MOHAMED ANWAR, J. ( 1 ) THIS appeal is filed by Karnataka state road transport corporation, Bangalore ('the k. s. r. t. c' in short) against the judgment and award dated 23. 8. 95 of the m. a. c. t. , kolar ('the tribunal' in short) made in m. v. c. No. 409 of 1992 granting total compensation of Rs. 3,85,000 with interest at 6 per cent per annum to the petitioners-claimants, who are respondent nos. 1 and 2 (r-1 and r-2) herein, on account of the accidental death of deceased balakumar bansal. The deceased was the only son of the claimants. He succumbed to the fatal injuries caused to him in the motor accident occurred on 29. 8. 1992 when the car (taxi) bearing No. Ctr 505 belonging to r-3 geetha (who was r-l in the claim petition) in which he was travelling as a paid passenger from Bangalore to kolar, dashed against an oncoming k. s. r. t. c. Passenger bus No. Ka 07-f79, at about 2. 00 p. m. Near arbaikothanur gate on national highway No. 4. He was unmarried and was aged about 28 years as per exh. P-4, post-mortem report. He was working as a marketing executive in hoechst India ltd. And was getting the gross salary of about Rs. 6,000 per month. It is a matter of record that he had two unmarried dependent sisters. Considering the prospects of increase in his salary in future and taking into account the relevant factors, the annual dependency loss suffered by his parents-claimants was assessed by the tribunal at Rs. 36,000 and the same was quantified with the multiplier of 10 depending upon their ages 47 years and 43 years respectively, and thereby the total dependency loss was assessed at Rs. 3,60,000. With further grant of conventional amounts under the admissible heads, the total compensation of Rs. 3,85,000 had been granted to the claimants by the tribunal under its award impugned herein. The adequacy of compensation is not in dispute before us. ( 2 ) R-3 geetha and r-4 oriental insurance co. Ltd. (who were r-l and r-2 respectively, in the claim petition) were admittedly the owner and insurer of the said car No. Ctr 505 at the material time. The adequacy of compensation is not in dispute before us. ( 2 ) R-3 geetha and r-4 oriental insurance co. Ltd. (who were r-l and r-2 respectively, in the claim petition) were admittedly the owner and insurer of the said car No. Ctr 505 at the material time. On consideration of the material evidence obtainable on record, the tribunal has recorded its finding that the accident occurred at the middle of the public road due to head-on collision of the said two vehicles as a result of their negligent driving by their drivers. Therefore, the liability for causing this accident has been equally apportioned between them, i. e. , in the ratio of 50:50. The correctness of this finding is challenged by the appellant. ( 3 ) IT has come in evidence on record that one amaregowda was the original owner of the said car and exhs. P-1 and p-2 are the cover note and the insurance policy which were duly issued by r-4 insurer with respect thereto with risk coverage for the period from 27. 11. 91 to 26. 11. 92. That car was sold by amaregowda to one thimmanna and accordingly the said policy was duly transferred by r-4 in favour of the former (buyer) with effect from 4. 5. 92. Exh. P-6, r. c. Of the said car indicates that it was registered as a private car for use of the owner. So also the insurance was taken out under exhs. P-l and p-2 for it as 'private car'. The purchaser thimmanna, in turn, sold the car to r-3 geetha on 30. 5. 92, who got the said insurance policy transferred in her favour with effect from 3. 7. 1992. On the same date, i. e. , 3. 7. 1992, she got the said car converted into luxury taxi from a private car and had the same so indicated in exh. P-6, r. c. , without getting this change correspondingly effected in its said insurance policy. So, the insurance of this car which was effected by r-4 insurer under its cover note and policy, exhs. P-l and p-2, as a 'private car' continued as such in favour of r-3 geetha also, although she got it converted into a taxi, i. e. , 'public service vehicle', with the registering authority. Thus, when the car met with the accident on 29. 8. P-l and p-2, as a 'private car' continued as such in favour of r-3 geetha also, although she got it converted into a taxi, i. e. , 'public service vehicle', with the registering authority. Thus, when the car met with the accident on 29. 8. 92, it was, admittedly, being plied as a taxi and was carrying the deceased balakumar bansal in it as a passenger for hire. The use of this car as a taxi was in breach of the condition in the insurance policy, exh. P-2 by which its use by the insured owner was restricted only for private use and its use for hire or reward was expressly prohibited. The relevant part of the condition stated in exh. P-2 under the heading 'limitations as to use' is as extracted below: "the policy does not cover use for hire or reward. . . " further, under the heading 'general exceptions' this prohibition is made still clear in the following terms:"the company shall not be liable under this policy in respect of (1) xxx xxx xxx (2) xxx xxx xxx (3) any accident, loss, damage and/or liability caused, sustained or incurred whilst any motor car in respect of or in connection with which insurance is granted under this policy is (a) being used otherwise than in accordance with the limitations as to use or (b) xxx xxx xxx" ( 4 ) IN view of this condition in the policy, the tribunal has concluded that the use of the car as a taxi was in clear breach thereof and, therefore, its insurer, r-4, cannot be held liable to indemnify the insured owner, r-3 geetha. With this finding, the petition against r-4 is dismissed by the tribunal and it has fastened the liability to pay the compensation on the appellant and r-3 owner of the car, jointly and severally. The present appeal is filed by the k. s. r. t. c. Challenging this finding of the tribunal also. ( 5 ) THE learned counsel for appellant, mrs. Prabha murthy, strenuously argued attacking the validity of the above stated two findings of the tribunal. We have gone through the evidence on record. ( 6 ) ADMITTEDLY, the said bus was a nonstop bus, which was plying from kolar to Bangalore with its passengers. It was being driven by rw 2. Prabha murthy, strenuously argued attacking the validity of the above stated two findings of the tribunal. We have gone through the evidence on record. ( 6 ) ADMITTEDLY, the said bus was a nonstop bus, which was plying from kolar to Bangalore with its passengers. It was being driven by rw 2. Pw 2, an eyewitness, has simply stated that he witnessed the said two vehicles coming in opposite directions being driven at a high speed and dashing against each other on the road. Rw 2's rebuttable evidence is to the effect that he had stopped the bus at the spot behind another k. s. r. t. c. Bus and that the said taxi came in the opposite direction after overtaking a lorry in front of it and dashed his bus and thus the accident occurred. It is not in dispute that in that accident, the taxi driver and the deceased balakumar bansal both died at the spot. The deceased car driver was charge-sheeted by the police. The chargesheet papers cannot be stated as material evidence on record for just decision of the issue of negligence. On the other hand, as rightly considered by the tribunal, exh. P-5 report of the motor vehicle inspector who inspected both the damaged vehicles at the spot and, exh. P-3 spot panchnama prepared by the police during investigation, is the most important material dependable documentary evidence which throws abundant light in regard to the manner of the accident. They are undisputed documents. Their contents are considered in detail by the tribunal. The description in exh. P-3 of the actual spot of accident shows that it was located at the middle of the road. Considering this fact and the standstill relative position of the offending vehicles on the road, as also the parts of the vehicles which were found damaged, we are of the considered view that the tribunal is perfectly justified in its finding that the accident occurred due to contributory negligence of the drivers of both vehicles and, therefore, they are equally liable in causing the same. In that view of the matter, we do not find any force in the appellant's objection against this finding of the tribunal. In that view of the matter, we do not find any force in the appellant's objection against this finding of the tribunal. ( 7 ) ADVERTING to the next objection of the appellant as regards exemption of r-4, insurer of the car from its liability, the only question that calls for decision is: whether the tribunal is legally correct in absolving the insurer of its liability by reason of the user of the car as a taxi in breach of the condition of the insurance policy? Exhs. P-l and p-2 are the undisputed material insurance documents. As indicated, the insurance for the said ambassador car No. Ctr 505 was taken out by its original owner k. Amaregowda as a 'private car' for the period from 27. 11. 91 to 26. 11. 1992. Exh. P-2 policy stood duly transferred with effect from 3. 7. 1992 in favour of its purchaser r-3 geetha, with the aforesaid condition therein relating to 'limitations as to use', that "the policy does not cover use for hire or reward. . . ". By this policy condition, the use of the car in question for 'hire or reward' was prohibited since its insurance thereunder was got effected by the owner thereof only as a 'private car' and not as a 'taxi' or a 'public service vehicle' as defined in the Motor Vehicles Act, 1988 ('the new act' for short) as any motor vehicle used or adopted to be used for the carriage of passengers for hire or reward, and includes a maxi cab, a motor cab, contract carriage or stage carriage. In the case in hand admittedly, the registration of the said private car No. Ctr 505 with the concerned regional transport authority was got changed by its insured owner r-3 geetha as a 'luxury taxi', i. e. , 'public service vehicle' with effect from 3. 7. 1992, but without getting this change effected in its exh. P-2 insurance policy also. Therefore, it remains as an undisputed fact that when the said car met with an accident on 29. 8. 1992 resulting in the death of the deceased, it was being used as a 'public service vehicle' carrying the passengers for hire or reward. 7. 1992, but without getting this change effected in its exh. P-2 insurance policy also. Therefore, it remains as an undisputed fact that when the said car met with an accident on 29. 8. 1992 resulting in the death of the deceased, it was being used as a 'public service vehicle' carrying the passengers for hire or reward. ( 8 ) IN that view of the matter, the only material point which needs to be decided is whether an insurer could successfully avoid its liability in law under the impugned award by pleading the defence that the car was used in breach of the said policy condition. The complete answer to this question could be found in sub-section (2) of Section 149 of the new act. Section 149 enjoins a duty on the insurer to satisfy the judgment and awards of the tribunal made against an insured person in respect of third party risk. There cannot be any doubt about the deceased passenger of the car being a third party to the contract of insurance at exh. P-2 between the insurer r-4 and the insured r-3, for the purpose of insurer's liability. [see New India Assurance Co. Ltd. V. H. Siddalinga Naika, 1985 ACJ 89 (karnataka)]. More so, when there is no express provision either in the act or under the terms and conditions of exh. P-2 stipulating that a passenger of the vehicle cannot be treated as a 'third party' in respect of the rights and liabilities of the parties arising under exh. P-2 policy. Subsection (2) of Section 149 is engrafted as an exception to the statutory liability of the insurer to indemnify the insured against third party risk, which permits the insurer to defend its liability to pay compensation only on certain grounds set out under this provision. One of these grounds which is material for our purpose is embodied in sub-clause (a) (i) (a) of Section 149 (2) which prohibits the use of the vehicle in breach of the above stated condition as a valid ground of defence by an insurer to resist its liability. This provision reads:"149. Duty of insurers to satisfy judg' merits and awards against persons insured in respect of third party risks. (1) xxx xxx xxx (2) no sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless,. . . This provision reads:"149. Duty of insurers to satisfy judg' merits and awards against persons insured in respect of third party risks. (1) xxx xxx xxx (2) no sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless,. . . the insurer had notice through the court. . . ; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely: (i) a condition excluding the use of the vehicle (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) xxx xxx xxx" (emphasis supplied) from a plain reading of the relevant Provisions, it becomes manifest that the insurer could successfully avoid its liability to pay compensation to the claimants under its 'act only policy' only when the following legal requirements are satisfied: (1) that the statutory defence ground provided under Section 149 (2) (a) (i) (a) was specifically included in the policy as it is, as a condition of the policy, and (2) that the insured vehicle had no valid permit under the act for its use for hire or reward as on the date of contract of insurance. Therefore, in the instant case, let us find if the relevant condition in exh. P-2 policy quoted at para 2 (supra) prohibiting use of the insured car for hire or reward fulfils these requirements. ( 9 ) AS could be seen from contents of exh. P-2, the said policy condition simply states: "the policy does not cover use for hire or reward" and nothing more. It covers only one part of the statutory condition, since it omits further part thereof that liability of insurer would not arise if the car had no valid permit for its use as a taxi. P-2, the said policy condition simply states: "the policy does not cover use for hire or reward" and nothing more. It covers only one part of the statutory condition, since it omits further part thereof that liability of insurer would not arise if the car had no valid permit for its use as a taxi. As could be seen from the provision under Section 149 (2) (a) (i) (a), the insurer would not be entitled to avoid its liability on the plea of breach of such a condition as is contained in the policy if the insured vehicle involved in the accident was found to be covered by a valid permit on the date of the accident. Therefore, Section 149 (2) (a) makes it imperative for exclusion of insurers on this ground of statutory mandate that whole of this provision must be contained as a condition in the policy limiting the use of the vehicle. The fact that the condition in exh. P-2 policy does not fully conform to this mandatory requirement of law, the appellant insurer cannot be permitted to take this plea and contend that it is not liable to indemnify the insured r-3 and pay compensation to the claimants under the impugned award. ( 10 ) NEXT, assuming for the sake of argument that the condition stated in Section 149 (2) (a) (i) (a) was also the condition of the policy, in its entirety, then the question would be, whether the second requirement of law for the insurer to avoid its liability has been satisfied. It is an undisputed fact that the said car bearing No. Ctr 505 was originally registered with the concerned transport authority as a private car, i. e. , for private use and its insurance under exh. P-2 policy was also got so effected by its original owner k. Amaregowda, and that the transfer of that policy was duly effected by r-4 insurer in favour of r-3 geetha with effect from 3. 7. 92. It is also an admitted fact that on the very date, i. e. , 3. 7. 92, the purchaser geetha got the said 'private car' converted into a 'taxi', i. e. , public service vehicle within the meaning of section 2 (35) of the new act to ply it for hire or reward. Therefore, when the car subsequently met. With the accident on 29. 8. 7. 92, the purchaser geetha got the said 'private car' converted into a 'taxi', i. e. , public service vehicle within the meaning of section 2 (35) of the new act to ply it for hire or reward. Therefore, when the car subsequently met. With the accident on 29. 8. 92, it was plying as a taxi under a valid permit. The crucial question which, therefore, arises for determination of insurer's liability is: whether by reason of the insured geetha getting the valid permit to ply the said car as a taxi on and with effect from 3. 7. 1992, and simultaneously getting the transfer of insurance policy, exh. P-2, also effected in her favour, could it be stated and held that the car was covered by a permit to ply for hire or reward as on the date of policy, i. e. , the contract of insurance between the parties. ( 11 ) SECTION 10 of the Indian Contract Act states that all agreements are contracts if they are made by free consent of parties competent to contract for lawful consideration and with lawful object and which are not expressly declared to be void under the act. As a general principle of contract, a person would be entitled to rights and subject to the liability under a lawful contract only from the time he becomes a party to it. In the case in hand, r-3 purchaser geetha could be stated as having become a formal party to exh. P-2 on and with effect from the date 3. 7. 92 on which date it was actually transferred in her favour although by fiction of law created by Section 157 of the new act with the main object to protect the interest of victims of accident, the policy exh. P-2 taken out by original owner of the car shall be deemed to have been transferred in favour of r-3 purchaser from the date of its (car's) transfer, i. e. , 30. 5. 92. Prior to 3. 7. 1992 for all legal purposes, she was not a party to exh. P-2. Therefore, by strict legal sense of the term 'contract', 'the contract of insurance' between her and r-4 insurer came into existence on and with effect from 3. 7. 92. Hence, it could be safely held that as regards r-3 purchaser geetha, the actual date of exh. 7. 1992 for all legal purposes, she was not a party to exh. P-2. Therefore, by strict legal sense of the term 'contract', 'the contract of insurance' between her and r-4 insurer came into existence on and with effect from 3. 7. 92. Hence, it could be safely held that as regards r-3 purchaser geetha, the actual date of exh. P-2 contract of insurance was 3. 7. 1992 and that the said insured car being covered by the valid permit for its use as a taxi, i. e. , public service vehicle, the defence to the insurer under clause (a) (i) (a) of Section 149 (2) would not be available. In that view of the legal position, the use of the car by the insured r-3 as a taxi in breach of the said policy condition will not absolve the insurer of its liability to indemnify the insured against third party risk. Therefore, the finding of the tribunal to the contrary is legally incorrect and has to be reversed. To this extent, the appeal deserves to be allowed. ( 12 ) HENCE, for the reasons aforesaid, the appeal is allowed holding r-4 insurer also liable along with r-3 insured to pay to the respondents-claimants the compensation in terms of the award under appeal. The impugned award shall stand modified accordingly. Appeal allowed. --- *** --- .