other authorities and proceed to award the claim whether the parties who were given notice, appear or not on the appointed date.'

It is also expedient to look at the statement of objects and reasons of the Motor Vehicles Amendment Act, 1982 published in Gazette of India Extraordinary Part II, dated 9-8-1982.

'The relevant portion of the statement of objects and reasons reads as follows: 'A new Chapter VII-A, providing for payment of compensation in certain casesof accidents without proof of fault or negligence on the part of the owner or the driver of the motor vehicle is being inserted in the Act. Under this Chapter, the owner of the vehicle involved in an accident will be liable to pay compensation of a fixed sum of Rs. 15,000 in respect of the death of a person and a fixed sum of Rs.7,500 in respect of permanent disablement of any person. For securing this compensation, it will not be necessary to prove any wrongful act or negligence on the part of the owner or the driver of the vehicle. However, the compensation payable by an owner on the basis of wrongful act or negligence on his part would be reduced by the compensation already paid by him under this Chapter. It has also been provided that the claim for compensation under the Chapter should be disposed of as expeditiously as possible. The benefit of the provisions of the Chapter would also be available in cases where compensation is claimed in respect of a motor accident under any other law, as for example the Workmen's Compensation Act, 1923. It may also be mentioned that the owner of a vehicle will have to insure himself against liability to third parties under this Chapter to the same extent as he has to insure himself against liability to third parties in cases where he is in default or negligent'

13. Now the intention of the Parliament is obvious from the above statement of Objects and Reasons. No fault liability is thus an 'Act Policy', In this context, it is apt to refer to the observations of the Supreme Court in Skandia Insurance Co. Ltd., (supra) and the relevant passage mentioned in Para 13 may profitably be extracted hereunder:

'In order to divine the intention of the Legislature in the course of interpretation of the relevant provisions there canscarcely be a better test than that of probing into the motive and philosophy of the relevant provisions keeping in mind the goals to be achieved by enacting the same. Section 94 requiring the owner of the motor vehicle using it in a public place has been inserted in order to protect the members of the Community travelling in vehicles or using the roads from the risk attendant upon the user of motor vehicles on the roads. The law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the dependents of the victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the Courts would be recoverable from the persons held liable for the consequences of the accident. A Court can only pass an award or a decree. It cannot ensure that such an award or decree results in the amount awarded being actually recovered, from the person held liable who may not have the resources. To overcome this ugly situation the Legislature has made it obligatory that no motor vehicle shall be used unless a third party insurance is in force. To use the vehicle without the requisite third party insurance being in force is a penal offence. The legislature was also faced with another problem. The insurance policy might provide for liability walled in by conditions which may be specified in the contract of policy. In order to make the protection real, the Legislature has also provided that the judgment obtained shall not be defeated by the incorporation of exclusion clauses other than those unauthorised by Section 96 and by providing that except and save to the extent permitted by Section 96 it will be the obligation of the Insurance Company to satisfy the judgment obtained against the persons insured against third party risks.'

The philosophy behind this piece of beneficial Legislation has thus been succinctly pointed out by the Apex Court as can be seen from the above excerpt.

14. The learned Counsel for the appellant in this connection relied upon a recent judgment of the Apex Court in National Insurance Co. Ltd., v. Jattu Ramu and others, : (1999)9SCC62 , in which the Apex Court held as follows:

'On a close scrutiny of the aforesaid provisions, we do not find anything contained therein which would suggest that the liability which accrues under the provisions of Section 92-A has to be borne by the insurer even if it is ultimately held that under the policy of Insurance the insurer is not liable to pay the compensation in question. In our considered opinion the Tribunal and the High Court have misread the aforesaid provisions of the Motor Vehicles Act. In the aforesaid premises the impugned judgment of the Tribunal and High Court cannot be sustained so far as it relates to the liability of the insurer arising under Sections 92-A and 92-B of the Act. These appeals are allowed.'

That was a case where the Tribunal held that the insurer was not liable under the policy to pay the compensation, and therefore, the owner was liable to pay the compensation. During the pendency of those proceedings, Sections 92-A and 92-B came to be incorporated in the Motor Vehicles Act, 1939 (old Act). The question arose as to whether the insurer who is not liable under the policy to pay the compensation is also not liable to pay the compensation under no fault liability. The Apex Court ultimately held by perusing both the provisions that the insurer was not liable to pay the compensation under no fault liability also as in the case of fault liability. In a way, the judgment suggests the liability of the insurer to pay thecompensation under no fault liability also; but in regard to the question as to whether the defences available to the insurer under Section 149 in respect of fault liability are also available in respect of no fault liability, the decision ultimately by the Apex Court is in the negative. We do not, therefore, think that this decision would render any help to the case of the appellants herein to buttress the plea that the insurer is not liable under no fault liability.

15. The learned Counsel for theappellant further relied upon an unreported judgment of this Court in CMA No.324 of 1991 and batch decided on 13-11-1998 between New India Assurance Company Limited v. Pesala Kishore Kumar and others. The Bench relying upon the judgment of the Apex Court in National Insurance Co. Ltd, (supra), held that the claimants were entitled for compensation from the owner of the vehicle, but not from the insurer. That was a case where the deceased was travelling in the lorry as an unauthorised passenger, and hence the Tribunal held that the Insurance Company was not liable to pay the compensation under fault liability. However, the owner was liable to pay compensation under no fault liability. The question as to whether the insurer is liable under Chapter X for no fault liability or not has not directly come up for consideration before the Bench. Therefore, this decision in our view cannot also render any assistance to the case of the appellants, and also in view of our conclusions arrived at supra that the insurer is liable to pay compensation under no fault liability.

16. From the back-drop under which the provisions providing for no fault liability came to be incorporated in the statute, the intention of the Parliament in having legislated the same pursuant to the clarion call given by the Apex Court in various judgments, the philosophy behind these provisions in making the insurance of the Motor Vehicles compulsory, the changesbrought into the Act and the relevant rules framed thereunder in sequel thereto clearly establish that the liability of the insurer is not confined to Chapter XI of the Act alone but is also inclusive of the liability under Chapter X. In other words, the insurer is liable both under fault liability and no fault liability. Once it is an Act Policy, nonpayment of any separate premium by the insured for no fault liability is of no consequence. It is for the insurer to collect the premium. In any view of the matter, the liability of the insured to pay the compensation under no fault liability being absolute and when the insured suffered a decree in regard thereto, the insurer shall indemnify the owner in accordance with the provisions of Section 149 of the Act regardless of the fact whether it is fault liability or no fault liability.

17. A Division Bench of this Court in United India Insurance Co. Ltd. v. CD. Muniratnam Reddy, : 1993(3)ALT237 (DB), has suggested an amendment to Section 95 of the old Act. It is in the following lines:

'When the Act contemplates that an insurance policy has to be taken and when that policy is either comprehensive or composite one and when the Legislature has fastened liability under Section 92-A of the Act, the liability of the Insurance Company so far as the amount payable under 'No fault liability' also should have been included in Section 95 of the Act. If it has been included so in Section 95, it will be binding on the Insurance Company irrespective of the inclusion in the policy. In these circumstances, it is suggested that an amendment is required to Section 95 of the Act by including the liability of the Insurance Company so far as the amount under 'No fault liability' is concerned also.'

However, in the judgment the Bench held that non-inclusion of 'no fault liability' inSection 95 of the Act does not mean that the Insurance Company can raise the plea that it is not liable for the compensation payable under Section 92-A especially when there is a composite policy or comprehensive policy. Since the intention of the Legislature is immediate payment of compensation to the victim without any enquiry and in case where there is a comprehensive or composite policy available, both the owner as well as the Insurance Company are liable to pay the compensation awarded under Section 92-A. The learned Judges of the Bench did not consider the effect of Section 93(ba) whereunder the word 'liability' was defined. The learned Judges felt that the Legislature having incorporated Section 92-A and 93(ba) ought to have included 'no fault liability' under Section 95 of the Act, and because of non-inclusion of 'no fault liability' in Section 95 of the Act the Insurance Company can claim that it is not liable to pay any amount in the case of a claim which arose under Section 92-A of the Act i.e., for 'no fault liability'. We share the view taken by our learned Brother Bikshapathy, J., in the judgment under appeal and we are in respectful disagreement with the view expressed by the learned Judges in United India Insurance Co. Ltd, (supra). Section 147 is the relevant provision of the new Act which is akin to Section 95 of the old Act. Section 147 in so far as is relevant may be extracted hereunder:

'147, Requirements of policies and limits of liability:--

(1) In order to comply with therequirements of this Chapter, a policy of insurance must be a policy which--

(a) ......

(b) ......

(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner ofthe goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;

(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place.'

The words 'any liability' used in Section 147(1)(b)(i) shall have to be construed with reference to the definition of the word 'liability' as given in clause (c) of Section 145 in the same Chapter XI. It may be mentioned here that the owner of the vehicle is vicariously liable for the tortious act of the driver. The liability of the insurer as can be seen from Section 149 is to indemnify the owner against any liability of the owner under any judgment or Award. The owner is obviously liable to pay compensation to the victim regardless of the fact that it is a fault liability or no fault liability subject, however, to the limitation of the compensation payable in fixed amount, as envisaged by Section 140 of the Act. This liability of the owner under the decree passed by a Tribunal against him shall be indemnified by the insurer under Section 149 of the Act. Any judgment to the contra without considering the background under which Section 92-A has come to be incorporated under the old Act, and the consequential changes that have been made in the other cognate sections to give effect to that intendment of the Parliament incorporating Section 92-A will suffer from the vice of per incurium and cannot, therefore, hold the field. Therefore, we are of the considered view that the Insurance Company is liable under no fault liability also.

18. Yet another important question that has been raised by the learned Counsel for the Appellant is:

Whether the insurer can raise the defences available to him under Section 147 of the Act in respect of the no fault liability also?

The learned single Judge of this Court under the impugned judgment held as follows:

'The plea of the defence available under Chapter XI, or the breach of terms of policy cannot be invoked by the insurance when a claim under Section 140 is made by the victims or the dependants.'

The liability under Section 140 is an absolute liability. The liability of the insurer under Section 147 held as above includes the liability under Section 140 also. A combined reading of Sections 140, 145, 147 and 149 would no doubt show that the liability of the insurer is in respect of both fault as well as no fault liability subject, however, to the defences available under Section 149 and the insurer should pay the compensation to the person in whose favour the Award is passed by the Tribunal as if the insurer were the judgment debtor. The logical deduction that can be drawn from a combined reading of the Sections 140, 145, 147 and 149 is, as discussed by us supra, no doubt favours the proposition that the insurer can plead the defences available under Section 149 of the Act while resisting the claim for no fault liability also. True what the Courts have to consider is not the necessary corollary ignoring totally the purpose and intention of the Act and the philosophy behind the Legislation, and the totality of all other relevant considerations. Undoubtedly, the Chapters providing for compensation to the victims more particularly the helpless and hapless victims incorporated in the Act are meant to sub-serve social justice. One should not be oblivious of the fact that the liability under Section 140 of the Act is an absolute liability, not withstanding the fact that there has been no fault on the part of the driver, consequently no vicariousliability on the part of the owner and regardless of any wrongful act, neglect or default on the part of the victim. The provision for compulsory insurance is to help the victims realising the compensation as awarded by the Tribunals without any difficulty unlike in the cases of the Civil Court decrees where divergent pleas will be taken up to stall the execution of the decrees. Should the insured or the insurer be permitted to take up any defences to resist the claim of the victim for a fixed sum under 'no fault liability' for which he will be forced to restrict himself leaving the rest of the claim which perhaps even be many fold to the restricted claim ignoring all these things it would certainly defeat the very object behind the provisions incorporated in the Act providing for no fault liability. The whole exercise by reading the relevant provisions and drawing the necessary corollary oblivious of the context, philosophy, social justice etc., as discussed supra, would render the provisions nugatory. Therefore, we see much force in the following contentions of the learned Counsel for the respondents that the provisions are to be read down if necessary and interpreted to subserve the object. Although Section 149 enables the insurer to take up validly certain defences, the provision is to be read down so as to be in peace and harmony with the object and purpose of the Legislation. Indeed it has been done so by interpreting the word 'breach' by the Apex Court by construing the same as not mere breach, but as 'wilful breach'. Similarly, Section 149 is to be construed when it comes to 'no fault liability' in such a fashion ultimately to subserve the principle of 'social justice'. Viewed in that perspective, the irresistible conclusion is that the liability under Section 140 being absolute, it shall not be scuttled by taking up any defence. However, this is not germane, albeit not wholly in appropriate, as the position is no more res Integra and is squarely covered by the judgment of the Apex Court in National insurance Co. Ltd.,(supra). The Apex Court has simply gone by the provisions of the Act nonetheless it is binding on us. It has been held that the insurer can take up the defence available to it under Section 149 of the Act even in respect of the claims under no fault liability. In other words, once the insurer is not liable under the policy for the fault liability for breach of any conditions mentioned therein, it is equally not liable in respect of no fault liability. In view of the judgment of the Apex Court, we have to invariably hold that the insurer can validly take the defence available under Section 149 of the Act even in respect of no fault liability. For the above reasons, we are unable to accept the view of the learned single Judge that the defence available under Chapter XI, or the breach of terms of policy cannot be invoked by the insurer in a claim under Section 140 of the Act. As far as this conclusion is concerned, we find no infirmity in the judgment under appeal. The result will be the same even if the last proposition which is in the nature of obiter laid down by the learned single Judge, is not approved.

19. To sum up, the burden is upon the insurer to prove that (1) the owner of the vehicle has committed not mere breach, but wilful breach of the conditions embodied in the policy (2) the insurer is liable under Section 149 of the Motor Vehicles Act to indemnify the owner of the vehicle involved in the accident who suffered a decree for both fault liability as well as no fault liability, and (3) the insurer can validly take the defence available under Section 149 of the Act not only in respect of fault liability, but also in respect of no fault liability.

20. In the result, all these Appeals fail and they are accordingly dismissed. Under the circumstances, no order as to costs.