Civil Appeal Nos
153839 Of 1985
From the Judgment and Order dated 2541984 of the Bombay High Court in First Civil Appeal Nos 378 and 388 of 1980
SK Mehta for the Appellants
Jitendra Sharma for the Respondents
The Judgment of the Court was delivered by DESAI J
A monopoly successfully avoided its legally incurred liability on the wholly untenable ground
That is the scenario in these appeals
Oriental Fire and General Insurance Company Ltd a nationalised company having the monopoly of general insurance is the Fifth Respondent in the first appeal and the second respondent in the second appeal
It would be referred to and insurance company  hereinafter
An accident occurred on Praca de Jorge Barrete Road Margao on May 17 1976 around 1030 AM in which one Sita Gomes and her sister in law Ida Menezes were injured
Ida succumbed to her injuries and Sita Gomes recovered
The offending vehicle was a pick up van belonging to Ms Narcinva V Kamat a firm carrying on business at Margao Goa
The vehicle was insured with the insurance company
Two petitions claiming compensation came to be filed one by the heirs of Ida and the other by Sita
The Motor Accident Claims Tribunal Tribunal for short held that the driver of the van was responsible for the accident as the van was being driven at the relevant time rashly and negligently
The Tribunal awarded Rs 75000 as compensation to the heirs of Ida and Rs 3000 to Sita
In the proceedings before the Tribunal the Insurance Company appeared and contended that according to the terms of the contract of insurance as evidenced by the policy of insurance the vehicle can be driven either by a driver in the employment of the insured or with the permission of the insured by one who holds a valid driving licence
In respect of this contention the Tribunal framed issue Nos 7 and 8 in both the petitions in the following terms 954 7
Whether the respondent No 6 insurance company proves that there is no liability on them as the respondent No 2 Narcinva Kamat who was driving the vehicle involved in the accident was not holding any effective driving licence  8
Whether the respondent No 6 proves that under the provisions of Sec 95 of the Motor Vehicles Act and the policy in force their liability in any event is limited to the extent of Rs 50000 in all both in respect of this Claim Petition as well as other Claim Petition filed in the same Tribunal on account of the same accident being Claim Petition Nos
22 2376 filed in the Tribunal on account of the same accident
 The Tribunal answered both the issues in favour of the insurance company observing that at the time of the accident the vehicle was being driven by appellant No 2 the partner of the firm which was the owner of the vehicle and as the driver did not produce his driving licence it must be held that the driver did not have a valid driving licence
The Tribunal therefore concluded that in the absence of a valid driving licence there was a breach of the contract of insurance and the insurance company was absolved from the liability under the policy of insurance
The firm and its partner preferred two appeals before the Panaji Bench Goa of the High Court of Bombay
A Division Bench of the High Court agreed with the findings of the Tribunal and dismissed the appeals
Hence these appeals by special leave
The scope of the appeals is very limited
The appeals are by the firm owner of the vehicle which was involved in the accident and one of its partner who it was alleged was shown to be driving the vehicle at the time of the accident and while granting leave it was limited to the question whether both the Tribunal and the High Court were justified in holding that the insurance company was not liable to satisfy the award under the contracts of insurance
The undisputed facts are that the pick up van motor vehicle bearing No GDT 9510 belongs to the first appellant firm and 955 the second appellant is the partner of the firm
This vehicle was involved in an accident that occurred on May 17 1976 at around 1030 am
There is a concurrent finding that the vehicle was driven rashly and negligently by the partner who was then driving the vehicle and that in this accident Sita and Ida suffered injuries
Ida s injuries proved fatal
The amount of the compensation awarded in both the petitions is no more open to dispute
The question is whether the insurance company under the contract of insurance is liable to satisfy the award  Before the Tribunal and the High Court it was contended on behalf of the appellants that at the relevant time it was not appellant No 2 but one Pandu Lotlikar who was respondent No 4 before the Tribunal was driving the vehicle
It has been concurrently found that it was appellant No 2 who was driving the vehicle
The concurrent finding must be accepted as correct
Appellant No 2 is none other than the partner of the first appellant firm which is the owner of the vehicle
The High Court has extracted a term in the schedule of the policy of insurance pertaining to the pick up van which may be reproduced from the judgment of the High Court
Driver Any of the following a deleted in type b any other person provided he is in the Insured s employ and is driving on his order or with his permission
Provided that the person driving holds a licence to drive the Motor Vehicle or has held and is not disqualified for holding or obtaining such a licence
 We have reproduced this term from the judgment of the High Court because the learned counsel for the insurance company did not have a copy of the policy of the insurance nor the one was shown from the record
Of course the Tribunal records that the vehicle was insured as a private carrier and this was culled out from the claim form submitted on October 141976
It is produced at Ext
One Jaimo Albert was examined on 956 behalf of the insurance company
He was shown Ext 29 which was identified as a copy of the policy of insurance issued by the insurance company in favour of the first appellant
He admitted that it was a comprehensive policy meaning thereby that the insurance company would be liable to satisfy the claim of damage arising out of the use of the vehicle
He does not speak of any other term of the contract of insurance
Now would the insurance company be discharged from the liability under the contract of insurance if as contended by it at the relevant time appellant No 2 was driving the vehicle
Appellant No 2 is the partners of the firm
All the partners of the firm if they have a valid driving licence would be entitled to drive the vehicle
Each partner of the firm is an agent of the firm as well as the other partner as provided by Sec 18 of the Partnership Act
Every partner is entitled to attend diligently to his duties in the conduct of the business as provided in Sec
12 of the Partnership Act
26 provides that where by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm or with the authority of his partners loss or injury is caused to any third party or any penalty is incurred the firm is liable therefor to the same extent as the partner
A conspectus of these provisions shall show that where the pick up van belonging to the firm is being driven by a partner it can be said that it is done with the permission of the owner namely the firm or with its implied authority
The next question is whether the partner had a valid driving licence at the relevant time
Unfortunately while dealing with this aspect of the case both the Tribunal and the High Court fell into an error which resulted in giving a clean chit to the insurance company
It is admitted that this pick up van could be used as a private carrier
It is also admitted that the insurance company had issued a comprehensive insurance policy in respect of this van and at the relevant time it was in force  It is contended on behalf of the insurance company that the second appellant did not have a valid driving licence
It is the insurance company which complains that there has been a breach of one of the important terms of the contract of insurance as evidenced by the policy of insurance the whole of which was 957 not shown to us and that the second appellant who was shown to be driving the vehicle at the relevant time did not have a valid driving licence to drive the pick up van
The insurance company complains of breach of a term of contract which would permit it to disown its liability under the contract of insurance
If a breach of a term of contract permits a party to the contract to not to perform the contract the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract
The test in such a situation would be who would fail if no evidence is led
The language and the format in which issues Nos 7 and 8 have been cast by the Tribunal clearly casts the burden of proof on the insurance company
Not an iota of evidence has been led by the insurance company to show that the second appellant did not have a valid driving licence to drive the vehicle
Mr J Sharma learned counsel who appeared for the appellant urged that a question was asked in the cross examination of the second appellant whether he would produce his driving licence and that as he failed to produce the same an adverse inference must be drawn against him that he did not have a valid driving licence
The High Court has recorded a finding in this behalf which may first be extracted in its own words Mr Cardoso s contention proceeds on a misreading of clause b indented above which brings to the forefront that the person driving the vehicle must be in the insurer s employ  and further being in such employment was driving the vehicle on the order of the insurer or with his permission
In this case the very first premise is missing for the simple reason it is not even the second P appellant s case that he was every in the employment of the first appellant firm but was at all material times a partner thereof
Even if the first appellant held a valid driving licence clause b would not absolve him from liability for payment if the van had been driven by him at the relevant time
 The High Court took no notice of the fact that the van belonged to the firm and every partner for that reason would be the owner of the property of the firm because the firm is not a legal entity in the sense in which the company under the Com 958 panies Act has a juristic personality
Firm is a compendious name for the partners
And the High Court limited its enquiry to ascertain whether the first part of the condition is satisfied viz whether the driver was in the employ of the insurer
It completely overlooked the second clause that the driver appellant No 2 was driving with the permission of the insured the firm in this case
Two clauses are disjointed by a disjunctives or 
On a proper analysis and interpretation of the term of contract of insurance the insurance company cannot escape the liability if a the insured himself was driving the vehicle or b the driver is in the employment of the insurer and is driving on the order of the insurer or c he is driving with his permission
The words with his permission does not qualify the expression is in the insurer s employ 
The clause can be properly read thus any other person with insurer s permission  This ought to be so because a friend can always be permitted if he has a valid driving licence to drive a friend s car
If in every such situation where the person driving the vehicle is not shown to be the insurer himself or someone in his employment the contract of insurance would afford no protection and the insurance company having collected the premium would wriggle out of a loophole
Therefore the proper construction of this condition must be to read it as stated hereinbefore
Approaching the matter from this angle if appellant No 2 was driving the vehicle belonging to the firm it can be said to be by the insurer itself or with its permission
The last question is whether he had a valid driving licence
The High Court has not recorded a clear cut finding on this point
The finding of the Tribunal is more evasive then the one by the High Court
Mr Sharma did not dispute that the second appellant had driving licence
His grievance is that he having failed to produce the same when called upon to do so in the cross examination an adverse inference be drawn against him that he did not have a valid licence to drive a pick up van
The submission fails to carry conviction with us
The burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company
It could not be said to have been discharged by it by a mere question in cross examination
The second appellant was under no obligation to furnish evidence so as to enable the insurance company to wriggle out its 959 liability under the contract of insurance
Further the RT which issues the driving licence keeps a record of the licences issued and renewed by it
The insurance company could have got the evidence produced to substantiate his allegation
Applying the test who would fail if no evidence is led the obvious answer the insurance company
To some up of insurance company failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence
Once the insurance company failed to prove that aspect its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance
Accordingly both these appeals must succeed and are partly allowed
The award of the Tribunal as well as the judgment of the High Court are modified directing the Oriental Fire and General Insurance Co Ltd to satisfy the award with interest at 12 percent from the date of the accident till payment and full costs in favour of the original claimants
The full payment to satisfy the award shall be made within a period of two moths from today
APJ Appeals allowed


Summary:
In a road accident that took place two ladies were injured
One succumbed to her injuries
The offending vehicle was a pick up van belonging to a firm and was being driven by one of the partners
Two claim petitions were filed one by the heirs of the deceased and the other by the injured
The Motor Accident Claims Tribunal held that the van was being driven at the relevant time rashly and negligently
The Tribunal awarded Rs 75000 as compensation to the heirs of the deceased and Rs 3000 to injured
Before the Tribunal the Insurance company contended that according to the terms of the contract of insurance as evidenced by the policy of insurance the vehicle can be driven either by a driver in the employment of the insured or with the permission of the insured by one who holds a valid driving licence
The Tribunal found that at the time of the accident the vehicle was being driven by appellant No 2 the partner of the firm which was the owner of the vehicle and as the driver did not produce his driving licence held that the driver did not have a valid driving licence and in the absence of a valid driving licence there was a breach of the contract of insurance and the insurance company was absolved from the liability under the policy of insurance
A Division Bench of the High Court confirmed the findings of the Tribunal and dismissed the appeals by the firm and its partners
On the question whether the insurance company under the contract of insurance is liable to satisfy the award partly allowing the appeals  HELD 1
The insurance company has failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence
Once the insurance company failed to prove that aspect its liability under the contract of insurance remains 952 intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance
959B D 2
The award of the Tribunal as well as the judgment of the High Court are modified
The Insurance Company is to satisfy the award with interest at 12 per cent from the date of the accident till payment
959D E 3
Where the pick up van belonging to the firm is being driven by a partner it can be said that it is done with the permission of the owner of the firm or with its implied authority
956E While dealing with the question whether the partner had a valid driving licence at the relevant time both the Tribunal and the High Court fell into an error which resulted in giving a clean chit to the insurance company Admittedly this pick up van could be used as a private carrier and the insurance company had issued a comprehensive insurance policy in respect of this van and at the relevant time it was in force
946E G 5
If a breach of a term of contract permits a party to the contract to not to perform the contract
the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract
The test in such a situation would be who would fail if no evidence is led
957B C In the instant case not an iota of evidence has been led by the insurance company to show that the second appellant did not have a valid driving licence to drive the vehicle
The High Court took no notice of the fact that the van be
longed to the firm and every partner for that reason would be the owner of the property of the firm
It limited its enquiry to ascertain whether the driver was in the employ of the insurer
It completely overlooked the fact that the driver appellant No 2 was driving with the permission of the insured the firm in this case
957C H 951A B 6
On a proper analysis and interpretation of the term of contract of insurance the insurance company cannot escape the liability if a the insured himself was driving the vehicle or b the driver was in the employment of the insurer and was driving on the order of the insurer or not being in such employment was driving under order of the insurer or c with his permission
958B C 7
The burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company
It could not be said to have been discharged by it by a more question in cross examination
The second appellant was under no obligation to furnish evidence so as to enable the insurance company to riggle out its liability under the contract of insurance
Further the RTA which issued the driving licence keeps a record of the licences issued and renewed by it
The insurance company could have got the evidence produced to substantiate his allegation
Applying the test who would fail if no evidence is led the obvious answer is the insurance company
958G H 959A 953