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1989 DIGILAW 7 (MAD)

Vaidyanatha Pillai v. Narasimhan

1989-01-03

PADMINI JESUDURAI

body1989
Judgement JUDGMENT :- The claimant, who was awarded compensation by the Motor Accidents Claims Tribunal for injuries sustained by him an accident caused by the Jeep TNU 3220, belonging to the second respondent, insured with the third respondent and being driven by the first respondent in a rash and negligent manner, has filed the present appeal challenging the award absolving the third respondent, the Insurance Company and casting liability on the first respondent, the driver on the vehicle. 2. Facts briefly are: on 09-12-1973 at about 5.45 p.m. while the appellant was coming from the bus stand at Paramakudi carrying betel leaves bundle on his cycle, he was knocked down by Jeep TNU 3220. The jeep was driven in a rash and negligent manner by the first respondent. The appellant sustained compound fracture of the left leg bone below the knee and above the ankle and the foot was crushed. The appellant underwent treatment, which finally left him with permanent disablement. The appellant filed M.C.O.P. No. 20 of 1975 before the Motor Accidents Claims Tribunal (Subordinate Judge), Ramanathapuram at Madurai, claiming a total compensation of Rs. 20,000/-. 3. The first respondent resisted the action contending that one Murugan, who was the regular driver of the jeep requested him to take the jeep for a trial, run, since some repairs had been done to the jeep just then, and that he did not drive the vehicle in a rash and negligent manner. The accident had occurred as a result of the negligence of the appellant. The claim was also considered excessive. The second respondent filed a counter stating that his regular driver was Murugan, who had stationed the jeep in the ESSO Petrol Bunk, after inflating air to the wheels and had gone for taking tea in a nearby tea shop. At that time, the first respondent, without any authority, on his own had taken the vehicle, which had resulted in the accident. The claim was excessive. At that time, the first respondent, without any authority, on his own had taken the vehicle, which had resulted in the accident. The claim was excessive. The third respondent filed a counter challenging its liability on the ground that the first respondent was not the employee of the second respondent at the time when he drove the vehicle and had taken the vehicle without the consent and knowledge of Murugan, the regular driver of the second respondent and that, therefore, the second respondent was not vicariously liable for the rashness and negligence of the first respondent and consequently the third respondent also could not be called upon to indemnify. 4. Before the Tribunal, the appellant examined himself as P.W. 2 examined the Medical Officer, who treated him as P.W. 1 and examined another witness as P.W. 3. Exts.A-1 to A-3 were marked on his side. On behalf of the respondents, the first respondent was examined as R.W. 1 and Murugan, the driver of the second respondent, was examined as R.W. 2. Exts.B-1 to B-3 were marked on their side. 5. On the above material, the Tribunal held that the accident was due to the rash and negligent driving of the first respondent and fixed the compensation at Rs. 11,000/- directing the third respondent, the Insurance Company to pay the amount awarded. Challenging its liability to pay compensation, the third respondent filed A.A.O. No. 77 of 1977 before this Court. This Court felt that there was no clear finding by the Tribunal as to whether the vehicle had been taken by the first respondent with or without the consent of the second respondent or his driver and therefore, remanded the matter for decision on that issue, giving opportunity to both parties to adduce further evidence. After remand, the appellant did not choose to adduce any evidence, either oral or documentary. On behalf of the respondents, R.Ws. 3 to 6 were examined and Exts.B-4 and B-6 were marked. 6. The Tribunal, on a consideration of the evidence, gave a finding that the 1st respondent did not receive any authorisation or consent from the second respondent's driver, R.W. 2 and that the first respondent drove the vehicle without the consent and knowledge of R.W. 2. 3 to 6 were examined and Exts.B-4 and B-6 were marked. 6. The Tribunal, on a consideration of the evidence, gave a finding that the 1st respondent did not receive any authorisation or consent from the second respondent's driver, R.W. 2 and that the first respondent drove the vehicle without the consent and knowledge of R.W. 2. Interpreting the exclusion clause found in the policy of insurance, Ex.B-1, whereby the third respondent, the Insurance Company, could not be called upon to indemnify the damages caused by persons not be called upon to indemnify the damages caused by persons not authorised by the second respondent, the owner, the Tribunal, held that the Insurance Company, as per the policy of insurance, was not liable to indemnify. The Tribunal therefore passed an award against the first respondent alone. Aggrieved with this finding absolving the liability of the insurance company, the claimant has filed this appeal. 7. Thiru R. Kannan, learned counsel for the appellant contended that on the finding given by the Tribunal, viz., that R.W. 1 had taken the vehicle without the authority or without the consent of Murugan, the regular driver of the second respondent, the Insurance Company, the third respondent herein, would be liable since the second respondent had not committed any breach of any of the terms of the policy of insurance between him and the third respondent, the Insurance Company. Learned counsel placed reliance upon the recent decisions of the Supreme Court, construing the provisions of the Motor Vehicles Act with reference to the exemption clauses found in the insurance policies. Reliance was placed upon the decision of the Supreme Court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 ACJ 411 : ( AIR 1987 SC 1184 ), which is directly on the point and also the decision in Guru Govekar v. Filomena F. Lobo, 1988 ACJ 585 : ( AIR 1988 SC 1332 ), which also reiterates the same principles laid down in the earlier decision. According to the learned counsel the exemption clause in the policy of insurance would not absolve the insurer, so long as the insured had not been proved to have committed breach of any of the terms of the policy of insurance. According to the learned counsel the exemption clause in the policy of insurance would not absolve the insurer, so long as the insured had not been proved to have committed breach of any of the terms of the policy of insurance. In the instant case even the Tribunal had found that the first respondent had taken the jeep without the consent and knowledge of the regular driver of the second respondent, the insured. 8. Thiru E. Padmanabhan, learned counsel for the second respondent and Thiru R. Vedantham, learned counsel for the third respondent were also heard. 9. After remand the Tribunal had given a specific finding that the first respondent took the jeep without the consent and even without the knowledge of Murugan, the regular driver of the second respondent. It is on this finding that the question whether the third respondent is liable or not, will have to be decided. 10. In Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 ACJ 411 : ( AIR 1987 SC 1184 ), the facts are more or less similar. A truck loaded at Barajadi and bound for Baroda had reached Baroda, was unloaded and was parked by the regular driver, who had a regular driving licence. Leaving the truck with the engine running and the ignition key in the ignition lock, the driver had gone to the opposite shop for snacks. The vehicle was under the control of the cleaner. The cleaner had no licence to drive and he meddled with the vehicle and drove the vehicle when the accident occurred. The Tribunal found the insured vicariously liable along with the driver and the cleaner. The High Court holding that though the driver of the truck had been negligent in leaving the vehicle with the cleaner with the engine running and with the ignition key in the ignition lock yet, in view of the fact that the owner, the insured, had never given permission to his cleaner to drive the vehicle, the insured had not committed any breach of the contractual conditions embodied in the policy of insurance and that, therefore, the insurer could not plead any exemption on the ground that the owner had committed breach of the specified condition. The Insurance Company, therefore, was directed to indemnity. Aggrieved with the finding, the Insurance Company filed an appeal before the Supreme Court. 11. The Insurance Company, therefore, was directed to indemnity. Aggrieved with the finding, the Insurance Company filed an appeal before the Supreme Court. 11. Before the Supreme Court, on behalf of the Insurance Company it was contended that the policy contained an exclusion clause, extending immunity to the insurance company, if a breach is committed of the conditions excluding driving by any person, who was not fully licensed. It was, therefore, contended that by virtue of the above exclusion clause, the insurance company could not be called upon to indemnify on behalf of the insurer, since there was a breach of one of the terms of the policy of insurance. The Supreme Court rejected this defence built on the exclusion clause, on the following three grounds ( AIR 1987 SC 1184 at p. 1189) :- "1. On a true interpretation of the relevant clause which interpretation is at peace with the conscience of Sec.96, the condition excluding driving by a person not duly licensed, is not absolute and the promisor is absolved once it is shown that he has done everything in his power to keep, honour and fulfil the promise and he himself is not guilty of a deliberate breach. 2. Even if it is treated as an absolute promise, there is substantial compliance therewith, upon an express or implied mandate being given to the licensed driver, not to allow the vehicle to be left unattended, so that it happens to be driven by an unlicensed driver. 3. The exclusion clause has to be 'read down' in order that it is not at war with the 'main purpose' of the provisions enacted for the protection of victims of accidents so that the promisor is exculpated when he does everything in his power to keep the promise." The Court further observed as follows (at p. 1190 of AIR) :- "It is, therefore, abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise, that a person who is not duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression 'breach' carries within itself induces an inference that the violation or infringement on the part of the promiser must be wilful infringement or violation. The very concept of infringement or violation of the promise that the expression 'breach' carries within itself induces an inference that the violation or infringement on the part of the promiser must be wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect, how can it conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is 'guilty' of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insured cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance." The Supreme Court finally held that the insurance company liable on the ground that the insured had not committed breach of any of the terms of the policy of insurance. 12. Yet another principle has been reiterated by the Supreme Court in Guru Govekar v. Filomena F. Lobe, 1988 ACJ 585 : ( AIR 1988 SC 1332 ) where the insurance company was held liable for damages resulting from the negligent driving of a car, which had been entrusted by the owner to an electrical repairer for the purpose of carrying out certain major electrical repairs and the car was taken by an employee of the electrical repairer, a mechanic when the accident occurred. The insurance company sought to avoid the liability contending that the insured had allowed or caused an independent contractor viz., the electrical repairer to use his vehicle in a public place and that, therefore, the insurance company would not be liable. The insurance company sought to avoid the liability contending that the insured had allowed or caused an independent contractor viz., the electrical repairer to use his vehicle in a public place and that, therefore, the insurance company would not be liable. The Supreme Court negatived the above contention and held that though under the Law of Torts, the owner might not be liable on the principle of vicarious liability, yet the insurer was liable to pay compensation by virtue of Sections 94 and 95 of the Motor Vehicles Act. The Supreme Court overruled the decision of this Court in D. Rajapathi v. University of Madurai, 1980 ACJ 113 : ( AIR 1980 Mad 219 ), which had taken a contrary view. The Court observed (at p. 1335 of AIR) : "The liability to pay compensation in respect of death of or injury caused to the person or property of a third party undoubtedly arises when such injury is caused when the insured was using the vehicle in a public place. It arises when the insured has caused or allowed any other person (including an independent contractor) to use his vehicle in a public place and the death of or injury to the person or property of a third party is caused on account of the said vehicle during such period, unless such other person has himself taken out a policy of insurance to cover the liability arising out of such an accident." The Supreme Court referred to one of its earlier decisions in New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani, AIR 1964 SC 1736 , where the owner of a motor car insured under a comprehensive policy, had permitted another person who had insured his own car with another company, to drive it and while the other person was driving the car, it met with an accident, in which one person died and another person sustained injuries. Both of them were in the car. Both of them were in the car. On claim petitions being filed, the Supreme Court held that the insurer of the motor car involved in the accident was liable to indemnify the person or class of persons specified in the policy in respect of any liability, which the policy purported to cover in the case of that person or those classes of persons and if the policy covered liability to third parties, the insurer was bound to indemnify the person or classes of person specified in the policy. On the basis of Sec.96(2) of the Motor Vehicles Act, the insurer was bound to pay to the person entitled to the benefit of a decree he had obtained in respect of any liability covered by the terms of the policy against any person, irrespective of the fact that the insurer was entitled to avoid or cancel the policy. 13. After referring to this decision and certain other decisions on the aspect, the Supreme Court in Guru Govekar v. Filomena F. Lobo, 1988 ACJ 585 : ( AIR 1988 SC 1332 ) finally observed (at p. 1338 of AIR) :- "Any other view will expose innocent third parties to go without compensation when they suffer injury on account of such motor accidents and will defeat the very object of introducing the necessity for taking out insurance policy under the Act." 14. It therefore follows that unless the insured himself commits breach of any of the terms of the policy of insurance of the nature specified in Section 96(2) of the Act, the insurance company cannot avoid liability. In the instant case, the positive finding of the Tribunal is that, the first respondent drove the vehicle, without the knowledge and consent of the regular driver, R.W. 2. The second respondent had employed a qualified driver R.W. 2, and had entrusted the vehicle to him. He had, therefore, done everything in his power to keep, honour and fulfil the promises of the policy of insurance. He had not committed breach of any of the terms of the policy of insurance. Following the law laid down in the decisions of the Supreme Court, referred to above, this Court has necessarily to come to the conclusion that the third respondent cannot take shelter under the exemption clause and is liable to pay the compensation awarded to the appellant. 15. In the result, the appeal is allowed. Following the law laid down in the decisions of the Supreme Court, referred to above, this Court has necessarily to come to the conclusion that the third respondent cannot take shelter under the exemption clause and is liable to pay the compensation awarded to the appellant. 15. In the result, the appeal is allowed. No costs.