JUDGMENT
V. Dhanapalan, J.
Page 1303
1. National Insurance Company Limited, Villupuram, aggrieved by the judgment and decree dated 28.08.1997 made in MACTOP No. 271 of Page 1304 1996 on the file of the Motor Accident Claims Tribunal (Sub-Judge), Kallakuruchi, has filed the above Civil Miscellaneous Appeal.
2. In respect of grievous injuries sustained in a motor accident that took place on 19.04.1993, the claimant/first respondent herein prayed for a compensation of Rs. 2 lakhs for the injuries assessed as 100% disability. In support of his claim, he himself was examined as P.W.1, one Manian who was the eye-witness to the accident was examined as P.W.2, Dr. Angamuthu, Senior Civil Surgeon, Government Hospital, Cuddalore, was examined as P.W.3 and one Dhanalakshmi, the wife of the injured was examined as P.W.4. In addition, Exs.P.1 to P.12 were marked on the side of the injured claimant. Since the injured Govindasamy is bedridden, his wife has Dhanalakshmi has filed the Claim Petition on his behalf.
3. On the side of the Insurance Company, one Srinivasa Gopalan was examined as R.W.1 and one Damodaran, the Inspector of the Insurance Company was examined as R.W.2 besides marking Exs.R.1 to R.6 to their defence.
4. The Tribunal, after analyzing the materials, holding that the accident was caused due to the negligence of the driver of the lorry in question, passed an award for Rs. 1,70,000/- with 12% interest per annum from the date of the petition till the date of deposit. Since the appellant Insurance Company obtained permission to contest the Claim Petition under Section 170 of the Motor Vehicles Act, I permit the learned counsel for the Insurance Company to advance arguments on the quantum determined by the Tribunal as well as the liability.
5. Heard Mr. S. Vadivelu, the learned counsel for the appellant Insurance Company and Mr. A. Thiagarajan, the learned counsel for the first respondent/claimant represented by his wife and guardian Dhanalakshmi.
6. Mr. S. Vadivel, the learned counsel for the appellant Insurance Company, after taking me through the award of the Tribunal and all other materials placed has submitted that the appellant Insurance Company who is the second respondent before the Tribunal had resisted the application for compensation and inter-alia contended that the driver had no valid licence to drive the lorry and that the claimant himself was negligent and the cause for the accident and denied the injuries sustained by the claimant and death caused to another bullock and further contended that on any event, the amount claimed as compensation is highly excessive.
7. He also contended that the Tribunal has mis-directed itself in law holding that in order to escape the liability, the Insurance Company was not only required to prove that the driver was not holding licence at the time of the accident but also should prove that the driver was disqualified from holding or obtaining a licence or never had any licence at all. He also contended that the Tribunal has failed to see that the appellant had also filed the report in Ex.R.2 regarding the investigation conducted and had also examined the investigator as R.W.2 to prove that the driver of the lorry did not hold any licence to drive the lorry and should have therefore accepted the defence raised by the appellant that the appellant was not to liable in law to indemnifyPage 1305 the owner of the lorry inasmuch as the owner had wilfully disobeyed the terms ad conditions of the policy, thereby committing breach of the warranties specified under the policy. The learned counsel for the appellant Insurance Company has not seriously questioned the quantum but has mainly attacked the Tribunal’s finding in respect of the liability.
8. On the other hand, Mr. A. Thiagarajan, the learned counsel for respondent/claimant has contended in the Claim Petition that on 19.04.1993, at about 10.30 p.m., when the injured claimant was proceeding in his bullock cart near Thimmalaikkaadu, he met with an accident when a lorry bearing Registration No. TN 31 3333 dashed his bullock cart and caused grievous injuries him and death to one of his bullocks. Due to the said accident, the spinal cord of the claimant has been totally fractured which has resulted in the claimant being bed-ridden and the doctor who was examined as P.W.3 has given a certificate assessing the disability of the injured as 100%. The learned counsel for the respondent/claimant has also brought to the notice of this Court that the Claim Petition itself is filed by the claimant’s wife as the claimant has been in bed-ridden position due to the serious damage in his spinal cord. To prove the involvement of the lorry in the accident, a certified copy of the First Information Report was marked as Ex.P.9 and other exhibits namely Ex.P.10 to P.12 along with Ex.P.1 and P.2, viz., Medical Register and a letter regarding his admission to Government Hospital at Cuddalore and also the negative of photograph in Ex.P.7 were marked and in respect of injuries suffered by him, Exs.P.6 to 8 were marked.
9. The learned counsel for the respondent/claimant has further contended that the eye-witness to the accident has confirmed the involvement of the lorry insured with the appellant Insurance company and the driver of the lorry is the cause for he accident and due to that accident, the claimant has sustained grievous injuries.
10. In the light of the submissions made, following points arise for consideration.
a. Whether the appellant Insurance Company is liable for the negligence in the absence of the availability of driving licence of the driver whose lorry has been insured with the appellant Insurance Company?
b. Whether the Tribunal is justified in fixing the quantum?
c. Whether the claimants are entitled for any compensation and if so, what is the quantum?
11. Before considering the above points, it would be proper for this Court to look into the provisions of law in relation to the liability under Chapter 11 of the Motor Vehicles Act, which reads as follows: “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 interpreted as to effectuate the said object.”
Page 1306
12. It would also be proper for this Court to refer to the provisions of law under Section 149 Sub-section 2a(ii) which reads as under:
(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 may 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) to (d) xxx xxx xxx
(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 licence during the period of disqualification
13. As per the above provision, breach of policy conditions, for example, disqualification of driver or invalid driving licence as contained in the above provision, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence or invalid driving licence or disqualification of driver for driving at the relevant time are not in themselves defence available to the insurer against every insured or the third parties. To avoid its liability towards the 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 a duly licenced driver or one who was not disqualified to drive at the relevant time. 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 wherefor would be on them.
14. The learned counsel for the appellant Insurance Company, in order to agitate that the driver of the lorry is not having licence and therefore, the liability cannot be fixed against the Insurance Company, has placed reliance on a decision of the Supreme Court (National Insurance Co. Ltd. v. Swaran Singh and Ors.) which reads as follows:
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 Page 1307 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 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. 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 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. 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.
15. The learned counsel for the appellant Insurance Company has placed further reliance on paragraph 9 of the decision reported in AIR 2005 SC 2850 (National Insurance Company Ltd. v. Kanti Devi and Ors.) which reads as follows:
In the instant case, the High Court did not go into the relevant questions at all and relying on Lehru’s case (supra) held that the insurer has to pay the amount and recover from the insured. it has to be noted that in Page 1308 Swaran Singh’s case (supra) the earlier decision in Lehru’s case (supra) was noted. In para 108 of the judgment, it was noted as follows:
Although, as noticed hereinbefore, there are certain special leave petitions the persons having the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicle in the manner laid down therein. But this order may not be considered as a precedent.
The essence of Lehru’s case (supra) was delineated in paras 92 and 100 as follows:
92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the willful breach of the conditions of the insurance policy or the contract of insurance. In Lehru’s case, the matter has been considered in some detail. We are in general agreement with the approach of the bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever. We would be dealing in some details with this aspect of the matter a little later.
100. This Court, however, in Lehru must not be read to mean that an owner of a vehicle can under no circumstances have any duty to make any enquiry in this respect. The same, however, would again be a question which would arise for consideration in each individual case.
16. In the light of the above discussions, the learned counsel for the appellant Insurance Company has pointed out that whether Insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. He further contended that in such terms, the insurer has to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever and therefore, the decision of the Supreme Court in Lehru’s case and the above ruling of the Supreme Court has clarified the position and submitted that this decision may be applied to the facts of the present case.
17. Per contra, the learned counsel for the respondent/claimant has placed reliance on paragraphs 15 and 16 of the decision of the Supreme CourtPage 1309 (United India Insurance Company Limited v. Lehru and Ors.) which reads as follows:
15. Now, let us consider Section 149(2). Reliance has been placed on Section 149(2)(a)(ii). As seen in order to avoid liability under this provision, it must be shown that there is a “breach”. As held in Skandia’s case, 1987 ACJ 411 (SC) and Shoan Lal Passi’s case, , the breach must be on the part of the insured. We are in full agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen. Whilst it is being driven by the thief, there is an accident. The thief is caught and it is ascertained that he had no licence. Can the Insurance Company disown liability? The answer has to be an emphatic “No”. To hold otherwise would be to negate the very purpose of compulsory insurance. The injured or relatives of person killed in the accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner himself would be an innocent sufferer. It is for this reason that the legislature, in its wisdom, has made insurance, at least third party insurance, compulsory. The aim and purpose being that in insurance company would be available to pay. The business of the company is of insurance. In all businesses, there is an element of risk. All persons carrying on business must take risks associated with that business. Thus, it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time, innocent parties must not be made to suffer or loss. These provisions meet these requirements. We are thus in agreement with what is laid down in aforementioned cases, viz., that in order to avoid liability, it is not sufficient to show that the person driving at the time of accident was not duly licensed. The insurance company must establish that the breach was on the part of the insured.
16. Section 3 of the Motor Vehicles Act, 1988, prohibits driving of a motor vehicle in any public place unless the driver has an effective driving licence. Further, Section 180 of the Motor Vehicles Act makes an owner or person in charge of a motor vehicle punishable with imprisonment or fine, if he causes or permits a person without a licence to drive the vehicle. It is clear that the punishment under Section 180 can only be imposed if the owner or person in charge of vehicle “causes or permits” driving by a person not only licensed. Thus, there can be no punishment if a person without a licence drives without permission of the owner. Section 149(2)(a)(ii) merely recognises this condition. It, therefore, only absolves the Insurance Company where there is a breach by the insured.”
18. While relying the above decision, the learned counsel for the respondent/claimant has pointed out Section 3 of the Motor Vehicles Act 1988 prohibits driving of a motor vehicle in any public place unless the driver has effective Page 1310 driving licence. Further, Section 180 of the Motor Vehicles Act makes an owner or person in charge of a motor vehicle punishable with imprisonment or fine, if he causes or permits a person without a licence to drive the vehicle and therefore, in such circumstances, the Insurance Company must establish that the breach was on the part of the insured.
19. Further reliance was placed by the learned counsel for the respondent/claimant on paragraph 12 of the decision of the Madhya Pradesh High Court (Oriental Insurance Company Limited v. Prasanna Kumar Jha and Ors.) which reads as follows:
12. The finding recorded by the Tribunal that owner gave permission to drive is based on misreading of the evidence. While saddling the liability on insurer, it was held by Tribunal that Dr. Beena Pathak, respondent No. 1, had no knowledge that the vehicle was driven by Prateek Pathak who had no valid driving licence to drive the car. It is clear that Prateek Pathak was not regular driver employed by the owner and it appears that it was only casually that Prateek Pathak drove Maruti without the knowledge of the owner. The insurance company cannot escape the liability to indemnify. Thus we find that the driver, owner and insurer are liable to pay the amount of compensation including the enhanced compensation.
20. In the above case, despite the contention of the insurance company with regard to its on the ground that the driver of the car had no licence, the owner of the vehicle contended that she had never authorised the driver to drive the car but in that circumstances, whether the insurance company is exempted from liability.
21. But, it is seen from the above ruling of the Supreme Court as well as the other decision cited by the learned counsel for the respondent/claimant, even there is no valid licence or he is not authorized to drive, the insurance company cannot avoid its liability. The proviso to sub-section (4) is very illustrative. It shows that insurance company has to pay to third parties but it may recover from the person who was primarily liable to pay. The liability of the Insurance Company to pay is further emphasized by sub-section (5). This also shows that the Insurance Company must first pay and then it can recover. If Section 149 of the Motor Vehicles Act is read as a whole it is clear that sub-section (7) is not giving any additional right to the insurance company. On the contrary, it is emphasizing that the Insurance Company cannot avoid liability except on the limited grounds set out in sub-section (2).
22. The learned counsel for the respondent/claimant has placed further reliance on paragraph 2 of the decision of the Supreme Court reported in 2004 (2) Supreme 2005 which reads as follows:
In National Insurance Co. Ltd., Chandigarh v. Nicolletta Rohagi and Ors. , it was held that the insurance company cannot Page 1311 challenge the quantum of compensation awarded by the Tribunal. The only ground open to insurer is contained in Section 149(2) of the motor Vehicles Act. In National Insurance Co. Ltd. v. Swaran Singh and Ors. 2004 (1) SCALE 180, this Court has held that “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 insured has to prove that the insured was guilty of negligence or 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.” In the present case, the insurer has not led any evidence that the driver of the vehicle had no licence. The burden of proof that the driver had no licence was open to the insurer which it failed to discharge.
23. The learned counsel for the Insurance Company has drawn my attention to the sub-clause (x) of the paragraph 105 in the decision (National Insurance Company Limited v. Swaran Singh) and other which reads as follows:
(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 bee 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 as 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.
24. If the above ruling has to be followed, first, such determination of the 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 Motor Vehicles Act as arrears as land revenue.
Page 1312
25. The object of the Motor Vehicles Act, 1888, is a beneficial legislation in nature and when there is a decree passed against the Insurance Company, it is the liability of the Insurance Company to satisfy the decree at the first instance and the liability cannot be shaken off only by saying that at the relevant point of time, the vehicle was driven by a person having no licence. The liability of the Insurance Company to satisfy the decree passed in favour of the third party at the first instance and to recover the award amount from the owner or driver thereof. The Tribunal and the Court must however exercise its jurisdiction to issue such a direction, upon consideration of the facts and circumstances of each case and in the event such a direction has been issued despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of Clause (a) and sub-section (2) of Section 149 of the Motor Vehicles Act, 1988, the Insurance Company shall be entitled to realize the award amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. Therefore, in the instant case, the Tribunal after analyzing the materials, holding that the accident was caused due to the negligence of the driver of the vehicle in question and the same is insured with the Insurance Company, has passed an award for a sum of Rs. 1,70,000/- with interest at the rate of 12% per annum and such an award has to be give effect to and the decree may be satisfied first and thereafter, the Insurance may initiate proceedings against the owner or the driver of the vehicle or both, as the case may be. This principle has been reiterated by the decisions as stated supra in the object of achieving he beneficial legislation made by the Legislature.
26. Even in Lehru’s case as stated supra, the Supreme Court has clarified the position in paragraph 92 as follows:
92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the willful breach of the conditions of the insurance policy or the contract of insurance. In Lehru’s case, the matter has been considered in some detail. We are in general agreement with the approach of the bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence….
27. Therefore, Lehru’s decision and Swaran Singh’s decision are in agreement in the decision (National Insurance Company Ltd. v. Kanti Devi and Ors.) wherein the observation of the Supreme Court has to mean “….. whereof the insurer is establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any Page 1313 defence or for the owners to be absolved from any liability whatsoever.” Thus, the above decision is in conformity with the decision reported in Lehru’s case and Swaran Singh’s case and hence, the same may be applied to the case on hand. In this view, the contention of the learned counsel for the appellant insurance company has no bearing to the facts of the present case.
28. In the light of the discussions made above and in view of the arguments of the learned counsel for the appellant Insurance Company and also the learned counsel for the respondent-claimant, the sub-paragraph (x) of paragraph 105 of the decision has to be considered and applied here. I find that the award of compensation is just and equitable and the same may be enforced and the pleas raised by the appellant Insurance Company in respect of liability are untenable and the Insurance Company is liable to pay the compensation to satisfy the award. In that view of the matter, the award of the Tribunal is confirmed.
29. In the circumstances, the learned counsel for the appellant Insurance Company has insisted that liberty may be given to the Insurance Company to recover the money from the owner of the lorry. This plea of the learned counsel for the appellant may be considered in the light of the decision of the Supreme Court as stated supra that the Insurance Company may initiate a separate action therefor against the owner or the driver of the lorry or both, as the case may be. I am able to find a force in the submissions of the learned counsel for the appellant and accordingly, liberty is given to the appellant Insurance Company that the award amount found due to it from the insured can be recovered on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Motor Vehicles Act, 1988 as arrears as land revenue.
30. Accordingly, the award of the Tribunal is confirmed except the liberty to recover the amount as indicated above and the appeal is disposed of as above and the appellant Insurance Company is directed to pay the entire award amount, less the amount already paid to the claimant, with the interest rate as fixed by the Tribunal, within a period of 60 days from the date of receipt of copy of this order, considering that the claimant has 100% disability and he has been bed-ridden from the date of accident.
The Appeal is disposed of with the above direction.