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2008 DIGILAW 634 (HP)

Oriental Insurance Company Ltd. v. Rajan Kumar

2008-12-30

SANJAY KAROL

body2008
JUDGMENT Sanjay Karol, J. 1. Both the claimant and the insurer are aggrieved by the impugned award dated 1st February, 2006 passed by the Motor Accident Claims Tribunal, Hamirpur, H.P. in MAC Petition No. 22 of 2004 titled as Rajan Kumar v. Tilak Raj and Ors. 2. The claimant, 25 years of age, having sustained multiple injuries in a road accident leading to para plegia on both lower limbs, rendering him to be crippled for the rest of his life has been awarded compensation of Rs. 7, 00,000/- by the Tribunal. The claimant is aggrieved of the fact that the compensation is on the lower side whereas the insurer is aggrieved of the fact that the liability has been wrongly fastened upon the Insurance Company. 3. It is a matter on record that the insurer did not seek permission under Section 170 of the Motor Vehicles Act (hereinafter referred to as the 'Act') and therefore the scope of challenge in the appeal filed by the insurer is limited. 4. Claimant Sh. Rajan Kumar filed a claim petition under Section 166 of the 'Act' claiming compensation of Rs. 10,00,000/-. On 5th February, 2004 the claimant was hit by vehicle No. HR-29-B-6417 owned by Sh. Inder Singh Kataria and driven by Sh. Tilak Raj. In the accident which took place at Matewal Punjab, the claimant sustained multiple injuries and had to be hospitalized for medical treatment. Initially he was treated at Civil Hospital, Hoshiarpur from where he was referred to Dayanand Medical College and Hospital, Ludhiana. 5. The claim petition was opposed by the owner on the ground that neither the petitioner had any locus to file the petition nor did it disclose any cause of action. The occurrence of the accident and the vehicle being driven by Sh. Tilak Raj was, however, admitted. The driver did not file any reply. 6. The insurer M/s Oriental Insurance Company, filed a reply, inter alia, pleading that the insurer was not liable to indemnify the insured for the reason that the terms and conditions of the insurance policy stood breached. 7. Based on the pleadings of the parties the Tribunal framed the following issues: 1. Whether the petitioner had suffered injuries on account of rash and negligent driving of respondent No. 1 of vehicle No. HR-29-B-6417?. ..OPP. 2. 7. Based on the pleadings of the parties the Tribunal framed the following issues: 1. Whether the petitioner had suffered injuries on account of rash and negligent driving of respondent No. 1 of vehicle No. HR-29-B-6417?. ..OPP. 2. If issue No. 1 is proved, to what amount of compensation and from whom is the petitioner entitled to ?. ...OPP. 3. Whether the petition is bad for non-joinder?. ...OPR-3. 4. Whether respondent No. 1 had not been in possession of a valid and effective driving license, if so, with what effect?. ..OPR-3. 8. On 29th March, 2005 the Tribunal passed the following order: Rejoinder filed. Copy given. According to learned Counsel for respondent No. 3, copy of driving license of respondent No. 1 or particulars thereof have not been furnished. So, without making available with the record, it cannot be possible to settle the matter amicably. In the meantime, learned Counsel for respondent No. 2 requires to furnish copy of driving license of the driver by the next date positively. At this stage, it is informed by the petitioner that he wants to amend the petition. Put up on 29.4.2005. 9. There is nothing on record to suggest as to whether the said order was complied with or not. But, however, from the subsequent orders it is evident that at no point of time did the insurer protest and bring out the non compliance of the said order. 10. It is also a matter of record that the insurer, the owner and the driver did not led any evidence in spite of the various opportunities afforded by the Tribunal. 11. Only the claimant examined himself as PW-1 and examined two other witnesses namely Sh. Bhagat Ram (PW-2) and Dr. Vipan Sharma (PW-3). 12. The record also reveals that the owner tendered in evidence copy of the insurance policy (Ext.RXX), copy of the R.C. (Ext.RXX/1) and copy of the fitness certificate (Ext.RXX/2). The same was tendered on 18th January, 2006 and even then the insurer did not raise any objection with regard to the driving license not having been furnished by the owner. It is also a matter of record that the insurer did not tender any document. 13. Based on the material on record (oral and documentary) while deciding issue No. 1 the Tribunal held that the driver Sh. It is also a matter of record that the insurer did not tender any document. 13. Based on the material on record (oral and documentary) while deciding issue No. 1 the Tribunal held that the driver Sh. Tilak Raj had been negligent in driving the vehicle in question which caused the accident in which the claimant sustained injuries. The finding was based on the claimant's evidence i.e. Sh. Rajan Kumar (PW-1), Sh. Bhagat Ram (PW-2) as also the copy of the F.I.R. (Ext.PX) which was tendered in evidence by the claimant. 14. The findings on issue No. 1 are not under challenge by anyone. In any event, in my view, the deposition of PW-1 was sufficient enough to enable the tribunal to come to the conclusion that the driver had been negligent in driving the vehicle. 15. While deciding issue No. 4 the Tribunal came to the conclusion that since the insurer had not led any evidence and there was nothing on record to prove the same, therefore, it could not be held that the material terms and conditions of the policy stood violated by the insurer. 16. Mr. Deepak Bhasin, learned Counsel for the insurer has assailed the findings of the Tribunal on the ground that the owner did not step into the witness box to prove that he was not guilty of negligence and had not failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding the use of the vehicles by a duly licensed driver. In support of his contention he has referred to and relied upon the decisions reported in United India Insurance Company Ltd. v. Gian Chand and Ors. (1997) 7 SCC 558, Oriental Insurance Company Ltd. v. Vidya Devi and Ors. 2006 ACJ 723, National Insurance Company Ltd. v. Brij Pal Singh and Anr. (2003) (1) ACC 629 and Oriental Insurance Company Ltd. v. Sadanandan (2000) (1) ACC 215. 17. Per contra, Mr. Goel learned Counsel for the claimant argued that the onus to prove that the insured was guilty of negligence was not discharged by the insurer and as such the ratio of law laid down by the Courts in the above mentioned decision was not applicable to the facts and circumstances of the case. 18. It is a matter of record that the insurer did not step into the witness box at all. 18. It is a matter of record that the insurer did not step into the witness box at all. It is also a matter of record that even the owner did not step into the witness box. 19. In National Insurance Company Ltd. v. Swaran Singh and Ors. (2004) 3 SCC 297 the Apex Court while considering its earlier decision rendered in Gian Chand (supra) has laid down certain principles which are reproduced as under: 110. The summary of our findings to the various issues as raised in these petitions are as follows: (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. (iii) The breach of policy condition 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 ox 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 toward insured, the insurer has to prove that the insurer was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions 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 where for would be on them. (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 where for 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 on 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 defence available to the insured 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 of bodily injury or damage to property of third party arising in 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. 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 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 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 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 by the tribunal. (xi) The provisions contained in Sub-section (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 adjudication of their claims inter se might delay the adjudication of the claims of the victims. (Emphasis Supplied) 20. (Emphasis Supplied) 20. While laying down the aforesaid principles, the Apex Court took into account the peculiar facts in which its earlier decision in Gian Chand (supra) was taken. For the purpose of proper appreciation, the relevant para is reproduced as under: Gian Chand's case (supra) relied on behalf of the petitioner is of not much assistance. Therein this Court was dealing with peculiar fact situation obtaining therein. In that case the insured admittedly did not have any driving licence and in that situation, the insurance company was held to be not liable. The Bench noticed the purported conflict between the two sets of decisions but did not refer the matter to a larger Bench. It merely distinguished the cases on their own facts stating: under the circumstances, when the insured had handed over the vehicle for being driven by an unlicensed driver, the Insurance Company would get exonerated from its liability to meet the claims of the third party who might have suffered on account of vehicular accident caused by such unlicensed driver. In view of the aforesaid two sets of decisions of this Court, which deal with different fact situations, it cannot be said that the decisions rendered by this Court in Skandia Insurance Company Ltd. v. Kokilaben Chandravadan and the decision of the Bench of three learned Judges, in Sohan Lal in any way conflict with the decisions rendered by this Court in the cases of New India Assurance Company Ltd. v. Mander Madhav Tambe and Kashiram Yadav v. Oriental Fire & General Insurance Company. (Emphasis Supplied) Therefore the reliance on Gian Chand (supra) in my view is not well founded. 21. Once the assured proves that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within its exception. The Insurance Company, which alleges the breach must prove the same and is required to establish the said breach by cogent evidence. Failure to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. The Insurance Company with a view to valid the liability must not only establish the available defences raised in the proceedings but must also establish the breach on the part of the owner of the vehicle. 22. The Insurance Company with a view to valid the liability must not only establish the available defences raised in the proceedings but must also establish the breach on the part of the owner of the vehicle. 22. It is a settled position of law that if breach of the terms of the contract permits the party not to perform the contract, the burden is squarely on that party which complains of the breach to prove that the breach has been committed by the other party to the contract. The test in such situation would be failed if no evidence is led. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of the contract of insurance on the part of the insurer by discharging its burden of proof. 23. The onus to prove that the insured was guilty of negligence and had failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding the use of the vehicle by duly licensed driver is heavy on the insurer. How the said burden is to be discharged, of course, has to depend on the facts and circumstances of each case. 24. In the present case no notice asking the owner to produce the driving license was issued nor was any material placed on record to show that the driver was not having an effective and valid driving license at the time of the accident. As has already been noticed earlier the insurer did not make any grievance about non-compliance of the order passed by the Tribunal. Therefore, it is to be only presumed that the order stood complied with and that the insurer had the license or was at least aware of the particulars of the same. Therefore, in my view, the insurer had not been able to show as to in what manner the terms and conditions of the insurance policy stood breached. Therefore, it is to be only presumed that the order stood complied with and that the insurer had the license or was at least aware of the particulars of the same. Therefore, in my view, the insurer had not been able to show as to in what manner the terms and conditions of the insurance policy stood breached. The Apex Court in Swaran Singh (supra) has clarified that even where the insurer is able to prove the breach on the part of the insured concerning the policy condition regarding holding of the valid license by the driver, the insurer would not be allowed to avoid its liability unless the said breach or the breaches on the conditions of the driving license are so fundamental as are found to have contributed to the cause of the accident. There is nothing on record to show the same. 25. The decision rendered by the Division Bench of Allahabad High Court in National Insurance Company Limited v. Brij Pal Singh and Anr. (2003) (1) ACC 629 wherein it has been held that the burden to prove the validity of the driving license would be entirely upon the owner of the vehicle, in my view, is no longer a good law in the teeth of the observations of the Apex Court in Swaran Singh (supra). 26. Vidya Devi (supra) was the case where the insurer had taken all possible steps within its power to ensure that the driving license of the driver was brought on record. It had moved two applications under Order 11, Rule 14 read with Section 151 C.P.C. The said applications were allowed and in spite of the order the owner and the driver who were ex parte did not produce the relevant license or furnish the details thereof. Further the insurer of its own had got the particulars of the driving license verified and it was found that no license had been issued by the Registering and Licensing Authority. There was no denial to the said stand taken by the insurer and hence it is in these circumstances the Court came to the conclusion that in the absence of any driving license having been brought on record by the owner the terms and conditions of the policy stood breached and the insurer held not liable to have indemnified the insured. Importantly, the Court also took into account the decision of the Apex Court in Swaran Singh (supra) 27. The facts in the present case are totally different. Hence the ratio of law does not apply at all. 28. This Court in Surrender Singh v. Smt. Jai Monti Devi and Ors. Latest 2008 MHLJ 1174 while dealing with almost similar situation in hand, where the Insurance Company had taken no steps whatsoever, arrived at its conclusion that the insurer had failed to discharge the initial burden laid down by the Apex Court in Swaran Singh (supra). 29. Therefore, in my view, the insurer has not been able to discharge the initial burden and show the negligence of the owner resulting into the breach of terms and conditions of the policy. 30. The findings returned by the Tribunal, in my view, are borne out from the record. 31. With regard to issue No. 3 the Tribunal came to the conclusion that the insurer failed to lead any evidence to prove the same. The same is not under challenge either by the insurer or by the owner. Hence, no interference is called for. While deciding issue No. 2 the Tribunal referred to and relied upon the statements of Sh. Rajan Kumar (PW-1), Sh. Bhagat Ram (PW-2) and Dr. Vipan Sharma (PW-3), PW-3 has proved on record the disability certificate (Ext.PW-3/A). He has been able to prove that the claimant had been medically examined by him and it was found that the claimant had suffered fracture (D-12) which had caused para plegia on both the legs and disability of permanent character of 75% in relation to the whole body. 32. The claimant himself has deposed that he suffered injuries in his spinal cord and he had been to undertake medical treatment at various institutions and incur expenditure. He was working as an Electrician and was privately employed and earning Rs. 10,000/- per month. He had been crippled and confined to bad. There is no cross-examination on this point at all. PW-2 father of PW-1 has also deposed to the said effect. It has come orf record that the claimant is un-married. 33. Except disability certificate (Ext.PW-3/A) and the testimony of PW-3, there is nothing on record to prove the money spent by the claimant in undertaking the various treatments at various places. PW-2 father of PW-1 has also deposed to the said effect. It has come orf record that the claimant is un-married. 33. Except disability certificate (Ext.PW-3/A) and the testimony of PW-3, there is nothing on record to prove the money spent by the claimant in undertaking the various treatments at various places. It was only after the entire evidence of the claimant's witnesses was recorded that the bills (Exts.P-1 to Ext.P-89) were tendered in evidence. The claimant did not step into the witness box to prove the same. 34. The Tribunal, however, took into account the said bills while awarding the compensation, which in my considered view was not correct. He awarded Rs. 3 lacs on account of reimbursement towards medical treatment, Rs. 50,000/- towards attendant, Rs. 50,000/- towards mental and physical pain and Rs. 3 lacs towards loss of future income. 35. The claimant was 26 years of age as on the date of accident. He is totally crippled and necessarily requires attendant to take care of him. Even at the stage of hearing of appeal no effort was made to lead additional evidence to prove the expenditure incurred for undertaking the medical treatment. Hence, the bills cannot be considered to have been proved but considering the fact that the claimant did sustain injury in the accident, it is to be accepted that some expenditure must have been incurred towards the same. Therefore, considering the entire material, in my view, a sum of Rs. 7 lacs as awarded by the Tribunal would be just, fair and rea sonable. 36. Further, it has been noticed that the Tribunal did not award any interest pendente lite. The petition was filed in 2004 and decided in 2006. I see no reason as to why the interest pendente lite be not awarded to the claimant. 37. Mr. Goel, learned Counsel for the claimant has referred to the decision Tara Kakati (Smt) and Ors. v. Oriental Insurance Company Ltd. and Ors. (2001) 9 SCC 253 to contend that the interest ought to have been awarded from the date of the accident. In the said case the Apex Court awarded the same keeping in view the peculiar facts and circumstances and in exercise of its powers under Article 142 of the Constitution of India. v. Oriental Insurance Company Ltd. and Ors. (2001) 9 SCC 253 to contend that the interest ought to have been awarded from the date of the accident. In the said case the Apex Court awarded the same keeping in view the peculiar facts and circumstances and in exercise of its powers under Article 142 of the Constitution of India. In the present case I am of the considered view that the claimant should be entitled to interest pendente lite and future up to the date of payment at the rate of 9% per annum. The impugned award is modified accordingly. The appeal filed by the claimant is partly allowed and that of the Insurance Company is dismissed.