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2024 DIGILAW 223 (AP)

Kalluri Venkata Lakshumamma v. N. Gurivi Reddy

2024-02-12

B.V.L.N.CHAKRAVARTHI

body2024
JUDGMENT : Heard Sri T.Kumara Ratnam, learned counsel representing Sri K.Rathanga Pani Reddy, learned counsel for the appellants/claimants and Sri Gudi Srinivasu, learned counsel for the respondent No.2/Insurance Company. 2. This appeal directed against the Order and Decree dated 11.04.2012 passed in M.V.O.P.No.540 of 2007 by the Motor Accidents Claims Tribunal – cum – Judge, Family Court – cum – VI Additional District Judge, Kadapa (hereinafter referred to as ‘Tribunal’). 3. Parties are referred to as they were arrayed in the proceedings before the learned Tribunal, for the sake of convenience and clarity. 4. The claimants filed the application under Section 166 of the Motor Vehicles Act, 1988 (for brevity ‘the Act’), seeking compensation for a sum of Rs.4,00,000/- for the death of Kalluri Pratap Reddy (hereinafter referred to as ‘deceased’) in a motor vehicle accident occurred on 25.07.2006. 5. The case of the claimants is that on 25.07.2006 around 10.00 AM, the deceased started to Vempalli town on a motorcycle bearing registration No.AP04 K 8806 (hereinafter referred to as ‘offending vehicle’) driven by N.Sivananda Reddy; the motorcycle was driven in a rash and negligent manner with high speed and when it reached at turning point near Pamuluru gutta, N.Sivananda Reddy failed to control the vehicle, as a result it turned turtle; the deceased fell down and sustained injuries; the deceased was shifted to the Government Hospital, Vempalli, but succumbed to injuries; the deceased was earning Rs.50,000/- per annum by doing cultivation. 6. The respondent No.1 remained ex parte. The respondent No.2/Insurance Company filed counter contending that the deceased was a pillion-rider in the respondent No.1’s motorcycle, as a gratuitous passenger; the liability of the respondent No.2 is subject to terms and conditions of the policy, if any; the respondent No.1 did not possess valid and effective driving licence at the time of accident; the claim of the claimants is highly excessive. 7. The learned Tribunal, basing on the rival contentions, framed the following issues for trial: 1. Whether the claimant received injuries in the accident due to the rash and negligent driving of the crime vehicle? 2. Whether R.1’s driver was having valid license at the time of the accident? 3. Whether the claimant is entitled for compensation and if so, for what amount and from whom? 4. To what relief? 8. Whether the claimant received injuries in the accident due to the rash and negligent driving of the crime vehicle? 2. Whether R.1’s driver was having valid license at the time of the accident? 3. Whether the claimant is entitled for compensation and if so, for what amount and from whom? 4. To what relief? 8. On behalf of the claimants, the wife of deceased i.e., 1st claimant was examined herself as P.W.1 and exhibited six (06) documents as Ex.A1 to Ex.A6. The claimants examined P.W.2, who is an eye-witness to the accident. On behalf of the respondent No.2/Insurance Company, its Legal Manager examined as R.W.1 and the Junior Assistant in RTA Office, Kadapa was examined as R.W.2. On behalf of respondent No.2, Ex.B1 to Ex.B3 and Ex.X1 to Ex.X3 documents were marked. 9. Learned Tribunal, basing on the evidence, on issue No.1 held that the accident was occurred due to rash and negligent driving of the motorcycle. The learned Tribunal further held that the owner of the offending vehicle i.e., respondent No.1 is liable to pay the compensation and thereby, awarded a sum of Rs.3,24,000/- and dismissed the petition against respondent No.2/Insurance Company. 10. The only contention of the claimants is that the learned Tribunal erroneously exonerated the respondent No.2/Insurance Company from its liability to indemnify the respondent No.1/owner of the offending vehicle on the ground that the driver of the offending vehicle i.e., motorcycle was not holding valid and effective licence on the date of accident. 11. Learned counsel for the claimants would submit that the learned Tribunal failed to follow the Judgment of the Hon’ble Apex Court in National Insurance Company Limited Vs. Swaran Singh and others, 2004 (3) SCC 297 and thereby committed an error in exonerating the respondent No.2/ Insurance Company from its liability to indemnify the offending vehicle. 12. Sri Gudi Srinivasu, learned counsel for the respondent No.2/Insurance Company would submit that the evidence would establish that the respondent No.1 i.e., driver of the offending vehicle was not holding valid and effective driving licence to drive two-wheeler at the time of accident and therefore, there are no grounds to interfere with the finding of the learned Tribunal. 13. Considering the above rival contentions, the points that would arise for consideration in this appeal are as under: 1. 13. Considering the above rival contentions, the points that would arise for consideration in this appeal are as under: 1. Whether the Order and decree passed by the learned Motor Accident Claims Tribunal-cum-Judge, Family Court-cum-VI Additional District Judge, Kadapa in M.V.O.P.No.540 of 2007 dated 11.04.2012 warrants interference of this Court? 2. To what relief? POINT NO.1: 14. The case of the claimants is that on 25.07.2006 the deceased viz., Kalluri Pratap Reddy along with N.Sivananda Reddy were travelling on a motorcycle bearing registration No.AP04 K 8806 driven by N.Sivananda Reddy to go to Vempalli; the motorcycle met with an accident near Pamuluru gutta as the driver of the offending vehicle i.e., N.Sivananda Reddy drove the vehicle in a rash and negligent manner and as a result, he failed to control the vehicle. The deceased was pillion-rider, fell down and sustained injuries; he was shifted to the Government Hospital, Vempalli; he died in the hospital; hence, application was filed by the claimants under Section 166 of the Act. 15. Learned Tribunal considering the evidence on record held that the accident was occurred due to rash and negligent driving of the driver of the offending vehicle and assessed the compensation. The learned Tribunal awarded a sum of Rs.3,24,000/- towards just compensation for the death of the deceased in the motor vehicle accident. The Tribunal, basing on the evidence, found that the offending vehicle involved in the accident is a two-wheeler and it was covered by a ‘package policy’ which covers the risk of the pillion-rider also and it was valid and in force at the time of accident. But, the learned Tribunal exonerated the respondent No.2/Insurance Company from its liability to indemnify the insured i.e., respondent No.1, on the ground that the driver of the motorcycle was not possessing driving licence to drive a two-wheeler vehicle and he was possessing ‘Light Motor Vehicle (LMV)’ driving license. 16. The claimants filed the appeal challenging the said finding of the learned Tribunal on the ground that in view of the Judgment of the Hon’ble Supreme Court in Swaran Singh case, the Tribunal ought to have applied ‘pay and recovery principle’ instead of complete exoneration of the respondent No.2/Insurance Company. 17. The Hon’ble Apex Court in Swaran Singh case, at paragraph No.110 held as under: “110. 17. The Hon’ble Apex Court in Swaran Singh case, at paragraph No.110 held as under: “110. The summary of our findings to the various issues as raised in these petitions is as follows: (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. (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 wherefor would be on them. (v) The court cannot lay down any criteria as to how said burden would be discharged, in as much as the same would depend upon the facts and circumstance of each case. (v) The court cannot lay down any criteria as to how said burden would be discharged, in as much 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. (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 fulfill 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. 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. 18. The learned Tribunal did not apply the principle of ‘pay and recovery’. 18. The learned Tribunal did not apply the principle of ‘pay and recovery’. It is pertinent to note down that the Hon’ble Apex Court in the above Judgment further observed that the residual question is what would be the appropriate direction and considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability and in some cases, the insurer has been given the option and liberty to recover the amount from the insured and for the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit, it may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. 19. In the case on hand, the deceased, admittedly was a pillion-rider of the offending vehicle and it was driven by one N.Sivananda Reddy. The risk of the pillion rider was covered under the policy. The respondent No.1 is the owner of the said motorcycle. The evidence on record, as found by the learned Tribunal would establish that N.Sivananda Reddy is the driver of the motorcycle was holding ‘Light Motor Vehicle (LMV) driving licence’ but, he was not having valid and effective driving licence to drive a two-wheeler motorcycle. But, there is no finding on record by the learned Tribunal that the respondent No.2/Insurance Company is able to prove that the owner had knowledge that the driver of the two-wheeler was not having valid and effective licence to drive the motorcycle at the time of accident and therefore, he knowingly allowed the driver i.e., N.Sivananda Reddy to drive his motorcycle at the time of accident. Further, the insurer would not be allowed to avoid its liability towards insured unless the said breach on the condition of driving license is so fundamental and found to have contributed to the cause of the accident. There is no evidence on record to establish the same. 20. In that view of the matter and in view of the Judgment of the Hon’ble Apex Court in the above case, the learned Tribunal ought not to have exempted the respondent No.2/Insurance Company completely from the liability to indemnify the insurer. There is no evidence on record to establish the same. 20. In that view of the matter and in view of the Judgment of the Hon’ble Apex Court in the above case, the learned Tribunal ought not to have exempted the respondent No.2/Insurance Company completely from the liability to indemnify the insurer. It ought to have applied the principle of ‘Pay and Recovery’ to the case on hand. In that view of the matter, the order and decree of the learned Tribunal has to be modified accordingly, ordering the respondent No.2/Insurance Company to pay the compensation amount at first and recover the same later from the respondent No.1/owner of the offending vehicle in the same proceedings by filing necessary application as per law. To that extent, the order and decree of the learned Tribunal be modified and the other part of order and decree shall remain intact. Point No.1 is answered accordingly. POINT NO.2: 21. In the light of finding on point No.1, the appeal in M.A.C.M.A.No.2633 of 2012 is liable to be ‘partly allowed’. 22. IN THE RESULT, the Appeal is ‘partly allowed’ by modifying the Order and Decree dated 11.04.2012 passed in M.V.O.P.No.540 of 2007 on the file of Motor Accidents Claims Tribunal-cum-Judge, Family Court-cum-VI Additional District Judge, Kadapa, holding that the respondent No.2/Insurance Company shall at first, deposit the compensation amount and can recover the same later, from the respondent No.1/owner of the offending vehicle by filing an application as per law, in the same proceedings before the Execution Court. The other part of order and decree of the learned Tribunal shall remain intact. 23. Respondent No.2/Insurance Company shall deposit the amount within a period of eight (08) weeks from the date of the judgment and later can recover the same as held above. There shall be no order as to costs. As a sequel, miscellaneous applications pending, if any, shall stand closed.