BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED:04/04/2008 CORAM THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN S.A.(MD)No.585 of 2007 M.Chidambaram ... Appellant Vs. M/s.United India Insurance Co., Ltd., rep. by its Divisional Manager, 457, V.E.Road, Tuticorin. ... Respondent PRAYER Second Appeal filed under Section 100 of the Code of Civil Procedure against the judgment and decree in A.S.No.212 of 2003 dated 30.08.2005 on the file of Principal District Judge, Tuticorin, reversing the judgment and decree in O.S.No.351 of 2000, dated 17.06.2003 on the file of Subordinate Judge, Tuticroin. !For Appellant ... Mr.C.Godwin ^For Respondent ... No Appearance :JUDGMENT
This appeal is directed against the judgment and decree dated
30.08.2005 in A.S.No.212 of 2003 on the file of Principal District Judge,
Tuticorin, reversing the judgment and decree dated 17.06.2003 in O.S.No.351 of
2000 on the file of Subordinate Judge, Tuticorin.
2. The suit in O.S.No.351 of 2000 was preferred by the appellant
against the respondent claiming a sum of Rs.50,000/- on account of damages
caused to his vehicle on account of accident.
3. In the plaint in O.S.No.351 of 2000, it was the case of the
appellant that his vehicle bearing Registration No.TN-67-9927 was duly insured
with the respondent for the period in question. The said vehicle was taken for
hire to transport cattle to Tenkasi Mattu Santhai on 24.04.1998 by one
Duraipandian and accordingly, while the vehicle was proceeding to the place of
destination, it met with an accident near Pattathur Vilakku Road in Kalugumalai-
Sankarankoil main road and in the said accident, the vehicle was seriously
damaged. The accident was immediately intimated to the respondent. There was
also a criminal case in respect of the said accident. Since the respondent had
repudiated the claim preferred by the appellant, he was constrained to file a
complaint before the District Consumer Disputes Redressal Forum, Tuticorin,
claiming compensation. However, the said claim petition was dismissed with
direction to approach the civil Court for appropriate relief and accordingly, by
restricting the claim to a sum of Rs.50,000/-, the appellant has preferred the
suit.
4. The suit was resisted by the respondent and in the written
statement filed by the respondent, though they have admitted the accident, they
repudiated the claim on the ground that the driver of the vehicle was not having
valid endorsement to drive transport vehicle. It was further contended that
though the driving licence produced by the driver of the vehicle did contain an
endorsement to drive a transport vehicle, the said endorsement was subjected to
verification by the Transport Department and it was found that the endorsement
was nothing but fake and as such, as on the date of accident, the driver of the
vehicle was not having valid licence. In the said circumstances, the respondent
contended that they are not liable to pay the amount to the appellant and prayed
for dismissal of the suit.
5. The trial Judge, after framing necessary issues, ultimately
decreed the suit as prayed for, whereby the respondent was directed to pay the
amount to the appellant.
6. The judgment and decree dated 17.06.2003 in O.S.No.351 of 2000
was taken up in appeal by the respondent before the Principal District Judge,
Tuticorin and the learned Judge framed two points for determination and
ultimately, concluded that the appellant is not entitled to claim damages from
the respondent and accordingly, the appeal was allowed by setting aside the
judgment and decree of the Court below.
7. The judgment and decree dated 30.08.2005 in A.S.No.212 of 2003 is
the subject matter of the present appeal at the instance of the unsuccessful
plaintiff in O.S.No.351 of 2000 on the file of Subordinate Judge, Tuticorin.
8. The following substantial question of law arises for
consideration in the present appeal:-
“Whether the Insurance Company is entitled to repudiate the claim
on the ground of absence of endorsement in the non-professional driving licence
of the driver to drive goods vehicle?”
9. The appeal came up for final hearing on 02.04.2008 and I have
heard Thiru.C.Godwin, learned counsel appearing for the appellant. Though the
name of the counsel for the respondent was found to be shown in the cause-list,
there was no representation on behalf of the respondent and as such, the matter
was passed over in the morning session so as to enable the respondent to make
submission. When the matter was again called in the afternoon session, there was
no representation on behalf of the respondent and accordingly, after hearing the
arguments of the counsel for the appellant, the judgment was reserved.
10. The learned counsel for the appellant contended that the
judgment and decree of the first appellate Court is clearly perverse, inasmuch
as the driver of the vehicle was having a valid driving licence to drive the
vehicle and merely because he was not having a licence to drive a transport
vehicle, it cannot be contended that the Insurance Company is not liable to pay
the amount in the face of a valid policy subsisting as on the date of the
accident.
11. I have considered the submission of the learned counsel and I
have also gone through the judgment and decree of the Court below.
12. The fact that the vehicle owned by the appellant met with an
accident on 24.04.1998 is not in dispute. Similarly, it is the admitted position
that the vehicle is covered by a policy issued by the respondent and the said
policy was in full force as on the date of accident. The respondent has
repudiated the claim on the ground that the driver of the vehicle had no valid
endorsement to drive a transport vehicle and as such, there is a clear violation
of the policy condition and the respondent is not liable to indemnify the
appellant for the loss sustained by him in the accident. In the written
statement filed by the respondent, they have contended that the appellant had,
in fact, submitted a copy of the driving licence of the driver, by name Muthu
Gurusamy for verification and since the respondent was having doubt about the
genuineness of the said document, the driving licence was sent for verification
to the Licensing Authority, Kovilpatti. Subsequently, the respondent was
informed by the Motor Vehicle Inspector attached to the office of the Licensing
Authority, Kovilpatti that the entry in the driving licence of the said Muthu
Gurusamy is a forged one and in fact, the Authorisation Number as found
mentioned in the driving licence of the driver of the appellant was granted to
one Muniappa, S/o.Mutthappan of Kulathoor.
13. The requisition sent by the respondent to the Lincensing
Authority as well as the verification certificate issued by the Motor Vehicle
Inspector were marked as Exs.B.4 and B.3 respectively. Therefore, it is evident
that as on the date on which the vehicle met with the accident, the driver of
the vehicle was not having a valid driving licence to drive goods vehicle.
14. The Motor Vehicles Act, 1988 in Chapter XI provides for
compulsory insurance of motor vehicles against third party risks. As per Section
146 of the Motor Vehicles Act, no person shall use, except as a passenger or
cause or allow any other person to use, a motor vehicle in a public place,
unless there is in force in relation to the use of the vehicle by that person
or that other person, as the case may be, a policy of insurance complying with
the requirements of the said Chapter. Section 147 of the Motor Vehicles Act
relates to the requirement of policy and the limits of liability. Section 149 of
the Motor Vehicles Act provides for satisfying judgments and awards against
persons insured in respect of third party risks. Section 149(2)(a)(ii) of the
Motor Vehicles Act permits the insurance company to repudiate the claim made by
the insurer, in case the vehicle has been driven at the material time by an
unlicensed person or driven by any person, who has been disqualified for holding
or obtaining a driving licence during the period of disqualification.
15. In Jitendra Kumar v. Oriental Insurance Co. Ltd. & Anr. reported
in JT 2003 (5) SC 538, while considering the question as to whether an insurance
company can repudiate the claim made by the owner of the vehicle on the ground
that the driver of the vehicle had no driving licence at the material time, the
Apex Court also considered the binding nature of Section 149(2)(a)(ii) of the
Motor Vehicles Act and observed thus:
“Section 149(2)(a)(ii) of the Motor Vehicles Act empowers the insurance
Company to repudiate a claim wherein the vehicle in question is damaged due to
an accident to which driver of the vehicle who does not hold a valid driving
license is responsible in any manner.”
16. In the present case, it is proved by documentary evidence that
the endorsement, as found mentioned in the driving licence of the driver, who
drove the vehicle at the material time, was a forged entry, thereby enabling the
respondent to contend that they are not liable to satisfy the claim made by the
appellant.
17. The Apex Court in New India Assurance Co., Shimla v. Kamla
reported in 2001(4) SCC 342 in the context of motor vehicle insurance considered
the invalidity of a forged/fake licence and held thus:
“12. As a point of law we have no manner of doubt that a fake
licence cannot get its forgery outfit stripped off merely on account of some
officer renewing the same with or without knowing it to be forged. Section 15 of
the Act only empowers any Licensing Authority to “renew a driving licence issued
under the provisions of this Act with effect from the date of its expiry”. No
Licensing Authority has the power to renew a fake licence and, therefore, a
renewal if at all made cannot transform a fake licence as genuine. Any
counterfeit document showing that it contains a purported order of a statutory
authority would ever remain counterfeit albeit the fact that other persons
including some statutory authorities would have acted on the document
unwittingly on the assumption that it is genuine.
13. The observation of the Division Bench of the Punjab and Hariyana High
Court in National Insurance Co. Ltd v. Sucha Singh that renewal of a document
which purports to be a driving licence, will robe even a forged document with
validity on account of Section 15 of the Act, propounds a very dangerous
proposition. It that proposition is allowed to stand as a legal principle, it
may, no doubt, thrill counterfeiters the world over as they would be encouraged
to manufacture fake documents in a legion. What was originally a forgery would
remain null and void forever and it would not acquire legal validity at any time
by whatever process of sanctification subsequently done on it. Forgery is
antithesis to legality and law cannot afford to validate a forgery.”
18. The Honourable Supreme Court in National Insurance Co. Ltd. v.
Swaran Singh reported in 2004(3) SCC 297, while considering the various facets
of Section 149(2)(a)(ii) of Motor Vehicles Act as well as Section 149(4) and (5)
and similar provisions in Chapter-XI observed thus:
“84. We have analysed the relevant provisions of the said Act in
terms whereof a motor vehicle must be driven by a person having a driving
licence. The owner of a motor vehicle in terms of Section 5 of the Act has a
responsibility to see that no vehicle is driven except by a person who does not
satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where
the driver of the vehicle, admittedly, did not hold any licence and the same was
allowed consciously to be driven by the owner of the vehicle by such person, the
insurer is entitled to succeed in its defence and avoid liability. The matter,
however, may be different where a disputed question of fact arises as to whether
the driver had a valid licence or where the owner of the vehicle committed a
breach of the terms of the contract of insurance as also the provisions of the
Act by consciously allowing any person to drive a vehicle who did not have a
valid driving licence. In a given case, the driver of the vehicle may not have
any hand in it at all e.g. a case where an accident takes place owing to a
mechanical fault or vis major [See Jitendra Kumar].”
19. The judgment in Swaran Singh’s case cited supra was followed by
the Apex Court in Punam Devi and Anr. V. Divisional Manager, New India Assurance
Co. Ltd., and Ors. reported in JT 2004 (3) SC 332.
20. In National Insurance Co. Ltd. v. Kusum Rai reported in 2006(4)
SCC 250, the Apex Court in the context of the necessity to have professional
licence to drive a commercial vehicle observed thus:
“11. It has not been disputed before us that the vehicle was being used as
a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle,
thus, was required to hold an appropriate licence therefor. Ram Lal who
allegedly was driving the said vehicle at the relevant time, as noticed herein
before, was holder of a licence to drive a light motor vehicle only. He did not
possess any licence to drive a commercial vehicle. Evidently, therefore, there
was a breach of condition of the contract of insurance. The appellant,
therefore, could raise the said defence.”
21. In Ashok Gangadhar Maratha vs. Oriental Insurance Co. Ltd.,
reported in 1999(5) Scale 346, the Apex Court directed the insurance company to
pay the compensation without agreeing with the contention of the insurance
company that the driver was having only LMV licence and the vehicle was used for
carrying goods. This judgment was considered and explained by the Apex Court in
New India Assurance Co. vs. Prabhu Lal reported in 2007(13) Scale 588 and more
particularly in paragraphs 31 and 32 and held thus:
“31. It is no doubt true that in Ashok Gangadhar, in spite of the
fact that the driver was holding valid driving licence to ply Light Motor
Vehicle (LMV), this Court upheld that claim and ordered the Insurance Company to
pay compensation. But, in our considered opinion, the learned counsel for the
Insurance Company is right in submitting that it was because of the fact that
there was neither pleading nor proof as regards the permit issued by the
Transport Authority. In absence of pleading and proof, this Court held that, it
could not be said that the driver had no valid licence to ply the vehicle which
met with an accident and he could not be deprived of the compensation. This is
clear if one reads paragraph 11 of the Judgement, which reads thus:-
11. To reiterate, since a vehicle cannot be used as transport vehicle on a
public road unless there is a permit issued by the Regional Transport Authority
for that purpose, and since in the instance case there is neither a pleading to
that effect by any party nor is there any permit on record, the vehicle in
question would remain a light motor vehicle. The respondent also does not say
that any permit was granted to the appellant for plying the vehicle as a
transport vehicle under Section 66 of the Act. Moreover, on the date of
accident, the vehicle was not carrying any goods, and though it could be said to
have been designed to be used as a transport vehicle or goods-carrier, it cannot
be so held on account of the statutory prohibition contained in Section 66 of
the Act.” (emphasis supplied)
32. In our Judgement, Ashok Gangadhar did not lay down that the driver
holding license to drive a Light Motor Vehicle need not have an endorsement to
drive transport vehicle and yet he can drive such vehicle. It was on the
peculiar facts of the case, as the Insurance Company neither pleaded nor proved
that the vehicle was transport vehicle by placing on record the permit issued by
the Transport Authority that the Insurance Company was held liable.
22. The ratio of the decision in Swaran Singh’s case cited supra was
considered by the Apex Court in Laxmi Narain’s case and the entire laws were
again discussed by the Apex Court in Premkumari vs. Prahlad Dev reported in
2008(1) Scale 531, wherein it was held thus:
“8. The effect and implication of the principles laid down in Swaran
Singh’s case (supra) has been considered and explained by one of us (Dr.Justice
Arijit Pasayat) in National Insurance Co. Ltd., Vs. Laxmi Narain Dhut, (2007) 3
SCC 700. The following conclusion in para 38 are relevant:
“38.In view of the above analysis, the following situations emerge:
1.The Decision in Swaran Singh case has no application to cases other than
third party risks.
2.Where originally the license was a fake one, renewal cannot cure the
inherent fatality.
3.In case of third-party risks the insurer has to indemnify the amount,
and if so advised, to recover the same from the insured.
4.The concept of purposive interpretation has no application to cases
relatable to Section 149 of the Act.”
9. In the subsequent decision, Oriental Insurance Co, Ltd., Vs. Meena
Variyal and others, (2007) 5 SCC 428, which is also a two-Judge Bench while
considering the ratio laid down in Swaran Singh’s case (supra) concluded that in
a case where a person is not a third party within the meaning of the Act, the
Insurance Company cannot be made automatically liable merely by resorting to
Swaran Singh’s case (supra). While arriving at such a conclusion the Court
extracted the analysis as mentioned in para 38 of Laxmi Narain Dhut (supra) and
agreed with the same. In view of consistency, we reiterate the very same
principle enunciated in Laxmi Narain Dhut (supra) with regard to interpretation
and applicability of Swaran Singh’s case (supra)
10. In the case of National Insurance Co. Ltd Vs. Kusum Rai and others,
(2006) 4 SCC 250, the vehicle was being used as a taxi. It was, therefore, a
commercial vehicle. The driver of the said vehicle was required to hold an
appropriate licence therefore. Ram Lap, who allegedly was driving the said
vehicle at the relevant time, was holder of a licence to drive light motor
vehicle only. He did not possess any licence to drive a commercial vehicle.
Therefore, there was a breach of condition of the contract of insurance. In such
circumstances, the Court observed that the appellant-National Insurance Co.Ltd.,
therefore, could raise the said defence while considering the stand of the
Insurance Company. This Court, pointing out the law laid down in Swaran Singh
(supra), concluded that the owner of the vehicle cannot contend that he has no
liability to verify the fact as to whether the driver of the vehicle possessed a
valid licence or not. However, taking note of the fact that the owner has not
appeared, the victim was aged only 12 years, the claimants are from a poor
background and to avoid another round of litigation applying the decision in
Oriental Insurance Co Ltd., Vs. Nanjappan (2004) 13 SCC 224 and finding that
though the appellant-Insurance Company was not liable to pay the claimed amount
as the driver was not possessing a valid licence and the High Court committed an
error in holding otherwise, in the peculiar facts and circumstances of the case
and in exercise of jurisdiction under Article 136 of the Constitution declined
to interfere with the impugned judgement therein and permitted the appellant-
Insurance Company to recover the amount from the owner of the vehicle.”
23. In a recent decision in Sardari vs. Sushil Kumar reported in
2008(3) Scale 570, the Apex Court considered the contract of insurance, which is
in the realm of private law and observed thus:
“5. The question, as regards the purport and object for which the Act had
been enacted and as also the statutory obligations on the part of the owner of
the vehicle to get the same compulsorily insured came up for consideration in a
large number of cases.
This court, time and again made a distinction between a case where third
party is involved vis-a-vis where the owner of the vehicle was involved in the
accident. The matter relating to grant of licence is dealt with in the Act.
There are provisions in terms whereof despite expiry of the period of licence,
the same can be renewed. There are also provisions providing for grant of a
fresh licence. In certain situation, the authorities are also entitled to refuse
to renew the licence.
6. Although, in terms of a contract of insurance, which is in the realm of
private law domain having regard to the object for which Section 147 and 149 of
the Act had been enacted, the social justice doctrine as envisaged in the
preamble of the Constitution of India has been given due importance. The Act,
however, itself provides for the cases where the insurance Company can avoid its
liability. Avoidance of such liability would largely depend upon violation of
the conditions of contract of insurance. Where the breach of conditions of
contract is ex-facie apparent from the records, the Court will not fasten the
liability on the Insurance Company. In certain situations, however, the Court
while fastening the liability on the owner of the vehicle may direct the
Insurance Company to pay to the claimants the awarded amount with liberty to it
to recover the same from the owner.
7. The concurrent finding of fact herein is that Sushil Kumar never held a
license. The owner of the vehicle has a statutory obligation to see that the
driver of the vehicle whom he authorized to drive the same holds a valid
license. Here again, a visible distinction may be noticed, viz, where the
license is fake and a case where the license has expired, although initially
when the driver was appointed, he had a valid license.
The question came up consideration before this Court in United India
Insurance Co.Ltd., Vs.Gian Chand and Others [(1997) 7 SCC 558], wherein, it was
held:
“12.Under the circumstances, when the insured had handed over the vehicle
for being driven by an unlicensed driver, the Insurance Company would get
exonerated from its liability to meet the claims of the third party who might
have suffered on account of vehicular accident caused by such unlicensed
driver…”
……………………………….”
24. The documentary evidence produced and exhibited on the side of
the respondent clearly shows that the driver of the vehicle, who drove the same
during the material time, was not having a valid driving licence to drive
commercial vehicle and as such, the Insurance Company is entitled to repudiate
the claim invoking the provisions of Section 149(2)(a)(ii) of the Motor Vehicles
Act and, therefore, it cannot be said that the first appellate Court erred in
interfering with the judgment and decree of the trial Court. The judgment and
decree of the first appellate Court, which was rendered on the basis of the
pleadings as well as evidence adduced on the side of the parties, cannot be
termed to be perverse or erroneous warranting interference in second appeal. The
substantial question of law is accordingly decided against the appellant and in
favour of the respondent. There is no merit in the contention as advanced on the
side of the appellant and the appeal is liable to be dismissed.
25. In the result, the Second Appeal is dismissed. However, in the
facts and circumstances of the case, there shall be no order as to costs.
SML
To
1.The Principal District Judge,
Tuticorin.
2.The Subordinate Judge,
Tuticroin.