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Allahabad High Court · body

2016 DIGILAW 3092 (ALL)

NEW INDIA ASSURANCE CO. LTD. v. SUNDARI

2016-09-09

KRISHNA MURARI, VIVEK KUMAR BIRLA

body2016
JUDGMENT By the Court.—This is an application seeking correction of the order dated 10.2.2016 transcribed and uploaded. 2. It is contended that after hearing learned counsel for the parties, the appeal was allowed and the matter was remanded back to the Tribunal for decision afresh, but on account of some inadvertent mistake, a wrong order has been transcribed and uploaded. On verification from the shorthand book maintained by the stenographer, it appears that due to inadvertent mistake, a wrong order was transcribed and uploaded. In view of above, correction application stands allowed. Order dated 10.2.2016 is recalled and is substituted by the following order, which was passed in open Court. 3. “This appeal under Section 173 of the Motor Vehicles Act (for short the ‘Act’) has been filed by the Insurance company challenging the judgment and award dated 26.11.2015 awarding a sum of Rs. 12,35,000/- alongwith 7% simple interest as compensation to the claimant-respondents. 4. Facts, in brief, are that an application under Section 166 read with Section 140 of the Act was filed by the claimant-respondents claiming compensation to the tune of Rs. 60,20,000/- alleging that their predecessor-in-interest, Sunil Kumar died in an motor accident on 1.5.2012 at about 3 p.m. It was further pleaded that the accident was a result of rash and negligent driving of the offending vehicle by its driver. The proceedings were contested by the owner of the offending vehicle as well as insurance company by filing written statement. The Tribunal vide judgment dated 19.5.2015 allowed the claim petition and awarded compensation to the tune of Rs. 30,80,000/- alongwith 7% interest. The Insurance company challenged the same by filing FAFO No. 2183 of 2015. A Division Bench of this Court vide judgment and order dated 20th August, 2015 allowed the appeal, set aside the award and remanded the matter back to the Tribunal with the direction to dispose of the case afresh in accordance with law and in the light of the observations made in the said judgment. It may be relevant to quote the following from the aforesaid judgment. “The claim was contested by the appellant insurer by filing the written statement wherein the averments made by the claimant in their claim petition were denied and also submitted that the driver of the offending vehicle did not possess any effective and valid driving licence at the time of accident. “The claim was contested by the appellant insurer by filing the written statement wherein the averments made by the claimant in their claim petition were denied and also submitted that the driver of the offending vehicle did not possess any effective and valid driving licence at the time of accident. The insurance company also claimed that the salary certificate of the claimant has not been verified from the said Sugar Mill. He further contends that with regard to the employment as no documentary evidence has been produced to say that deceased was employed in the Sugar Mill. In view of the material evidence on record, it would be evident that it is for the claimant to approach the sugar cane factory by filing an application and on the application sugar cane factory to issue certificate with regard to employment of deceased and salary certificate and certificate in respect of the period during which he worked, what was the salary being paid to the deceased on the date of accident and also depute someone on behalf of the employer before the Court. Tribunal shall also issue notice to Sugar Mill and thereafter Tribunal shall pass appropriate order after giving opportunity of hearing to the parties. In view of above, without going into the merits of the appeal, we think it proper that the impugned order should be set aside and the matter be remanded back to the Tribunal for deciding afresh. Accordingly, the award passed by the Motor Accident Claims Tribunal/Additional District Judge/Special Judge (Prevention of Corruption Act), Meerut in M.A.C.P. No. 824 of 2012 is set aside and the matter is remanded back to the Tribunal with a direction to dispose of the case afresh in accordance with law and in the light of the observations made by us.” 5. In pursuance to the aforesaid order of remand made by this Court, the claim petition was considered afresh by the Tribunal and decided vide judgment and award dated 26.11.2015, which is under challenge in this appeal. By means of the impugned award, the Tribunal awarded a sum of Rs. 12,35,000/- alongwith 7% simple interest as compensation. 6. Issue No. 2 framed by the Tribunal was whether the driver of the offending vehicle was having a valid and effective driving licence. By means of the impugned award, the Tribunal awarded a sum of Rs. 12,35,000/- alongwith 7% simple interest as compensation. 6. Issue No. 2 framed by the Tribunal was whether the driver of the offending vehicle was having a valid and effective driving licence. The driving licence of the driver of the offending vehicle, namely, Ankur Jain was available on the record of the Tribunal, which was issued on 1.3.2004 and was valid till 28.2.2024. The age of the licence holder was shown to be 19 years on the date of its issuance. 7. Insurance company filed in evidence the secondary school certificate, 2004 of the Ankur Jain, wherein his date of birth was recorded as 9th July, 1988. On the basis of the secondary school certificate, it was contended that since on the date of issuance of the driving licence, Ankur Jain was only aged about 15 years, as such, he could not have been issued the licence and was disqualified for the same being less than 18 years of age, however, the Tribunal returned a finding that on the date of accident, the driver of the offending vehicle was having a valid and effective driving licence. 8. Learned counsel for the appellant contends that the aforesaid finding of the Tribunal is solely based on the fact that validity of the said driving licence was duly proved by producing an employee of the office of the Road Transport authority. It is further contended that the question raised that the age of the driver of the offending vehicle was less than 17 years on the date of issuance of the driving licence, has not at all been considered by the Tribunal only on the ground that no issue was raised by the Insurance company in the written statement that driving licence was forged or obtained by fraud. 9. In reply, learned counsel for the claimant-respondents has tried to justify the impugned judgment by contending that once the Insurance Company had not set up the case that the driving license was obtained by fraud and the same was duly proved by producing the employee of the issuing authority, the Tribunal rightly held that the license was valid. 10. We have considered the argument advanced by the learned counsel for the parties and perused the record. 11. 10. We have considered the argument advanced by the learned counsel for the parties and perused the record. 11. The sum and substance of the controversy issued between the parties is not with respect to the effective and valid driving licence, but the question for consideration is whether a person, who is disqualified from holding a driving licence, even if he holds a licence, can be said to be duly licensed and whether the same can be raised as a defence in a claim petition by the insurer. 12. For an effective adjudication of the controversy between the parties, it may be relevant to notice certain relevant statutory provisions of the Statute. Section 2 (10) of the Act defines driving licence as under. “(10) “driving licence” means the licence issued by a competent authority under Chapter II authorising the person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle of any specified class or description.” 13. Section 3 of the Act prescribes the necessity for driving licence and prohibits of driving of any motor vehicle by any person in any public place unless he holds an effective driving licence. The said Section reads as under. “3. Necessity for driving licence.—(1) No person shall drive a motor vehicle in any public place unless he holds an effective driving license issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle [other than a motor cab or motor cycle hired for his own use or rented under any scheme made under sub-section (2) of Section 75 unless his driving license specifically entitles him so to do. (2) The condition subject to which sub-section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be prescribed by the Central Government.” 14. Section 4 of the Act prescribes the minimum age limit for being eligible to drive a particular class of motor vehicle in a public place. The said section reads as under. “(4) Age limit in connection with driving of motor vehicles.—(1) No person under the age of eighteen years shall drive a motor vehicle in any public place: Provided that a motor cycle with engine capacity not exceeding 500cc may be driven in a public place by a person after attaining the age of sixteen years. “(4) Age limit in connection with driving of motor vehicles.—(1) No person under the age of eighteen years shall drive a motor vehicle in any public place: Provided that a motor cycle with engine capacity not exceeding 500cc may be driven in a public place by a person after attaining the age of sixteen years. (2) Subject to the provisions of Section 18, no person under the age of twenty years shall drive a transport vehicle in any public place. (3) No learner’s license or driving license shall be issued to any person to drive a vehicle of the class to which he has made an application unless he is eligible to drive that class of vehicle under this section.” Section 5 prescribes for responsibility of owners of motor vehicle for contravention of Sections 3 and 4. (5) Responsibility of owners of motor vehicles for contravention of Sections 3 and 4.—No owner or person in charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of Section 3 or Section 4 to drive the vehicle. Section 9 provides for grant of driving licence. Relevant part of the said Section for the purposes of the case reads as under. “9. Grant of driving licence.—(1) Any person who is not for the time being disqualified for holding or obtaining a driving licence may apply to the licensing authority having jurisdiction in the area- (i) ————— (ii) —————” 15. A conjoint analysis of the aforesaid provisions of the Act goes to show that nobody can drive a motor vehicle in a public place without an effective driving license and no one under the age of 18 years is entitled to drive a motor vehicle in a public place with the exception that a motorcycle with engine capacity not exceeding 50cc can be driven by a person after attaining the age of 16 years. It is, thus, clear that a person unless he attained the age of 18 years, is not eligible to drive a motor vehicle and is disqualified to hold a licence to drive a motor vehicle. Thus, a person below the age of 18 years is clearly disqualified from holding or obtaining a driving licence to drive a motor vehicle and cannot make an application for grant of the same in accordance with the provisions of Section 9 of the Act. 16. Thus, a person below the age of 18 years is clearly disqualified from holding or obtaining a driving licence to drive a motor vehicle and cannot make an application for grant of the same in accordance with the provisions of Section 9 of the Act. 16. The next question which immediately arises for our consideration is whether in a fact situation where the driver of the offending vehicle though has a driving licence, but is below the age of 18 years, the fact can be set up as a defence by the Insurance company to avoid its liability as envisaged in sub-section (2) of Section 149 of the Act. Section 149 (1) castes a liability upon the insurer to satisfy judgment and awards against insured in respect of third party claims. Section 149 (2) enumerates defences available to the insurance companies, which on being established, the insurance company may not be liable to fulfil their statutory obligation under Section 149 (1) of the Act. Relevant Section 149 (2) of the Act is being reproduced hereunder. “149. Section 149 (2) enumerates defences available to the insurance companies, which on being established, the insurance company may not be liable to fulfil their statutory obligation under Section 149 (1) of the Act. Relevant Section 149 (2) of the Act is being reproduced hereunder. “149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.— (1) ———— (2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case my be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely : (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:— (i) a condition excluding the use of the vehicle— (a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or (b) for organised racing and speed testing, or (c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.” 17. The opening words “that there has been a breach of a specified condition of the policy” of clause (a) of sub-section (2) of Section 149 implies that the insurer’s defence of an action would depend upon the terms of the policy. The said sub-clause contains three conditions, which on being established, the insurer can get away from its liability. 1. driving of the offending vehicle by a named person or person specifically excluded under the terms of the policy. 2. driving of the offending vehicle by a person, who is not duly licensed; and 3. driving by a person disqualified from holding or obtaining a driving licence. 18. It is clear that the driving by a person disqualified from holding or obtaining a driving licence is one of the defence open to the Insurance company to avoid its liability for indemnifying the insurer. 19. The provisions of Section 149 (2) (b) (ii) of the Act has been subject-matter of interpretation by the Hon’ble Apex Court in number of cases. While interpreting the provisions of Section 96 of the old Act, which is in para materia with Section 149 (2), Hon’ble Apex Court in the case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, (1987) 2 SCC 654 , has held as under. “Section 96 (2) (b) (ii) extends immunity to the insurance company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified from holding or obtaining a driving licence during the period of disqualification. The expression ‘breach’ is of great significance. The dictionary meaning of ‘breach’ is ‘infringement or violation of a promise or obligation’ (see Collins English Dictionary). It is therefore abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of promise that a person who is duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression ‘breach’ carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. The very concept of infringement or violation of the promise that the expression ‘breach’ carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself, it cannot be said that the insured is guilty of any breach.” 20. The ratio of the decision rendered in the case of Skandia Insurance Co. LTD. (supra) has been approved by a three Judges Bench when the correctness thereof was referred to a larger Bench in the case of Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21 . The three Judges Bench of the Hon’ble Apex Court noticing the ratio propounded in the Skandia’s case (supra) observed as under. “In other words, once there has been a contravention of the condition prescribed in sub-section (2) (b) (ii) of Section 96, the person insured shall not be entitled to the benefit of sub-section (1) of Section 96. According to us, Section (2) (b) (ii) should not be interpreted in a technical manner. “In other words, once there has been a contravention of the condition prescribed in sub-section (2) (b) (ii) of Section 96, the person insured shall not be entitled to the benefit of sub-section (1) of Section 96. According to us, Section (2) (b) (ii) should not be interpreted in a technical manner. Sub-section (2) of Section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in sub-section (2) including that there has been a contravention of the condition excluding the vehicle being driven by an person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression ‘breach’ occurring in Section 96 (2) (b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the Court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of Section 96.” In the backdrop of the aforesaid legal proposition, we now proceed to analyse the facts of the case in hand. A perusal of the written statement filed by the appellant-insurance company goes to show that it was specifically pleaded that driver of the offending vehicle was not having a valid and effective driving licence and the owner had entrusted it knowingly and deliberately to a person who was not legally authorised to drive it and, thus, the provisions of Motor Vehicle Act as well as terms of policy had been violated. It may be relevant to quote paragraph 29 of the written statement which contains pleading in this regard. “29. That although the alleged accident with Car No. UK-07 U-9556 is not admitted but in alternative it is pleaded that at the time of accident, the said vehicle was being driven by its driver having no valid and effective driving license with the proper endorsements. The owner of this vehicle had entrusted it knowingly and deliberately, to a person who was not legally authorised to drive it, and thus he has violated the provisions Motor Vehicle Act 1988 as well as terms and conditions of the policy of insurance, if any is found in future.” 21. In support of the averments, the insurance company filed certificate secondary school examination of 2004 of the driver, Ankur Jain, as paper No. “61 ga”. The said certificate recorded his date of birth of 9.7.1988. The driving licence filed by the owner of the offending vehicle as paper No. 30 Ga/3 went to show that it was issued on 1.3.2004. Thus, in accordance with the date of birth recorded in the secondary school examination certificate, the age of the driver, on the date of issuance of driving licence was only 15 years and 7 months. Motor Accident Claims Tribunal instead of adverting itself to this issue held the driving licence to be valid and effective solely on the ground that it was proved by producing an employee of the issuing authority in the witness box, hence, it cannot be said to be fake. The Tribunal also held that it was not pleaded by the insurance company that driving licence was fake or was got issued fraudulently. Insofar this issue is concerned, as already noticed above, the written statement filed by the insurance company contained a specific pleading. 22. Tribunal lost sight of the fact that issuance of fake or forged licence is altogether different issue. Insofar this issue is concerned, as already noticed above, the written statement filed by the insurance company contained a specific pleading. 22. Tribunal lost sight of the fact that issuance of fake or forged licence is altogether different issue. Licence issued to the driver of the offending vehicle may not be fake or forged but whether the same could have been issued to the holder in view of his disqualification on the ground of having not attained the minimum age prescribed by the Statute and such a licence whether can be termed as effective and valid licence was the issue required to be addressed by the Tribunal. Further if the licence is obtained by furnishing wrong and incorrect information, the same may not be fake but having been obtained on the basis of wrong or incorrect information deliberately furnished, would fall in the category of licence obtained fraudulently. Such a licence cannot fall in the category of valid and effective driving licence. Mere fact that an employee of issuing authority appears and proves the same, only goes to establish it was issued by the authority and was not fake or forged. However, such an evidence is not sufficient to establish it as valid and effective once the competence of the holder is challenged. The Tribunal has to advert to other evidence on record led by the party asserting the fact to come to a finding. In case, the evidence leads to a conclusion that on account of any bar prescribed by the Statute, the holder was disqualified, the licence even though not being fake or forged cannot be termed to be a valid and effective driving licence. The other consequence is a licence having been obtained on the basis of deliberate false and incorrect information would fall within the category of licence obtained fraudulently automatically taking it out of the category of valid and effective driving licence. 23. The Tribunal without entering into above aspects of the matter held the licence to be effective and valid only because the issuance of the same was proved by producing an employee in the witness box. It was incumbent upon the Tribunal to have considered the issue in the light of evidence adduced by the insurance company to establish the age of the licence holder. 24. It was incumbent upon the Tribunal to have considered the issue in the light of evidence adduced by the insurance company to establish the age of the licence holder. 24. In light of above discussions, the finding of the Tribunal on issue No. 2 is not liable to be sustained and is set aside. The matter is remanded back to the Tribunal to decide issue No. 2 afresh in accordance with law and in the light of observations made hereinabove. Findings on rest of issues stand confirmed. Liability to make payment of compensation to the claimant-respondents shall also be determined by the Tribunal in accordance with finding returned on issue No. 2. Appeal to that extent stands allowed. However, in the facts and circumstances, we do not make any order as to costs.” 25. After the aforesaid order was directed to be substituted, learned counsel for the appellant submits that in pursuance to the wrong order transcribed in the appeal, entire awarded amount has been deposited. Since the matter is being remanded back and the liability to make payment is also to be determined afresh by the Tribunal, the amount deposited by the appellant-insurance company shall continue to remain in deposit and shall be subject to the adjudication made by the Tribunal with respect to liability to make payment. The Tribunal is further directed to conclude the proceedings within two months from the date of production of certified copy of this judgment by either of the parties.