Judgment 1. These two appeals are filed by insurer questioning the correctness and legality of the judgment and award passed by MACT, Bangalore in MVC Nos.3370/2007 & 3371/2007 dated 15.09.2008, whereunder claimpetitions have been allowed in part and compensation of Rs. 3,02,400/- and Rs. 12,000/- has been awarded by fastening the liability on insurer. 2. Heard Smt. Harini Shivananda, learned counsel appearing for insurer and Sri. R. Chandrashekar, learned counsel appearing for respondent No.1 in both the appeals. In MFA No.135/2009 notice to respondent No.2 is held sufficient vide order dated 17.08.2012 and Respondent No.3 is served and unrepresented. In MFA No.134/2009 service of notice on respondent Nos. 2 and 3 has been held sufficient by this Court vide order dated 03.07.2012. 3. It is the contention of Smt. Harini Shivananda, learned counsel appearing for insurer that Tribunal erred in fastening the liability on insurance company without examining the driving licence marked as Exhibit R-2, which would clearly indicate that the driver of the offending vehicle did not possess a valid and effective driving licence as on the date of accident i.e. on 25.03.2007 and it was renewed from 02.04.2007 and as such Tribunal could not have fastened the liability on the insurer. She would also contend that compensation awarded in MFA No.134/2009 is on the higher side and prays for reducing the compensation in the event of contention of insurer is not accepted by this Court. In support of her contentions she has relied upon the following judgments: i. 2008 AIR SCW 7145: NATIONAL INSURANCE CO. LTD. VS. VIDHYADHAR MAHARIWALA & ORS. ii. 2008 AIR SCW 6512: RAM BABU TIWARI VS. UNITED INDIA INSURANCE CO. LTD. & ORS. iii. ILR 2007 KAR. 4567: YASHODHARA B. SHETTY VS. UNITED INDIA INSURANCE CO. LTD., AND OTHERS. She further contends that initial burden is on the insured to establish that he had done everything within his power and knowledge while engaging or entrusting the vehicle to a licenced driver to drive the vehicle. 4. Per contra, Sri. R.Chandrashekar, learned counsel appearing for the claimants would support the judgment and award passed by the Tribunal. LTD., AND OTHERS. She further contends that initial burden is on the insured to establish that he had done everything within his power and knowledge while engaging or entrusting the vehicle to a licenced driver to drive the vehicle. 4. Per contra, Sri. R.Chandrashekar, learned counsel appearing for the claimants would support the judgment and award passed by the Tribunal. He would also submit that under Section 15 of the Motor Vehicles Act, 1988, even if an application is made for renewal of license after a period of 30 days from the date of expiry of licence, though it would be renewed from the date of renewal it cannot be held that such driver was disqualified to hold the driving licence and as such Tribunal was justified in fastening the liability on the insurer and prays for dismissal of the appeal. In support of his submissions, Sri.Chandrashekar, learned counsel for claimants has relied upon following judgments: i. 2011 ACJ 2337 : NATIONAL INSURANCE CO. LTD. VS. MAHADEV RAWAT AND ANOTHER ii. ILR 1999 KAR. 2101: THE ORIENTAL INSURANCE COMPANY VS. MOHAMMED SAB ALI SAB KALADAGI & OTHERS. iii. 2004 ACJ 1: NATIONAL INSURANCE CO. LTD., VS SWARAN SINGH AND OTHERS iv. 2004 ACJ 785: PUNAM DEVI AND ANOTHER VS. DIVISIONAL MANAGER, NEW INDIA ASSURANCE CO. LTD. AND OTHERS 5. Having heard the learned Advocates appearing for the parties I am of the considered view that following points would arise for my consideration: (1). Whether Tribunal was justified in fastening the liability on the owner of the offending vehicle and absolving the insurer of indemnifying the insured? OR (2). Whether Tribunal was correct in holding that driver of the offending vehicle possessed a valid and effective driving license though validity of said license had expired and was renewed beyond the period of 30 days of its expiry? 6. Facts leading to the filing of these appeals are as under: On account of a road traffic accident that occurred on 25.03.2007 at about 6.45 a.m. two claim petitions were filed in MVC Nos.3370/2007 & 3371/2007 claiming compensation of Rs. 5,00,000/- and Rs. 50,000/- respectively. On service of notice, before the Tribunal respondent No.1 therein being the owner of the offending lorry, appeared through learned Advocate but did not choose to file the written statement. 5,00,000/- and Rs. 50,000/- respectively. On service of notice, before the Tribunal respondent No.1 therein being the owner of the offending lorry, appeared through learned Advocate but did not choose to file the written statement. Respondent No.2, who was the previous owner of the offending lorry and in whose name the insurance policy was issued as per Exhibit R-1 was placed exparte. Respondent No.3 - insurer appeared and filed its statement of objections denying the averments made in claim petition. It was specifically contended by the insurer that driver of the offending lorry did not possess a valid and effective driving licence at the time of accident and the owner or insured had entrusted the vehicle to said driver though he was not having valid and effective driving licence and as such, it was contended that insurer need not indemnify the claim. 7. Charge sheet has been filed as per Exhibit P-2 against one Sri.Shaik Mahboob, son of Sri.Shaik Ibrahim, who was the driver of offending lorry bearing registration No. CAM - 2159. Licence issued to the said Mahboob came to be produced by the insurer as per Exhibit R-2 namely the certified extract issued by the Regional Transport Officer, Bangalore, dated 01.02.2008 which indicates that said licence was renewed from 08.02.2004 to 07.02.2007, which was for transport vehicle. Said driving licence was initially issued in favour of licensee Sri. Shaik Mahboob by RTO, Madras (Tamil Nadu) on 21.12.1990 and it was valid upto 07.02.2004, which was in respect of light motor vehicle. Licensee was authorized to drive Heavy Goods Vehicle (HGV) with affect from 26.02.1993. Said Licence was renewed from 8.2.2004 and it was valid upto 07.02.2007. Accident in question occurred on 25.03.2007. Undisputedly, the driver did not possess a valid and effective driving licence as on the date of accident i.e., 25.03.2007. Same came to be renewed on 02.04.2007 to be valid upto 01.04.2010 in respect of transport vehicle and also in respect of non transport vehicle as reflected in Exhibit P-25 certified extract of RDL- particulars which came to be produced by the claimants. There is no dispute with regard to these facts. 8. As already noticed hereinabove, contention of Smt. Harini Shivananda is that as on the date of the accident driver did not posses a valid and effective driving licence namely he did not have any licence at all to drive the offending vehicle. 9. There is no dispute with regard to these facts. 8. As already noticed hereinabove, contention of Smt. Harini Shivananda is that as on the date of the accident driver did not posses a valid and effective driving licence namely he did not have any licence at all to drive the offending vehicle. 9. The issue regarding the breach of policy condition by the insured on account of driver of the offending vehicle not possessing a valid driving licence, the burden of proof and the defence available to insurer in such circumstances including whether insurer is required to indemnify the claim of third parties or not, came up for consideration before the Apex Court in the case of National Insurance Co. Ltd. Vs. Swaran Singh reported in 2004 ACJ 1 and it has been summarised by the Apex Court after analysing various statutory provisions of the Act and the law laid down earlier thereto in the following manner: "(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object. (ii) Insurer is entitled to raise a defence in a claim petition filed under section 163-A or section 166 of the Motor Vehicles Act, 1988, inter alia , in terms of section 149(2)(a)(ii) of the said Act. (iii) The breach of policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licenced driver or one who was not disqualified to drive at the relevant time. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licenced driver or one who was not disqualified to drive at the relevant time. (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle, the burden of proof wherefor would be on them. (v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case. (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches of the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences available to the insurer under Section 149(2) of the Act. (vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. (viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree. (ix) The Claims Tribunal constituted under section 165 read with section 168 is empowered to adjudicate all claims in respect of the accidents involving death or bodily injury or damage to property of third party arising from use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims, inter se, between claimant or claimants on one side and insured, insurer and driver on the other. The said power of the Tribunal is not restricted to decide the claims, inter se, between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in section 174 of the Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-section (7), as interpreted by this court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of the claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal. (xi) The provisions contained in sub- section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims." 10. Said judgment came to be followed in the case Ishwar Chandra and Ors. vs. Oriental Insurance Co. Ltd. And Ors. reported in 2007 SC 1445 and the import of proviso to Section 15 came to be considered in the said judgment and it has been held as under: "8. Section 15(1) of the Act and the first proviso appended thereto reads as under: "15. Renewal of driving licences. (1) any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of its expiry; Provided that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal;" 9. From a bare perusal of the said provision, it would appear that the licence is renewed in terms of the said Act and the rules framed thereunder. The proviso appended to Section 15(1) of the Act in no uncertain terms states that whereas the original licence granted despite expiry remains valid for a period of 30 days from the date of expiry, if any application for renewal thereof is filed thereafter, the same would be renewed from the date of its renewal. The accident took place on 28.04.1995. The accident took place on 28.04.1995. As on the said date, the renewal application had not been filed, the driver, did not have a valid licence on the date when the vehicle met with the accident." 10. In Swaran Singh (supra), whereupon the learned Counsel appearing on behalf of the appellants relied upon, it is stated: "45. Thus, a person whose licence is ordinarily renewed in terms of the Motor Vehicles Act and the Rules framed thereunder, despite the fact that during the interregnum period, namely, when the accident took place and the date of expiry of the prescribed period apply for renewal thereof and could obtain the same automatically without undergoing any further test or without having been declared unqualified therefore. Proviso appended to Section 14 in unequivocal terms states that the licence remains valid for a period of thirty days from the day of its expiry. 46. Section 15 of the Act does not empower the authorities to reject an application for renewal only on the ground that there is a break in validity or tenure of the driving licence there is a break in validity or tenure of the driving licence has lapsed, as in the meantime the provisions for disqualifications of the driver contained in Sections 19, 20, 21, 22, 23 and 24 will not be attracted, would indisputably confer a right upon the person to get his driving licence renewed. In that view of the matter, he cannot be said to be delicensed and the same shall remain valid for a period of thirty days after its expiry." 11. Thereafter the Apex Court in the case of Ram Babu Tiwari Vs. United India Insurance Co. Ltd. & Ors. reported in 2008 AIR SCW 6512 examining the issue as to whether the renewal of licence would take effect retrospectively or not held that licence would stand renewed from the date of its renewal where the application for renewal is filed within the period of 30 days as otherwise its validity would be from date of renewal, while interpreting Section 15(1) and proviso thereto and Sub Section (2). It has been held to the following effect: "18. It has been held to the following effect: "18. It is beyond any doubt or dispute that only in the event an application for renewal of licence is filed within a period 30 days from the date of expiry thereof, the same would be renewed automatically which means that even if an accident had taken place within the aforementioned period, the driver may be held to be possessing a valid licence. The proviso appended to sub-section (1) of Section 15, however, clearly states that the driving licence shall be renewed with effect from the date of its renewal in the event the application for renewal of a licence is made more than 30 days after the date of its expiry. It is, therefore, evident that as, on renewal of the licence on such terms, the driver of the vehicle cannot be said to be holding a valid licence, the insurer would not be liable to indemnify the insured." The second proviso appended to sub- section (4) of Section 15 is of no assistance to the appellant. It merely enables the licensing authority to take a further test of competent driving and passing thereof to its satisfaction within the meaning of Sub-section (3) of Section 9. It does not say that the renewal would be automatic. It is therefore, a case where a breach of the contract of insurance is established. This aspect of the matter has been considered by this Court in National Insurance Co. Ltd. v. Kusum Rai & Ors. [ (2006) 4 SCC 250 ] holding: "11. It has not been disputed before us that the vehicle was being used as a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle, thus was required to hold an appropriate licence therefor. Ram Lal who allegedly was driving the said vehicle at the relevant time, as noticed hereinbefore, was holder of licence to drive a light motor vehicle only. He did not possess any licence to drive commercial vehicle. Evidently, therefore, there was a breach of condition of the contract of insurance. The appellant, therefore, could raise the said defence." It was furthermore held: "14. This Court in Swaran Singh clearly laid down that the liability of the Insurance Company vis-à-vis the owner would depend upon several factors. He did not possess any licence to drive commercial vehicle. Evidently, therefore, there was a breach of condition of the contract of insurance. The appellant, therefore, could raise the said defence." It was furthermore held: "14. This Court in Swaran Singh clearly laid down that the liability of the Insurance Company vis-à-vis the owner would depend upon several factors. The owner would be liable for payment of compensation in case where the driver was not having a licence at all. It was the obligation on the part of the owner to take adequate care to see that the driver had an appropriate licence to drive the vehicle." It was opined: "16. In a case of this nature, therefore, the owner of a vehicle cannot contend that he has no liability to verify the fact as to whether the driver of the vehicle possessed a valid licence or not." 12. Yet again the Hon'ble Apex Court in the case of National Insurance Company Limited vs. Vidyadhar Mahariwala & Others reported in 2008 AIR SCW 7145 has held that in the event of licence of the driver of an offending vehicle not being in force on the date of the accident the insurance company has to be exonerated of its liability and was held as follows: "11. In Ishwar Chandra's case (supra) the three decisions referred to by the High Court were considered and it was held that the insurance company would have no liability in the case of this nature. We are in agreement with the view. The appeal deserves to be allowed which we direct. The impugned order of the High Court is set aside. It is open to the claimant to recover the amount from respondent No.2." 13. Though Sri. Chandrashekar, learned counsel appearing for the claimants would contend that even if on the date of accident the driver of the offending vehicle did not possess a valid driving licence on account of the same having been expired and if it is subsequently renewed as it has happened in the instant case i.e., after 18 days, it cannot be said that during the intervening period the driver was incompetent or otherwise disqualified to drive the lorry. Said contention cannot be accepted in view of the law laid down by the Apex Court in the case of Ram Babu Tiwari's referred to supra whereunder their lordships after following the dicta laid down by Larger Bench in Swarna Singh's case have categorically held that only in the event of an application for renewal of licence is filed within a period of 30 days from the date of expiry thereof it would stand renewed automatically from the date it gets expired and not when application for renewal is filed beyond said date. In other words, it has been held that even if the accident had occurred during this interregnum period i.e., after the licence has expired and within 30 days before it could be renewed, if an application for renewal is filed such application when filed within 30 days from the date of expiry it would automatically entitle the licence holder to seek for renewal from the date of expiry or in other words the statute itself provides for the licence being in force or in vogue even during this interregnum period. As otherwise the license would be renewed from the date on which renewal is made if it is beyond 30 days period. In this background the driver of the offending vehicle in the instant case cannot be said to have possessed a valid licence and as such the insurer would not be liable to indemnify the claim. 14. In the instant case the owner has not entered the witness box and has not filed statement of objections to demonstrate and establish that as the owner of the offending vehicle he had taken reasonable care as is expected of a prudent owner of a vehicle he had entrusted the vehicle to a driver who possessed a valid and effective driving licence as on the date of entrustment. In that view of the matter also it cannot be held that insurer would still be liable to indemnify the claim despite there being breach of policy condition namely the driver not possessing a valid driving licence. 15. In view of the same, I am of the considered view that Tribunal committed a serious error in fastening the liability on the insurer and to that extent the award of Tribunal cannot be sustained and accordingly, judgment and award passed in MVC Nos.3370 and 3371/2007 dated 15.09.2008 is hereby set aside. 15. In view of the same, I am of the considered view that Tribunal committed a serious error in fastening the liability on the insurer and to that extent the award of Tribunal cannot be sustained and accordingly, judgment and award passed in MVC Nos.3370 and 3371/2007 dated 15.09.2008 is hereby set aside. However, claimants would be at liberty to enforce the judgment and award passed by the Tribunal against the owner of the offending lorry namely respondent No.1 before Tribunal i.e., respondent No.2 herein. 16. Hence, both the appeals are hereby allowed. Judgment and award passed in MVC No.3370/2007 & 3371/2007 by MACT, Bangalore dated 15.09.2008 is hereby set aside insofar as fastening liability on the appellant insurer and claim petitions filed against appellant-insurer stands dismissed. Amount in deposit is ordered to be refunded to appellant on proper identification by the Registry forthwith.