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2004 DIGILAW 244 (HP)

NATIONAL INSURANCE CO. LTD. v. SANTOSH KUMAR

2004-09-28

V.K.GUPTA

body2004
JUDGMENT V.K. Gupta, J. (Oral): In this appeal filed under Section 173 of the Motor Vehicles Act, 1988 by the appellant-Insurer against the award dated 7th March, 1996 passed by the learned Motor Accidents Claims Tribunal, Mandi in Claim Petition No. 56 of 1992 the only ground of challenge is that at the time of the accident, the person driving the vehicle in question was not possessed of a valid driving V licence and, therefore, the appellant-Insurer is not liable to pay the award amount. 2. The vehicle in question was a three wheeler bearing No. HP-05-0041. The owner of this vehicle is Shri Virender, respondent No. 2 in this appeal. It is the undisputed finding the Tribunal that as at the time of the accident, this vehicle was being driven by Chaman Lal, respondent No. 3 and that Chaman Lal of course did not possess a valid driving licence to drive the vehicle in question at the time of the accident. The Tribunals irrefutable finding is that as far as respondent No. 2 is concerned, the owner of the vehicle, he had not engaged or employed respondent No. 3 as the person to drive the vehicle. The Tribunals irrefutable finding is that respondent No. 2 had actually employed one Kahan Singh as the person to drive the vehicle and Karan Singh was possessed of a valid driving licence. 3. Based on the aforesaid facts the point which, therefore, arises for consideration in this appeal is whether the owner of the vehicle, i.e. respondent No. 2 can be held to be guilty of any violation or infringement so as to enable the appellant-Insurer to avoid its liability to pay the award amount. This point has to be decided in the light of the evidence adduced in the Tribunal and what emerges based on such evidence is that the appellant had not set up a case in the Tribunal that respondent No. 2 Chaman Lal was engaged by respondent No. 2 as a driver to drive the vehicle knowing fully that he did not possess a valid driving licence. On the other hand the thrust of the entire evidence is that respondent No. 2 had nothing to do with respondent No. 3 and respondent No. 2 actually had engaged only Kahan Singh to drive the vehicle and undoubtedly Kahan Singh was possessed of a valid driving licence. On the other hand the thrust of the entire evidence is that respondent No. 2 had nothing to do with respondent No. 3 and respondent No. 2 actually had engaged only Kahan Singh to drive the vehicle and undoubtedly Kahan Singh was possessed of a valid driving licence. In turn, if Kahan Singh handed. over the vehicle to respondent No. 3 to drive, without the consent, knowledge or authorisation from respondent No. 2, for that act of Kahan Singh, respondent No. 2 cannot be held guilty of any violation of infringement. 4. A two Judge Bench of the Supreme Court in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and others, reported in 1987(2) SCC.654 clearly held that Section 96(2)(b)(ii) of the Motor Vehicles Act, 1939 even though had extended immunity to the Insurer if a breach was committed of the condition excluding driving by a named person or by a person who was not fully licensed, the Insurer had to establish in support of such plea regarding breach that the insured was guilty of an infringement or violation of the promise that a person who is duly licensed will have to be the in charge of the vehicle. The very concept of infringement or violation of the promise that the expression "breach" carried within itself induced an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. It is only when the insured himself knowingly places a vehicle in charge of the person who does not hold a valid driving licence, can it be said that he is guilty of the breach. The Insurer must, therefore, establish that the breach was on the part of the Insured and it was insured who was guilty of breaching the promise or committing infringement of the contract. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive the vehicle himself, it cannot be said that the insured is guilty of any breach if this licensed driver in turn hands over the vehicle to an unlicensed person to drive at the time of the accident. The judgment in Skandia Insurance Co. The judgment in Skandia Insurance Co. Ltd. (supra) came up for consideration before a three Judge Bench of the Supreme Court in Sohan Lal Passi v. P. Sesh Reddy, reported in 1996(5) SCC 21, wherein, after approving the aforesaid ratio in Skandia Insurance Co. Ltd. (supra), their Lordships held as under :- "In other words, once there has been a contravention of the condition prescribed in sub-section (2)(b)(ii) of Section 96, the person insured shall not be entitled to the benefit of sub-Section (1) of Section 96. According to us, Section 96(2)(b)(ii) should not be interpreted in a technical manner. Sub-Section N (2) of Section 96 enables the insurance company to defined itself in respect of the liability to pay compensation on any of the grounds mentioned in sub-Section (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attached. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression breach occurring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the Court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-Section (1) of Section 96." 5. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-Section (1) of Section 96." 5. The aforesaid ratio and the proposition of law flowing therefrom have been fully endorsed and approved by a latest three Judge Bench judgment of the Supreme Court in the case of National Insurance Co. Ltd. v. Swaran Singh and others, reported in 2004(3) SCC 297. 6. In view of the aforesaid clear exposition of law and the undisputed facts including the fact of respondent No. 2 not at all having been guilty of any violation or infringement, the appellant cannot succeed in avoiding its liability to pay the award amount to the claimant-respondent No. 1. 7. In the result, therefore, the appeal fails and is dismissed but without any order as to costs. 8. Whatever amount the appellant has deposited in this Court shall be disbursed to claimant-respondent No. 1 along with the interest accrued thereupon until date.