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2016 DIGILAW 1074 (HP)

Oriental Insurance Company v. Neelma Devi

2016-06-17

MANSOOR AHMAD MIR

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JUDGMENT : Mansoor Ahmad Mir, J. This appeal is directed against the award, dated 7th May, 2009, passed by the Motor Accident Claims Tribunal, Bilaspur, District Bilaspur, H.P., (for short, “the Tribunal”) in M.A.C. No.91 of 2006, titled Neelma Devi & others vs. Sukh Dev Kaushal & others, whereby a sum of Rs.5,20,000/- alongwith interest at the rate of 9% per annum came to be awarded as compensation in favour of the claimants and the insurer came to be saddled with the liability (for short the “impugned award”). 2. The claimants, the driver and the owner-insured have not questioned the impugned award on any count. Thus, the same has attained finality so far it relates to them. 3. Learned counsel for the appellant argued that the Tribunal has wrongly saddled the insurer with liability for the reason that the driver of the offending vehicle was not having a valid and effective driving licence at the time of accident and the insured-owner has committed willful breach. The argument, though attractive, is devoid of any force for the reasons enumerated hereinbelow. 4. The claimants invoked the jurisdiction of the Tribunal under Section 166 of the Motor Vehicles Act, 1988 (for short, the Act), for grant of compensation on account of death of Desh Raj in a vehicular accident, which occurred on 2nd August, 2006, near village Doli (Namhol). The claimants, being the widow, sons and daughters, filed the claim petition claiming compensation to the tune of Rs.20 lacs, as per the break-ups given in the claim petition. 5. The respondents have resisted the claim petition by filing replies and following issues came to be framed in the claim petition:- “1. Whether late Shri Desh Raj (deceased) died on account of injuries sustained by him on 2.8.2006, at about 5.00 P.M. near Namhol, District Bilaspur, H.P. due to the rash and negligent driving of Bus No.HP-69-0215, being driven by respondent No.2 as alleged? ….OPP. 2. If issue No.1 is proved in affirmative, to what amount of compensation, the petitioners are entitled to and from whom? ….OPP. 3. Whether the offending bus was being driven by an unauthorized person, who was not having a valid and effective driving licence? …OPR-3. 4. Whether the offending bus was being driven without documents as well as contravention of the terms and conditions of the insurance policy? …OPR-3. 5. Relief.” 6. ….OPP. 3. Whether the offending bus was being driven by an unauthorized person, who was not having a valid and effective driving licence? …OPR-3. 4. Whether the offending bus was being driven without documents as well as contravention of the terms and conditions of the insurance policy? …OPR-3. 5. Relief.” 6. The claimants, in order to prove their case, have examined six witnesses, namely, PW-1 Jagdish Chand, PW-2 Dr. A.K. Soni, PW-3 Neelma Devi (claimant), PW-4 HC Jai Ram, PW-5 Sher Singh and PW-6 Sukh Dev. On the other hand, respondents examined RW-1 Manoj Kumar, RW-2 ASI Ram Dass and RW-3 Sada Ram (driver of the offending vehicle). 7. I have heard the learned counsel for the parties and have gone through the record. 8. The findings returned by the Tribunal on issue No.1 are not in dispute. Accordingly, the same are upheld. 9. Before taking up issue No.2, I deem it proper to deal with issues No.3 and 4. It was also for the insurer to prove that the driver of the offending vehicle was not having a valid and effective driving licence at the time of accident. The insurer has not taken pains to examine any official from the office of Licencing Authority concerned to prove the said factum, thus, has failed to discharge the onus. 10. Still, I have gone through the driving licence, which has been proved on record as Ext.R-4, a perusal of which does disclose that the licence was renewed on 24th July, 2004 and was valid upto 20th January, 2007. The accident had taken place on 2nd August, 2006, meaning thereby that at the time of accident, the driving licence was valid and effective one. 11. It is settled proposition of law that it is the duty of the insurer to plead and prove that the insured had committed willful breach of the terms and conditions of the insurance policy read with the mandate of Sections 147 to 149 of the Act, has not led any evidence and has failed to discharge the onus. 12. 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 Supreme Court 1531. It is apt to reproduce relevant portion of para 105 of the judgment hereinbelow: “105. ..................... (i) ......................... (ii) ........................ 12. 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 Supreme Court 1531. It is apt to reproduce relevant portion of para 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 defences 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.” 13. It is also profitable to reproduce para 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. It is also profitable to reproduce para 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. 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 ingh 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.” 14. Having said so, the findings returned by the Tribunal on issues No.3 and 4 are upheld. 15. Now, coming to issue No.2, the Tribunal has rightly made the guess work and has rightly assessed the compensation. Having said so, the findings returned by the Tribunal on issues No.3 and 4 are upheld. 15. Now, coming to issue No.2, the Tribunal has rightly made the guess work and has rightly assessed the compensation. However, the Tribunal has awarded interest at the rate of 9%, which is on the higher side. It is beaten law of the land that the rate of interest should be awarded as per the prevailing rates, in view of the judgments rendered by the Apex Court in cases titled as United India Insurance Co. Ltd. and others versus Patricia Jean Mahajan and others, reported in (2002) 6 SCC 281 ; Santosh Devi versus National Insurance Company Ltd. and others, reported in 2012 AIR SCW 2892; Amrit Bhanu Shali and others versus National Insurance Company Limited and others, reported in (2012) 11 SCC 738 ; Smt. Savita versus Binder Singh & others, reported in 2014 AIR SCW 2053; Kalpanaraj & Ors. versus Tamil Nadu State Transport Corpn., reported in 2014 AIR SCW 2982; Amresh Kumari versus Niranjan Lal Jagdish Pd. Jain and others, reported in (2015) 4 SCC 433 , and Mohinder Kaur and others versus Hira Nand Sindhi (Ghoriwala) and another, reported in (2015) 4 SCC 434 , and discussed by this Court in a batch of FAOs, FAO No. 256 of 2010, titled as Oriental Insurance Company versus Smt. Indiro and others, being the lead case, decided on 19.06.2015. 16. Accordingly, it is held that the amount of compensation shall carry interest at the rate of 7.5% per annum from the date of filing of the claim petition till realization. 17. The Registry is directed to release the entire amount in favour of the claimants, alongwith interest as awarded above, forthwith, strictly in terms of the impugned award and the excess amount, if any, worked out in favour of the insurer on account of slashing of the rate of interest, shall be refunded to the insurer through payee’s account cheque. 18. The appeal stands disposed of accordingly.