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2014 DIGILAW 1405 (HP)

Oriental Insurance Company Ltd. v. Pratibha Devi

2014-10-10

MANSOOR AHMAD MIR

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JUDGMENT : Mansoor Ahmad Mir, J. Subject matter of this appeal is the award, dated 9th March, 2007, passed by Motor Accident Claims Tribunal-I, Sirmaur District at Nahan, H.P., (hereinafter referred to as the Tribunal), in Claim Petition No.46-MAC/2 of 2005, titled Pratibha Devi and another vs. M/s Renuka Carrier and others, whereby compensation to the tune of Rs.1,56,000/-, with interest at the rate of 7.5% per annum from the date of filing of the claim petition till its realization, was awarded in favour of the claimants (respondents No.1 and 2 herein) and the appellant-insurer came to be saddled with the liability, (for short, the impugned award). 2. The owner/insured and the driver have not questioned the impugned award on any count, thus the same has attained finality so far as it relates to them. 3. The insurer has questioned the impugned award on the ground that the driving licence of the driver, namely, Kalyan Singh (respondent No.4 herein) was fake, but was duly renewed. Thus, it was submitted that the owner has committed willful breach. 4. The Tribunal after examining the record and scanning the evidence held that the insurer has failed to prove that the owner has committed any willful breach and saddled the insurer with the liability. The Tribunal, in paragraph 16 of the impugned award, has categorically held that the owner had employed the driver after taking his driving test and after perusing the driving licence, which was renewed by the Registering and Licencing Authority, Paonta Sahib. Thus, it cannot be said that the owner has committed any willful breach. The owner is not required to move here and there and make inquiries and investigations qua the genuineness of the driving licence. 5. It is profitable to reproduce paragraph 10 of the latest judgment of the Apex Court in the case of Pepsu Road Transport Corporation versus National Insurance Company, reported in (2013) 10 SCC 217 hereinbelow: ?10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran singh case. If despite such information with the owner that the licence possessed by his driver is 8 :fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the Insurance Company is not liable for the compensation.? 6. It is also beaten law of the land that the insurer has to plead and prove that the owner of the offending vehicle has committed willful breach of the terms contained in the policy and mere plea here and there cannot be a ground for seeking exoneration. 7. My this view is fortified by the Apex Court judgment in the case of National Insurance Co. Ltd. versus Swaran Singh & others, reported in AIR 2004 SC 1531 . It is apt to reproduce relevant portion of paragraph 105 of the judgment hereinbelow: ?105. ..................... (i) ......................... (ii) ........................ 7. My this view is fortified by the Apex Court judgment in the case of National Insurance Co. Ltd. versus Swaran Singh & others, reported in AIR 2004 SC 1531 . It is apt to reproduce relevant portion of paragraph 105 of the judgment hereinbelow: ?105. ..................... (i) ......................... (ii) ........................ (iii) The breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver, as contained in subsection (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 or 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 towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition 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 wherefore would be on them. (v)......................... (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 defences available to the insured under Section 149 (2) of the Act.? 8. Having said so, the Tribunal has rightly saddled the insurer with the liability. 9. In view of the above discussion, the impugned award merits to be upheld and the same is upheld. Consequently, the appeal is dismissed. and the concept of ?fundamental breach? to allow defences available to the insured under Section 149 (2) of the Act.? 8. Having said so, the Tribunal has rightly saddled the insurer with the liability. 9. In view of the above discussion, the impugned award merits to be upheld and the same is upheld. Consequently, the appeal is dismissed. The compensation amount be released in favour of the claimants strictly in terms of the impugned award, after proper identification.