FAO No.4550 of 2002 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.4550 of 2002 Date of Decision. 21.09.2010 The New India Assurance Company Limited, SCO 36-37, Sector 17-A, Chandigarh through its Regional Manager ......Appellant Versus Smt. Raj Rani wd/o Sh. Sohan Lal @ Sohan Singh son of Kashmir Singh and others ......Respondents Present: Mr. L.M. Suri, Senior Advocate with Mr. Neeraj Khanna, 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 point for consideration in the appeal is whether the insurer of an offending vehicle will be able to deny liability by the fact that at the relevant time when the accident took place, the vehicle had been stolen and the vehicle had been driven by some unknown person and perhaps by a person who had no driving licence. 2. The case is not res integra. For damage to the vehicle caused, the insurer had already satisfied the owner under the terms of policy for own damage. The Tribunal itself relied on a decision of the Bombay High Court that held the insurer liable in Shujaat Z. Dalal and another Vs. Muktabai Vitthal Lohar and others 1995 FAO No.4550 of 2002 -2- ACJ 865 (Bombay). Considering the claim from 3rd party perspective, the Tribunal said that the benefit flowing from statute for compulsory insurance cover cannot be whittled down, by relying on a decision of this Court in Muktiar Singh Vs. Kailasho Devi 2002 (1) ACJR 252 (P&H) and New India Assurance Company Limited Vs. Smt. Bhanwari Devi and others 2001 ACJR 632. 3. Examining the case from the point of view of the insured, all the statutory defences under Section 149(2) of Motor Vehicle Act, when the policy of insurance is proved, require proof of breach of terms of the policy by the insured. If the theft had taken place, without any fault of the insured, the insured will have no basis to complain of breach. Merely because the driver could not be traced is no ground to reject the claim of the 3rd parties, as held in Bishan Devi and others Vs. Sirbaksh Singh and another (1980) 1 SCC 273 . The Hon'ble Supreme Court was actually dealing with the contention of the insured that the vehicle had at the relevant time been stolen. In such a situation, it would not have been possible for the insurer to even prove whether the driver had a driving licence or not. Consequently, it could never be urged as a positive assertion that the insured had committed a breach. In National Insurance Co. Ltd. Vs. Nitin Khandelwal (2008) 11 SCC 259, this issue of insurer's liability for an accident after the vehicle was stolen was directly in consideration, when the complaint was that the vehicle had been used as a taxi, when it had been insured as a private vehicle. The Hon'ble Supreme Court said that breach of terms of policy is no defence to an insurer for a stolen vehicle. The insured's breach shall FAO No.4550 of 2002 -3- always be seen as pivotal to deny the benefit of indemnity to the insured. That was the philosophical underpinning in the decision in Skandia Insurance Co. Ltd. Vs. Kokilaben Chandravadan and others AIR 1987 SC 1184 when the Hon'ble Supreme Court fastened the liability on an insurer, when the authorized driver had gotten down from the vehicle, when some unauthorized person got into the vehicle and involved the vehicle in an accident giving rise to a 3rd party damage. 4. The case has been analyzed and dealt with by remarkable clarity of legal reasoning by the Tribunal Judge (Dr. Bharat Bhushan Parsoon) and the appeal by the insurance company is quite an unnecessary exercise. The appeal is frivolous and it is dismissed. (K. KANNAN) JUDGE September 21, 2010 Pankaj*