JUDGMENT Mansoor Ahmad Mir, J. A vehicular accident, which was caused by the driver, namely Shri Bir Singh, while driving tractor, bearing registration No. HP-16-0243, rashly and negligently on 30.08.2001 at about 10.45 P.M. near Village Ratoli on Rajgarh-Solan Road, has given birth to the appeal in hand calling in question the award, dated 01.03.2008, made by the Motor Accident Claims Tribunal-II, Sirmaur District at Nahan (for short "the Tribunal") in MAC Petition No. 40-N/2 of 2005, titled as Shri Lalli alias Laloo versus Nagender Chauhan and another (for short "the impugned award"). 2. The claimant, namely Shri Lalli alias Laloo, being the victim of the vehicular accident, filed a claim petition before the Tribunal seeking compensation to the tune of Rs.7,90,000/-, as per the break-ups given in the claim petition. 3. The respondents in the claim petition, i.e. the owner-insured and the insurer appeared and resisted the claim petition on the grounds taken in the respective memo of objections. 4. Following issues came to be framed by the Tribunal on 13.10.2006: "1) Whether the petitioner had sustained injuries on 30.8.2001 at about 10.45 P.M. at place near village Ratoli on Rajgarh Solan road due to the rash and negligent driving of tractor No. HP-16-0243 being driven by Shri Bir Singh (since deceased) as alleged? ..OPP 2) If issue No. 1 is proved, to what amount of compensation the petitioner is entitled to and from whom? ..OPP 3) Whether the driver of the offending tractor was not possessed of a valid and effective driving licence at the time of accident? ..OPR-2 4) Whether the offending tractor was being driven in contravention of terms and conditions of the Insurance Policy at the relevant time? ..OPR-2 5) Whether this petition is collusive with respondent No. 1? ..OPR-2 6) Relief." 5. Parties led evidence. 6. The Tribunal, after scanning the oral as well as documentary evidence decided the claim petition in favour of the claimant-injured and directed the insurer to satisfy the award. 7. The insurer has questioned the impugned award only on two grounds: (i) That the driver of the offending vehicle was not having a valid and effective driving licence; and (ii) That three persons were traveling in the offending vehicle at the time of the accident, thus, their risk was not covered in terms of the insurance contract. 8. 7. The insurer has questioned the impugned award only on two grounds: (i) That the driver of the offending vehicle was not having a valid and effective driving licence; and (ii) That three persons were traveling in the offending vehicle at the time of the accident, thus, their risk was not covered in terms of the insurance contract. 8. Both the arguments, though attractive, are devoid of any force for the following reasons: 9. Parties have led evidence and the owner-insured, while appearing in the witness box as RW-1, has specifically stated that he had engaged the driver-Bir Singh after examining his driving licence and after knowing the fact that he was also driving the tractor of one Bhagat Ram in the same village. 10. Thus, it can be safely said that the owner-insured has performed his duties, which he was supposed to do in view of the mandate of the insurance contract read with the mandate of Sections 147 to 149 of the Motor Vehicles Act, 1988 (for short "the MV Act"). 11. The Apex Court in a case titled as National Insurance Co. Ltd. versus Swaran Singh and others, reported in AIR 2004 Supreme Court 1531, the laid down principles, how the insurer can avoid its liability. It is apt to reproduce relevant portion of para 105 of the judgment herein: “105. ..................... (i) ......................... (ii) ........................ (iii) The breach of policy condition 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 licensed 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 licensed 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 wherefore would be on them. (v)......................... (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 on 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 insured under Section 149 (2) of the Act.” 12. The Apex Court in a case titled as Lal Chand versus Oriental Insurance Co. Ltd., reported in 2006 AIR SCW 4832, where the owner-insured had performed his job whatever he was required to do and satisfied himself that the driver was having valid driving licence, held the insurer liable. It is apt to reproduce paras 8, 9 and 11 of the judgment herein: “8. We have perused the pleadings and the orders passed by the Tribunal and also of the High Court and the annexures filed along with the appeal. This Court in the case of United India Insurance Co. Ltd. v. Lehru & ors., reported in 2003 (3) SCC 338 , in paragraph 20 has observed that where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). This Court in the case of United India Insurance Co. Ltd. v. Lehru & ors., reported in 2003 (3) SCC 338 , in paragraph 20 has observed that where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). He will, therefore, have to check whether the driver has a driving licence and if the driver produces a driving licence, which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take test of the driver, and if he finds that the driver is competent to drive the vehicle, he will hire the driver. 9. In the instant case, the owner has not only seen and examined the driving licence produced by the driver but also took the test of the driving of the driver and found that the driver was competent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, the owner has satisfied himself that the driver has a licence and is driving competently, there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would not then be absolved of its liability. 10. ............................. 11. As observed in the above paragraph, the insurer, namely the Insurance Company, has to prove that the insured, namely the owner of the vehicle, 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 a duly licensed driver or one who was not disqualified to drive at the relevant point of time.” 13. It would also be profitable to reproduce para 10 of the judgment rendered by the Apex Court in Pepsu Road Transport Corporation versus National Insurance Company, reported in (2013) 10 Supreme Court Cases 217, herein: “10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh case. If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the Insurance Company is not liable for the compensation.” 14. Having said so, I am of the considered view that the Tribunal has rightly made discussion in paras 31 and 32 of the impugned award. 15. Viewed thus, the owner-insured has not committed any willful breach and the Tribunal has rightly saddled the appellant-insurer with liability to satisfy the award. 16. The next question to be determined is - whether the risk of the claimant-injured was covered in terms of the terms and conditions contained in the insurance contract? The answer is in the affirmative for the following reasons: 17. The factum of insurance is admitted. The risk of 1+1' is covered in terms of the insurance agreement, Ext. R-1. 16. The next question to be determined is - whether the risk of the claimant-injured was covered in terms of the terms and conditions contained in the insurance contract? The answer is in the affirmative for the following reasons: 17. The factum of insurance is admitted. The risk of 1+1' is covered in terms of the insurance agreement, Ext. R-1. Meaning thereby, the policy covers the risk of the driver and one passenger. Thus, the insurer is to be saddled with liability of one passenger. 18. Only one person, i.e. the claimant-injured has filed claim petition before the Tribunal. Thus, his risk is covered. Had there been any other claim than the risk covered, it was for the owner-insured to satisfy the liability. 19. My this view is fortified by the judgment of the Apex Court in the case titled as United India Insurance Company Limited versus K.M. Poonam & others, reported in 2011 ACJ 917. It is apt to reproduce para 24 of the judgment herein: “24. The liability of the insurer, therefore, is confined to the number of persons covered by the insurance policy and not beyond the same. In other words, as in the present case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the provisions of sub-section (1) of Section 149 of the Act, as it would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle." 20. It is also apt to reproduce para 15 of the judgment of the Apex Court in the case titled as National Insurance Company Limited versus Anjana Shyam & others, reported in 2007 AIR SCW 5237, herein: “15. In spite of the relevant provisions of the statute, insurance still remains a contract between the owner and the insurer and the parties are governed by the terms of their contract. The statute has made insurance obligatory in public interest and by way of social security and it has also provided that the insurer would be obliged to fulfil his obligations as imposed by the contract and as overseen by the statute notwithstanding any claim he may have against the other contracting party, the owner, and meet the claims of third parties subject to the exceptions provided in Section 149(2) of the Act. But that does not mean that an insurer is bound to pay amounts outside the contract of insurance itself or in respect of persons not covered by the contract at all. In other words, the insured is covered only to the extent of the passengers permitted to be insured or directed to be insured by the statute and actually covered by the contract. The High Court has considered only the aspect whether by overloading the vehicle, the owner had put the vehicle to a use not allowed by the permit under which the vehicle is used. This aspect is different from the aspect of determining the extent of the liability of the insurance company in respect of the passengers of a stage carriage insured in terms of Section 147(1)(b)(ii) of the Act. We are of the view that the insurance company can be made liable only in respect of the number of passengers for whom insurance can be taken under the Act and for whom insurance has been taken as a fact and not in respect of the other passengers involved in the accident in a case of overloading.” 21. The Tribunal has granted meager amount of compensation. The Tribunal has granted meager amount of compensation. But, the claimant-injured has not questioned the same, the same is reluctantly upheld. 22. Having said so, the impugned award merits to be upheld and the appeal is to be dismissed. Accordingly, the appeal is dismissed and the impugned award is upheld. 23. Registry is directed to release the awarded amount in favour of the claimant-injured strictly as per the terms and conditions contained in the impugned award after proper identification. 24. Send down the record after placing copy of the judgment on the Tribunal's file.