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2012 DIGILAW 2386 (MAD)

New India Assurance Company Ltd. v. G. Susai Raj

2012-06-12

P.DEVADASS

body2012
Judgment :- The New India Assurance Company Limited, in this appeal, disputes its liability to pay compensation to the first respondent. 2. According to the learned counsel for the appellant/Insurance Company, at the time of accident, the driver of the second respondent was not possessing a valid driving licence. For such violation, he has also been charge-sheeted before the Magistrate's Court. So, it is a case of not possessing driving licence. Even if the driver is having expired driving licence, he would be construed as not having a driving licence. There is policy violation. So, the Insurance Company is not liable to pay the compensation amount to the first respondent on account of the second respondent. 3. On the other hand, the learned counsel for the claimant/first respondent would submit that there is no proof that at the time of accident, the driver of the second respondent was not holding valid driving licence. No independent evidence to that effect was adduced. No notice was issued to the second respondent to produce the driving licence of his driver. At any rate, even if it is held that the driver of the offending vehicle was not holding valid driving licence, as there is policy coverage and the claimant is a third party, the Insurer shall be directed to pay the compensation amount and recover it from the owner of the offending vehicle. 4. On 14.12.2004, at about 09.30 a.m., at the Koyambedu 100 ft. Road, the first respondent came driven his bicycle, at that time, the Motorcycle bearing Registration No.PY-02-A-9240, belonging to the second respondent, insured with the appellant came driven in a rash and negligent manner and hit against the Cyclist. In this accident, the first respondent sustained multiple injuries. He sought for compensation. The Tribunal awarded him a total compensation of Rs.84,300/-. 5. There was no notice from the Insurance Company to the second respondent to produce the driving licence of his driver. The FIR (Ex.R2) has been filed as against the driver of the second respondent. After investigation, the police filed Ex.R3 - Final Report as against the said driver. It is to be noted that he has also been prosecuted for not possessing valid driving licence at the time of accident. These aspects were not disputed by the first respondent. 6. The FIR (Ex.R2) has been filed as against the driver of the second respondent. After investigation, the police filed Ex.R3 - Final Report as against the said driver. It is to be noted that he has also been prosecuted for not possessing valid driving licence at the time of accident. These aspects were not disputed by the first respondent. 6. In this case, admittedly, at the time of accident, there is policy coverage for the offending vehicle with the appellant. The Insurance Company did not dispute this. 7. Learned counsel for the appellant brought to our notice two decisions reported in 2008 (1) TN MAC 115 (SC) [PREMKUMARI AND OTHERS Vs. PRAHLAD DEV AND OTHERS] and2008 (2) TN MAC 369 (SC) [NATIONAL INSURANCE COMPANY LIMITED Vs. VIDHYADHAR MAHARIWALA AND OTHERS]. They tell us the position of law on this aspect during 2008. Now, there is a shift in law on the aspect of liability of the Insurance Company in cases where the driver of the offending vehicle either not possessed the driving licence or held a fake licence or was having Learners' licence. 8. Recently, in RAMASAMY Vs. SELVARAJ AND ANOTHER [2012-2-L.W.946], under similar circumstances, referring to latest decisions, this Court held as under:- "17. In the recent decision of the Honourable Supreme Court reported in = 2011-5-L.W.416 (Jawahar Singh Vs. Bala Jain and Others) the Honourable Supreme Court, dealing with a case where the driver had no valid and effective driving licence, approved the findings of the Tribunal and the High Court in applying the doctrine of pay and recover. It held as follows:- "11. We cannot shut our eyes to the fact that it was Jatin, who came from behind on the motorcycle and hit the Scooter of the deceased from behind. The responsibility in causing the accident was, therefore, found to be solely that of Jatin. However, since Jatin was a minor and it was the responsibility of the petitioner to ensure that his motorcycle was not misused and that too by a minor who had no licence to drive the same, the Motor Accident Claims Tribunal quite rightly saddled the liability for payment of compensation on the Petitioner and accordingly, directed the Insurance Company to pay the awarded amount to the awardees and thereafter, to recover the same from the petitioner. The said question has been duly considered by the Tribunal and was correctly decided. The said question has been duly considered by the Tribunal and was correctly decided. The High Court rightly chose not to interfere with the same."" "6. When the insurer seeks exoneration from its liability to pay compensation/indemnify the insured on the ground that the driver of the vehicle is not duly licensed or not licensed or driven by a person having learners’ licence, the Court has to go into the question whether the vehicle owner, willfully with his full knowledge, placed the vehicle in the possession of such persons and further that has contributed to the accident. If it is not and the vehicle is insured, the insurer shall be asked to pay the compensation amount to the claimants on behalf of the insured and recover the amount from the vehicle owner in execution. No separate suit need be filed. Based on the findings of the claims Tribunal, the execution petition can be maintained. Thus, in view of this current position of law, we accept the submission of the learned counsel for the appellant.” 9. Thus, now in case when the Insurance Company takes the defence that at the time of the accident, the driver of the offending vehicle was not holding valid driving licence, so also held an expired driving licence, it must be proved by the Insurance Company that the owner of the vehicle knowing fully well, in other words, willfully placed the vehicle in the possession of a person, who has no driving licence at all or who was having an expired driving licence. Then, it would be a case for exempting the Insurance Company from its liability to pay the compensation amount to the injured/third party. In the absence of such a proof, the Insurance Company is liable to pay to the claimant the compensation amount and recover it from the owner of the offending vehicle. 10. Now, in the case before us, the Insurance Company examined RW1-Murali, who is a Senior Assistant in the Insurance Company. He had spoken that at the time of accident, the driver of the bike was not having a valid driving licence. He is not an eye witness to the accident. His evidence will not show that the second respondent had willfully placed his motorcycle in the possession of his driver, who is not duly licensed. He had spoken that at the time of accident, the driver of the bike was not having a valid driving licence. He is not an eye witness to the accident. His evidence will not show that the second respondent had willfully placed his motorcycle in the possession of his driver, who is not duly licensed. Therefore, to avoid its liability under the policy, the Insurance Company has not proved that the owner of the offending vehicle, with his eyes open, with his full knowledge, willfully placed the vehicle in the possession of his driver, who is not duly licensed. 11. It is a case of violation of terms and conditions of the policy. For that, a third party should not be made to suffer. The reason being there is compulsory statutory Insurance coverage for the vehicles under the Motor Vehicles Act to compensate the innocent third party/road accident victims. When there is Insurance coverage and there is policy violation as the one stated before us, the Company shall be directed to pay the compensation amount to the claimant and recover it from the owner of the offending vehicle. In the facts and circumstances, this is a fit case for issuing such a direction to the Insurance Company. 12. In the result, the appellant/Insurance Company is directed to pay compensation amount to the claimant and permitted to recover the amount from the vehicle owner/second respondent. The claimant is permitted to withdraw the entire amount from the deposit. Based on the direction contained in this Judgment, the Insurance company can file an Execution Petition before a Competent Court as against the vehicle owner and recover the amount from him. It need not file a separate suit for this purpose. Thus, the award of the Tribunal is modified accordingly. The Civil Miscellaneous Appeal is disposed of accordingly. No costs.