ORDER P. Shanmugam, J.: The second respondent/Insurance company before the Motor Accidents Claim Tribunal is the appellant herein. 2. The brief facts of the case are stated below: A Matador Van bearing Registration No.GDR-1533, owned by one G. Ravi, the fourth respondent herein, was insured with the appellant Insurance company. On 27.7.1990 at 7 p.m. the said vehicle had a head-on collision with a lorry bearing Registration No.TNM-7380 belonging to one S.Sekar, the fifth respondent herein and insured with the sixth respondent Insurance company. On account of this accident, the following O.Ps. were preferred, the particulars of the claims made thereunder and the amount awarded by the Tribunal in its order dated 16.5.1996 made in the O.Ps. being given below: Sl. No. O.P.No. Amount claimed Towards (Rs.) Amount awarded (Rs.) 1. 234 of 1995 51,21,000 Death of one Mangalal Vayani by his L.Rs. 21,61,965 2. 235 of 1995 2,00,000 Injures sustained 84,000 3. 236 of 1995 2,50,000 Injures sustained 80,000 4. 237 of 1995 2,00,000 Injures sustained 84,000 5. 238 of 1995 2,50,000 Injures sustained 1,01,000 The present appeals are against the above awards. 3. The only question that was raised and argued by the counsel for the appellant in all these appeals is that the insurance company has no liability to indemnity the fourth respondent, the owner of the Matador Van and therefore, they should be absolved of their liability to pay compensation to the claimants. 4. The facts necessary for deciding this question are stated hereunder: The fourth respondent G. Ravi is the owner of the Matador Van/Mini Bus bearing Registration No.GDR-1533. The mini bus was engaged by the first respondent Mrs. Kamala Mangalal Vayani, who was travelling along with her husband, children and other relatives, totalling 13 members, in the van for the purpose of visiting various important places in South India. During their journey from Bangalore to Kanyakumari via. Villupuram, the van met with a head-on collision with a lorry bearing Registration No.TNM-7380 near Kandamanady Village. The owner of the van remained ex parte. Admittedly, the van did not have a permit. The vehicle is covered by an insurance policy with the appellant insurance company covering a period from 31.3.1990 to 30.3.1991 and it is marked as Ex.A-19. Villupuram, the van met with a head-on collision with a lorry bearing Registration No.TNM-7380 near Kandamanady Village. The owner of the van remained ex parte. Admittedly, the van did not have a permit. The vehicle is covered by an insurance policy with the appellant insurance company covering a period from 31.3.1990 to 30.3.1991 and it is marked as Ex.A-19. The policy, under the heading Limitations as to use, states as follows: “The policy covers the vehicle only under a permit within the meaning of the Motor Vehicles Act, 1988 or such a carriage falling under Sub-sec.(3) of Sec.66 of the Motor Vehicles Act, 1988. The policy does not cover for: (a) organised racing; or (b) speed testing.” As per this policy, the maximum licensed carrying capacity of the vehicle, including the driver and the conductor is 10 + 1. 5. The appellant had issued a notice dated 16.11.1995 (Ex.B.1) calling upon the owner of the vehicle G.Ravi, the fourth respondent herein, to prove that he had a valid registration and permit before the date of the accident. In the said notice, the insurance company pointed out to the fourth respondent that they understand that he had contravened the rules and regulations of the insurance policy by running a tourist van without a valid permit exceeding the capacity of passengers. It is also stated that they came to know that the Bangalore Regional Transport Officer (Central) rejected his application for registration of the vehicle as taxicab and informed him that the insurance company is not liable to pay any compensation arising out of the accident and that there is no vicarious liability since he had contravened the policy regulation also. Though the said notice was acknowledged by him under Ex.B-2, there was no reply and he also remained ex parte in the O.P. The appellant was able to get a certified copy of the proceedings of the Regional Transport Authority, Bangalore (Central) ordering rejection of the application of the van owner and filed it as Ex.B-3. As per these proceedings dated 7.7.1990, the Regional Transport Authority has ordered the rejection of his application for registration as taxicab. In the said order, it is found that the application was made for a motorcab permit. As per these proceedings dated 7.7.1990, the Regional Transport Authority has ordered the rejection of his application for registration as taxicab. In the said order, it is found that the application was made for a motorcab permit. Though the application has mentioned the seating capacity of the van excluding the driver as 6 + 1 in column No.19, it was found from the sale letter that the vehicle is a mini bus with a seating capacity of 15, excluding the driver. Hence, it was stated that the vehicle is a taxicab, but on the other hand, it was a vehicle with a seating capacity of 15, excluding the driver. The vehicle is neither a motorcab nor a goods carrier. In transport vehicles other than goods carriers and motorcabs, as per Rule 151(2) of the Karnataka Motor Vehicles Rules, the minimum number of seats including the two seats for the driver and conductor or attender to be provided that shall be specified in the column provided thereunder. In the light of the non-compliance of the rules, according to the order, the question of registration of the vehicle does not arise. The order also directed the owner to comply with the provisions of Rules 151(2) of the Rules and seek for registration of the vehicle in the appropriate class. 6. Thus, it could be seen that the vehicle was neither registered nor was having a permit in order to be used as a public transport vehicle. Sec.66 of the Motor vehicles Act, 1988 (hereinafter referred to as the Act) says that no owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place without a permit and applications have to be made under Sec.69 of the Act for a permit to authorise the use of the vehicle as a transport vehicle. When the policy was taken on 31.3.1990, the fourth respondent did not obtain the permit and the application made by the fourth respondent for a motorcab permit to carry 6 + 1 for hirer or reward as rejected on 7.7.1990, Knowing this fully well, the vehicle was engaged on 27.7.1990 and met with accident on that day. The owner remained ex parte and refusing to respondent to the legal notice issued to him to produce the records. The owner remained ex parte and refusing to respondent to the legal notice issued to him to produce the records. In the above circumstances, it is clear that the fourth respondent van owner did not have the necessary permit and has contravened the limitations as to use specified in the insurance policy. The policy specifically requires the fourth respondent to use the vehicle only under a permit. The coverage of the policy is subject to obtaining of a permit to use the vehicle. 7. This question was raised in the written statement by the appellant and the claimants were cross-examined on this aspect and it is admitted that they did not verify whether the owner of the van had the permit and registration certificate for the vehicle, especially, when the vehicle was on a pilgrimage tour in the two States namely Karnataka and Tamil Nadu. On behalf of the insurance company, R.W.1 was examined, who has categorically stated that the owner's application for permit was rejected and inspite of the notice for production, the owner did not produce any record regarding registration and permit and that the van was used for more than the capacity for which the policy was taken. 8. From the documentary and oral evidence, it is beyond doubt that the van which was involved in the accident, the liability for the accident which was fastened on the appellant insurance company, was not having the required registration and permit for the use of the vehicle. 9. Sec.146 of the Act requires every person using the motor vehicle in a public place to take a policy of insurance complying with the requirements of Chapter XI. Sub. sec.(3) of Sec.147 says that the policy could be subject to condition. Sub-sec.(5) says that an insured has to indemnify the person in respect of any liability which the policy purports to cover. Sec.149 imposes a duty on the insurers to satisfy judgments and awards. Sub-sec.(1) obliges the insurer to pay to the person entitled to the benefit of the decree an assured sum. Sub-Sec.(2) of Sec.149 entitles the insurer to defend the action in pursuance to a judgment or award against the insured. Sec.149 imposes a duty on the insurers to satisfy judgments and awards. Sub-sec.(1) obliges the insurer to pay to the person entitled to the benefit of the decree an assured sum. Sub-Sec.(2) of Sec.149 entitles the insurer to defend the action in pursuance to a judgment or award against the insured. The insurer is entitled to defend the action on the specified grounds namely the policy, excluding use of the vehicle under particular circumstances such as without permit, using it for organised racing or speed testing and the like as set out under the provision. Sec.149 of the Act enables the insurance company to avoid the liability and defend the action against an award under Sub-sec.(2) of Sec.149 namely that there has been breach of a specific condition of the policy that the vehicle was used for hire or reward and on the date of the contract of insurance not covered by a permit to ply for hire or reward. 10. The question whether there has been a breach of the terms of the policy of the insurance company is examined from liability was considered by a Division Bench of the Kerala High Court in Julian and others v. Peethambaran and others Julian and others v. Peethambaran and others 1998 A.C.J. 913 wherein one of us is a party to the said judgment. In that case, the accident involved a tempo van. It was contended on behalf of the insurance company that the policy was taken for a private car and that the vehicle was driven by a person without a licence and registration. The case of the owner was that he had subsequently obtained a contract carriage permit for the vehicle. The question that was taken up for consideration was whether there was an insurance policy for the vehicle so as to operate the same as contract carriage authorising to carry 13 passengers. It was found that a policy obtained for using the vehicle as a private car cannot be used for the purpose of using it as a contract carriage. It was further found that the policy, though valid, came to an end since the class of the vehicle was altered as contract carriage and the use of the vehicle as contract carriage was a violation of the policy conditions. It was further found that the policy, though valid, came to an end since the class of the vehicle was altered as contract carriage and the use of the vehicle as contract carriage was a violation of the policy conditions. According to the Division Bench, a defence would be open to the insurer since the expression in Clause (b) of the policy, “breach of specific condition of the policy” makes it clear that the liability would depend upon the incorporation of the conditions in the policy and hence, the defence is available to the insurer. After change of the class of the vehicle, the owner of the vehicle ought to have paid additional premium or obtained a new policy after the vehicle has been classified as a contract carriage vehicle. The Division Bench followed the judgment of the Gujarat High Court in National Insurance Co. Ltd. v. Nathibai Chaturabhuji 1982 A.C.J. 153. That was a case where the insurance company disclaimed its liability to satisfy the award on the ground that the vehicle in question was, on the date of the contract of insurance, a vehicle not covered by a permit to carry passengers for hire or reward and that it was, at the time of the accident, stated to have been actually used to carry three passengers for hire or reward and that therefore, the insurance company was not liable to satisfy the award made in favour of one of such passengers. Both these decisions, in our view, apply to the facts of the present case in favour of the appellant. In Hindustan General Insurance company Ltd. v. M.Saramma Hindustan General Insurance company Ltd. v. M.Saramma 1969 A.C.J. 25 a learned Judge of the Andhra Pradesh High Court has taken the view that a statutory right is conferred on the insurer under Sec.96(2) of the old Motor Vehicles Act (Sec.149 of the new Act) to raise all or any of the specified defences which would result in avoiding the policy itself. Hence, it follows that the insurer is entitled to raise the defence that the policy was originally obtained by false representation. The Supreme Court in United India Insurance Co. Ltd. v. Gian Chand and others United India Insurance Co. Hence, it follows that the insurer is entitled to raise the defence that the policy was originally obtained by false representation. The Supreme Court in United India Insurance Co. Ltd. v. Gian Chand and others United India Insurance Co. Ltd. v. Gian Chand and others 1997 A.C.J. 1065 has held that when the insured had handed over the vehicle for being driven by an unlicensed driver, the insurance company would get exonerated from its liability to meet the claims of the third parties who might have suffered on account of the vehicular accident caused by such an unlicensed driver. 11. In Raghunath Eknath Hivale v. Shardabai Karbhari Kala 1986 A.C.J. 460 a Division Bench of the Bombay High Court has held that a breach of the condition of the permit is not the same thing as the purpose for which it is issued. The contravention of one or other condition of the permit is not a contravention of the purpose for which the permit is issued. In Skandia Insurance Company Limited v. Kokilaben Chandravadan 1987 A.C.J. 411 the Supreme Court held that unless the insured is at fault and is guilty of breach, the insurer cannot escape form the obligations to indemnify the insured. That was a case of the driver of the vehicle not having the licence. In that context, it was held by the Supreme Court that it is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence it can be said that he is guilty or breach of the promise that the vehicle will be driving by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who guilty of violating the promise of infringement of the contract. When the insured is done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle incharge of a licensed driver with the express of implied mandate to drive himself, it cannot be said that the insured is guilty of any breach and it is only in case of breach or violation or promise on the part of the insured that the insured can hide under the umbrella of the exclusion clause. 12. 12. In this case, it is seen that the insured has admittedly not taken the permit or the registration as required and the insured has not done anything within his power to comply with the conditions of the policy taken. Therefore, he can be held to be guilty of a breach entitling the insurance to avoid the contract. The appellant in this case had suffered a decree and has complied with Sub-sec.(1) of Sec.149 of the Act. However, the appellant is entitled to defend their action against enforcement of the decree under Sub-sec.(2) of Sec.149 and in our view, the appellant has successfully established that the vehicle was not covered by a permit on the date of the contract of insurance and even thereafter did not have the permit till the date of the accident and that the insured tried to take a permit for a motorcab, whereas, the vehicle itself was a Matador Van and that even his application for registration of the vehicle as motorcab was dismissed and as on date, the vehicle was not registered as a public service vehicle and also did not have the permit. 13. Per contra, the counsel appearing on behalf of the claimants referred to a judgment of the Gujarat High Court in Gulam Yasin Mirza v. V.K. Makwan and others Gulam Yasin Mirza v. V.K.Makwan and others (1992)2 S.C.C. 87 wherein the learned Judge has held that the insurance company, after having accepted the coverage despite absence of any valid permit or any fitness certificate as to its road-worthiness, it does not lie in its mouth to come out with the defence that the vehicle in question did not have any permit or did not have any certificate of fitness as to its road-worthiness. It was further held that use of the vehicle contrary to the terms of the permit is different from the absence of such permit. Use of the vehicle contrary to the terms of the permit is a ground for defence. Absence of permit, as a defence by itself, is not available to the insurer. The learned Judge held that these defences are available, provided a case is made out and this factual position was conceded at the time of obtaining the insurance coverage with respect to the vehicle in question. Absence of permit, as a defence by itself, is not available to the insurer. The learned Judge held that these defences are available, provided a case is made out and this factual position was conceded at the time of obtaining the insurance coverage with respect to the vehicle in question. In that case, no such plea was taken in the written statement filed by and on behalf of the insurance company and in the proceedings before the Tribunal. In Narcinva V.Kamat v. Alfredo Antonio Doe Martins Narcinva V.Kamat v. Alfredo Antonio Doe Martins 1985 A.C.J. 397 the Supreme Court held that the burden to prove that there was a breach of a contract of insurance is squarely on the shoulders of the insurance company and a mere non-production of licence by the driver does not exonerate the insurance company. In United India Insurance Company Limited v. O.Jameela Beevi United India Insurance Company Limited v. O.Jameela Beevi A.I.R. 1991 Ker. 380 a Division Bench of the Kerala High Court held that if the insurer desires the Court to give judgment as to his legal right to be exonerated from the liability to indemnify the insured, he must prove the existence of facts upon which such legal right depends. The burden of proof lies on the insurer. In Hanuman Transport Company v. R.J. Insurance Company Hanuman Transport Company v. R.J. Insurance Company A.I.R. 1973 Mys. 335 the Mysore High Court has taken the view that playing a stage carriage on a road not covered by the road mentioned in the permit amounts only to a breach of condition of the permit and does not affect the purpose for which the stage carriage permit was granted. The breach does not automatically invalidate the permit and make it ineffective. These judgments, in our view, will not be of any assistance to the case of respondents 1 to 3. Since the absence of permit and registration of the vehicle to enable the owner of the vehicle to ply in a public place for hire is admitted, the insurance company is entitled to defend the action. These judgments, in our view, will not be of any assistance to the case of respondents 1 to 3. Since the absence of permit and registration of the vehicle to enable the owner of the vehicle to ply in a public place for hire is admitted, the insurance company is entitled to defend the action. In a recent judgment, the Supreme Court, in New India Assurance Company, Shimla v. Kamala and others J.T. (2001)4 S.C. 235 has held as follows: “The insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition.” In that case, the Supreme Court was dealing with the case of a vehicle driven by a driver with a fake driving licence. 14. Sec.66 of the Act says that no owner of a motor vehicle shall use or permit the use of a vehicle as transport vehicle in any public place for carrying passengers unless permits are obtained from the prescribed authority. Though the application for registration of the vehicle as a contract carriage or a taxicab and for the permit requires insurance policy being taken, the policy of insurance also contemplates that the vehicle should not be used without a permit. In other words, the use of the vehicle in a public place for hire is subject to the registration and insurance. If the owner of the vehicle contravenes these specific conditions, the various provisions referred to above would make the owner of the vehicle liable for the consequences thereof and will exonerate the insurance company on proving that the vehicle did not satisfy the conditions for its use. Precisely that is the reason why the various rules insist the entries in respect of these particulars being painted in the public service vehicles to enable the passengers to know about it,. The insurer is entitled to successfully disclaim his liability on the grounds mentioned under Sub-sec.(2) of Sec.149 of the Act. 15. Precisely that is the reason why the various rules insist the entries in respect of these particulars being painted in the public service vehicles to enable the passengers to know about it,. The insurer is entitled to successfully disclaim his liability on the grounds mentioned under Sub-sec.(2) of Sec.149 of the Act. 15. In the light of the facts stated above, we are of the view that the appellant insurance company has established that it is entitled to defend the action under Sub-sec.(2) of Sec.149 of the Act and proved that the fourth respondent had contravened and breached the specific conditions of the policy and that the policy itself was obtained on a wrong representation that permit would have obtained and that the vehicle would be registered in accordance with law. Hence, we hold that the appellant is exonerated from the liability. 16. The appeals filed by the Insurance Company are allowed and the fourth respondent second respondent respectively the owner of the vehicle is liable to pay the compensation awarded. The appellant is entitled for recovery of the amount paid and obtain refund of the amount deposited. No costs. Consequently, the connected C.M.Ps. are closed. R.S. ----- Appeal allowed.