IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.407 of 2007
National Insurance Company Limited, Branch Office at
Madhubani Deepak Hotel, Post Office + Police Station
+ District/Town Madhuabni.
... ... Appellant.
Versus
1. Mosomat Asha Devi, Wife of Late Ganesh Das.
2. Sunil Kumar Das
3. Anil Kumar Das
4. Savita Kumari, Minor sons and daughter of Late Ganesh
Das.
5. Kaushalaya Devi, Wife of Bahru Das, Respondent nos.1 and
5 are wife and mother of the deceased respectively and
Respondent nos.2, 3 and 4 are Minor sons and daughter of
the deceased under the guardianship of their mother Asha
Devi and All are Residents of Village & Post office
Loans, Police Station Sadar Darbhanga, District
Darbhanga.
6. Pawan Kumar Jha, Son of Yogendra Jha, Village Baliya,
Post Office Raiyam Factory, Police Station Sakri,
District Madhubani.
... ... Respondents.
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17. 29.9.2011. Heard Shri Prakash Kumar, learned
counsel for the appellant and Shri Ashutosh
Kumar, learned counsel appearing on behalf
of the respondent nos.1 to 5. Despite valid
service of notice, the respondent no.6 has
not entered his appearance.
The present appeal has been
preferred under Section 173 of the Motor
Vehicles Act,1988 (hereinafter referred to
as the Act) against the judgment dated
14.5.2007 and award dated 30.5.2007 by the
Fast Track Court No.IV, Madhubani
(hereinafter referred to as the Tribunal).
The Tribunal has directed the
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appellant/National Insurance Company
Limited, which was insurer of offending
vehicle i.e. Jeep bearing registration
No.BR-32A-0041 to pay compensation amount
of Rs.1,89,900/- to the
claimants/respondent nos.1 to 5 with simple
interest at the rate of 6% per annum from
the date of filing of the claim petition.
Short fact of the case is that on
2.5.2002, while husband of respondent no.1
was traveling along with others in the
offending Jeep at about 9.45 P.M. due to
rash and negligent driving of the vehicle,
the jeep turned turtle by the road side as
a result of which the husband of respondent
no.1, namely, Ganesh Das, who was sitting
extreme right in the middle seat of the
jeep got crushed beneath the jeep and died
on the spot itself. Thereafter, an F.I.R.
was lodged against the driver of the
offending vehicle vide Madhubani Town P.S.
Case No.115 of 2002 under Sections 279, 337
and 304(A) of the Indian Penal Code. In the
first information report, the driver‟s name
was mentioned as Madan Mishra, son of
Jogendra Mishra. However, during
3
investigation, it was found that offending
vehicle at the time of accident was being
driven by respondent no.5, Pawan Kumar Jha,
who was also owner of the said vehicle and
thereafter, charge sheet was submitted
against him. The claimants i.e. respondent
no.1, wife of the deceased, respondent
nos.2 to 4, son and daughters of the
deceased jointly filed Claim Case vide MACT
Case No.20 of 2002 under Section 166 of the
M.V. Act in the court of Motor Accident
Claims Tribunal/District Judge, Madhubani
arraying the driver and owner of the
offending vehicle as opposite party nos.1
and 2 and the appellant being insurer was
impleaded as opposite party no.3.
In the case, despite valid service
of notice, the driver-cum-owner of the
offending vehicle did not appear and as
such the Claim Tribunal proceeded against
him ex-parte. In the case, the insurer i.e.
appellant appeared and filed a written
statement objecting to the claim petition.
The claimants besides producing documents
examined altogether five witnesses and the
claimants before the Tribunal fully
4
established that the death of the deceased
had occurred in a Motor Vehicle Accident
due to rash and negligent driving of the
offending vehicle. They also established
regarding the income of the deceased and
finally the Tribunal directed the insurer
to pay the compensation amount to the
claimants as indicated above.
Aggrieved with the impugned
judgment and award, the National Insurance
Company Limited has preferred the present
appeal. The appeal has been preferred
primarily on the ground that the driver,
who was the owner of the offending vehicle,
was driving the vehicle at the time of
accident without any valid license. During
internal investigation conducted by the
Insurance Company, the purported driving
license was found as fake since the driving
license, which was claimed to be in the
name of the driver of the offending vehicle
was actually standing in the name of a
different person and as such the Claim
Tribunal instead of directing the owner of
the offending vehicle has incorrectly and
illegally directed the insurer of the
5
vehicle to make payment of the compensation
amount.
At the time of hearing, learned
counsel for the appellant Shri Prakash
Kumar has only raised the issue that in
case of invalid driving license the insurer
was not liable to pay compensation amount.
It was argued that time without number, it
has been held that in absence of valid
driving license the insurer cannot be
directed to pay compensation, but in such
case, the owner of the offending vehicle is
required to be directed to pay
compensation.
In support of his argument, Shri
Prakash Kumar, learned counsel for the
appellant has heavily relied on an apex
court judgment reported in 2008(3) SCC 193
(Prem Kumari and others Vs. Prahlad Dev and
others). He has specifically relied on
paragraph-9 of the judgment. For proper
appreciation, it would be appropriate to
quote paragraph-9 of Prem Kumari‟s case
(Supra), which is as follow :
“9. The effect and implication
of the principles laid down in
6Swaran Singh case has been
considered and explained by
one of us (Dr. Arijit
Pasayat,J.) in National
Insurance Co. Ltd. v. Laxmi
Narain Dhut. The following
conclusions in para 38 are
relevant : (Laxmi Narain case,
SCC p.719):
"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
licence 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
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interpretation has no
application to cases
relatable to Section 149 of
the Act.”
Relying on aforesaid judgment, it
was submitted that in the instant case,
driver of the offending vehicle was non
else, but the owner himself and in such
situation, it was the owner, who was liable
to be directed to pay compensation not the
insurer. On this ground alone, it has been
prayed to set aside the impugned judgment
and award.
Shri Ashutosh Kuamr has appeared on
behalf of respondent nos.1 to 5/claimants.
Even before this Court, the respondent
no.6/driver-cum-owner of the offending
vehicle, despite valid service of notice
has not appeared and participated in the
present proceeding. Learned counsel for the
claimant has argued that onus was on the
insurer to establish the fact that driver
of the offending vehicle at the time of
accident was not having any valid license.
Before the tribunal, the insurer has not
produced any evidence to establish that the
8
driver was not having license to drive the
vehicle. It was argued that except filing
written statement before the tribunal and
investigation report, which was internally
got conducted by the Insurance Company, the
insurer has produced no cogent evidence in
support of its claim. In absence of any
material, the learned claim tribunal has
rightly allowed the claim case since the
appellant was the insurer of the offending
vehicle and at the time of accident, the
offending vehicle was under the cover of
insurance policy.
Besides hearing learned counsel for
the parties, I have also perused the
materials available on record. Since the
appellant has challenged the impugned
judgment and award only on the ground that
driver was not having any valid driving
license, there is no requirement to discuss
other facts in detail. It is not in dispute
that at the time of accident, the offending
vehicle was under insurance cover of the
appellant and the appellant was the insurer
of the vehicle. There is plethora of
judgment on the point that for taking the
9
defence under Section 149(2) of the M.V.
Act, the insurer is required to establish
that the driver at the time of accident was
not having any valid driving license. If
the insurer is taking such plea, it is
mandatory for the insurer to establish such
plea by cogent and reliable evidence.
Before the claim tribunal in the present
case, the insurer has not at all bothered
to produce or lead any evidence on the
point of invalid or no driving license in
favour of the driver of the offending
vehicle.
On perusal of the written statement
also, it is evident that no such plea was
specifically taken by the insurer.
Regarding the plea of driving license, a
vague averment was made in paragraph-11 of
the written statement of insurer. For just
decision in the matter, it would be
appropriate to quote the said paragraph,
which is as follows :
“11. That driving license,
fitness certificate,
registration documents, age
certificate of the deceased,
10tax token, insurance Police
have not furnished on the
record which is encumbrant upon
claimants as well as O.P.
owner, be directed to produce
and prove in this case failing
which it should be presumed
that there is statutory
violation of the condition of
the policy, if any, as
contemplated u/s 149 of M.V.
Act and this O.P. will not as
such stand in law to indemnify
the awarded amount of
compensation, if at all in
future.”
It is further evident that the
insurer has not produced any evidence.
Regarding the plea of invalid/fake driving
license the insurer has brought on record a
report of verification of driving license
(Ext.A) prepared by one Shri Dewashish
Gupta, advocate, which was addressed to the
Branch Manager, National Insurance Company
Ltd., Brahmpura Branch, Murshidabad along
with the application for information. The
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insurer had claimed before the tribunal
that Driving License No.MSD/136/90 was
issued in the name of one Shri Ashok Kumar
Rudra. However, on the record, there was a
photo copy of driving license vide No.136
of 1990 issued in the name of one Shri
Prakash Kumar Jha, who was driver and owner
of the offending vehicle. The photo copy of
the driving license in the name of Shri
Prakash Kumar Jha was issued from the
District Transport Officer, Samastipur.
In view of aforesaid material, it
is difficult to comprehend as to how it can
be presumed that the driver of the
offending vehicle was not having any valid
driving license. Apparently, in such
situation, the onus was completely on the
insurer to produce reliable evidence for
establishing that driver was carrying
either no license or was having fake
driving license. On the basis of materials
available on record, the court is of the
opinion that the insurer had completely
failed to establish the plea of
invalid/fake driving license.
In a case reported in 2004(3)SCC
12
297 (National Insurance Company Ltd. Vs.
Swaran Singh), it has been held that for
establishing breach of policy condition
i.e. dis-qualification of the driver onus
would be on the insurer. At this stage, it
is appropriate to quote paragraph-110 of
Swaran Singh‟s case (Supra), which is as
follows :
“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
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effectuate the said object.
(ii) An 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 the driver or invalid
driving licence of the driver,
as contained in sub-section
(2)(a)(ii) of Section 149, has
to be proved to have been
committed by the insured for
avoiding liability by the
insurer. Mere absence of, 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
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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 licensed driver or one who
was not disqualified to drive
at the relevant time.
(iv) insurance companies,
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 the said
burden would be discharged,
inasmuch as the same would
depend upon the facts and
circumstances of each case.
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(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 the 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 insurer under Section
149(2) of the Act.
(vii) The question, as to whether the owner has taken
reasonable care to find out as
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to whether the driving licence
produced by the driver (a fake
one or otherwise), does not
fulfil 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
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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 the 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.
(x) Where on adjudication of the claim under the Act the Tribunal arrives at a
conclusion that the insurer has
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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
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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 the
proviso thereunder and sub-
section (5) which are intended
to cover specified
contingencies mentioned therein
to enable the insurer to
recover the amount paid under
the contract of insurance on
behalf of the insured can be
taken recourse to by the
Tribunal and be extended to
claims and defences of the
insurer against the 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.”
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In view of aforesaid proposition of
law, it was duty on the part of the
insurer/appellant to establish the breach
by the insured/driver and owner of the
offending vehicle in the present case and
since there were no evidence on record to
raise finger in respect of driving license
there is no reason to interfere with the
impugned judgment and award.
In the facts and circumstances of
the present case, the court is of the
opinion that the appellant being insurer of
the offending vehicle cannot be exonerated
from the liability of the compensation
amount, which has been directed by the
Claim Tribunal and as such I do not find
any material to interfere with the impugned
judgment and award and appeal stands
dismissed.
In view of dismissal of the appeal,
the statutory amount deposited by the
appellant may be remitted back to the court
below.
N.H./ ( Rakesh Kumar,J.)
