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FA/789/2008 15/ 15 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST
APPEAL No. 789 of 2008
With
CIVIL
APPLICATION No. 2394 of 2008
In
FIRST APPEAL No. 789 of 2008
For
Approval and Signature:
HONOURABLE
MR.JUSTICE
H.K.RATHOD
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
NEW
INDIA ASSURANCE CO. LTD. - Appellant(s)
Versus
RAMESHBHAI
GOPALJI LAKHANI & 2 - Defendant(s)
=========================================================
Appearance
:
MS
MEGHA JANI for
Appellant(s) : 1,
None for Defendant(s) : 1,
MR HM PRACHCHHAK
for Defendant(s) : 2 -
3.
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE H.K.RATHOD
Date
: 17/09/2008
ORAL
ORDER
Draft
amendment is allowed. Appellant to carry out the same within a period
of two days and supply the amended copy of appeal to other side.
1. Heard learned advocate Ms.Megha Jani for appellant ? Assurance Co.
2. In
the present appeal, the appellant ? Assurance Co. has challenged
the award passed by MAC Tribunal, Porbandar in MACP No.93 of 1999
dated 31.5.2006 whereby the claims Tribunal has awarded Rs.62,730/-
with 7.5% interest in favour of respondents claimants.
3. Learned
advocate Ms.Jani has raised contention before this Court that claims
Tribunal has failed to appreciate that the person driving the vehicle
was not holding driving licence on the date of accident ? 6.7.1998.
The driving license of the driver of the motorcycle at Exh-42 shows
that the license was issued for the first time on 25.4.2000 after the
accident took place. She further submitted that neither the claimant
nor the owner of the vehicle has succeeded in establishing that the
driver was holding a valid driving licence when the accident
happened. Therefore, in view of absence of any driving licence, the
Tribunal ought to have held that there was breach of terms and
conditions of policy and ought to have exonerated the Insurance Co.
She also raised contention that as per the policy, only a person
holding an effective driving licence at the time of accident and who
is not disqualified from holding for obtaining such a licence is
entitled to drive the vehicle insured. This condition is violated in
facts of this case. She also raised contention that the claims
Tribunal has committed an error in holding that Insurance Co. would
be liable to pay compensation in view of the Apex Court’s decision in
case of National Insurance Co. Ltd. v. Swaran Singh, 2004 (3) SCC 297
and also committed an error in appreciating the ratio of the
aforesaid case. She also submitted that each and every case, even
when there is a patent breach of terms and conditions of policy, the
Insurance Co. would still be liable to pay compensation and indemnify
the insured. She also submitted that quantum awarded by the claims
Tribunal is on higher side. The Parag D. Karia in his deposition vide
Exh.41 has admitted before the claims Tribunal that looking to the
date of birth ? 11.3.1982 he was minor at the time when the
accident occurred. Meaning thereby she canvassed the submission that
minor is not qualified to have the driving licence according to Motor
Vehicle Rules. She relied upon the decision of Apex Court in support
of her submissions in case of Oriental Insurance Co. Ltd. v. Meena
Variyal and others reported in 2007 ACJ 1284. She relied upon Para.6,
8 and 13 and pointed out that in case when a clear breach established
from the record that driver of the vehicle was not holding valid
driving licence at all then, Insurance Co. should not be held liable
for payment of compensation. She also submitted that in the recent
decision of Meena Variyal (supra), the decision in case of Swaran
Singh (supra) has been clarified and distinguished by the Apex Court.
She also relied upon the decision of Apex Court in case of Sardari
and others v. Sushil Kumar and others reported in 2008 ACJ 1307.
Except that, no other submission is made by learned advocate Ms.Megha
Jani.
4. I
have considered the submissions made by learned advocate Ms.Jani and
also considered the decisions which have been cited by learned
advocate Ms.Jani. I have also perused the award passed by claims
Tribunal, Porbandar. The accident occurred on 6.7.1998 at about 1.00
p.m., when applicant was going to his house from Mahendra &
Brothers, Sutarwada, on his bicycle on left side with a slow speed.
When he reached near railway station road, opposite Harish
Sweet-Mart, at that occasion, opponent No.1 came with Hero-Honda
Motorcycle No.GJ-11-H-6742 with rash and negligent driving and dashed
with the claimant and claimant received the injuries of fracture in
various part of the body. The claimant was immediately admitted to
Bhavsinhji Hospital at Rajkot and remained as an indoor patient for
about 12 days and thereafter, for 9 months, he remained under the
treatment. The claimant has claimed Rs.80,800/- before the claims
Tribunal. The opponent Nos.1 and 2 have not remained present, though
notice was served. The appellant ? Insurance Co. has filed its
written statement vide Exh.17 raising contention that opponent No.1
was not having licence at all at the time when the accident occurred.
Thereafter, the claims Tribunal has framed the issue vide Exh.20. The
claims Tribunal has come to the conclusion that held 15% negligence
of the claimant and 85% negligence of opponent No.1. Thereafter, the
claims Tribunal has discussed the evidence on record for deciding the
quantum of compensation. Thereafter, the claims Tribunal has examined
the arguments canvassed by Insurance Co. in Para.12. Vide Exh.33, the
insurance policy was produced by appellant before the claims
Tribunal. The period of insurance policy from 11.5.1998 to 21.5.1999
which includes the date of accident ? 6.7.1998. Learned advocate
Ms.Megha Jani has not disputed the fact that claimant is a third
party, who is met with an accident by opponent No.1. The only
contention is that in light of the facts that opponent No.1 was not
having driving licence, whether the Insurance Co. can be held liable
for payment of compensation or not. The claims Tribunal has
considered that looking to the date of birth ? 11.3.1982, at that
occasion the opponent No.1 was 16 years and 4 months, therefore,
naturally he is not qualified to possess valid driving licence on the
date of accident. The claims Tribunal has considered the decision of
Apex Court in case of United India Insurance Co. ltd. v. Lehru and
others reported in 2003 GLR 1771 and also considered Section 149(4)
and in the case of National Insurance Co. Ltd. v. Kamla reported in
2002 GLR 916 and advocate of the appellant – Insurance Co. has
relied upon the decision of Apex Court reported in 1989 (2) UJ 659
and 2002 (2) GLH 50. Over and above, the claims Tribunal has
considered the decision of Apex Court in case of Swaran Singh (supra)
and considering the aforesaid decision, the claims Tribunal has come
to the conclusion that it is a liability of the Insurance Co., if in
case of breach of terms and conditions of the insurance policy by
opponent No.1 not having the licence to pay the compensation to the
claimant ? third party and then, to recover from the owner insured.
Therefore, accordingly award has been passed with a direction to pay
the compensation to the claimant of Rs.62,730/-.
5. In
this case, the claimant is a third party dashed by opponent No.1, who
was not having driving licence at all and not qualified to possess
the driving licence. Learned advocate Ms.Jani heavily relied upon the
decision of Apex Court in case of Meena Variyal (supra). The facts of
that case are totally different than the facts of present case. The
liability of the Insurance Co. in case of death of regional manager
of company which owned the car when it dashed against a tree. The
claimant deposed that car was being driven by the driver and deceased
was a passenger. The driver who was in the card lodged the FIR
stating that deceased was driving the car at the time of accident.
The Insurance Co. seeks to avoid its liability on the ground that
policy did not cover the employee of the owner company who was
driving the car, deceased was not a third party in terms of the
policy or in terms of the Act, Act did not provide for statutory
coverage of such a person, there was no special contract and deceased
did not possess a driving licence. These are the facts that statutory
liability is not of the Insurance Co. because the deceased was not a
third party but, he was an employee of the co. and there was no
special contract to have the risk of such employee and therefore, the
Insurance Co. raised the contention. But, the entire decision of Apex
Court based on the facts and on these facts, decision of Apex Court
in case of Swaran Singh (supra) has been considered by the Apex
Court. Therefore, the reliance which has been placed by learned
advocate Ms.Jani is not helpful to her that looking to the facts of
present case, the Insurance Co. is not liable.
6. The
Apex Court has in case of Oriental Insurance Co. Ltd. v. Meena
Variyal reported in 2007 ACJ 1284, in Para.14 has observed as under :
?S14. It
is difficult to apply the ratio of this decision to a case not
involving a third party. The whole protection provided by Chapter XI
of the Act is against third party risk. Therefore, 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 the Swaran Singh (supra) ratio. This appears to be the
position. This position was expounded recently by this Court in
National Insurance Co. Ltd. Vs. Laxmi Narain Dhut [2007 (4) SCALE
36]. This Court after referring to Swaran Singh (supra) and
discussing the law summed up the position thus:
“In
view of the above analysis the following situations emerge:
1. The
decision in Swaran Singh’s case (supra) 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 interpretation has no application to cases
relatable to Section 149 of the
Act.
The
High Courts/Commissions shall now consider the mater afresh in the
light of the position in law as delineated above.”
We
are in respectful agreement with the above view.?S
6.1 Therefore,
the ratio which has been decided and laid down in aforesaid decision
is relevant. Other paragraphs are only discussion of law and
therefore, this decision which has been heavily relied upon is not
applicable to the facts of this case because in this case, claimant
is third party admitted by Ms.Jani that risk of third party is
covered.
7. Similarly,
the Apex Court has in case of Sardari and others v. Sushil Kumar and
others reported in 2008 ACJ 1307, in Para.6, observed as under :
?S6. 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.?S
7.1 In
the aforesaid decision, the Apex Court has considered that in certain
situation, however, the Court while passing the liability on the
owner of the vehicle may direct the Insurance Co. to awarded the
amount with liberty to recover the same from the owner.
8. Recently,
the Apex Court has examined very question in case of Oriental
Insurance Co. Ltd. v. Zaharulnisha & Others reported in 2008 AIR
SCW 3251. Relevant observations of the said decision are in Para.10,
14, 15, 16, 17,18 and 19 which are quoted as under :
?S10. In
order to appreciate the rival contentions of the learned counsel for
the parties, the legal question that needs to be considered by us is
: Whether the appellant insurance company could be held liable to
pay the amount of compensation for the default of the scooterist who
was not holding licence for driving two wheeler scooter but had
driving licence of different class of vehicle in terms of Section 10
of the MV Act?
14. Sub-section
(1) of Section 149 casts a liability upon the insurer to pay to the
person entitled to the benefit of the decree ?Sas if he was the
judgment debtor??, that is, the Statute raises a legal fiction to
the effect that for the said purpose the insurer would be deemed to
be a judgment-debtor in respect of the liability of the insurer in
respect of third party risks.
15. It
is beyond any doubt or dispute that under Section 149
(1) of
the MV Act, insurer, to whom notice of bringing of any proceeding for
compensation has been given, can defend the action on any of the
grounds mentioned therein. A three- Judge Bench of this Court in
National Insurance Company Limited v. Swaran Singh [(2004) 3 SCC 297]
has extensively dealt with the meaning, application and
interpretation of various provisions, including Ss. 3(2), 4(3), 10(2)
and 149 of the MV Act. In paragraph 47 of the judgment, the learned
Judges have held that if a person has been given a licence for a
particular type of vehicle as specified therein, he cannot be said to
have no licence for driving another type of vehicle which is of the
same category but of different type. As for example, when a person
is granted a licence for driving a light motor vehicle he can drive
either a car or a jeep and it is not necessary that he must have
driving licence both for car and jeep separately. In paragraph 48,
it is held as under: ?SFurthermore, the insurance company with a
view to avoid its liabilities is not only required to show that the
conditions laid down under Section 149(2)(a) or (b) are satisfied but
is further required to establish that there has been a breach on the
part of the insured. By reason of the provisions contained in the
1988 Act, a more extensive remedy has been conferred upon those who
have obtained judgment against the user of a vehicle and after a
certificate of insurance is delivered in terms of Section 147(3).
After a third party has obtained a judgment against any person
insured by the policy in respect of a liability required to be
covered by Section 145, the same must be satisfied by the insurer,
notwithstanding that the insurer may be entitled to avoid or to
cancel the policy or may in fact have done so. The same obligation
applies in respect of such a liability but who would have been
covered if the policy had covered the liability of all persons,
except that in respect of liability for death or bodily injury.??
16. The
judgment proceeds to hold that under the MV Act, holding of a valid
driving licence is one of the conditions of contract of insurance.
Driving of a vehicle without a valid licence is an offence. However,
the question herein is whether a third party involved in an accident
is entitled to the amount of compensation granted by the Motor
Accidents Claims Tribunal although the driver of the vehicle at the
relevant time might not have a valid driving licence but would be
entitled to recover the same from the owner or driver thereof. It is
trite that where the insurers, relying upon the provisions of
violation of law by the assured, take an exception to pay the
assured or a third party, they must prove a willful violation of the
law by the assured. In some cases, violation of criminal law,
particularly violation of the provisions of the MV Act, may result in
absolving the insurers but, the same may not necessarily hold good in
the case of a third party. In any event, the exception applies only
to acts done intentionally or ?Sso recklessly as to denote that the
assured did not care what the consequences of his act might be??.
The provisions of sub- sections (4) and (5) of Section 149 of the MV
Act may be considered as to the liability of the insurer to satisfy
the decree at the first instance. The liability of the insurer is a
statutory one. The liability of the insurer to satisfy the decree
passed in favour of a third party is also statutory.
17. The
learned judges having considered the entire material and relevant
provisions of the MV Act and conflict of decisions of various High
Courts and this Court on the question of defences available to the
insurance companies in defending the claims of the victims of the
accident arising due to the harsh and negligent driving of the
vehicle which is insured with the insurance companies, proceeded to
record the following summary of findings.
(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 effectuate the said object.
(ii) Insurer
is entitled to raise a defence in a claim petition filed under
Section 163A 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 driver or
invalid driving licence of the driver, as contained in Sub- section
(2)(a)(ii) of Section 149, have to be proved to have been committed
by the insured for avoiding liability by the insurer. 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 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 duly licensed driver or one
who was not disqualified to drive at the relevant time, (iv) The
insurance companies are, 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 said burden would be
discharged, inasmuch as the same would depend upon the facts and
circumstance of each case.
(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 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 ?Sthe rule of main
purpose?? and the concept of ?Sfundamental breach?? to allow
defences available to the insured under Section 149(2) of the Act.
(vii) The
question as to whether the owner has taken reasonable care to find
out as to whether the driving licence produced by the driver, (a fake
one or otherwise), does not fulfill 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 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 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 Se 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 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 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 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.
18. In
the light of the above-settled proposition of law, the appellant
insurance company cannot be held liable to pay the amount of
compensation to the claimants for the cause of death of Shukurullah
in road accident which had occurred due to rash and negligent driving
of scooter by Ram Surat who admittedly had no valid and effective
licence to drive the vehicle on the day of accident. The scooterist
was possessing driving licence of driving HMV and he was driving
totally different class of vehicle which act of his is in violation
of Section 10(2) of the MV Act.
19. In
the result, the appeal is allowed to the limited extent and it is
directed that the appellant insurance company though not liable to
pay the amount of compensation, but in the nature of this case it
shall satisfy the award and shall have the right to recover the
amount deposited by it along with interest from the owner of the
vehicle, viz. Respondent No. 8, particularly in view of the fact that
no appeal was preferred by him nor has he chosen to appear before
this Court to contest this appeal. This direction is given in the
light of the judgments of this Court in National Insurance Co. Ltd.
v.Baljit Kaur and Others [(2004) 2 SCC 1] and Deddappa and Others v.
Branch Manager, National Insurance Co. Ltd. [(2008) 2 SCC 595].??
9. In
view of the aforesaid decision of the Apex Court and considering the
identical facts which are available in facts of present case and
looking to the finding and reasoning given by the claims Tribunal and
also taking into consideration the decision in case of United India
Insurance Co. ltd. v. Lehru and others reported in 2003 GLR 1771 and
National Insurance Co. Ltd. v. Kamla reported in 2002 GLR 916 and
Swaran Singh (supra), according to my opinion, in case of third
party, Insurance Co. is liable to pay the compensation to the
claimant to have the right to recover from the insured because a
breach committed by insured gives the right to the Insurance Co. to
recover the amount of compensation from the owner. Therefore,
contentions which are raised by learned advocate Ms.Jani cannot be
accepted and same are rejected.
10. The
claims Tribunal has rightly assessed the income and also rightly
considered the medical evidence which was admitted by the Insurance
Co. vide Exh.14 and from 30% disability it was reduced to 15% and
looking to the monthly salary of Rs.1800/-, yearly it comes to
Rs.3240/- and looking to the age 35 years, multiplier of 15 has been
rightly applied and Rs.48,000/- towards loss of future income and
pain, shock and suffering and transportation and actual loss, the
claims Tribunal has rightly awarded Rs.73,800/- and considering 15%
negligence, it was reduced to Rs.11,070/- and net amount comes to
Rs.62,730/-. The claims Tribunal has not committed any error even
assessing the income and awarding the compensation and it cannot be
considered in any manner on higher side. Therefore, there is no
substance in the present appeal. Accordingly, present appeal is
dismissed. The amount of Rs.25,000/- deposited with this Court for
the purpose of appeal shall be transmitted to the Tribunal concerned.
11. As the First Appeal No.789 of 2008 is dismissed, no order is necessitated in Civil Application No.2394 of 2008. Accordingly, Civil Application No.2394 of 2008 is disposed of.
(H.K.RATHOD,J.)
(vipul)
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