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2004 DIGILAW 183 (CHH)

NATIONAL INSURANCE CO. LTD. v. CHAND KAUR

2004-10-01

S.S.SARON, V.M.JAIN

body2004
V. M. JAIN, J. ( 1 ) AS per office report, respondent Nos. 6, 7 and 8 have been duly served, whereas respondent No. 9 had refused to accept the notice and notice was received by his brother. However, no one was present on behalf of these respondents. ( 2 ) AFTER hearing learned counsel for the appellant insurance company and perusing the record, in our opinion, there are sufficient grounds to condone the delay of one day in filing the appeal. Hence, application under section 5 of the Limitation Act is allowed and delay in filing the appeal is condoned. ( 3 ) THUS, the appeal has been filed by the appellant insurance company against the award given by the Motor Accidents claims Tribunal, Rohtak, vide which a sum of Rs. 4,00,000 has been awarded as compensation to the claimants for the death of Rajbir deceased in a motor vehicular accident. ( 4 ) THE learned Tribunal while awarding the compensation in favour of the claimants had held the driver, the owner and the insurance company jointly and severally liable to pay the compensation amount to the claimants along with interest. ( 5 ) IN the present appeal filed by the appellant insurance company it has been submitted before us by learned counsel for the appellant insurance company that since surinder, driver, was not holding a valid driving licence at the time of accident, the appellant insurance company could not be held liable to pay the compensation amount to the claimants and in any case the appellant insurance company should have been given the right to recover the compensation amount from the owner, since it was the duty of the owner of the offending vehicle to see that its driver was holding a valid driving licence while driving the vehicle in question. ( 6 ) HOWEVER, we find no force in this submission of the learned counsel appearing for the appellant insurance company. In the present case, it has come in evidence that Surinder driver was holding a valid driving licence, copy Exh. R1, issued by the Licensing Authority, Bombay and it was renewed by the Licensing Authority at Jaipur and Sirsa, as deposed by Surinder driver. The accident in the present case has taken place on 13/9/1999. In the present case, it has come in evidence that Surinder driver was holding a valid driving licence, copy Exh. R1, issued by the Licensing Authority, Bombay and it was renewed by the Licensing Authority at Jaipur and Sirsa, as deposed by Surinder driver. The accident in the present case has taken place on 13/9/1999. RW 3, Gaurav Sharma, an official from the Regional transport Authority, Jaipur had proved the case of Surinder driver to the effect that the driving licence in question was issued to him by the Licensing Authority, Bombay on 29/9/1973 and this witness had also proved that the endorsement was made by regional Transport Authority, Jaipur vide which Surinder driver was allowed to drive public service vehicles w. e. f. 21/12/1979. Furthermore, RW 2, Pawan Kumar, licence clerk from the Licensing Authority, Sirsa had proved the renewal entries on the said driving licence showing that the said driving licence was renewed on 21. 12. 1995 up to 21/12/1998. The case of the appellant insurance company is that the validity of the said driving licence had expired on 21/12/1998 and as such Surinder driver was not holding a valid driving licence on the date of accident,. e. , on 13. 9. 1999. ( 7 ) IN our opinion, this point has recently been settled by a Bench of three Hon'ble judges of the Supreme Court, in the case of National Insurance Co. Ltd. v. Swaran singh, 2004 ACJ 1 (SC ). After considering the various judgments and various provisions of the Motor Vehicles Act, 1988, the hon'ble Apex Court gave the following summary of findings in para 102 of the report:" (i) Chapter XI of the Motor Vehicles act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object. (ii) Insurer is entitled to raise a defence in a claim petition filed under section 163-A or section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of section 149 (2) (a) (ii) of the said Act. (ii) Insurer is entitled to raise a defence in a claim petition filed under section 163-A or section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of section 149 (2) (a) (ii) of the said Act. (iii) The breach of policy conditions, e. g. , disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time. (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence (s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle, the burden of proof wherefor would be on them. (v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case. (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches of the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences available to the insurer under section 149 (2) of the Act. The Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences available to the insurer under section 149 (2) of the Act. (vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. (viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree. (ix) The Claims Tribunal constituted under section 165 read with section 168 is empowered to adjudicate all claims in respect of the accidents involving death or bodily injury or damage to property of third party arising from use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims, inter se, between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in section 174 of the Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149 (2) read with sub-section (7), as interpreted by this court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of the claim by the tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under section 174 of the Act as arrears of the land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award of the Tribunal. (xi) The provisions contained in subsection (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances the adjudication of their claims inter se might delay the adjudication of the claims of the victims. "from a perusal of the above, in our opinion, it would be clear that mere absence, fake or invalid driving licence are not in themselves defences available to the insurer against either the insured or the third parties and in order to avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver. Furthermore, in order to avoid their liability the insurance company must establish breach on the part of the owner of the vehicle, the burden of proof whereof would be on the insurance company. Furthermore, even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of valid licence by the driver, the insurer would not be allowed to avoid its liability towards the insured unless the said breach of the condition of driving licence is so fundamental as is found to have contributed to the cause of the accident. ( 8 ) IN the present case, in our opinion, nothing has come on the record to show that there was any breach on the part of the owner of the vehicle, since nothing has come on the record to show that at the time when the driver was employed by the owner, the driver was not holding a valid driving licence. Furthermore, if during the course of his employment, the driving licence of the driver had expired and even if this is treated as a breach on the part of the owner still, in our opinion, it could not be said that this breach of the condition of the driving licence was so fundamental as is found to have contributed to the cause of accident. If Surinder driver was otherwise holding a valid driving licence and was authorised to drive vehicles including heavy vehicles and even if his driving licence had expired, it could not be said that the expiry of the driving licence had contributed to the cause of accident. Under these circumstances, in our opinion, the appellant insurance company would not be allowed to avoid its liability even towards the owner (insured) in respect of the compensation amount awarded to claimants, in view of the law laid down by the Hon'ble supreme Court, in Swaran Singh's case, 2004 ACJ 1 (SC ). No other point has been urged before us in this appeal. For the reasons recorded above, finding no merit in this appeal, the same is hereby dismissed. Appeal dismissed. --- *** ---