Unlicensed-driver exclusion in motor insurance cannot defeat third-party protection unless the insured himself is in breach.

Compulsory third-party insurance under the Motor Vehicles Act is intended to secure real compensation for accident victims, so the unlicensed-driver exclusion cannot defeat that statutory protection unless the insured himself is in breach. Where the insured engaged a duly licensed driver and placed the vehicle in his charge, the insurer could not avoid liability merely because the driver negligently allowed an unlicensed person to use the vehicle and an accident followed. The exclusion clause in Section 96(2)(b)(ii) had to be construed, and if necessary read down, consistently with the statutory scheme. The insurer remained liable to satisfy the award.

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Issues: Whether the insurer could avoid liability under the policy exclusion for driving by an unlicensed person when the insured had engaged a licensed driver, who left the vehicle unattended and a cleaner then caused the accident; and whether the exclusion clause in Section 96(2)(b)(ii) of the Motor Vehicles Act could be applied so as to defeat the statutory protection afforded to victims of motor accidents.

Analysis: The statutory scheme under Sections 94 and 96 of the Motor Vehicles Act was intended to ensure real compensation to third-party victims and not to leave recovery dependent on the personal resources of the wrongdoer. The expression "breach" in Section 96(2)(b)(ii) was held to denote a breach by the insured, not a mere accidental or collateral occurrence caused by the negligence of the licensed driver. Where the insured had done everything within his power by engaging a duly licensed driver and placing the vehicle in his charge, the insurer could not avoid liability merely because the driver, through negligence, allowed the vehicle to be used by an unlicensed person. Section 84 of the Motor Vehicles Act also supported the conclusion that the driver had a statutory duty not to leave the vehicle unattended, and the exclusion clause had to be read down consistently with the main purpose of compulsory third-party insurance.

Conclusion: The insurer was not exonerated under Section 96(2)(b)(ii) and remained liable to satisfy the award.

Ratio Decidendi: An insurer cannot invoke the unlicensed-driver exclusion unless the insured is guilty of the breach, and such exclusion must be construed, and if necessary read down, in harmony with the statutory purpose of protecting third-party victims.

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