FAO No.3775 of 2001 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.3775 of 2001 Date of Decision. 30.08.2010 United India Insurance Co. Ltd., through Vijay Kapoor, Dy. Manager, Regional Office, Sector 17, Chandigarh ......Appellant Versus Munshi Ram son of Shri Goma Ram and others ......Respondents 2. FAO No.3776 of 2001 United India Insurance Co. Ltd., through Vijay Kapoor, Dy. Manager, Regional Office, Sector 17, Chandigarh ......Appellant Versus Jammu Ram son of Shri Chandi Ram and others ......Respondents Present: Mr. Manmohan, Advocate for Mr. Suman Jain, Advocate for the appellant. None for the respondents. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? -.- K. KANNAN J.(ORAL) 1. The insurance company is on appeal challenging the denial of recovery rights to the insurer in spite of a finding that the driver did not have a valid driving licence. This the Tribunal held was on account of the fact that the claim had been made under Section 163- A of the Motor Vehicles Act and in such a situation, the defences of the insurance company under Section 149 of the Motor Vehicles Act FAO No.3775 of 2001 -2- would get completely eclipsed. The reasoning, in my view, is wholly erroneous. Granting an entitlement to a claimant under a strict liability regime without having proof of negligence is a wholly different legislative scheme. To this extent, there has been a dilution of the liability principle involved in the law of torts. The liability on the insurer has to be seen through an instrument of contract and what the statute provides for through compulsory insurance under Section 147 of the Motor Vehicles Act to provide for protection to third parties. The liability of the insurer, therefore, would be to satisfy the claimant but in a case where the insured had committed a breach of terms of the policy by entrusting the vehicle to a person, who was not duly licenced, the right of recovery cannot be denied to the insurer for what is an enforcement of terms of the policy against its insured for the breach which he had committed. The sphere of operation of the entitlement under Section 163-A and the entitlement of an insurer to take up certain defences under Section 149 operate on two different fields. One does not eclipse the other. 2. The award of the Tribunal is, therefore, modified providing for a right of recovery against the insured only, consistent with its finding that the driver did not have a valid driving licence. 3. The appeals are allowed to the above extent. (K. KANNAN) JUDGE August 30, 2010 Pankaj*