Judgment :- 1. The plaintiff which is an insurance company, hereinafter called the insurer is the appellant. It filed a suit against the defendant hereinafter called the ‘Insured’ for recovery of a sum of Rs. 6000 in the following circumstances. The defendants lorry MDY 2575 was insured with the insurer for third party risk. The defendants employee, the driver of the lorry, caused the death of two boys by his rash and negligent driving. The parents of the boys filed a petition for compensation before the Motor Acci dents Claims Tribunal, which awarded a compensation of Rs. 8000 as against the insurer) The insurer who was a party to the proceedings before the Tribunal took the matter in appeal to the High Court, C.M.A. No. 237 of 1963, impleading not only the claimants but also the defendant as respondents. In that appeal before the High Court the insurer arrived at a compromise with the claimants and settled the claim at Rs. 6000 as against Rs. 8000 awarded by the Tribunal. Thereafter the said amount of Rs. 6000 was paid by the insurer to the claimants After payment, the insurer filed the suit against the defendant for reimbursement of the said amount of Rs. 6000 on the basis that under the terms of the policy, the insurer is not liable to pay the amount. The said suit was resisted by the defendant on more than one ground. He contended that no amount was payable as compensation to the claimants as the driver of the lorry was acquitted by the criminal court on the ground that there was no rash and negligent driving on his part, and that the decision of the Motor Accidents Claims Tribunal was erroneous. When the insurer filed an appeal before the High Court against the award given by the tribunal, be engaged a separate lawyer to represent his case but instead of prosecuting the appeal the insurer settled the claim without his knowledge and behind his back. He therefore alleged that in any event the payment having been made in pursuance of a settlement, reimbursement cannot be claimed from him. Further he stated that the reimbursement claimed is not in accordance with the terms of the policy. 2. He therefore alleged that in any event the payment having been made in pursuance of a settlement, reimbursement cannot be claimed from him. Further he stated that the reimbursement claimed is not in accordance with the terms of the policy. 2. The trial court, in the main, considered the following three matters—(1) whether the accident resulting in the death of the two boys was due to rash and negligent driving of the lorry, (2) whether the settlement of the claim between the insurer and the claimants was binding on the defendants and (3) whether the insurer is entitled to the reimbursement claimed. So far as the first two matters are concerned, the trial court found that the defendant not being a party to the compromise entered into between the insurer and the claimants in the High Court in C.M.A. No. 257 of 1963, neither the finding given by the tribunal that the accident was caused due to the rash and negligent driving of the lorry by the driver nor the terms of the compromise are binding on him. On the question whether the insurer is entitled to get reimbursement of the sum of Rs. 6000 paid to the claimants in pursuance of the settlement before the High Court, the trial court took the view that the insured is entitled to get reimbursem ent of the amount in view of the following special clause found in the policy, Ex. B-6. The clause in Ex. B-6 relied on by the trial court runs as follows— “Nothing in this policy or any endorsement herein shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the Motor Vehicles Act, 1939, S. 96. But the Insured shall repay to the company all sums paid by the company which the company would not have been liable to pay but for the said provisions”, The trial court has taken the view that the liability of the insurer has arisen by virtue of S. 96 of the Motor Vehicles Act, 1939, that but for that section the insurer would not have been made liable to pay the sum of Rs. 6000 to the claimants and therefore, by virtue of the above clause in the policy which provides that the insured shall repay to the insurer all sums paid by the latter which it could not have been liable to pay but for S. 96, the insurer is entitled to recover the suit sum. 3. On appeal, however, the lower appellate court took a different view. Before the lower appellate court it was contended by the defendant (insured) that the trial court having found that the settlement during the pendency of the appeal in the High Court was arrived at behind the back of the insured, should have dismissed the suit and that instead of doing so, the trial court on an erroneous interpretation of the Motor Vehicles Act, as also the various clauses in the policy erred in decreeing the suit. The lower appellate court, therefore, proceeded to consider the only question whether the insurer is entitled to invoke the reimbursement clause referred to above in the policy and recover the amount paid by it to the claimants. After referring to the various sub-sections of S. 96 as also the terms of the policy, it took the view that the insurer is not entitled to claim reimbursement. The insurer questions the view taken by the lower appellate court. 4. From what has been stated above, it will be clear that the question before this court relates to the construction to be placed on the said reimbursement clause found in the policy. The clause in question provides that nothing in the policy or any endorsement therein will affect the right of the person indemnified by the policy or a third party to recover an amount under or by virtue of S. 96 of the Motor Vehicles Act. But the insurer is given the right to recover all sums paid to the person indemnified by the policy or any third party if it would not have been made liable to pay but for S. 96 of the Motor Vehicles Act, We have to therefore find out the scope of S. 96 of the Motor Vehicles Act. 5. Chapter VIII of the Motor Vehicles Act deals with insurance of motor vehicles against third party risk. 5. Chapter VIII of the Motor Vehicles Act deals with insurance of motor vehicles against third party risk. S. 94(1) of the Act prohibits the use of any motor vehicle in a public place by the owner or any one on his behalf unless there is in force an insurance policy as required by the provisions of that chapter. S. 95 provides for the requirements of such insurance policies and the limits of liability. S. 95 (1)(b) provides that the insurance policy contemplated by S. 94(1) must be one which insures the person or classes of persons specified in the policy to the extent specified in sub-S. (2) against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused or arising out of the use of the vehicle in a public place. Sub-S. (2)(a) of S. 95 provides a limit of Rs. 20,000, in all in respect of death of, or bodily injury to, employees (other than the driver) not exceeding six in number. S. 95(4) provides for the issue of a certificate of insurance in the prescribed form containing particulars of any conditions subject to which the policy is issued. S. 95(5) makes the insurer liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or classes of persons. S. 96 enjoins the insurers to satisfy judgments against persons insured in respect of third party risks. Sub S. (1) of S. 96 provides that the insurer is bound to pay to the person entitled to the benefits of a decree he obtains in respect of any liability covered by the terms of the policy against any person by the policy irrespective of the fact that the insurer was entitled to avoid or cancel or might have avoided or cancelled the policy. This means that once the Insurer has issued a certificate of insurance in accordance with S. 95(4) he has to satisfy any decree obtained against the insured person in respect of injuries or death caused by the use of the vehicle. This means that once the Insurer has issued a certificate of insurance in accordance with S. 95(4) he has to satisfy any decree obtained against the insured person in respect of injuries or death caused by the use of the vehicle. But the insurer will be liable to satisfy the decree only when it has been served with a notice under S. 96(2) of the Motor Vehicles Act about the proceedings in which the decree was obtained. Sub-s. 3 of S. 96 states that where a certificate of insurance has been issued under S. 95 (4) by the insurer to a person by whom a policy has been effected, all restrictions and conditions other than those in Cls. (b) of Sub-s. (2) of S. 96 contained in the policy shall, to the extent of the liability covered by the policy be void and of no effect. The proviso to the said Sub-s.(3) is as follows— “Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section, shall be recoverable by the insurer from that person”. S. 96 (4) provides that if the amount for which the insurer becomes liable under S. 96 in respect of a liability incurred by the insured exceeds the amount for which the insurer could apart from the provisions of S. 96 be liable under the policy in respect of that liability the insurer will be entitled to recover the excess from the insured. It is in the light of these provisions we have to consider the entitle meat of the insurer to get reimbursement from the insured of the amount which the former has paid in respect of the third party risk. 6. The learned counsel for the appellant insurer contends that under the said clause all sums paid by the insurer to third parties can be recovered from the insured as the third party risk has been undertaken by the insurer only by virtue of S. 96 of the Motor Vehicles Act and that but for S. 96 the insurer would not have been made liable to pay any compensation to the claimants. But a closure scrutiny of the relevant provisions of Chap. VIII of the Motor Vehicles Act will show that the contention of the learned counsel for the appellant is not tenable. But a closure scrutiny of the relevant provisions of Chap. VIII of the Motor Vehicles Act will show that the contention of the learned counsel for the appellant is not tenable. A conjoint reading of Ss. 94 to 96 indicates that S. 96 by itself does not create a liability to be discharged by the insurer in respect of claims against the parties. As a matter of fact, the Act itself does not directly create such a liability but it merely enjoins that the owner of the Motor Vehicles should have the vehicle insured as per the terms of S. 95(1)(b) which provisions in its turn provides that the insurance policy should also caver risks against third parties. So the liability to third parties is required to be covered by a policy under S. 95(1)(b) though the liability is in fact covered by the terms of the policy. S. 96(1), however, with a view to protect the rights of third parties, provides that the insurer is bound to indemnify the insured so far as his liability to third parties is concerned as per the policy issued, even though the insurer was entitled to avoid or cancel or might have avoided or cancelled the policy for breach of certain restrictions, conditions and limitations contained therein. For effectuating the said object all restrictions, conditions and limitations contained, in the policy other than those in S. 96(2)(b) are made invalid and ineffective by sub. s: (3) as regards the insured liability to third parties. But the proviso to S. 96(3) enables the insurer to recover the amount which it had been made to pay to third parties merely by virtue of that sub-section. The relevant reimbursement clause in the policy which is to be considered in this case is similar to the said proviso. Since the said clause refers to the liability imposed by S. 96 it has to be ascertained in what circumstances the insurer is made liable to meet the claim from third parties, though under the terms of the policy the insurer may be able to avoid such a claim. 7. It is not in dispute in this case under Cl. Since the said clause refers to the liability imposed by S. 96 it has to be ascertained in what circumstances the insurer is made liable to meet the claim from third parties, though under the terms of the policy the insurer may be able to avoid such a claim. 7. It is not in dispute in this case under Cl. (1) of the Policy Ex-6, the insurer is liable to indemnify the insured in respect of third party risks It is not the case of the insurer that it had avoided or cancelled the policy for breach of any of the conditions, restrictions or limitations therein, Sec. 96(1) directs that the insurer is bound to satisfy the judgments rendered against the insured in respect of third party risks even though the insurer may be entitled to avoid or cancel or might have avoided or cancelled the policy. The section would come into play only if the insurer is not liable to meet the claim of the third party under the terms of the policy either because the policy has been avoided or cancelled or because of the infringement of the terms of the policy. The object of this section is to keep the liability of the insurer as regards third parties under the policy, in fact, whatever might happen as between the insurer and the insured subsequent to the issue of the policy. Therefore, S. 96 can be said to make the insurer liable to third parties only in cases where the policy has been avoided for breach of its terms as a result of which the insurer is not liable to meet the claim of third parties, but not in a case where under the terms of the policy itself which was current or the date of the accident the insurer is liable. The proviso to Sec. 96(3) seems to make the position clear It gives a right of recovery to the insurer only in cases where sub-sec. (3) stands in the way of the insurer relying on the restrictions, limitations and conditions imposed by the terms of the policy. The right of recovery contemplated by that proviso cannot be invoked in a case where sub-sec. (3) is not sought in aid to impose a liability against the insurer. (3) stands in the way of the insurer relying on the restrictions, limitations and conditions imposed by the terms of the policy. The right of recovery contemplated by that proviso cannot be invoked in a case where sub-sec. (3) is not sought in aid to impose a liability against the insurer. Similarly, the reimbursement clause in the policy in question gives a right of recovery only in cases where the insurer is made liable in respect of third party risks by virtue of S. 96 alone and not under the terms of the subsisting policy Ordinarily, the insurer will not pay any amount under the policy, if there is a breach or infringement of the terms of the policy. But by virtue of Sec. 96 (i) the insurer will have to meet the claims of third parties given in such a case, though the amount so paid can be recovered from the insured. Thus the right of recovery contemplated by the clause in question to cases where the insurers liability arises only because of Sec. 96 is not restricted and will not apply to cases where the liability arises under the terms of the policy itself without the aid of the said section. Therefore, the interpretation sought to be placed by the learned counsel for the insurer on the clause above referred to, cannot, in my view, be sustained. As already stated, it is under the terms if the policy, the insurer has been made liable to third party in this case and S. 96 of the Motor Vehicles Act has not been invoked for imposing the liability. The view taken by the lower appellate court has, therefore, to be upheld. The result is the second appeal fails and is dismissed. No costs. No leave.