REPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 689/2007
BALJINDER KAUR AND ORS. ..... Appellants
Through: Mr. O.P.Mannie, Advocate.
Versus
SANJIV SAINI AND ANR. ..... Respondents
Through: Mr. Ashok Popli, Advocate for
the respondent No.1.
Mr. Ram N.Sharma, Advocate
for the respondent No.2.
% Date of Decision : September 19, 2011
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
: REVA KHETRAPAL, J.
1. The short question which arises for consideration in the present
appeal is whether the Insurance Company can repudiate a claim made
by the legal representatives of a deceased person in respect of a
vehicle which is duly insured with the Company solely on the ground
FAO 689/2007 Page 1 of 11
that the driver of the vehicle did not hold a valid licence even though
the vehicle was stationary at the time of the accident and the driver of
the vehicle had nothing to do with the accident?
2. Concisely, the facts are that on 28.06.2005 at about 6:30 p.m.
one Gurcharan Singh (hereinafter referred to as “the deceased”) met
with an accident while welding a stationary truck bearing Registration
No. HR-38-G-5351, at Transport Nagar, Samaipur Badli, Delhi, and
died due to electrocution. A DD entry bearing No.19-A dated
28.06.2005 was recorded under Section 174 Cr.P.C. with regard to the
aforesaid accident by the Police of Police Station, Samaipur Badli,
Delhi. A claim petition was filed by the appellant No.1, who is the
widow, the appellants No.2, 3 and 4, who are the minor children and
the appellants No.5 and 6, who are the parents of the deceased under
Section 163-A of the Motor Vehicles Act, 1988 claiming
compensation in the sum of ` 10,00,000/- for the untimely demise of
their sole bread-earner. The respondent No.1 is the registered owner
of the offending truck No.HR-38-G-5351, which was admittedly
insured with the respondent No.2, M/s. Oriental Insurance Company
Limited for all such risks vide policy No.215400/2005/863 valid from
12.07.2004 to 11.07.2005 (Exhibit R2W1/E).
FAO 689/2007 Page 2 of 11
3. The learned Tribunal by its judgment dated 06.08.2007awarded
a sum of ` 5,18,750/- with interest at the rate of 7.5% per annum to be
calculated from the date of the institution of the petition till the date of
actual deposit. On the question as to upon whom the liability to pay
could be fastened, relying upon the judgment of the Hon’ble Supreme
Court in the case of Oriental Insurance Company Limited versus
Meena Variyal and Ors. 2007 ACJ 1284, the Tribunal held that the
owner of the vehicle who gets the vehicle insured is duty-bound to
engage a driver who has a valid and effective driving licence and is
competent to drive. It further held that it was the duty of the insured
to produce the driving licence of the driver and prove the same in
accordance with law, but in the present case despite service of notice
under Order XII Rule 8 Code of Civil Procedure the insured had
chosen not to come up with the driving licence of his driver. It held
that in such circumstances, the Court had no option but to draw
adverse inference against the Respondent No.1 that his driver never
possessed any driving licence. The Tribunal accordingly held that no
liability could be fastened upon the respondent No.2/Insurance
Company and, accordingly, the respondent No.1, the owner of the
vehicle, was liable to pay the award amount to the appellants.
FAO 689/2007 Page 3 of 11
4. Aggrieved by the aforesaid findings rendered by the learned
Tribunal, the present appeal has been preferred by the appellants for
modification of the judgment to the extent of making the Insurance
Company (the respondent No.2) liable to pay the compensation along
with the up-to-date interest to the appellants. Relying upon the
judgment rendered by the Hon’ble Supreme Court in the case of
National Insurance Company Ltd. versus Swaran Singh and Ors.
AIR 2004 SC 1531, Mr. O.P. Mannie, the learned counsel for the
appellants, contended that the Claims Tribunal erred in exonerating
the Insurance Company on the ground that the licence of the driver
was not produced by the insured-owner. The learned counsel pointed
out that even otherwise, the findings of the Tribunal were self-
contradictory, inasmuch as on the one hand the Tribunal while
deciding Issue No.2 relating to the impleadment of the driver as a
party respondent, had ruled that the driver was not a necessary party to
the claim petition, but, on the other hand, it held that the Insurance
Company deserved to be exonerated from its liability to pay
compensation on the ground that the driving licence of the driver had
not been produced by the insured.
FAO 689/2007 Page 4 of 11
5. Mr. Ashok Popli, the learned counsel for the respondent No.1-
insured, sought to support the aforesaid contentions of Mr. Mannie.
6. Mr. Ram N. Sharma, the learned counsel for the respondent
No.2-Insurance Company, on the other hand, contended that the
offending vehicle was admittedly not in use at the time of the accident
and was stationary. The deceased was electrocuted while he was
doing a welding job on the vehicle and was not hit by the vehicle. No
First Information Report had been registered nor any challan was filed
by the Police and, as such, the learned Tribunal had rightly refused to
fasten any liability on the Insurance Company.
7. I am not inclined to agree with the aforesaid contention of the
learned counsel for the Insurance Company in the instant case for the
reason that the petition was filed under Section 163-A of the Motor
Vehicles Act, 1988, which reads as under:
“163-A. Special provisions as to payment of
compensation on structured formula basis. – (1)
Notwithstanding anything contained in this Act or
in any other law for the time being in force or
instrument having the force of law, the owner of
the motor vehicle or the authorised insurer shall
be liable to pay in the case of death or permanent
disablement due to accident arising out of the use
of motor vehicle, compensation, as indicated in the
Second Schedule, to the legal heirs or the victim,
as the case may be.
FAO 689/2007 Page 5 of 11
Explanation. – For the purposes of this sub-
section, “permanent disability” shall have the
same meaning and extent as in the Workmen’s
Compensation Act, 1923 (8 of 1923)(2) In any claim for compensation under sub-
section (1), the claimant shall not be required to
plead or establish that the death or permanent
disablement in respect of which the claim has been
made was due to any wrongful act or neglect or
default of the owner of the vehicle or vehicles
concerned or of any other person.
(3) The Central Government may, keeping in view
the cost of living by notification in the Official
Gazette, from time to time amend the Second
Schedule.”
8. A bare perusal of the Section 163-A makes it abundantly clear
that it is only the owner of the motor vehicle or the authorised insurer
which shall be liable to pay in the case of death or permanent
disablement due to accident arising out of the use of the motor vehicle,
compensation, as indicated in the Second Schedule to the legal heirs or
the victim, as the case may be. Clearly, Section 163-A is a special
provision with regard to the payment of compensation on no-fault
basis and the driver, therefore, is not a necessary party to a petition
under Section 163-A. Thus, in my view, the reliance placed by the
learned Tribunal upon the decision of the Supreme Court rendered in
the case of Meena Variyal (supra) is entirely misplaced. The
FAO 689/2007 Page 6 of 11
judgment in the said case was rendered in a proceeding under Section
166 of the Motor Vehicles Act. Section 166 of the said Act, it may be
mentioned, falls in Chapter XII of the Act and is governed by the
provisions of Section 168 of the Act. Sub-Section (1) of Section 168
of the Act reads as under:
“On receipt of an application for compensation made
under Section 166, the Claims Tribunal shall, after
giving notice of the application to the insurer and after
giving the parties (including the insurer) an opportunity
of being heard, hold an inquiry into the claim or, as the
case may be, each of the claims and, subject to the
provisions of Section 162 may make an award
determining the amount of compensation which appears
to it to be just and specifying the person or persons to
whom compensation shall be paid and in making the
award the Claims Tribunal shall specify the amount
which shall be paid by the insurer or owner or driver of
the vehicle involved in the accident or by all or any of
them, as the case may be:”
Provided that where such application makes a claim for
compensation under Section 140 in respect of the death
or permanent disablement of any person, such claim and
any other claim (whether made in such application or
otherwise) for compensation in respect of such death or
permanent disablement shall be disposed of in
accordance with the provisions of Chapter X.”
9. It needs to be emphasised that in view of the provisions of sub-
Section (1) of Section 168, reproduced hereinabove, in a case where
the accident is caused by the rash and negligent driving of the driver
and a claim petition is preferred for compensation under Section 166
FAO 689/2007 Page 7 of 11
of the Act, in the form prescribed thereunder, the Claims Tribunal
shall specify the amount which shall be paid by the insurer or owner
or driver of the vehicle involved in the accident or by all or any of
them as the case may be. The necessary corollary is that it is
incumbent upon the claimant to implead the driver of the vehicle
involved in the accident as a party respondent to a claim petition
under Section 166 of the Act. The rationale, quite obviously, is that
primarily, it is the driver, who is liable for the accident caused through
his rashness and negligence, while the owner is vicariously liable for
the act of his employee and the insurer is liable on account of having
issued the policy of insurance in favour of the insured-owner. It is not
so in the case of a claim petition filed under Section 163-A, where the
impleadment of the driver is irrelevant for the reason that it is only the
involvement of the vehicle which is relevant for the purpose of
determining the compensation payable by the owner of the motor
vehicle or the authorized insurer, and not any act of omission or
commission committed by the driver of the vehicle in question.
10. In view of the aforesaid, it must be held that the driver, in the
instant case, was not a necessary party to the proceedings and it was
irrelevant whether he had a valid driving licence or held no licence at
FAO 689/2007 Page 8 of 11
all. I am fortified in coming to the aforesaid conclusion from the
judgment of the Hon’ble Supreme Court rendered in the case of
Jitendra Kumar versus Oriental Insurance Company Limited 2003
ACJ 1441. In the said case, the vehicle in question was damaged due
to a mechanical fault and for no fault of the driver. It caught fire and
was burnt beyond repair. The Insurance Company repudiated the
claim of the appellant solely on the ground that the driver did not have
a valid driving licence at the time of the accident in question. The
question arose as to whether the holding of a valid driving licence was
a condition precedent to claim any damage from the Insurance
Company even when the accident in question had occurred due to no
fault/act of the driver. The Supreme Court held as follows:
“So far as the facts of this case are concerned,
there is hardly any dispute, therefore we can safely
proceed on the basis that the vehicle in question
was damaged due to a mechanical fault and no
fault of the driver. For the purpose of argument,
we may also proceed on the basis that the driver of
the car did not have a valid driving licence.
Question then is: can the Insurance Company
repudiate a claim made by the owner of the vehicle
which is duly insured with the Company, solely on
the ground the driver of the vehicle who had
nothing to do with the accident did not hold a valid
licence? Answer to this question, in our opinion,
should be in the negative. Section 149 of the Motor
Vehicles Act, 1988 on which reliance was placed
by the State Commission, in our opinion, does notFAO 689/2007 Page 9 of 11
come to the aid of the Insurance Company in
repudiating a claim where driver of the vehicle
had not contributed in any manner to the accident.
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 licence is
responsible in any manner. It does not empower
the Insurance Company to repudiate a claim for
damages which has occurred due to acts to which
the driver has not, in any manner, contributed, i.e.,
damages incurred due to reasons other than the
act of the driver.”
11. In the present case it is not in dispute that the deceased died due
to electrocution, which occurred while he was engaged in a welding
job on the vehicle, and not due to any fault or act or omission of the
driver. The Insurance Company could not, therefore, in my opinion,
have repudiated the claim of the appellants, and the learned Tribunal
erred in holding that the liability to pay the compensation could not be
fastened upon the respondent No.2-Insurance Company. The
judgment of the learned Tribunal to this extent is accordingly set aside
and it is held that the respondent No.2 is liable to pay the award
amount to the appellants.
12. The appeal is accordingly allowed with a direction to the
respondent No.2 to deposit the award amount with the Registrar
FAO 689/2007 Page 10 of 11
General of this Court not later than 30 days from the date of the
passing of this order.
13. Records of the Tribunal shall be sent back to the concerned
Tribunal. There shall be no order as to costs.
REVA KHETRAPAL
JUDGE
September 19, 2011
ak
FAO 689/2007 Page 11 of 11