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2022 DIGILAW 49 (JK)

Oriental Insurance Co. Ltd. v. Bishamber Singh

2022-02-18

RAJNESH OSWAL

body2022
JUDGMENT : Rajnesh Oswal, J. The appellant-insurance company has filed the present appeal impugning the award dated 28.08.2017 passed by the Motor Accidents Claim Tribunal, Kathua (hereinafter to be referred as the Tribunal) in claim petition bearing No. 85/2014 titled “Bishamber Singh vs. Anil Khanna & Ors”, by virtue of which the appellant has been directed to pay a sum of Rs. 1,50,000/- along with pendente lite as well as future interest at the rate of 7% per annum till its realisation. 2. The award has been impugned primarily on the following grounds: (i) That the driver of the offending vehicle was having a fake licence. (ii) That the appellant had submitted the list of witnesses before the tribunal and had even deposited the diet expenses but the learned tribunal without giving any opportunity to the appellant herein, closed the evidence and passed the impugned award. (iii) That the learned tribunal without there being any documentary evidence on record, on the basis of probability, fixed the cost of each cattle at the rate of Rs. 50,000/- which is exorbitant. 3. Mr. Suneel Malhotra, learned counsel appearing on behalf of the appellant argued that the appellant was not under obligation to indemnify the insured, particularly when the driver of the vehicle was driving the vehicle with a fake licence and further that the learned Tribunal was not afforded opportunity to lead evidence, particularly when the appellant- Insurance Company had submitted the list of witnesses and had deposited the diet expenses. He further argued that the quantum of compensation of Rs. 50,000/- per cattle is exorbitant. 4. Per contra Mr. Anil Khajuria, learned counsel appearing for the respondent No. 2/owner argued that assuming though not admitting that the driving licence of the respondent No. 3 was fake still respondent Insurance Company has not lead any evidence that the respondent No. 2 employed the respondent No. 3 as a driver despite having knowledge that he was having a fake licence. He further submitted that the respondent No. 2 has filed affidavit before the learned tribunal that he had employed the respondent No. 3 as his driver on the basis of the licence and there was nothing to disbelieve the genuineness/ validity of the licence. 5. Heard and perused the record. 6. He further submitted that the respondent No. 2 has filed affidavit before the learned tribunal that he had employed the respondent No. 3 as his driver on the basis of the licence and there was nothing to disbelieve the genuineness/ validity of the licence. 5. Heard and perused the record. 6. The facts necessary for the disposal of the present appeal are that the claim petition was filed by the respondent No. 1 alleging therein that a vehicular accident was caused by the vehicle bearing No. HR55-9788 on 10.01.2014 at Jagatpur Morh (RTO office), Lakhanpur, Tehsil and District Kathua and in the said accident, two mulching buffaloes and one mulching cow received fatal injuries. The respondent-insurance company filed the response and on the basis of the pleadings, the following issues were framed. (i) Whether an accident occurred on 10.01.2014 at Jagatpur Morh (RTO office), Lakhanpur, National Highway, Tehsil and District Kathua, within the jurisdiction of Police Station, Lakhanpur, by rash and negligent driving of vehicle bearing No. HR55-9788, by its driver respondent No. 2 as a result of which two milching buffaloes and one milching cow of petitioner received fatal injuries? (OPP) (ii) If issue No. 1 is proved in affirmative, whether the petitioner is entitled to compensation? If so, to what amount and from whom? (OPP) (iii) Whether the respondent No. 2, driver of the offending vehicle was not holding a valid and effective driving licence at the time of accident and whether there was any violation of terms and conditions of the policy of insurance? If so, to what effect? (OPR-3) (iv) Relief? 7. The petitioner besides examining himself, examined Ramesh Singh as his witness, whereas the respondents did not lead any evidence. The learned Tribunal after considering the evidence on record passed the award impugned. 8. The first contention of the appellant is that respondent No. 3 was having a fake licence and the Tribunal has deprived the appellant of its right to lead evidence by not summoning the witness despite the fact that the appellant had deposited the diet expenses. The appellant insurance company has relied upon the verification report, in which it has been stated that the licence in question has not been issued by the Motor Vehicle Department, Agra. The appellant insurance company has relied upon the verification report, in which it has been stated that the licence in question has not been issued by the Motor Vehicle Department, Agra. The Insurance Company has not led any evidence with regard to the fact that the respondent No. 2 was having knowledge that the driving licence of the respondent No. 3 was fake, particularly when the respondent No. 2 had submitted an affidavit that he had engaged the services of the respondent No. 3 when he had produced the driving licence. Even the respondent insurance company did not lay any motion for cross examining the respondent No. 2 with regard to the affidavit filed by him. No doubt, the diet expenses of the witness were deposited by the appellant-insurance company in order to prove verification report of the licence and this Court would have remanded the matter back to the learned tribunal had the appellant either led any evidence with regard to the respondent No. 2 employing the respondent No. 3 as driver despite having knowledge of his driving licence being fake or cross examined the respondent No. 2 with regard to the affidavit. But, the appellant has neither led any evidence nor cross-examined the respondent No. 2 by laying motion before the Tribunal. Reliance is placed upon decision of Apex Court in case National Insurance Company Ltd. vs Swaran Singh and others, (2004) 3 SCC 297 , in which three Judge Bench of the Hon’ble Supreme Court elaborately discussed the issue and concluded as under: “(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object. (ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act. (ii) Insurer is entitled to raise a defence in a claim petition filed under Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)(a)(ii) of the said Act. (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. 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 where for would be on them. (v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case. (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. 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. (vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. (viii) If a vehicle at the time of accident was driven by a person having a learner’s licence, the insurance companies would be liable to satisfy the decree. (ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal. (xi) The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.” 9. In Nirmala Kothari v. United India Insurance Co. Ltd., reported in (2020) 4 SCC 49 , the Apex Court after relying upon National Insurance Company Ltd. vs Swaran Singh and others (supra) held as under: “9. Having set forth the facts of the present case, the question of law that arises for consideration is what is the extent of care/diligence expected of the employer/insured while employing a driver? To answer this question, we shall advert to the legal position regarding the liability of the insurance company when the driver of the offending vehicle possessed an invalid/fake driving licence. In United India Insurance Co. Ltd. v. Lehru (2003) 3 SCC 338 , a two-Judge Bench of this Court has taken the view that the insurance company cannot be permitted to avoid its liability on the ground that the person driving the vehicle at the time of the accident was not duly licenced. It was further held that the wilful breach of the conditions of the policy should be established. The law with this respect has been discussed in detail in PEPSU RTC v. National Insurance Co., (2013) 10 SCC. We may extract the relevant paragraph from the judgment : “10. It was further held that the wilful breach of the conditions of the policy should be established. The law with this respect has been discussed in detail in PEPSU RTC v. National Insurance Co., (2013) 10 SCC. We may extract the relevant paragraph from the judgment : “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 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.” 10. 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.” 10. While the insurer can certainly take the defence that the licence of the driver of the car at the time of accident was invalid/fake, however, the onus of proving that the insured did not take adequate care and caution to verify the genuineness of the licence or was guilty of wilful breach of the conditions of the insurance policy or the contract of insurance lies on the insurer. 12. While hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the insurance company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the insurance company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.” 10. Thus, mere fake or invalid driving license at the relevant time, are not in themselves defences available to the insurer either against the insured or the third parties. So far as the insured is concerned, the insurer has to prove that the insured failed to exercise reasonable care in the matters of fulfilling the condition of the policy. Thus, there is no force in the contentions of the appellant, as such, this Court does not deem it proper to remand the matter back. As such, these contentions are rejected. 11. The other ground is with regard to the quantum of compensation. Thus, there is no force in the contentions of the appellant, as such, this Court does not deem it proper to remand the matter back. As such, these contentions are rejected. 11. The other ground is with regard to the quantum of compensation. The respondent No. 1 has stated that he was getting about eight to ten kilograms of milk from each cattle and the cost of each cattle which gives eight to ten kilograms of milk is 80,000/- to 90,000/-. The learned Tribunal did not believe sum of Rs. 80,000/- to 90,000/- as cost for each cattle despite there being no evidence in rebuttal thereof but nonetheless, the learned tribunal has considered the cost of each cattle at Rs. 50,000/- and it can hardly be considered as an exorbitant amount. 12. This Court in “National Insurance Company Ltd. Vs. Abdul Karim & ors” reported in 2006(3) JKJ(HC) 126 had granted the compensation of Rs. 55,000/- on account of death of buffalo in the year 1998 and sum of Rs. 50,000/- each for death of three cattle in the year 2014 can hardly be termed as exorbitant compensation. As such, this contention of the appellant too is rejected. 13. Viewed thus, there is no merit in the present appeal and the same is accordingly dismissed. The amount if deposited be released in favour of claimant after proper verification. 14. Record of the Tribunal be sent back.