NEW INDIA ASSURANCE CO. LTD. v. SRIKANTA GHOSH — 1970 DIGILAW 186 (ORI)

JUDGMENT : R.N. Misra, J. - This appeal and the connected revisions arise out of a common order passed by the Motor Vehicles Claims Tribunal, Cuttack, constituted u/s 110 of the Motor Vehicles Act, 1939. 2. Mr. Srikanta Ghosh who was Inspector General of Police of Orissa in November, 1966 was travelling by his own car No. ORC 4590 from Sambalpur to Cuttack on 27.11.66. His car was being driven by one Nakul Dora and in that car the other occupants were Biswanath Das, an orderly peon, Rasananda Garnaik, a constable on duty and his son Rajkishore Garnaik, aged about 12. At about 4 P.M. on 27.11.66 when the Ambassador car ORC 4590 of Mr. Ghosh was; proceeding towards Cuttack and had entered the Gurjang Bridge and had covered about half the distance of the length of that bridge, a truck bearing registration No. M.P.S, 5021 belonging to one S. Dilip Singh Chawlia and driven by one Dharam Singh came at uncontrollable speed from the opposite direction. The bridge was a narrow one and would not admit two vehicles to cross. The occupants of the car shouted out and showed signals to the truck not to proceed and yet the truck driver did not stop the vehicle and dashed head on against the front side of the Ambassador car as a result of which Mr. Ghosh's car was pushed back 20 to 30 feet and was damaged. Each of the occupants of the vehicle sustained injuries. 3. Claim under the Act was preferred by each of them Miscellaneous Case No. 186/66 was by Mr. Ghosh, the appeal from which in this Court is Miscellaneous Appeal No. 86 of 1968. The minor son of Rasananda Garnaik preferred a claim which was registered as Miscellaneous Case No. 13 of 1967. The claim by the driver Nakul Dora was registered as Miscellaneous Case No. 14/67. Similarly, the claim by Biswanath Das was registered as Miscellaneous Case No. 15 and that by Rasananda Garnaik as Miscellaneous Case No. 16 of 1967. The amount awarded by way of compensation in the other four cases being less than Rs. 2,000, no appeal is maintainable u/s 110D(2) of the Act. Therefore, four separate revisions have been filed in this Court being Civil Revisions No. 294, 295, 296 and 297 of 1968 arising out of awards made in Miscellaneous Cases Nos. 15,16,14 and 13 of 1967 respectively. 2,000, no appeal is maintainable u/s 110D(2) of the Act. Therefore, four separate revisions have been filed in this Court being Civil Revisions No. 294, 295, 296 and 297 of 1968 arising out of awards made in Miscellaneous Cases Nos. 15,16,14 and 13 of 1967 respectively. In each of these cases the Insurance Company, namely, the New India Assurance Company Limited is the Appellant or the Petitioner as the case may be. 4. The learned Tribunal has allowed compensation of Rs. 15,000/- to Mr. Ghosh; Rs. 250/- to the minor son of Rasananda ; Rs. 1500/- to the driver and Rs. 500/- each to the two other occupants who were the orderly peon and the constable on duty respectively. 5. The defence taken before the Claims Tribunal by the Insurance Company was that the driver of Mr. Ghosh's car had suffered from contributory negligence; the truck was not being driven at any uncontrollable speed and that it had not really dashed with such force as was alleged in the claim. It was next contended that the Insurance Company should have been notified of the accident either by the insured or by the claimant and in the absence of such notice, the Insurance Company was deprived of an opportunity of making an assessment of the actual loss. It was also contended that the claim was inappropriately high and the injuries as alleged were also disputed. 6. The hearing began by examination of the witnesses for the claimants with effect from 29.11.67. For claimants 10 witnesses in all were examined. P.Ws. 1,2,3,4, and 5 were doctors who had examined the injured persons and had testified to their injuries. They had also granted certificates testifying to the results of their examination of the injured persons. P.W. 6 was the Chief Inspector of Motor Vehicles. In his cross-examination he stated: I did not see the truck driver when I inspected the vehicles as he was under arrest. I was shown the licence of the driver of the truck which was one for light transport vehicles like car or jeep, but there was no licence for a driver to drive a heavy transport vehicle like a truck of the type involved in the accident. MPS 5021 was a heavy transport vehicle.... If the driver would have been more experienced and properly licensed, it could have been one of the reasons to avoid the accident. MPS 5021 was a heavy transport vehicle.... If the driver would have been more experienced and properly licensed, it could have been one of the reasons to avoid the accident. If the driver would have stopped the vehicle; no accident would have occurred. So, if the driver would have been more experienced and properly licensed, the accident would have been avoided. The driver in this case should not have driven the truck as he was not licensed to drive the truck and possessing the improper licence tantamounts to driving without licence. 7. Soon after this deposition had been given by P.W.6, an application was made by the Insurance Company to amend the written statement. An additional ground was sought to be taken in the defence that as the truck was being driven by a person not holding a proper licence, under one of the clauses of the policy, the Insurance company had no liability. By order dated 20th December, 1967, this amendment of the written statement was allowed. The learned Claims Tribunal directed: The learned advocate for the Petitioner also states that the law is so and therefore he will have no objection if the amendment is allowed by way of an additional statement without altering the written statement already filed. Therefore, the paragraph sought to be added is treated as an additional written statement. But in view of the purpose for which it is sought to be introduced no additional issue is necessary. 8. Four more witnesses were examined for the claimants they being P.W.7, the driver ; P.W.S, the orderly peon, P.W.9 the constable and P.W.10 Mr. Ghosh each one being a claimant. 9. On behalf of the Insurance Company, the Officer in charge of the Handapa Police Station and the owner of the truck were examined. The owner of the vehicle was set ex-parte by order No. 12 dated 14.8.67. Two questions were raised as issues before the Tribunal. Firstly, was the Petitioner in each of the cases entitled to any damage and if so, to what extent and secondly, was the insurer not liable for any breach of the Insurance Policy as contended by him ? The Tribunal came to find that the driver of the truck was rash and negligent and thus he fixed liability on the owner of the vehicle for damages sustained by the claimants. The Tribunal came to find that the driver of the truck was rash and negligent and thus he fixed liability on the owner of the vehicle for damages sustained by the claimants. He further found that it was not established by the Insurance Company that the driver of the truck did not have a proper licence. He then held that the Insurance Company was bound to reimburse the owner of the truck for any damages decreed against him and then proceeded to quantify the damages in respect of each of the claimants and awarded damages as already indicated. 10. The owner of the truck has not appeared. The dispute raised in this Court either by way of appeal or revision is at the instance of the insurance Company. Mr. Roy, learned Counsel for the insurer raised two questions in the main. Firstly, according to him, the finding reached by the Tribunal, that the insurer was liable tinder the Policy and that the defence raised by it of nonliability on account of the driver having no proper licence was not sustainable, is erroneous His next contention on the question of quantum of damage was confined to the award given in favour of Mr. Ghosh and Mr. Roy fairly did not seek to dispute the award of damages to the four other persons. Thus the common question raised in the appeal and the four revisions is in relation to the liability of the insurer on account of the driver of the truck not being properly licensed. In the appeal, only the other question relating to the quantum would arise. 11. Section 94 of the Motor Vehicles Act provides: (1) No person shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this chapter... Section 95 provides for the requirements of policies and indicates limits of liability. Section 95 provides for the requirements of policies and indicates limits of liability. Section 96(1) provides as follows: 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 interest on that sum by virtue of any enactment relating to interest on judgment. Sub-section (2) provides the grounds of objection available to the insurer in a dispute under Chapter 8 of the Act. For convenience, Sub-section (2) of Section 96 may also be extracted. Sub-section (2) provides the grounds of objection available to the insurer in a dispute under Chapter 8 of the Act. For convenience, Sub-section (2) of Section 96 may also be extracted. No sum shall be payable by an insurer under Sub-section (1) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had notice through the Court of the bringing of the proceeding, or in respect of any judgment so long as execution is stayed therein pending an appeal ; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action of any on the following grounds namely: (a) that the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident giving rise to the liability and that either the certificate of insurance was surrendered to the insurer or that the person to whom the certificate was issued has made an affidavit stating that the certificate has been lost or destroyed, or that either before or not later than fourteen days after the happening of the accident the insurer has commenced proceedings for cancellation of the certificate after compliance with the provisions of Section 115; or (b) that there has been a breach of special condition of the policy, being one of the following conditions namely (i) a condition excluding the use of the vehicle (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached, where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification ; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion ; or (c) that the policy is void on the ground that it was obtained by the nondisclosure of a material fact or by a representation of fact which was false in some material particular. 12. As it appears, the defences are three-fold, and so far as the present case is concerned, the defence sought to be raised was one which was covered under (b) (ii) of the aforesaid provisions. In the case of British India General Insurance Co. Ltd. Vs. Captain Itbar Singh and Others their Lordships of the Supreme Court stated: To start with it is necessary to remember that apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury. Sub-section (2) of Section 96 however gives him the right to be made a party to the suit and to defend it. The right therefore is created by statute and its content necessarily depends on the provision of the statute. The question then really is, what are the defences that Sub-section (2) makes available to an insurer. That clearly is a question of interpretation of the Sub-section....It would follow that an insurer is entitled to defend on any of the grounds enumerated and no others. If it were " not so, then of course no grounds of defence have been specified, they cannot be added to. To do that would be adding words to the statute.... We, therefore, think that Sub-section (2) clearly provides that an insurer made a Defendant to the action is not entitled to take any defence which is not specified in it.... Sub-section (2) in fact deals with defences other than those based on the conditions of a policy. Thus Clause (a) of that Sub-section permits an insurer to defend an action on the ground that the policy has been duly cancelled provided the conditions set out in that clause have been satisfied. Clause (c) gives him the right to defend the action on the ground that the policy is void as having been obtained by nondisclosure of a material fact or a material false representation of fact. Therefore, it cannot be said that in enacting Sub-section (2) the legislature was contemplating only those defences which were based on the conditions of the policy. 13. Therefore, it cannot be said that in enacting Sub-section (2) the legislature was contemplating only those defences which were based on the conditions of the policy. 13. It also seems to us that even if Sub-section (2) and Sub-section (3) were confined only to defences based on the conditions of the policy that would not have led to the conclusion that the legislature thought that other defences not based on such conditions, would be open to an insurer. If that was what the legislature intended then there was nothing to prevent it from expressing its intention. What the legislature has done is to enumerate in Sub-section (2) by Sub-section (6) that he cannot avoid his liability excepting by means of such defences. In order that Sub-section (2) may be interpreted in the way the learned Solicitor-General suggests we have to add words to it. The learned Solicitor-General concedes this and says that the only word that has to be added is the word "also" after the word "grounds". But even this the rules of interpretation do not permit us to do unless the section as it stands is meaningless or of doubtful meaning, neither of which we think it is. The addition suggested will, in our view, make the language used unhappy and further effect a complete change in the meaning of the words used in the Sub-section. 14. Thus it is clear on the basis of the aforesaid decision of their Lordships of the Supreme Court that the scope of the defence open to the insurer in the present case is confined only to one namely, that the driver had not been properly licensed. 15. Mr. Roy contended that u/s 2(5A) of the Act, the driving licence has been defined to mean the document issued by a competent authority under Chapter II authorising the person specified therein to drive a motor vehicle or a motor vehicle of any specified class or description. Section 3 Provides (1) No person shall drive a motor vehicle in any public palace unless he holds an effective driving licence issued to himself authorising him to drive the vehicle ; and no person shall so drive a motor vehicle as a paid employee or shall so drive a transport vehicle unless his driving licence specifically entitles him so to do. Section 5 provides: No owner or person in charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of Section 3 or Section 4 to drive the vehicle. According to Mr. Roy, the driver of the truck must be taken to be a person not entitled to drive the vehicle and in view of the fact that the insured i.e. the owner of the truck had allowed such a person to drive the vehicle he had committed a bread of the Insurance policy. The examination of this question involves two aspects. Firstly it requires a finding that the driver of the truck was not properly licensed and upon such a fact being found, the legal aspect about the insurer being entitled to take such a plea. 16. Mr. Roy contends that the insurer had taken the earliest steps to raise the defence on this aspect The licence of the driver had been seized in the criminal case in which the driver of the truck was prosecuted for rash and negligent driving. This fact is clear from the seizure list of the criminal case The prosecutor for reasons best known to it did not exhibit the licence in the case. The licence was actually withdrawn from the Court by the admitted power of Attorney Holdep of the insured ?the owner of the truck. He was called upon to produce the same and evidence was led to show that the licence had been returned to the driver. All steps taken by the insurer to get the licence on record failed. In such circumstances, Mr. Roy says, adverse inference should be drawn against the owner of the vehicle and a finding should be reached that the truck was being driven by an unlicensed driver. Mr. Roy also seeks to place reliance on the evidence of P.W. which I have already extracted. The evidence of P.W.I, the Sub Inspector of Police also shows that he had seized the driving licence of Dharam Singh, the driver of the truck MPS 5021. The licence showed that he was authorised to drive light motor vehicles. The insured clearly stated:? M.P.S. 5021 truck is a heavy transport vehicle. Om Prakash Agarwal is my power of attorney holder and he was looking after my case. After the criminal case was over, he took return of the papers. Ext. C is his signature. The licence showed that he was authorised to drive light motor vehicles. The insured clearly stated:? M.P.S. 5021 truck is a heavy transport vehicle. Om Prakash Agarwal is my power of attorney holder and he was looking after my case. After the criminal case was over, he took return of the papers. Ext. C is his signature. The driving licence was returned to the driver Dharam Singh. He is no longer in my service. I do not know his whereabouts. Ext. D is a letter written by Om Prakash Agarwal on my behalf to insurance Company. While the truck owner had made the aforesaid statement in his examination in chief, in cross examination he had stated: The driver had a valid licence to drive the truck No. MPS 5021. 17. The learned Tribunal referred to this aspect of the matter and came to hold: The merits or otherwise of these contentions are first to be considered. In the first place the owner of the vehicle, that is, the opposite party No. I who was examined as the witness No. 2 for the contesting opposite party No. 2 has admitted in clear terms that the driver had a valid licence to drive the truck MPS 5021. So also the O.P.W.1 who was the officer in charge and who had investigated into the case relating to the accident has stated in his cross examination that the driver had a proper and valid driving licence. He says that he had seized the licence which showed that he was authorised to drive light motor vehicles and he had forwarded that licence to Court. The said licence was' not proved before the criminal court whose judgment as per Ex. 8 will show that the court accepted the position that the driver had a valid and proper licence to drive and, therefore, acquitted him of the charge under the Motor Vehicles Act for alleged driving without a proper licence. The Chief Inspector of Motor Vehicles (P.W.6) has stated that the licence was shown to him which was for light transport vehicles but it was not one to drive a heavy vehicle but he did not see the driver. The seizure list which had been proved as Ex. A showed that a light vehicle licence only was seized and the evidence of the O.P.W.2 is that his authorised agent had taken return of the driving licence etc. The seizure list which had been proved as Ex. A showed that a light vehicle licence only was seized and the evidence of the O.P.W.2 is that his authorised agent had taken return of the driving licence etc. But this authorised agent was not summoned nor was any attempt made by the opposite party No. 2 to prove the licence in court to see whether in fact it was not a proper and valid a licence and the definite evidence of the owner of the vehicle, that is O.P.W.2 is that the driver had a proper and valid licence to drive a truck and the finding of the criminal court that he (driver) had a proper licence are facts to show that the driver had a valid licence and it is not proved beyond doubt that he had no licence to drive a a truck. 18. The view adopted by the Claims Tribunal cannot be said to be erroneous. Mr. Roy's plea that an adverse inference should be drawn against the owner of the vehicle for non-production of the licence cannot be accepted because it is not shown that the licence is still in his custody and though it is available with him he had intentionally withheld it. The explanation given by the truck owner that the licence has since been returned to the driver who is no more in his employment on the materials on record, cannot but be accepted and once such an explanation is accepted, there is no basis in law to draw an adverse inference against the truck owner and on the basis of such inference to find that the driver of the truck was not properly licensed. If the Insurance company wanted to rely on that fact, steps should have been taken to bring into evidence the licence and the fact that the truck driver was not licensed to drive a heavy vehicle. Difficulty in establishing such a fact by the insurer cannot give rise to a position that an adverse inference can be drawn against the truck owner and the burden that lay on the insurer can be taken to have been discharged. I would, therefore, in agreement with the Tribunal hold that the insurer has failed to establish that the driver of the truck was not possessed of a valid driving licence in respect of a heavy motor vehicle. I would, therefore, in agreement with the Tribunal hold that the insurer has failed to establish that the driver of the truck was not possessed of a valid driving licence in respect of a heavy motor vehicle. The admission of O.P.Ws.1 and 2 who were witnesses for the Insurance company has been rightly relied upon in the facts of this case by the tribunal and in view of such admission, another view is not open to be taken on the materials on record. 19. The next question to be examined in this connection is as to whether even if the driver of the truck was not properly licensed a defence of this type is entertainable in law. Mr. Parija, learned Counsel for the other side seeks to rely upon a decision of their Lordships of the Supreme court in the case of New Asiatic Insurance Co. Ltd. Vs. Pessumal Dhanamal Aswani and Others, wherein it has been said: Thus the contract between the insured and the company may not provide for all the liabilities which the company has to undertake vis-a-vis the third parties, in view of the provisions of the Act. We are of opinion that once the company had undertaken liability to third parties incurred by the persons as specified in the policy, the third parties' right to recover any amount under or by virtue of the provisions of the Act is not affected by any condition in the policy. Considering this aspect of the terms of the policy, it is reasonable to conclude that proviso(a) of paragraph 3 of Section II is a mere condition affecting the rights of the insured who effected the policy and the persons to whom the cover of the policy was extended by the company, and does not come in the way of third parties claim against the company on account of its claim against a person specified in paragraph 3 as one to whom cover of the policy was extended. 20. In view of the finding already reached by me that the Insurance Company has failed to establish that the driver of the truck was not properly licensed, examination of this question becomes academic and need not be finally decided. 21. On this finding alone that the defence raised by the insurer is not valid, the revisions are bound to fail since no other question arises therein. 22. 21. On this finding alone that the defence raised by the insurer is not valid, the revisions are bound to fail since no other question arises therein. 22. So far as the appeal is concerned, Mr. Roy raised the contention that the quantum awarded was excessive. Mr. Parija contended that the Insurance company was not entitled to dispute the quantum and had the statutory liability to reimburse the insured in respect of any liability under Chapter 8 against him. Thus, according to Mr. Parija this contention of Mr. Roy is not tenable particularly in view of the fact that the owner of the vehicle does not dispute the quantum. The contention of Mr. Roy that the owner of the vehicle did not co-operate with the Insurance company cannot be accepted in view of the fact that he was examined himself as a witness for the Insurance company and made certain statements in his evidence in chief to support the stand of the Insurance company, though he later on resiled from it in his cross-examination. 23. The Claims Tribunal has awarded compensation of Rs. 15,000/- to Mr. Ghosh. The basis for determining this quantum has been indicated thus: Therefore, I hold that due to the accident, the Petitioner ( Mr. Ghosh) suffered bodily pain of his limbs including eyes and ears, had received shock and was unable to do his duties for a period and further as a result of the accident he has got a permanent disability of his foot which occasionally makes him unable to stand strain due to walking and also got permanent bad effect on his vision and considering all these circumstances, the amount of compensation to be awarded to him has to be fixed. Of course, he has not got any vouchers for the medicines he says to have purchased besides those which he gets free as a Government servant. I have already stated in the earlier portions of this judgment that the principles on which damages should be awarded in such cases are the status of the Petitioner, the sufferings by him immediately after the accident as well as the permanent disability which subsists in his bodily movement due to the accident are matters which should be taken into consideration and I think having regard to all these circumstances Rs. 15,000/- can be reasonably fixed as the compensation he is to get from the opposite parties. 24. An analysis has not been given in this appeal to indicate in what way the compensation fixed by the Tribunal in his award is arbitrarily excessive. In fixing quantum of compensation in such circumstances, there is bound to be some element of arbitrariness because after certain salient features are indicated, the matter would normally be left to the Tribunal to take a reasonable view of those facts and come to fix the quantum of compensation. Once such an amount is determined unless a positive basis is indicated to refute such quantification, I do not think by adopting another arbitrary standard, interference with the quantum determined by the tribunal would be called for. There may be cases where the quantum determined is so excessive or out of the way and disproportionate to the facts indicated that there may be scope for interference. But the present one is certainly not a case. I, therefore, do not propose to interfere with the quantum as well. 25 On the aforesaid analysis, the appeal also fails. In the facts of this case I think it proper to direct both parties to bear their own expenses of this appeal and the revisions.