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Himachal Pradesh High Court · body

2015 DIGILAW 1735 (HP)

Oriental Insurance Company Ltd. v. Surinder Kumar

2015-11-27

MANSOOR AHMAD MIR

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JUDGMENT : Mansoor Ahmad Mir, C.J. (Oral) These appeal along with Cross Objection is directed against the judgment and award dated 10.9.2008, made by the Motor Accident Claims Tribunal (II), Shimla, in MAC petition No. 15-S/2 of 2004, titled Surinder Kumar v. Sh. K.C. Sharma, and others, whereby compensation to the tune of Rs.75000/- with 8% interest was awarded in favour of the claimant and insurer/appellant herein came to be saddled with the liability, hereinafter referred to as "the impugned award", for short, on the grounds taken in the memo of appeal. 2. The insurer has questioned the impugned award on the ground that the driver was not having a valid driving licence to drive the offending vehicle and the Tribunal has fallen in an error in saddling the insurer with the liability as the owner has committed wilful breach. The insurer has examined two witnesses but has not proved the said factum. The owner has not committed any wilful breach in terms of Sections 147 and 149 of the Motor Vehicles Act, for short "the Act", read with the judgment delivered by the apex Court in Pepsu Road Transport Corporation v. National Insurance Company, reported in (2013) 10 Supreme Court Cases 217. It is apt to reproduce para 10 of the said judgment herein: "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. 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. 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 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." 3. The insurer has also not pleaded and proved that the owner has committed wilful breach. It was for the insurer to plead and prove that the owner has committed wilful breach in order to seek exoneration. The apex Court in National Insurance Co. Ltd. v. Swaran Singh and others, reported in AIR 2004 Supreme Court 1531 has laid down the test how the owner can be said to have committed wilful breach in terms of Sections 147 and 149 of the Motor Vehicles Act, for short "the Act" read with the insurance policy. But it is not the case here. It is apt to reproduce relevant portion of para 105 of the judgment herein: "105. ..................... (i) ......................... (ii) ........................ (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 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. 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." 4. The Tribunal has made the discussion in paras, 15, 24 to 27 of the impugned award, needs no interference and the appeal filed by the insurer merits to be dismissed. 5. The Tribunal has rightly made the assessment in paras 15 to 23 of the impugned award. Thus, the amount awarded cannot be said to be inadequate in any way. Accordingly, cross-objections also merits to be dismissed. 6. Viewed thus, the appeal as well as cross objections are dismissed and the impugned award is upheld. 7. Registry is directed to release the amount in favour of the claimant strictly, in terms of the conditions contained in the impugned award, through payee's cheque account. 8. Send down the record, forthwith, after placing a copy of this judgment.