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2004 DIGILAW 168 (UTT)

United India Insurance Co. v. Narayani Devi

2004-08-19

RAJESH TANDON

body2004
JUDGMENT Rajesh Tandon, J. 1. Heard the learned Counsel for the parties. 2. Present appeal has been filed against the judgment and award dated 3.6.2002 passed by the Motor Accident Claims Tribunal, Tehri Garhwal. 3. Briefly stated the facts giving rise to the present appeal are that the respondent No. 1 filed a claim petition under Section 166-Aot MV Act for the grant of compensation on account of death of her husband in a motor vehicle accident on 27.6.2000 at 1.00 p.m. at Pilwa near village Kemaria Suar on Chamiala-Nageshwarsaur motor road involving bus No. UGY 8713. The petitioner alleged that the accident took place due to rash and negligent driving of the bus. 4. The respondents contested the claim. The owner of the vehicle has contended that the vehicle was comprehensively insured with the respondent No. 2, hence respondent No. 2 is liable to pay compensation. 5. Appellant Insurance Company has alleged that the cheque by which insurance premium was paid had been dishonoured by the Bank and it had been informed to the opposite party No. 1, the owner of the vehicle. The driver of the bus had no valid driving licence and the vehicle had no valid registration, fitness and permit. 6. On the pleadings of the parties the Claims Tribunal framed the following issues: (1) Whether this accident took place on 27.6.2000 at about 1 p.m. at Pilwa name-tok situated at Chamiala Nageshwar Saur motor road by rash and negligent driving of offending bus No. UGY 8713 by its driver? If so, its effect? (2) Whether the offending vehicle bus No. UGY 8713 was insured with opposite party No. 2 at the time of the accident? If so, its effect. (3) Whether the driver of the offending vehicle No. UGY 8713 was not holding a valid driving licence at the time of the Accident? (4) To what amount of compensation is the petitioner entitled and from which of the opposite parties? 7. The Claims Tribunal on the basis of the ocular evidence of P.W. 2 Kamal Singh has come to the conclusion that the accident took place due to the rash and negligent driving of Bus No. UGY 8713. 8. (4) To what amount of compensation is the petitioner entitled and from which of the opposite parties? 7. The Claims Tribunal on the basis of the ocular evidence of P.W. 2 Kamal Singh has come to the conclusion that the accident took place due to the rash and negligent driving of Bus No. UGY 8713. 8. In the answer of issue No. 2 the claims Tribunal has held that the vehicle was insured for one year on 10.3.2000 the cheque in question was returned dishonoured on 7.4.2000, the opposite party No. 1 was informed by registered post 9.5.2000 and even if it is assumed that on the date of accident the owner of the vehicle has received intimation regarding cancellation of insurance policy, even then the Insurance Company cannot escape from its liability in respect of the third party. 9. The Counsel for the respondents have relied upon the case of Oriental Insurance Co. Ltd v. Inderjit Kaur , in which the policy of insurance was issued on the basis of cheque. The cheque was dishonoured and the policy was subsequently cancelled. The Apex Court has held that the Insurance Company cannot avoid its liability in respect of the third party. The observations of the Apex Court are quoted below: 7. We have, therefore, this position. Despite the bar created by Section 64VB of the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to cover the bus without receiving the premium therefor. But reason of the provisions of Sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured. 10. The Counsel for the respondents has also referred Section 146(1) of the M.V. Act, where it has been laid down that no motor vehicle shall be plied without an insurance policy. Thus the Insurance Company is liable to pay compensation to the third party whether or not the premium of insurance policy has been paid. 11. The Claims Tribunal also framed issue on the point that whether the driver of the vehicle in question had valid driving licence. Thus the Insurance Company is liable to pay compensation to the third party whether or not the premium of insurance policy has been paid. 11. The Claims Tribunal also framed issue on the point that whether the driver of the vehicle in question had valid driving licence. The Insurance Company has nowhere proved that the driver of the vehicle had no valid driving licence. However in view of the observations made by the Apex Court in the case of United India Insurance Co. Ltd. v. Lehru and Ors. , the Insurance Company cannot absolve its liability towards third party. The Apex Court has held as under: Now let us consider Section 149(2). Reliance has been placed on Section 149(2)(a)(ii). As seen in order to avoid liability under this provision it must be shown that there is a breach. As held in Skandia's and Sohan Lal Passi's cases (supra) the breach must be on part of the insured. We are in full agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen while it is being driven by the thief there is an accident. The thief is caught and it is ascertained that he had no licence. Can the Insurance Company disown liability? The answer has to be an emphatic "no". To hold otherwise would be to negate the very purpose of the compulsory insurance. The injured or relatives of person killed in the accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner himself would be an innocent sufferer. It is for this reason that the Legislature, in its wisdom, has made insurance at least third party insurance compulsory. The aim and purpose being that an Insurance Company would be available to pay. The business of the company is to insurance. In all businesses there is an element of risk. All persons carrying on business must taken risks associated with that business. Thus it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time innocent parties must not be made to suffer or loss. Those provisions meet these requirements. We are thus in agreement with what is laid down in aforementioned cases viz. Thus it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time innocent parties must not be made to suffer or loss. Those provisions meet these requirements. We are thus in agreement with what is laid down in aforementioned cases viz. that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The Insurance Company must establish that the breach was on the part of the insured. 12. The Claims Tribunal has also recorded a finding that the deceased was 63 years of age at the time of accident. His annual income was held to be Rs. 15,000 per year and after deducting one-third for himself, if he would have been alive, the annual dependency was held to be 10,000. After applying multiplier of 5 the compensation was calculated as Rs. 50,000. The Claims Tribunal also awarded a sum of Rs. 2,000 for funeral expenses, Rs. 2,500 for loss of estate and Rs. 5,000 for loss of consortium. Thus a total sum of Rs. 59,500 as compensation has been awarded to the petitioner. In my opinion the amount of compensation awarded by the Claims Tribunal is just and proper. 13. The appeal has no force and is hereby dismissed. No order as to costs.