1. This appeal by the insurer is directed against the judgment and award dated December 18, 1979, passed by the Motor Accidents Claims Tribunal, Dharwad, in M.C. (M.V.C.) No. 76 of 1978 fixing the liability of the insurance company along with the owner and the amount awarded to be paid by the insurance company under s. 110B of the M.V. Act.
2. The only point that was canvassed for our consideration by the learned counsel for the appellant is that the vehicle was not insured on the date of accident, namely, on February 11, 1978. If that is so, the Tribunal was not justified in fixing the liability on the insurance company.
3. A perusal of the records indicate that the insurance company has issued renewal receipt on February 14, 1978, after having received the premium due thereunder on February 13, 1978, and with effect from February 10, 1978, for a period of one year thereafter. The accident happened on February 11, 1978. Therefore, it is clear that policy was in force on the date of the accident, in which case the insurance company cannot escape its liability to pay the amount in question. Section 96(1) of the M.V. Act, 1939, reads thus :
'If, after a certificate of insurance has been issued under sub-section (4) of section 95 in favour of the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 95 (being a liability covered by the terms of the policy) is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment-debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.'
4. Section 96 (1) deals with the duty of the insurer to satisfy judgment against person insured in respect of third party risks. The provisions of the section have to be so construed as to ensure the object of Chap. VIII. The said chapter makes a provisions for the insurance of vehicles against third party risks, i.e., its provisions ensures that third parties who suffer on account of the user of a motor vehicle would be able to get damages for the bodily injuries or the damage to property suffered as a result of an accident by the use of the motor vehicle and that their ability to get damages should not be made dependent either on the financial condition of the driver of the vehicle, whose user led to the causing of the injury or the financial capacity of the owner of the vehicle, who permitted such user. Therefore, the right parties to get compensation being a statutory one is independent of the contractual right and obligation between the insurer and the insured. The liability of the insurer to third parties being statutory, when a third party suffers injury or damages due to the use of the motor vehicle, the right flows from the statute and is not contractual.
5. Therefore, s. 96(1) of the Act, with a view to protect the right 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 insured was entitled to avoid or cancel the policy of breach of certain restrictions, conditions and limitations contained therein. In the instant case, the case of the insurer was that the vehicle in question had not been insured with it at the time of the accident. But, as already indicated, the insurance company has issued renewal insurance receipt on February 14, 1978, having received for the premium on February 13, 1978, giving effect from February 10, 1978, for a period of one year. So, the renewal certificate was very much in force on the date of the accident i.e., February 11, 1978. Under the circumstances, the insurer may be entitled to proceed against the insured of the policy, either to avoid or cancel or have avoided or cancelled the policy, but the insurer is bound by the provisions of s. 96(1) of the Act, to pay the person entitled to the benefit of the decree any sum not exceeding the sum assured as payable thereunder. So, there is no force in the contention of the learned counsel for the insurer-appellant with regard to the findings of the Tribunal fixing the liability on the insurance company.
6. In the result, for the reasons stated above, this appeal fails and the same is dismissed. No costs.