KASHIRAM YADAV & ANR. versus ORIENTAL FIRE & GEN. INSURANCE CO. & ORS.

Citation: [1989] 3 S.C.R. 811 · Decided: 10-08-1989 · Supreme Court of India · Bench: K. JAGANNATHA SHETTY · Disposal: Dismissed

Judgment (excerpt)

KASHIRAM YADAV & ANR. 
v. 
ORIENTAL FIRE & GEN. INSURANCE CO. & ORS. 
AUGUST 10, 1989 
[K. JAGANNATHA SHETTY AND A.M. AHMADI, JJ.) 
Motor Vehicles Act, 1939: Sec. 96-Fatal accident caused by 
unlicensed driver-Compensation awarded-Insurance company-
Whether liable to indemnify owner of vehicle. 
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A Constable while returning home after performing his duties was 
knocked down by a tractor owned by appellant No. I, and driven by 
appellant No. 2 who had no driving licence. As a result or"the accident, 
the Constable died and his widow and children claimed compensation, 
before the Tribunal. 
Awarding a compensation of Rs.96,000 the Tribunal held that at 
the time of the accident the vehicle belonged to appellant No. I and was 
driven by appellant No. 2, who had no driving licence, thatthe accident 
took place due to his rash and negligent driving, and appellant No. I 
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B 
c 
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-\ alone was liable to pay the compensation. 
E 
/ 
The appellant bas come in appeal, by special leave, contending 
1 that the insurer alone would be liable to pay the compensation amount, 
even though the tractor was not driven by a licensed driver. 
Dismissing the appeal, 
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HELD: I. Section 96 of the Motor Vehicles Act, 1939 imposes a 
duty on the insurer to satisfy judgments against persons insured in 
respect of third party ris~. Sub-section 2 thereof provides exception to 
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the liability of the insurer. Sub-sec. 2(b) of sec. 96 provides that the 
insurer is not liable to satisfy the judgments against the persons insured 
·if there has been a breach of a specified condition of the policy. One of 
. the conditions orthe policy specified under clause (ii) is that the vehicle 
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should not be driven by any person who is not duly licensed or by any 
person, who has been disqualified from holding or obtaining driving 
licence, during the period of disqualification. It is not in dispute that the 
. certificate of insurance c«ncerned in this case contains this condition . 
. If, therefore, there is a breach of this condition, the insurer will not be 
·liable to indemnify the owner. f8I3C-E) 
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811 
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812 
SUPREME COURT REPORTS 
[1989} 3 S.C.R. 
A 
2. In the present case, the onus of the insurer has been discharged 
from the evidence of the insured himself. The insured took a po>itive 
defence slating that he was not the owner of the vehicle since he had 
already sold the same lo a third party. This had not been proved. 
Secondly, he took a defence stating that the vehicle at the relevant time 
was driven· by a licensed driver. This was proved to be false. There is no 
B other material even to indicate that the vehicle was entrusted to the 
licensed driver on the date of the fatal accident. [8140-F} 
Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and 
Ors., [1987) 2 SCC 654, distinguished. 
) 
C 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2183 
of 1988. 
From the Judgment and Order dated 25.3.1988 of the Allahabad 
High Court in F.A.F.O. No. 951of1987. 
D 
N.D.B. Raju and N. Ganapathy for the Appellants. 
M.S. Ganesh and Murlidhar for the Respondents. 
The Judgment of the Court was delivered by 
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K. JAGANNATHA SHETTY, J. The question raised in this 
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appeal relates to the liability of the owner of an insured vehicle to pay 
compensation for the accident caused by negligence of an unlicensed 
driver. 
The facts which are now found are these. 
A constable while returning home after performing his duties· 
was knocked down by a tractor owned by appellant no. 1-Kashiram 
Yadav. Appellant No. 2-Raghuraj was then driving the tractor. He 
had no driving licence. The widow of the constable and her children 
claimed compensation from the appellants and the insurer. The owner 
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resisted the claim contending inter alia that he had already sold the 
vehicle to a third party and that vehicle was driven by the licensed 
driver Gaya Prasad at the time of the accident. Both these facts were l., 
not established. The Tribunal held that Raghuraj Singh was driving 
the tractor and the accident took place due to his rash and negligent 
driving and not due to any fault on the part of the constable. Since 
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Raghuraj Singh had no driving licence, the Tribunal held that the 
' 
. K.R. YADAV v. INSURANCE CO. ISHETIY, J.) 
813 
~ owner of the vehicle alone is liable to pay the compensation. Having A 
reached that conclusion, the Tribunal determined the amount of com-
pensation payable to the claimants. A sum of Rs.96,000 was awa

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