Motor insurance liability: insurer remains bound unless the insured willfully permits unlicensed driving in breach of policy conditions.

An insurer cannot avoid third-party liability merely because a vehicle was driven by an unlicensed person if the insured did not willfully permit the breach. The exclusion for driving by an unlicensed person under the Motor Vehicles Act was construed to require a breach by the insured himself, and mere proof of unlicensed driving was held insufficient where the owner had engaged a licensed driver and placed the vehicle in his charge. The owner was also not absolved, because an act authorised in substance but done in an unauthorised manner by a servant in the course of employment remains within the scope of employment as against third parties. The insurer was therefore liable to satisfy the award jointly and severally with the owner.

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Issues: Whether the insurer was liable to satisfy the award when the vehicle was being driven at the relevant time by an unlicensed person with the consent of the licensed driver employed by the owner, and whether the owner could be absolved on the ground that he had not personally authorised that manner of driving.

Analysis: The liability of the owner was held to arise on the principle that an authorised act, if done in an unauthorised manner by a servant acting in the course of employment, remains within the scope of employment so far as third parties are concerned. The licensed driver had been duly engaged by the owner and the unlicensed cleaner was allowed to drive the vehicle in connection with the owner's business. On the insurance issue, the exclusion relating to driving by an unlicensed person under Section 96(2)(b)(ii) of the Motor Vehicles Act, 1939 was construed as requiring a breach by the insured himself. The insurer could avoid liability only if it was shown that the insured willfully permitted the breach. Mere proof that the vehicle was driven by an unlicensed person was insufficient where the insured had done everything within his power by engaging a licensed driver and placing the vehicle in his charge.

Conclusion: The insurer was not absolved of liability and was jointly and severally liable to pay the compensation along with the owner.

Final Conclusion: The appeals succeeded to the extent that the insurer was brought in as liable to satisfy the compensation award, and the owner was not left solely responsible.

Ratio Decidendi: An insurer cannot repudiate liability under the motor insurance policy merely because the vehicle was driven by an unlicensed person, unless the insured is shown to have willfully committed the breach; an authorised act done in an unauthorised manner in the course of employment does not, by itself, absolve the owner or insurer from third-party liability.

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