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2009 DIGILAW 721 (AP)

Oriental Insurance Co. Ltd. v. Ravi Vishnu

2009-10-20

R.KANTHA RAO

body2009
JUDGMENT : 1. These appeals are filed by the Oriental Insurance Company Limited, which is the second respondent before the Motor Accidents Claims Tribunal-cum-II Additional Chief Judge, City Civil Court, Hyderabad against the Award impugned dated 29.01.2000 in O.P.Nos.404 of 1996 and 403 of 1996. 2. Though several grounds have been urged in the memorandum of appeals, both the parties confined their submissions only to the question as to whether the appellant insurance company can be exonerated from paying compensation to the first respondent- claimant owing to the alleged breach of the stipulations of the policy by the insured. 3. I have heard the learned counsel appearing for the appellant-insurance company and the learned counsel for the first respondent-claimant. 4. On facts and evidence forthcoming before it, the learned Tribunal below held that the appellant-insurance company could be able to prove that the driver of the offending vehicle had no valid driving licence as on the date of accident. Nevertheless, placing reliance on the decision reported in THE DIVISIONAL MANAGER, NEW INDIA ASSURANCE COMPANY v T.GURUVAREDDY AND OTHERS 1998(5) ALT 271 the learned Tribunal held that the insurer cannot disown liability on the ground that the driver was possessing fake driving licence. 5. The contention urged by the appellant-insurance company is that the learned Tribunal found from the evidence of RW.1, the Assistant Divisional Manager and RW.2, an employee working in the office of the Joint Transport Commissioner, Hyderabad and also considering the endorsement – Ex.B.3 on the reverse of Ex.B.2, copy of the letter dated 7.8.1997 addressed by the appellant-insurance company which is to the effect that the driving licence bearing No.4176/86/Hyderabad was not issued to Narender Pande, the driver of the offending vehicle, that the appellant – insurance company could prove that the driver of the vehicle had no valid driving license on the date of accident ought not to have fastened liability on it. 6. On the other hand, it has been contended on behalf of the first respondent-claimant that in fact, the evidence adduced by the appellant-insurance company before the Tribunal was not enough to hold that the driver of the offending vehicle was possessing a fake licence or that he had no valid driving licence at the relevant time and the said finding was erroneously recorded by the learned Tribunal. It has been further contended in the alternative that even if it is held that the Insurance company could prove that the driving licence possessed by the driver of the offending vehicle was fake, there was no willful breach committed by the insured and therefore, the insurance company cannot disown it’s liability. 7. Reliance is placed by the learned counsel appearing for the appellant on the following decisions: NATIONAL INSURANCE CO. LTD v KAUSHALYA DEVI AND OTHERS CDJ 2008 SC 994 wherein, it was held that: “When the owner handed over the vehicle to a person, who had no valid driving license, he alone is liable to pay compensation to the claimants and the insurance company cannot be made liable to pay compensation.” 8. ORIENTAL INSURANCE CO. LTD v ANGAD KOL AND OTHERS CDJ 2009 SC 309 in which case the driver of the vehicle possessing licence to drive the light motor vehicle actually drove the transport vehicle which met with the accident and dealing with the said situation the Supreme Court held that the insurance company could not be made liable to pay any compensation. NEW INDIA ASSURANCE CO.LTD v SURESH CHANDRA AGGARWAL CDJ 2009 SC 1389 wherein it was held as follows: “We fail to understand as to how the licence was and could be renewed w.e.f. 23rd March, 1992 after the death of the licence-holder on 29th February, 1992. In our opinion therefore, the appellant was not liable to indemnify the claimant for the loss suffered by him in the accident of the insured vehicle. SARDARI AND OTHERS v SUSHIL KUMAR AND OTHERS CDJ 2008 SC 414 wherein it was held as follows: “the owner of the vehicle has statutory obligation to see that the driver of the vehicle whom he authorized to drive the same holds a valid driving licence. But when the owner fails to discharge the said statutory obligation, the insurance company cannot be fastened with liability to pay compensation to the claimant.” 9. On the other hand, in support of his contention, reliance is placed by the learned counsel appearing for the respondent on NATIONAL INSURANCE CO. But when the owner fails to discharge the said statutory obligation, the insurance company cannot be fastened with liability to pay compensation to the claimant.” 9. On the other hand, in support of his contention, reliance is placed by the learned counsel appearing for the respondent on NATIONAL INSURANCE CO. LTD v SWARAN SINGH AND OTHERS 2004 (1) ACJ 1 wherein three judge Bench of the Apex Court held that the insurance company established breach on the part of the insured concerning policy condition regarding holding of a valid driving licence by the driver or his qualification to drive during the relevant period but the breach was not so fundamental as found to have contributed to the cause of accident and in such event the insurance company cannot be exempted from liability. 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 Apex Court further clarified that the question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver or owner of the vehicle was a fake one or otherwise, does not fulfill the requirements of law or not will have to be determined in each case. 10. It has to be seen in the present case as to whether the insurer can be exempted from paying compensation in the light of the principles laid down by the Apex Court in the decisions referred above relied upon by both the counsel. In all the decisions on which the learned counsel appearing for the appellant-insurance company relied upon the judgment 6th cited above (Swarn Singh case) was referred to. In NATIONAL INSURANCE CORPORATION LTD v KANTI DEVI AND OTHERS 2005(3) ALT 35 (SC) it was held that the insurer can raise a defence that the license possessed by the driver is a fake one and the insurer also can take a defence that the driver does not have the requisite driving licence to drive a particular type of vehicle. In NATIONAL INSURANCE CORPORATION LTD v KANTI DEVI AND OTHERS 2005(3) ALT 35 (SC) it was held that the insurer can raise a defence that the license possessed by the driver is a fake one and the insurer also can take a defence that the driver does not have the requisite driving licence to drive a particular type of vehicle. The said defence can be raised and it will be for the insurer to prove that the insured does not take care and caution to verify the genuineness or otherwise of the licence held by the driver and the effect of the evidence in this regard has to be considered by the concerned Tribunal. 11. In the cases relied upon by the learned counsel appearing for the appellant-insurance company the ratio laid down in Swaran Singh case (6th cited) has in fact been followed. In Swaran Singh case (6th cited) the three Judge Bench of the Supreme Court laid down the law on the subject as follows: “We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle, admittedly, did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand in it at all e.g. a case where an accident takes place owing to a mechanical fault or vis major.” 12. In a given case, the driver of the vehicle may not have any hand in it at all e.g. a case where an accident takes place owing to a mechanical fault or vis major.” 12. So it is wrong to presume that in the subsequent judgments relied upon by the appellant – insurance company the Supreme Court took a different view to that of the ratio laid down in Swarn Singh case (6th cited). The fact situation in the judgments relied upon by the learned counsel appearing for the appellant – insurance company is different from the facts of the present case. The owner knowingly allowing the driver holding a licence to drive the light motor vehicle to drive transport vehicle or a goods vehicle, and the owner knowing fully well that the driving licence was renewed after the date of expiry and long after the accident had taken place is different from not finding out as to whether the driving licence of the driver is in fact genuine or fake one. In the instant case, the appellant-insurer produced only Ex.B.3 endorsement of the RTA concerned on the reverse of Ex.B.2 letter addressed by the insurer indicating that the licence bearing No. 4176/86/Hyderabad was not issued to Narendra Pande, the driver of the offending vehicle. But, as per the ratio laid down in Swarna Singh case (6th cited), it will be for the insurer to establish by convincing evidence that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the driver. Such being the position, in the instant case the burden is on the appellant – insurance company to prove that the owner of the vehicle did not exercise the required care and caution to verify the genuineness or otherwise of the license held by the driver of the vehicle. But the insurer did not adduce enough evidence in this regard. The insurer did not take any steps to summon either the driver or owner of the offending vehicle. The driving license which was actually possessed by the driver of the offending vehicle was not before the learned Tribunal. Only Ex.B.2 letter addressed by the insurer and Ex.B.3 endorsement made by the RTA concerned thereon were before the Tribunal. The insurer did not take any steps to summon either the driver or owner of the offending vehicle. The driving license which was actually possessed by the driver of the offending vehicle was not before the learned Tribunal. Only Ex.B.2 letter addressed by the insurer and Ex.B.3 endorsement made by the RTA concerned thereon were before the Tribunal. From these two documents and the evidence of RW2, it was not actually possible for the learned Tribunal to hold that the licence possessed by the driver of the vehicle was fake. The finding was arrived at only basing on the fact that the driver and the owner of the vehicle did not contest the case and also on the premise that there was no adequate cross examination by the claimant enabling the Tribunal to arrive at the conclusion that the driving licence supposed to have been held by the driver of the offending vehicle was in fact genuine. This finding recorded by the Tribunal below is factually incorrect since it was not based on any proof by the insurer either that the licence possessed by the driver was in fact fake or that the owner of the vehicle failed to take adequate care that the driving licence which was produced by the driver to drive his vehicle was in fact, fake. It would be relevant to know in this contest that it is not the specific case of the appellant – insurer that the driver of the offending vehicle had no driving licence at all. It’s version was only that the driving licence possessed by the driver of the offending vehicle was a fake one, but, the said fact had not been positively proved by the appellant. One cannot expect that the owner of the vehicle had to indulge in roving enquiry as to the genuineness of the driving licence produced by the driver before permitting him to drive a particular vehicle. It is suffice on his part, if he prima facie satisfies about the genuineness of the driving licence produced by the driver of the vehicle. One cannot expect that the owner of the vehicle had to indulge in roving enquiry as to the genuineness of the driving licence produced by the driver before permitting him to drive a particular vehicle. It is suffice on his part, if he prima facie satisfies about the genuineness of the driving licence produced by the driver of the vehicle. In the instant case, the appellant-insurer was unable to demonstrate that the owner of the vehicle failed to exercise adequate care as to the genuineness of the driving licence of the driver of the vehicle or knowing fully well that licence possessed by the driver is fake he willfully allowed the driver to drive the offending vehicle. Therefore, absolutely, there was no material before the Tribunal that the breach committed by the owner is a fundamental breach or a willful breach. In such an event, in view of the ratio laid down in Swaran Singh case (6th cited) the appellant – insurance company cannot be exonerated from the liability to pay compensation to the first respondent – claimant. 13. For the reasons aforementioned, both the appeals filed by the insurance company fail and they are dismissed without any order as to costs.