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2010 DIGILAW 111 (JK)

National Insurance Co. Ltd. v. Qazi Hilal Ahmad

2010-03-04

GH.HASNAIN MASSODI

body2010
1. Shri Qazi Hilal Ahmad, respondent-1 herein on 15.7.2004 while proceeding from Srinagar to Jammu in his Maruti Car, was hit by a Truck bearing Registration No. JK03-2531 coming from the opposite direction. Respondent-1 sustained injuries and was administered medical treatment at Bones and Joints Hospital, Barzulla Srinagar. Respondent-1 on 30.09.2004 filed a claim petitioner under section 166 of the Motor Vehicles Act, against the appellant and respondents 2 and 3 in Motor Accidents Claims Tribunal (MACT), Srinagar. The petitioner claimed compensation on account of loss of earning, future capacity to earn medical expenses etc. before the tribunal. 2. Respondent-1 in the claim petition (present appellant) filed objections to the claim petition. Respondents 2 and 3 opted not to appear and contest the petition and were said ex-parte on 12.03.2005. Respondent No. 2 in the claim petition/driver of the Truck, nonetheless was examined as witness by the appellant. Learned tribunal after the issues were settled and the parties afforded an opportunity to lead evidence in support of their respect stand, allowed the claim petition and awarded compensation of Rs. 3.35 (rupees three lacs thirty five thousand) in favour of the claimants. Respondent No. 2 in the claim petition/driver of the offending vehicle having been found to have been driven the vehicle without an effective and driving licence, was directed to pay an amount of Rs. 35,000/- out of the awarded amount. The break-up of the awarded amount was: Rs. 90,000/- on account of loss of income, Rs. 1,00,000/- on account of loss of future prospects, Rs. 60,000/- on account of tests and medicines, Rs. 10,000/- for the inconvenience, Rs. 25,000/- on account of permanent partial disability and Rs. 50,000/- on account of pains and sufferings. 3. The appellant assails the award through the medium of instant appeal on the following grounds:- i) That the diver of the offending vehicle did not hold driving licence at the time of accident and was thus driving the offending vehicle without any driving licence. The driving licence later presented by the driver, was found to be faked and the appellant could not have been burdened with the obligation to pay compensation to the claimants in as much as the owner had committed a bread of insurance contract and the compensation if any, was recoverable from the owner. ii) That the compensation awarded was exorbitant, excessive and unjust. 4. Heard. ii) That the compensation awarded was exorbitant, excessive and unjust. 4. Heard. It is submitted by the counsel for the appellant that the appellant took a specific plea before the learned tribunal that the driver of the offending vehicle was not holding a valid driving licence at the time of accident and as such, the appellant was not under obligation to pay compensation to the claimants, and that the plea taken by the appellant was duly reflected in the issue settle by the learned tribunal as issue no. 3: that the appellant successfully discharged the burden and substantiated before the tribunal that the drive of the offending vehicle/respondent No. 2 in the claim petition was not holding a valid driving licence at the time of accident. It is stated that though the driver of the offending vehicle stepped in the witness box, claimed to be a professional driver and presented a photocopy of his driving licence, yet the driving licence was found to be faked and in the name of a person other than the driver of the vehicle. The official of the office of Regional Transport Office, Srinagar, according to counsel for the appellant, in an unambiguous words deposed that the licence no. 59273/K, a photocopy of which was presently before the Learned Tribunal, was issued to one Farooq Ahmad Malla and not to the drive of the offending vehicle. It is argued that once the learned tribunal concluded that the driving licence was fake, the tribunal ought not to have held the appellant responsible for payment of compensation to the claimants and instead should have asked the owner of the vehicle who was guilty of breach of insurance contract to pay compensation assessed by the tribunal to the claimants. Learned counsel to buttress his argument, has referred to the case law, a reference to which would meet during the course of this judgment. In order to appreciate the argument advanced by the learned counsel for the appellant, it would be advantages to reproduce following observations of the learned tribunal:- "From the evidence on record, it is established that the driving license No. 59273/K had never been issued in the name of respondent Gulzar Ahmad Khan but to one Farooq Ahmad Malla. In order to appreciate the argument advanced by the learned counsel for the appellant, it would be advantages to reproduce following observations of the learned tribunal:- "From the evidence on record, it is established that the driving license No. 59273/K had never been issued in the name of respondent Gulzar Ahmad Khan but to one Farooq Ahmad Malla. From the verification report mark `A, which has been proved to be correct by Senior Assistant Mohammad Amin Sheikh Senior Assistant RTO Office, Kashmir examined by the respondent company, it is established that the respondent No. 2, Gulzar Ahmad Khan, was driving the offending vehicle on the date of accident with a fake driving license. Gulzar Ahmad Khan, respondent No. 2 has been examined by the respondent insurance company and admitted that the driving license had been obtained by his teacher, namely, Azad of Mir Bazar Palpora and he has never gone for a try before any authority in order to obtain the driving license. The statement of respondent No. 2 Gulzar Ahmad itself establishes the companys stand that the respondent driver was driving the offending vehicle on the date of accident without a valid driving license." 5. Learned Tribunal after holding the driving licence claimed by the driver , entitling him to drive the offending vehicle at the time of accident to be fake, has rejected the case set up by the appellant that it was absolved of the duty to pay compensation to the claimants by observing : "By mere saying that the owner engaged the respondent-2 as driver of the offending vehicle holding a fake driving license, the respondent company cannot raise a plea of breach of contract on the part of the insured . But it is to prove the said plea with some cogent evidence. Where was the occasion for the owner to doubt the driving license on the file which shows that the date of issuance in 1992 and the subsequent renewals upto 2005. The owner is not expected to hold an enquiry or investigation with regard to the genuineness of driving license when engages a driver to ply a vehicle. The owner was supposed to see the license which he has apparently done and has also found the respondent-driver eligible to ply a heavy goods vehicle. The owner is not expected to hold an enquiry or investigation with regard to the genuineness of driving license when engages a driver to ply a vehicle. The owner was supposed to see the license which he has apparently done and has also found the respondent-driver eligible to ply a heavy goods vehicle. In absence of any evidence with regard to the owner having knowledge of the driver holding a fake driving license and despite that engaging him as driver of the offending vehicle, cannot absolve the insurance company from its liability to indemnify the insured as the offending vehicle had been admittedly under the insurance cover of the respondent company" 6. The learned tribunal thereafter has proceeded to declare the driver responsible for paying part of compensation and held: "The Courts/Tribunals have a sacred duty not to allow a driver to go scot- free who knowingly cheats his employers by producing a fake driving licence and getting the job of a driver. The respondent driver, Gulzar Ahmed Khan has admitted that he never applied for a driving licence and did not pass the procedure of giving try and also admitted that the driving licence had been obtained by his teacher when he was only 13 years old." 7. It appears that the learned tribunal has expressed conflicting opinion regarding the driving license in question in the course of judgment. The tribunal has on page no. 12 of the judgment held that ; it is established that respondent -2, Gulzar Ahmad Khan was driving the offending vehicle on the date of accident with fake driving license and that " the statement of respondent -2, Gulzar Ahmad Khan itself establishes the companys stand that the respondent was driving offending vehicle on the date of accident with an effective and valid driving licence." The tribunal thereafter on page no. 13 of the judgment stated that photocopy of the driving licence placed on record by respondent -2 do not appear to be a fake one as it has been renewed from time to time till 2005. The learned tribunal has once again made shift by observing on page no. 13 of the judgment stated that photocopy of the driving licence placed on record by respondent -2 do not appear to be a fake one as it has been renewed from time to time till 2005. The learned tribunal has once again made shift by observing on page no. 14 of the judgment that " the respondent -- driver, Gulzar Ahmad Khan never applied for driving licence and did not pass the procedure of driving a try and admitted that the driving licence had been obtained by his teacher when he was only 13 years old." Be that as it may, the stand of the appellant - company that the driver of the offending vehicle did not hold an effective and valid driving licence at the time of accident having been accepted , fall out of the said finding on the liability of the appellant to pay compensation to the claimants, is to be looked into. 8. Section-3 of the Motor Vehicles Act lays down that no person shall drive motor vehicle unless he/she holds an effective and valid driving licence issued to him authorizing him/her to drive vehicle and that no person shall drive a motor vehicle unless his driving licence specifically entitles him to do so. Sub Section (10) of Section 2 of the Act defines that driving licence means "licence issued by the competent authority under Chapter --II authorizing a person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle of any specified class or description." Section -- 5 of the Act casts duty on the owner of motor vehicle or person Incharge of a motor vehicle not to permit any person who does not hold an effective and valid licence to drive the vehicle. Owner of a motor vehicle who permits his vehicle to be driven by a person without an effective and valid driving licence is liable to be sentenced to three months imprisonment with fine under Section 181 and ignorance or negligence ins not a defence available to such a driver. To drive a motor vehicle without licence is any offence punishable under Section 181 of the Act. The insurer thus, in terms of Sections 149(2) of the Act may, relying upon the provisions of violation of the law by the assured, taken exception to pay the compensation to the insured or the third party. To drive a motor vehicle without licence is any offence punishable under Section 181 of the Act. The insurer thus, in terms of Sections 149(2) of the Act may, relying upon the provisions of violation of the law by the assured, taken exception to pay the compensation to the insured or the third party. The insurer in such case has to prove an intentional and willful violation of the law by the insurer. The exception taken by the insurer to pay the compensation apples to act done intentionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be". It follows that the where the evidence brought on the file leads to the conclusion that the insurer has intentionally committed breach of the insurance contract or has acted "so recklessly as to denote that the assured did not care what the consequences of his act might be." The insurance company cannot be saddled with the responsibility to pay compensation to the claimants, where it is proved before the tribunal that the owner permitted a person not having an effective and valid driving licence to drive the vehicle owner or person Incharge of motor vehicle and the offending vehicle while being driven by such person met with an accident resulting in death or injury to the third party, the owner or the person Incharge of the motor vehicle is to be taken to have intentionally committed breach of the insurance contract or acted so recklessly as to denote that the owner or the person Incharge of the motor vehicle did not care what the consequences of his act might be. Once it is proved that the insured has committed breach of the insurance contract by permitting the person not having an effective and valid driving licence to drive the vehicle, the only person who can convince the tribunal that neither there was any intentional lapse on part of the insured nor had the insured acted "so recklessly as to denote" that he did not care what the consequences of his act might be, is the insured and none else . It is for the owner of the vehicle to verify and ensure while employing a driver that the driver possesses an effective and valid driving licence and in case the owner permits a person to drive his vehicle, it is at his Peril and the owner cannot be heard later saying that he had no time to make necessary verification. 9. The controversy regarding liability of insurer to indemnify the insured in the event of violation of section 5 of the Act and breach of Insurance Contract, has not died down with the authoritative pronouncement in Swarn Singhs case but surfaced and resurfaced in a number of cases before the Supreme Court and High Courts, in which the law laid down in Swarn Singhs case has been re-visited and interpreted. It would be advantageous to scan the case law, that as stated, reflects different dimensions/aspects of the controversy. 10. In National Insurance Co. Ltd. v. Kusum Rai and others, (2006) 4 SCC 250, Commercial vehicle driven by a person not possessing appropriate licence therefor, met with an accident resulting death of minor girl. It was held that the insurance company could rightly set up the defence of breach of condition of the insurance contract. The award of the tribunal and the judgment in appeal of the High Court was set aside. The court held, in such a case, the owner of the vehicle could not contend that he had no liability to verify the fact as to whether the driver of the vehicle possesses a valid driving licence or not. The appellant (insurance company) was held not liable to pay the claimed amount as the driver was not possessing a valid driving licence. 11. In Ishwar Chandra and others v. Oriental Insurance Company Limited and others ; 2007 AIR SCW 1889, the driver of the offending vehicle (Eicher Tractor) that hit the deceased, was found to have been driving the tractor at the time of accident without having driving license. The Tribunal, rejecting the insurers case that it was absorbed to pay any compensation to the dependents of the deceased because of breach committed by the owner in implying the driver without license, made the award against the insurer. The Tribunal, rejecting the insurers case that it was absorbed to pay any compensation to the dependents of the deceased because of breach committed by the owner in implying the driver without license, made the award against the insurer. The insurance company preferred an appeal and the Insurance company was given an option to initiate proceedings before the Executing Court without filing any separate suit and before the release of the award amount in favour of the claimants, the owner of the vehicle/ insured was directed to be summoned and required to furnish security for the entire amount which the insurer was asked to pay to the claimants. In an appeal by the owner of the offending vehicle, the Supreme Court after reviewing the law on the subject held the appeal to be without any merit. 12. In National Insurance Co. Ltd. v. Kaushalya Devi and Ors. 2008 AIR SCW 4025, driver of the offending vehicle was licensed to drive the light transport vehicle. The driver however, was driving a heavy goods vehicle which caused the accident. In other words, the driver was not holding license of the description/kind as was required to drive the offending vehicle. The insurance company nonetheless was asked by the tribunal to pay the compensation. The Supreme Court held that owner alone was liable to pay compensation to the claimants and the award amount if deposited but not withdrawn by the claimants, be refunded to the insurance company and the proceedings for realization of the amount may be initiated against the owner of the vehicle. In the event the amount was withdrawn, the insurance company was held to be entitled to recover the same from the owner of the vehicle. 13. In New India Assurance Co. Ltd. v. Roshanben Rahemansha Fakir and another, AIR 2008 SC 2266, the driver of the offending vehicle was holder of the licence of three wheelers i.e. Auto Rikshaw, the driver was driving transport vehicle for which he had no licence. The driver was held not to have been holding an effective driving licence. The tribunal nevertheless burdened the insurance company with an obligation to pay compensation. The appeal of the insurance company before the High Court also failed. The Supreme Court set aside the judgment of the High Court and held that the insurance company is not liable. The driver was held not to have been holding an effective driving licence. The tribunal nevertheless burdened the insurance company with an obligation to pay compensation. The appeal of the insurance company before the High Court also failed. The Supreme Court set aside the judgment of the High Court and held that the insurance company is not liable. However, the insurance company was asked to satisfy the award and recover the amount from the owner. 14. In Oriental Insurance Company v. Zaharulnisha and others; AIR 2008 SC 2218, the driver of the scooter that caused accident resulting in death to a cycle rider, was not holding licence to drive the scooter but had a licence to drive the heavy motor vehicle only. The driver of the offending scooter was thus a driver of a totally different class of vehicle in violation of sections 10(2) of the M.V. Act. It was held that in light of the settled proposition of law, the insurance company cannot be held liable to pay the compensation to the claimants for the cause of death of a cycle rider in road accident which had occurred due to rash and negligent driving of the scooter by a person , who admittedly had no valid and effective driving licence on the day of accident. It was held that the scooterist was possessing driving licence for driving HMV and it was totally a different class of vehicle, which act is in violation of Section 10 (2) of the Act. 15. In United India Insurance Co. Ltd. v. Rakesh Kumar Arora and Others; AIR 2009 SC 24, the driver of the offending vehicle at the time of accident was minor and without driving licence. The tribunal absolved the insurance company of its liability under the policy. The appeal allowed by the learned Single Judge and the Letters Patent Appeal dismissed. The Supreme Court held "16. The learned Single Judge as also the Division Bench of the High Court did not put into themselves a correct question of law. They proceeded on a wrong premise that it was for the Insurance Company to prove breach of conditions of the contract of insurance. 17. The Supreme Court held "16. The learned Single Judge as also the Division Bench of the High Court did not put into themselves a correct question of law. They proceeded on a wrong premise that it was for the Insurance Company to prove breach of conditions of the contract of insurance. 17. The High Court did not advert to itself the provisions of sections 4 and 5 of M.V. Act and thus misdirected itself in law." The judgment of the High Court was set aside and that of learned Tribunal restored. The appellant insurance company was held entitled to recover the amount in question from the owner, as the amount had been deposited and withdrawn. 16. In National Insurance Co. Ltd. v. Ram Parsad Kushwaha and Ors. AIR 2009 Patna 48, the driver of the offending vehicle was not holding a valid licence to drive the vehicle in question -- the owner of the vehicle ( Tractor ) was held liable to pay the compensation . The court noticed Sections 3, 5 and 10 of the M.V. Act and held appellant- insurance company entitled to recover from the owner. 17. In Bhuwan Singh v. M/s Oriental Insurance Co. Ltd and another; AIR 2009 SC 2177, the Learners licence had expired on 22-12-2000. The accident took place on 5-1-2001. The driver applied for regular licence on 22-1-2001, whereafter the licence was granted to him. It was held that the insurance company was not under an obligation to pay the award amount. 18. In National Insurance Company Limited v. Vidhyadhar Mahriwala and others, AIR 2009 SC 208, The drivers license was initially valid for a period from 15.12.1997 to 14.12.2000 and thereafter from 29.12.2000 to 14.12.2003 and again from 16.5.2005 to 15.5.2008. The driving license was thus not renewed from 14.12.2003 to 16.5.2005. The accident took place on 11.6.2004. The insurance company took a plea before the MACT that it had no liability to pay the compensation, as license of the driver of the offending vehicle was not in force on the date of accident. The insurers plea for exoneration was rejected by the Tribunal. The Insurance Company preferred an appeal before the High Court and the High court referring to the judgments of the Supreme Court in Swaran Singh, Nanjappan and Kusum Rais case came to hold that Insurance Company was liable to indemnify the award. The insurers plea for exoneration was rejected by the Tribunal. The Insurance Company preferred an appeal before the High Court and the High court referring to the judgments of the Supreme Court in Swaran Singh, Nanjappan and Kusum Rais case came to hold that Insurance Company was liable to indemnify the award. It was held that merely gap in the renewal of the driving license is not a ground for exoneration. The Supreme Court referring to Ishwar Chandras case recorded agreement with the view expressed in the said case, allowed the appeal and set aside the judgment of the High court. The Supreme Court permitted the claimants to recover the award amount from the owner of the offending vehicle. 19. The deciding factor, having regard to the law laid down in the aforementioned cases, is whether the driver had valid and effective driving licence within the meaning of Section 3 of the Act at the time of accident and not whether in the opinion of the Tribunal driver was otherwise independent of his not having driving licence, competent to drive. 20. In view of the principles emerging from the aforementioned case law, the learned Tribunal erred in holding that the owner of then vehicle was not expected to hold enquiry or investigation with regard to the genuineness of the driving licence, when he engaged a driver to ply a vehicle; and that the owner was not to be held to have committed breach of the insurance contract and fastened with an obligation to pay the compensation to the claimants. The evidence brought on the file against the backdrop of above discussion convincingly proved that the owner of the offending vehicle was guilty of breach of the insurance contract and was duty bound to pay the compensation to the claimants, absolving the insurer of such responsibility. Needless to mention there was no evidence before the tribunal that accident had taken place because of any mechanical failure or similar other cause This takes us to the second limb of the case projected by the appellant. The appellant assails compensation amount determined by the tribunal on the ground that the amount is exorbitant and based on mis-appreciation of evidence. It is insisted that the learned tribunal has without being any evidence on the file, rushed to determined compensation on the grounds, never urged before the tribunal. 21. The appellant assails compensation amount determined by the tribunal on the ground that the amount is exorbitant and based on mis-appreciation of evidence. It is insisted that the learned tribunal has without being any evidence on the file, rushed to determined compensation on the grounds, never urged before the tribunal. 21. Section 168 of the Act requires the tribunal to determine such amount as compensation which appears to the tribunal to be just. 22. The tribunal in the circumstances, is to determine such an amount as compensation which appears to be fair having due regard to the evidence brought on the file and it has proportionality with the loss suffered by the victim. 23. In the present case, the tribunal has awarded Rs.90,000/- on account of loss of salary for the period of nine months, the petitioner was disabled to perform his duty due to the inures suffered in the accident .The petitioners evidence regarding monthly salary has gone un-rebutted. There is substance in the contention of the counsel for the appellant, that the salary certificate attributed International Management Centre, Delhi of which the respondent claimed to be an employee has not been proved in accordance with law .The lapse, however, does not change the complexion of the matter, in view of other evidence on the file which as already stated, have not been reverted by the appellant. The amount determined by the tribunal on account of salary thus, does not warrant any interference. The tribunal has proceeded to award an amount of Rs 60,000/- on account of medical expenses. It appears that the respondent did not submit any receipts and bills to substantiate that the respondent incurred the awarded amount or an amount over and above such amount on his medical treatment. There was absolutely no evidence before the tribunal to make the aforesaid award and the tribunal relied on conjuncture and surmise to reach the conclusion, as is evident from the reasons given in support of the conclusion. The compensation determined on account of expenses on medical treatment/medicines thus, deserve the second look. An amount of Rs 10,000/- on account of expenditure incurred on medical treatment would be just and proper in the circumstances of the case. The compensation determined on account of expenses on medical treatment/medicines thus, deserve the second look. An amount of Rs 10,000/- on account of expenditure incurred on medical treatment would be just and proper in the circumstances of the case. The tribunal after awarding Rs 90,000/- on account of loss of salary for the period during which the respondent was recuperating proceeded to award Rs 1.00 lac on account of job due to 25% disability, the tribunal has been of the view that because of stiffness of the hip, inability to drive and 25% disability suffered by the respondent, the respondent was not in a position to resume his earlier job of Marketing Manager and make further progress in his said profession. There is again no scope for any disagreement with the conclusion drawn by the tribunal. The tribunal has awarded an amount of Rs 50,000/- on account of pain and suffering to which the respondent was exposed to the accident and again Rs 10,000/- on account of stiffness in his hip and right ankle and an amount of Rs 25,000/-for 25% permanent partial disability. It appears that the tribunal has determined the compensation on the same grounds more than one time though giving it different names. The tribunal, as already said, has awarded an amount of Rs.50,000/- on account of pain and suffering, then again Rs.10,000/- on account of lot of inconvenience and again Rs 25,000/- on account of permanent partial disability. Once the tribunal determined an amount of Rs 50,000/- on account of pain and suffering and further an amount of Rs 25,000/- on account of permanent partial disability, there was no reason to grant Rs 10,000/- on account of inconvenience. The amount of Rs 10,000/- awarded by the tribunal on account of inconvenience is, thus unwarranted. To sum up, an amount of Rs 2,75,000/- awarded by the tribunal on account of injuries suffered by the respondent, is just and proper in the facts and circumstances of the case. 24. For the reasons discussed above, the appeal is allowed and the award of the learned tribunal is modified as under:- I) That the respondent -3 (owner of the offending vehicle ) shall be liable to pay the award amount to the claimant-respondent -1 herein. 24. For the reasons discussed above, the appeal is allowed and the award of the learned tribunal is modified as under:- I) That the respondent -3 (owner of the offending vehicle ) shall be liable to pay the award amount to the claimant-respondent -1 herein. However, having regard to the fact that the petitioner has already deposited a part of the award amount and the same has been released in favour of the claimant respondent -1,the award amount shall be paid by the appellant to be recovered from respondent-3 (owner of the offending vehicle).The appellant, as laid down in Ishwar Chandras case(supra), shall be under no obligation to institute a separate suit for recovery of the award amount and shall be entitled to ask for such recovery in the execution proceedings before the learned tribunal. II) That the compensation shall be restricted to an amount of Rs 2,75,000/-. 25. Having regard to the conclusions drawn, it is necessary that all information regarding driving licences is made available by the authorities saddled under Motor Vehicle Act, with the duty to grant driving licence under the Act to the general public, so that owner of a motor vehicle has ready access to such information while employing a driver. There is no reason as to why the concerned authorities should not integrate Information Technology with the day-to-day affairs of their office(s) and with the help of Information Technology tools make the requisite information accessible to the general public. So viewed, the Transport Commissioner, J&K State and all other authorities associated with grant of driving licence(s) under the Motor Vehicles Act, are directed to place material particulars including names, parentage, residential address, age, date of issuance of driving licence, type of the driving licence, the type of vehicle authorized to drive and period of validity etc, in respect of each and every driving licence issued by the authority(ies) on the Government website or any website set up by the Transport Department within 60 days from the date of this judgment and in the event such website is not already set up to set up a website and place such information on such website within the said period, so that flow of hassle-free information is facilitated and general public including owners of vehicles have online access to the information. Disposed of.