IN THE HIGH COURT OF KERALA AT ERNAKULAM
MACA No. 1078 of 2005()
1. PAULOSE, ATHITHOTTATHIL HOUSE,
... Petitioner
Vs
1. VINU, S/O. SIMON,
... Respondent
2. SHYJO, S/O. PAULOSE,
3. UNITED INDIA INSURANCE COMPANY LIMITED
For Petitioner :SRI.R.BINDU (SASTHAMANGALAM)
For Respondent :SRI.PMM.NAJEEB KHAN
The Hon'ble MR. Justice M.SASIDHARAN NAMBIAR
Dated :12/02/2007
O R D E R
M.SASIDHARAN NAMBIAR, J.
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M.A.C.A.NO.1078 OF 2005 (C)
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Dated this the 12 th day of February, 2007.
J U D G M E N T
The owner of autorikshaw KL 7/S 5520 involved in a motor
accident on 27.6.98 causing injuries to first respondent, is the appellant.
The Motor Accident Claims Tribunal, Moovattupuzha awarded a compensation
of Rs.16,000/- and directed third respondent to pay the compensation and
allowed insurance company to realise it from appellant. The Motor Accidents
Claims Tribunal holding that second respondent, the driver was not
authorised to drive an autorikshaw under Ext.B1 insurance policy, held that
due to violation of policy conditions, the insurance conpany is entitled to
realise the amount paid to the claimant from appellant, the insured. Third
respondent has already remitted the amount with interest. The case of the
appellant was that Tribunal did not consider the question whether absence
of a badge by second respondent was the cause of the accident and unless it
was the cause of the accident, insurance company cannot be exonerated
from its liability to compensate appellant and therefore that portion of the
award is to be set aside. Appellant did not appear or contest the case before
the Tribunal. Tribunal passed the award accepting the contentions of third
respondent and relying on Ext.B2 insurance policy and Ext.B1 driving licence.
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2. Learned counsel appearing for appellant and third respondent
were heard.
3. Learned counsel for appellant relying on the decision of Apex
court in National Insurance Company vs. Swaran Singh (2004 (1) KLT 781)
and Division Bench of this court in Ramachandran vs. Unnikrishnan (2006
(2) KLT 15) argued that mere absence of a badge to drive a commercial
vehicle is not sufficient to exonerate the insurance company from its liability
under Ext.B2 policy and no evidence was adduced before the Tribunal to
show that absence of badge was either the cause of accident or that it
contributed to the accident and therefore Tribunal should not have granted
an award in favour of third respondent to realise the amount paid to first
respondent/claimant from appellant. Learned counsel appearing for third
respondent relying on the decision of Apex court in National Insurance
company vs. Kusum Rai (2006 (2) KLT 300) argued that facts are identical,
where the driver was not holding licence to drive a commercial vehicle and
Apex court permitted the Insurance company to realise the amount paid to
the injured from the insured and therefore the appeal is only to be dismissed.
4. Apex court in Swaran Singh’s case considered the liability of the
insurance company to pay compensation due to an injured in a motor
accident, even in cases of violation of policy conditions. Thier Lordship
summarising the findings in paragraph 102 clause (vi) held;
“Even where the insurer is able to prove breach on
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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 of 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
insurer under S.149(2) of the Act.”
5. Though it was 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
third parties and 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 policy regarding
use of vehicles by duly licenced driver or one who was not disqualified to
drive at the relevant time and whether the owner has taken reasonable care
to find out as to whether the driving licence produced by the driver, does not
fulfill the requirements of law or not will have to be determined in each case,
M.A.C.A.NO.1078 OF 2005 (C)
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it was held that to avoid its liability towards insured, the insurer has to
establish that the said breach or breaches of condition of driving licence
is/are so fundamental as are found to have contributed to the cause of the
accident. Therefore the fact that second respondent driver was not holding
a badge by itself is insufficient to exonerate the insurance company from its
liability to the insured. Even if second respondent was not holding a badge,
unless the said breach of condition of the driving licence was so fundamental
as to have contributed to the accident, insurer cannot be exonerated. In
Kusum Rai’s case, relied on by learned counsel appearing for third
respondent, it was held that, the question whether the driver did not possess
any licence to drive a commercial vehicle and so there was breach of
conditions of the contract of insurance is a defence available to the
insurance company. It was not held that for the reason it was a defence,
insurance company is entitled to be exonerated in all cases. Quoting the
dictum in Swaran Singh’s case their Lordship relied on a decision of the
Division Bench in National Insurance Corporation Ltd. vs. Kantidevi (2005
(5) SCC 789). In that case Apex court remanded the case back to the
Tribunal, permitting parties to lead such further evidence to prove the facts
as directed in Swaran Singh’s case. But that course was not followed
considering the peculiar circumstances of the case, finding that the owner
did not appear and the injured was a 12 year old boy. Therefore Kusum
Rai’s case cannot be taken as a precedent to hold that absence of a badge
M.A.C.A.NO.1078 OF 2005 (C)
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by itself is sufficient to exonerate the insurance company from avoiding its
liability to the insured under the insurance policy. As held in Swaran Singh’s
case, unless that breach of condition is found to have contributed to the
cause of accident, insurance company is not entitled to be exonerated.
Appellant did not contest the case before the Tribunal. In such
circumstances Tribunal did not consider the question in the light of the
dictum laid in Swaran Singh’s case. Interest of justice warrants that an
opportunity shall be granted to the parties to let in evidence in support of
the respective contentions.
6. The appeal is allowed. Award passed by Motor Accident Claims
Tribunal, Moovattupuzha in O.P.(M.V) 566/1999 is set aside to the extent of
the liability of appellant/first respondent and the permission granted to third
respondent insurance company to realise the amount from appellant. Motor
Accident Claims Tribunal is directed to consider the question whether the
violation of the policy condition, as claimed by third respondent, is sufficient
enough to exonerate third respondent and enable third respondent to realise
the compensation paid to first respondent from appellants in the light of the
decision of the Apex court in Swaran Singh’s case.
Even though learned counsel appearing for appellant challenged
the quantum of compensation and prayed that the said question may also be
left opened to be decided by the Tribunal in the circumstances of the case, I
do not find that it is in the interest of justice to interfere with the quantum of
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compensation awarded. Appellant and third respondent are directed to
appear before the Tribunal on 28.3.2007.
M.SASIDHARAN NAMBIAR,
JUDGE.
bkn
M.A.C.A.NO.1078 OF 2005 (C)
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ORDER ON I.A.2000/2005 IN M.A.C.A.NO.1078/2005
DISMISSED.
12.2.2007 SD/- M.SASIDHARAN NAMBIAR, JUDGE.
//TRUE COPY//
P.A. TO JUDGE.