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2005 DIGILAW 377 (JK)

Oriental Insurance Co. Ltd. v. Mushtaq Ahmad

2005-12-22

PERMOD KOHLI

body2005
1. These Civil 1st Miscellaneous Appeals preferred by the Insurance Company arise out of an award dated 31-1-2002 passed by the Motor Accidents Claims Tribunal, Ramban in favour of respondents No.1 to 6, herein, who were the claimants before the Tribunal. Mehboob Ahmed and his wife Mst. Shakila Begum were traveling in Bus No. JK02 5355 which met with an accident on 5-6-2000 at Maruti, Tehsil Gandoh. Both of them sustained serious injuries and died as a result of the accident. The deceased, predecessor in interest of the claimants was 45 years of age and their mother was 40 years of age. Both of them were working as Safiawalas in Ramban Hospital. Deceased Mehboob Ahmed was earning Rs. 5000/- PM whereas Shakila Begum was earning Rs. 4000/- PM. 2. The Insurance Company, present appellant on being served before the Tribunal resisted the claim on variety of grounds: (i) that the claim petition is in-complete and discloses no cause of action; (ii) that the liability of the Insurance Company is limited within the ambit and scope of the policy of Insurance and cannot be held liable beyond the ambit, scope and conditions of the policy. It has also denied the knowledge of the accident. Further additional pleas were raised that the insurance company reserves the right to defend the action for insured owner and driver when the occasion arises. (iii) that the Insurance Company shall not be liable to pay any compensation if the driver of the offending vehicle was not holding a valid driving licence at the time of accident; (iv) the insurance Company is also not liable to pay compensation if the offending vehicle is being plied in contravention of the terms and conditions of route permit or fitness. 3. As regards the factual averments made in the petition from paras 17 to 22 the same were denied for want of personal knowledge. However, copy of the insurance policy was placed on record by the insured/appellant. The Tribunal framed following three issues: - 1. Whether the petition is not maintainable in the face of preliminary objections and additional pleas raised by respondent No.2? OPR-2 2. Whether Shakila Begum W/O Mehboob Ahmed R/O Maitra Ramban, aged 40 years, worked as Safaiwali, earning Rs. However, copy of the insurance policy was placed on record by the insured/appellant. The Tribunal framed following three issues: - 1. Whether the petition is not maintainable in the face of preliminary objections and additional pleas raised by respondent No.2? OPR-2 2. Whether Shakila Begum W/O Mehboob Ahmed R/O Maitra Ramban, aged 40 years, worked as Safaiwali, earning Rs. 4000/- a month, had died on 5-6-2000 at Gandoh Bhalesha, while traveling in Vehicle No. JK01D 5355, owned by respondent No.1 and insured with respondent No.2, as a result of rash and negligent driving by respondent No.1, holding valid driving licence? OPP 3. Whether the petitioners are entitled to compensation? If so, how much and from whom? OPP. 4. The claimant examined three witnesses Mushtaq Ahmed. Hamid Khan, Bahar Din, whereas no evidence was led by the respondents in the claim petition including the appellant herein. The trial of the petitions culminated into passing of the impugned award where-under an amount of Rs. 2,40,000/- on account of death of Mst. Shakila Begum, whereas Rs. 4,16,000/- and funeral expenses were awarded on account of death of Mehboob Ahmed. Both the claims were allowed with interest at the rate of 9% p.a. from the date of the petition. The share of the minor was directed to be deposited in their name till they attain the majority. 5. Aggrieved of the afore-said award the Insurance Company has preferred these appeals. These appeals are against a common judgment passed by the Tribunal. 6. Mr. Baldev Singh, learned counsel appearing for the appellant has sought the setting aside of the impugned judgment/award of the Tribunal on the following grounds: - (1) Negligence of the driver of the offending vehicle has not been proved and no liability can be fastened upon the Insurance Company unless the negligence is establish; (2) Liability of the insured i.e. the owner of the vehicle has not been fixed and consequently the Insurance Company cannot be made liable. (3) FIR relied upon has not been proved in evidence and thus the findings regarding accidents are perverse. (4) The bus was over-loaded which is a violation of the Insurance policy and thus no liability can be fastened upon the insured. 7. I have perused the impugned award. (3) FIR relied upon has not been proved in evidence and thus the findings regarding accidents are perverse. (4) The bus was over-loaded which is a violation of the Insurance policy and thus no liability can be fastened upon the insured. 7. I have perused the impugned award. As far as issues regarding maintainability of the petition are concerned, the Tribunal held the claim petition to be maintainable and stated that the accident itself gives cause of action. Regarding the liability of the Insurance Company beyond the limit prescribed, the Tribunal held that under the Motor Vehicle Act 1988 there is no limit of the liability of Insurance Company and thus this plea has no valid basis. While deciding issue No.2 the Tribunal relied upon FIR and held that the same discloses negligence of the driver of the offending vehicle. On the basis of the income as disclosed the Tribunal awarded the compensation. Regarding the liability the Tribunal held that the vehicle was owned by non-appellant No.1 and was insured with the Insurance Company. As far as the question of over-loading is concerned, the plea was rejected on the ground that no evidence was led by the Insurance Company to prove the violation of the Insurance policy or that the vehicle was over-loaded and particularly that the predecessor-in-interest of the claimants were the over-loaded persons. 8. Mr. B. Singh has relied upon case Minu B. Mehta and another vs. Balkrishna Ramchandra Nayan and another, AIR 1977 SC 1248. In this case the Apex Court while considering the vicarious liability of the owner of a vehicle arising out of the use of motor vehicle held as under: - x x x x A person is not liable unless he contravenes any of the duties imposed on him by common law or by the statute. In the case of a motor accident the owner is only liable for negligence and on proof of vicarious liability for the acts of his servant. Proof of negligence is therefore, necessary before the owner of the insurance company could be held to be liable for the payment of compensation in a motor accident claim case.� 9. Grounds (1) & (3) are inter-related and can be taken up together. Admittedly no eye witness has been produced in the case. Proof of negligence is therefore, necessary before the owner of the insurance company could be held to be liable for the payment of compensation in a motor accident claim case.� 9. Grounds (1) & (3) are inter-related and can be taken up together. Admittedly no eye witness has been produced in the case. Though, one of the petitioner, namely, Mushtaq Ahmed has stated that his parents died in an accident which was caused due to negligent driving of the driver of the offending vehicle. This witness is not the witness of the accident. The trial court primarily relied upon copy of FIR No.42/2000 of Police Station, Bhallesa, Gandoh dated 5-6-2000 produced before it. It is argued on behalf of the appellant that copy of the FIR was not proved before the Tribunal and thus the Tribunal committed illegality in placing reliance upon the same to infer the occurrence as also the liability. Reliance is placed upon a judgment of this Court reported in case Oriental Insurance Co. Ltd. Vs Sudesh Kumari, 1996 KLJ 671. In paras 12 & 13 of the afore-stated judgment a Coordinate bench of this Court observed as under: - 12. Fact remains that neither the insurance Policy nor the FIR have been proved during the course of proceedings before the Tribunal below. 13. So far strict rigorous of Evidence Act as well as of CPC in relation to production and proof of documents, those do not apply in strict terms of the proceedings before a Tribunal constituted under the provision of Motor Vehicles Act. It is also well known that the Tribunals are constituted to provide just compensation with utmost expedition to the dependants of a deceased victim or to an injured. As the case may be. Thus for adjudicating the claim petition the Tribunal can even evolve its own procedure so that the matter is expeditiously decided. It may also be appropriate to notice that to some extent the proceedings can be termed as summary in nature. Still the fact remains that while evolving summary procedure. I am of the confirmed opinion that the procedure underlying the provisions of Evidence Act and CPC is a proper procedure of course without insisting upon the technicalities of such laws.� 10. I have perused this judgment. Still the fact remains that while evolving summary procedure. I am of the confirmed opinion that the procedure underlying the provisions of Evidence Act and CPC is a proper procedure of course without insisting upon the technicalities of such laws.� 10. I have perused this judgment. The above directions of the Court do not in any manner lay down the proposition of law that the FIR cannot be relied upon for any purpose without its formal proof in accordance with the rigors of Evidence Act. Though the Court has observed that the procedure provided under the Evidence Act and Code of Civil Procedure is a proper procedure. The Tribunal besides relying upon the FIR has also stated that number of persons died and were injured in the same accident. There were a number of claim petitions before the Tribunal and award came to be passed. The learned counsel for the respondents has placed on record copy of the judgment dated 29-10-2002 passed in File No. 268/Claims and other connected matters. In this case the claimants led evidence to prove the occurrence as also the negligence of the driver. The Tribunal relying upon the evidence of various witnesses recorded in those claim petitions, held as under: - In order to prove rash and negligent driving on the part of the driver of the offending vehicle the petitioners Prito Devi, Ajit Singh, Haresh Kumar, Jaswant Singh and Ghulam Hussan Bhat have appeared in the witness box as their own witnesses. They were traveling in the offending vehicle at the time of the accident and have corroborated all the averments made in the claim petition. They have categorically stated that the accident took place due to the rash and rack less driving by the driver of the offending vehicle. There is no ground to disbelieve their statements because there is no evidence in rebuttal. They have stood the test of cross-examination and no counter version of the alleged accident has been suggested to them.� 11. They have categorically stated that the accident took place due to the rash and rack less driving by the driver of the offending vehicle. There is no ground to disbelieve their statements because there is no evidence in rebuttal. They have stood the test of cross-examination and no counter version of the alleged accident has been suggested to them.� 11. The Tribunal further relied upon the FIR which is also relied upon in the present case and returned its findings which are noticed here-under: - The fact of rash and negligent driving is further corroborated by the attested copy of the FIR which reveals that a case under section 279/337/338, 304-A RPC was registered against the driver of the offending vehicle for driving it in a rash and negligent manner and causing the accident which resulted in the death of the number of passengers whereas some passengers were grievously injured. The copy of the FIR is a public document and hence, it is admissible in evidence without any formal proof. The learned counsel for the injured had submitted that the accident took place because the bus was over-loaded. The offending vehicle has capacity of 42 persons but the driver was carrying more passengers which resulted in the said accident. In order to prove the sitting capacity of the bus, he has relied upon the statement of Co., Charanjit Singh RW who has deposed that the verified the registration certificate from the office of Regional Trans-port officer and got the certificate which reveals that sitting capacity of the bus was 12 only. The argument of the learned counsel for the insurer is not sustainable. There is no doubt that the bus was overloaded at the time of the accident but there is nothing on the record to suggest that the overloading was responsible for causing the said accident. Rather the petitioners have led cogent and un-impeachable evidence to prove that the accident was caused because of the rash and negligent driving by the driver of the offending vehicle. In view of what has been stated above, the petitioners have succeeded in proving that the accident was the result of careless and reckless driving and accordingly issues No. 1 & 4 are decided in favour of the petitioners and against the respondents.� 12. These findings relate to the same FIR and same occurrence. In view of what has been stated above, the petitioners have succeeded in proving that the accident was the result of careless and reckless driving and accordingly issues No. 1 & 4 are decided in favour of the petitioners and against the respondents.� 12. These findings relate to the same FIR and same occurrence. It is relevant to note that finding of negligence is in fact in sum and substance a findings against the driver and the owner. None of them have challenged the findings of the Tribunal, in the present appeals or in other cases arising out of the same accident. The award dated 24-10-2003 passed by the Tribunal in other connected matters has been challenged only by the Insurance Company and not by the driver or the owner. This finding has attained finality against them. The Insurance Company cannot be permitted to challenge the findings on this count. A Division Bench of the High Court of Himachal Pradesh in case Himachal Road Transport Corporation & ors Vs Kunta and others, 1999 ACJ 646 while examining a similar issue held as under: - 22. As stated above, save and except in FAQ No. 170 of 1991 the findings of the learned Tribunal as to the negligence of the truck driver, have not been assailed by the owner, driver and insurer of the truck. Such findings having thus become final are not open to challenge in the present case. Therefore, the only question for determination is whether the bus driver was guilty of composite negligence and, if so, to what extent? 13. A similar view was taken by the Punjab & Haryana High Court in case Haryana State through Secretary Transport, Chandigarh vs. Sudesh Raizada and others, 1991 ACJ 54, wherein it was held as under: - The findings of rash and negligent driving by Tarsem Lal driver of Haryana Roadways Bus No. HYX 2428 and causing accident were accepted by the State by not challenging the award in appeal. Since no appeal was preferred challenging the award, the State having accepted rash and negligent driving of its driver once, cannot be permitted now to say that the bus driver was not negligent qua the other claimants injured in the same accident between the same vehicles the findings that the driver was rash and negligent in driving the vehicle involved in the accident having been accepted by the State, it would be ridiculous be hold in other proceedings on the same facts and evidence that the driver was not rash and negligent. The very concept of res judicata shall then be eroded because it would amount to bringing into existence two contradictory judgments on the same set of facts which cannot be supported on any reasonable ground.� 14. In view of the specific findings of negligence having been returned by the Tribunal on the basis of evidence, produced before it, in other connected matters arising out of the same incident the plea raised by the appellant Insurance Company in the present case, loses its significance. 15. Mr. Baldev Singh has further argued with utmost vehemence that there is no finding of liability of the insured and unless the liability of the insured is determined, Insurance Company cannot be fastened with the liability. According to him under the Scheme of the Act, Insurance Company is required to discharge the liability of the insured. There is no dispute with this proposition. Section 149 of the Motor Vehicles Act as also the contract of Insurance provided for indemnification of the liability of the insured by the Insurance Company. Once a policy of Insurance is taken then it becomes the statutory liability of the insurance Company to indemnify the insured as far as the third party claims are concerned. This section is vouched such terms so as to transfer the liability of the insured to the Insurance Company once the existence of a valid contract of the insurer is established. The appellant has not denied the contract of Insurance. A copy of the insurance policy was placed on record. The name of the owner is duly reflected in the Insurance Policy and there is no dispute that the offending vehicle was owned by respondent No. 1. The appellant never disputed the relationship of respondent No. 1 with that of the driver as a master and servant. A copy of the insurance policy was placed on record. The name of the owner is duly reflected in the Insurance Policy and there is no dispute that the offending vehicle was owned by respondent No. 1. The appellant never disputed the relationship of respondent No. 1 with that of the driver as a master and servant. The occurrence of the accident is also not denied in the reply filed before the Tribunal. I have gone through the reply filed by the appellant company before the Tribunal and it would not be out of context to say that there was no specific denial either of the occurrence as also the death of the predecessors-in-interest of the claimant. The Tribunal has returned findings of the accident of the offending vehicle as also the rashness and negligence of the driver of the offending vehicle. This itself is sufficient to make the owner vicariously liable for the act of the driver, whether the vicarious liability can be inferred from the facts on record, the findings of the court imposing liability upon the Insurance Company cannot be faulted with. From the judgment impugned it is evidently established that the vehicle was owned by respondent No. 1 which met with the accident being driven by the driver. Neither respondent No. 1 has denied his relationship with the driver nor being the owner of the offending vehicle. Respondent No. 1 being insured under the policy, the appellant cannot be permitted to deny the statuary and contractual liability under such a vague plea. 1 don not find any valid ground to accept the contention of the appellant. Regarding the over-loading of the offending vehicle again the plea raised by the appellant was conditional viz if it is found that the vehicle was being plied in contravention of the insurance policy the Insurance Company has no liability. Having raised this plea it was obligatory upon the appellant company to have led necessary evidence or brought such material on record where from the violation of the Insurance policy could have been established. Mr. Baldev Singh has referred to observations of the Tribunal in the impugned judgment wherein the Tribunal has referred the contention of the Insurance Company that 51 passenger were traveling as against a sanctioned capacity of 42. There is no finding by the Tribunal that 51 persons were traveling in the offending vehicle. Mr. Baldev Singh has referred to observations of the Tribunal in the impugned judgment wherein the Tribunal has referred the contention of the Insurance Company that 51 passenger were traveling as against a sanctioned capacity of 42. There is no finding by the Tribunal that 51 persons were traveling in the offending vehicle. In para 8 of the memo of appeal, it is mentioned that the accident resulted into 27 deaths and 26 injured. Even if this is the true position there is nothing on record to show that the injured or the dead were in fact traveling in the bus, therefore, the argument of Mr. B. Singh regarding the violation of the Insurance policy is without any basis, evidence or material on record. 16. Apart from that it is settled law that the Insurance Company is liable as far as the third party liability of the Insurance Company is concerned and the third party liability cannot be avoided even if there is violation of the Insurance policy by the insured. Apex Court after examining the provisions of Motor Vehicles Act 1988 and some earlier judgments in case United India Insurance Co. Ltd Vs. Lehru and others, (2003) 3 SCC 338 held as under: - Thus under sub-section (1) the insurance company must pay to the person entitled to the benefit of the decree, notwithstanding that it has become entitled to avoid or cancel or may have avoided or cancelled the policy�. The words subject to the provisions of this section� mean that the insurance company can get out of the liability only on the grounds set out in Section 149. Sub-Section (7), which has been relied on, does not state anything more or give any higher right to the insurance company. On the contrary, the wording of sub-section (7) viz. no insurer to whom the notice referred to kin sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability� indicates that the legislature wanted to clearly indicate that insurance companies must pay unless they are absolved of liability on a ground specified in sub-section (2). This is further clear from sub-section (4) which mandates that conditions, in the insurance policy, which purport to restrict insurance would be of no effect if they are not of the nature specified in sub-section (2). The proviso to sub-section (4) is very illustrative. This is further clear from sub-section (4) which mandates that conditions, in the insurance policy, which purport to restrict insurance would be of no effect if they are not of the nature specified in sub-section (2). The proviso to sub-section (4) is very illustrative. It shows that the insurance company has to pay to third parties but it may recover from the person who was primarily liable to pay. The liability of the insurance company to pay is further emphasized by sub-section (5). This also shows that the insurance company must first pay, then it can recover. If Section 149 is read as a whole it is clear that sub-section (7) is not giving any additional right to the insurance company. On the contrary it is emphasizing that the insurance company cannot avoid liability except on the limited grounds set out in sub-section (2).� 17. Though I have considered the various grounds urged by the appellant Insurance Company in this appeal, the fact remains that the right of appeal of the insurance company is confined to the grounds enumerated under section 149 (2) of the Motor Vehicles Act which inter-alia reads as under: - 149. Though I have considered the various grounds urged by the appellant Insurance Company in this appeal, the fact remains that the right of appeal of the insurance company is confined to the grounds enumerated under section 149 (2) of the Motor Vehicles Act which inter-alia reads as under: - 149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks- (1) x x x x x x x x x x x x x x (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon 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 defend the action on any of the following grounds, namely: (a) That there has been breach of a specified 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 organized 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 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, (b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.� 18. It is equally settled proposition of law that the insurer can be permitted to contest the claim on all or any of the grounds without prejudice to the provisions contained in sub-section (2) of section 149 only while seeking leave of the Court under section 170 of the Motor Vehicles Act. For convenience section 170 is noticed here-under: - 170. Impleading insurer in certain cases- Where in the course of any inquiry, the claims Tribunal is satisfied that- (a) there is collusion between the person making the claim and the person against whom the claim is made, or; (b) the person against whom the claim is made has failed to contest the claim, it may, for reasons to be recorded in writing, direct that the insurer who may be liable tin respect of such claim, shall be impleaded as a party to the proceeding and the insurer so impleaded shall thereupon have, without prejudice to the provisions contained in sub-section (2) of Section 149, the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made.� 19. There is nothing in the memo of appeal to suggest that any such leave of the court was sought under section 170 of the Motor Vehicle Act before the Tribunal and the Tribunal has permitted the appellant to contest the claim on the grounds other than specified under section 149 (2) of the Act. The Apex Court in case National Insurance Co Ltd Vs. Nicolletta Rohtagi and others, (2002) 7 SCC 456 held as under: - We have earlier noticed that motor vehicle accident claim is a tortious claim directed against tortfeasors who are the insured and the driver of the vehicle and the insurer comes to the scene as a result of statutory liability created under the Motor Vehicle Act. The legislature has ensured by enacting Section 149 of the Act that the victims of motor vehicle are fully compensated and projected. It is for that reason the insurer cannot escape from its liability to pay compensation on any exclusionary clause in the insurance policy except those specified in section 149 (2) of the Act or where the condition precedent specified in Section 170 is satisfied.� It goes without saying that right of appeal is a statutory right and can be exercised within bounds of law. Under the Motor Vehicles Act dealing with the compensation arising out of vehicular accident the right of the Insurance Company to contest the claim both before the Tribunal and before the appellate forum is circumscribed. The appellant having not been permitted to contest the claim on behalf of the insured before the Tribunal cannot question the issues relating to the negligence and quantum of compensation because of the availability of specified grounds. None of the grounds urged before entitles the appellant to challenge the award impugned. This appeal accordingly fails and is dismissed.