JUDGMENT
G.S. Singhvi, J.
1. This appeal is directed against award dated 15.12.2000 passed by Motor Accident Claims Tribunal, Ludhiana (for short, ‘the Tribunal’) in M.A.C.T. No. 47 of 1988, Amur Kaur and Ors. v. Avtar Singh and Ors.
The facts:
2. While he was going on a bicycle from village Alamgir to village Jassowal, Tehsil and District Ludhiana, Darshan Singh (deceased) was hit by truck bearing No. PIP 5277 which was owned by late Hari Rattan Kapoor, Proprietor of Punjab Machinery (sic) and was being driven by Avtar Singh (respondent No. 2 herein). As a result of the accident, Darshan Singh suffered grievous injuries and died. His mother Avtar Kaur and father Sarwan Singh filed petition under Section 166 of the Motor Vehicles Act, 1988 (for short, ‘the Act’) for award of compensation to the tune of Rs. 10 lacs.
3. On notice, respondent Nos. 1 and 2 filed separate written statements and denied that the accident was caused by the truck. They pleaded that the bicycle of the deceased had hit the truck when it was in stationary condition and he died due to the injuries suffered by him as a result of the impact.
4. Respondent No. 3 did not deny that the truck was insured at the time of accident but contested its liability by asserting that owner had committed breach of the terms and conditions of the policy and that the driver did not have driving licence at the time of accident.
5. On the pleadings of the parties, the Tribunal framed the following issues:
(1) Whether Darshan Singh died as a result of rash and negligent driving of Truck No. PIP-5277 by respondent No. 1? OPP
(2) Whether claimants are legal representatives of deceased Darshan Singh? IPP
(3) Whether the claimants are entitled to any compensation? If so, to what extent and from which of the respondent? OPP
(4) Whether respondent No. 1 did not hold a valid driving licence at the time of accident? If so, its effect? OPR3
(5) Whether there has been breach of other terms and conditions of the insurance policy as alleged by respondent No. 3? If so, its effect? OPR3
(6) Relief.
6. After considering the pleadings and evidence of the parties, the Tribunal
decided Issues Nos. 1 and 2 in favour of the claimants. On Issue No. 3, the Tribunal held that the claimants were entitled to compensation of Rs. 1,30,000/-. Issue No. 5 was decided against respondent No. 3 on the ground that no evidence had been led in support thereof. On Issue No. 4, the Tribunal referred to the order passed by it directing the owner and the driver to produce the driving licence and drew an adverse inference against them by observing that they had failed to comply with the direction. The relevant extracts of paragraphs 12 and 13 of the impugned award which contain discussion on this aspect are reproduced below:
A perusal of the file also shows that in response to this application, respondent No. 1 did not place on the file any driving licence or its copy, although the petition for this purpose had been adjourned to 21.10.1999, 25.10.1999, 10.11.1999, 26.11.1999, 7.12.1999 and 10.1.2000.
xx xx xx
On 25 9.2000, learned Counsel for respondent No. 3 represented that respondent No. 1 had not supplied this driving licence or its copy to him till then so that its correctness could be verified and sought a direction for its production. Accordingly, respondent No. 1 was directed to produce it on 25.9.2000 and 12.10.2000. It was not produced and, therefore, vide order of this Tribunal dated 12.10.2000, it was directed that adverse inference shall be drawn against respondent No. 1 for non-production of the driving licence in accordance with law.
XX XX XX
The Insurance Company in its written statement has categorically pleaded that the driver did not have a valid driving licence and this plea of the Insurance Company has not been controverted by respondent Nos. 1 and 2 by filing any counter written statement. Despite notice by respondent No. 3, respondent Nos. 1 and 2 did not produce the driving licence of respondent No. 1 so that the Insurance Company could verify its correctness and, therefore, in view of the rulings referred to in para No. 12, adverse inference has necessarily to be drawn against respondent Nos. 1 and 2.
7. The conclusion recorded by the Tribunal on Issue No. 3 reads as under:
Consequently, the issue is decided in favour of respondent No. 3 and against respondent Nos. 1 and 2 by holding that for want of a valid driving licence on the part of respondent No. 1, respondent No. 3 is not liable to indemnify the insured.
8. Mr. Sameer Sachdeva (assailed the finding and conclusion recorded by the Tribunal on Issue No. 4 by arguing the failure of the owner and driver to produce the driving licence possessed by the latter was not sufficient to draw an adverse inference against them and the learned Tribunal committed a serious illegality by absolving respondent No. 3 of its liability to compensate the dependents of the deceased ignoring the fact that it had failed to adduce any evidence to show that the owner had violated the terms and conditions of policy. Learned Counsel relied on the iudgments of this Court in United India Insurance Co. Ltd. v. Balwant Singh II 2000) ACC 56 (DB) : (2000)2 A.C.J. 1575; and Miss Navroop Kaur v. Dharam Pal , and of the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh and Ors. I (2004) ACC 1 (SC) : (2004-l) 136 P.L.R. 510 (S.C.), and submitted that the Tribunal committed a serious illegality by holding the owner and driver responsible for payment of compensation by drawing an adverse inference against them on the ground that respondent No. 2 had not produced the driving licence despite the direction given in that regard.
9. Mr. Harsh Aggarwal, learned Counsel for respondent No. 3 relied on the judgments of the two learned Single Judges of this Court in New India Assurance Co. Ltd. v. Surinder Paul and Ors. and Smt. Sardari and Ors. v. Sushil Kumar and Ors. , and argued that the Tribunal did not commit any error by holding the owner and driver exclusively responsible for compensating the claimants because they had failed to produce the driving licence despite the direction given on the application filed by respondent No. 3. Learned Counsel pointed out that the driver had filed written statement to contest the claim but deliberately withheld the driving licence and, therefore, the owner and the driver cannot be absolved of their liability to compensate the claimants.
10. I have given serious thought to the respective arguments and carefully perused the impugned award. In Swaran Singh’s case (supra), a three-Judge Bench of the Supreme Court analysed the provisions of Sections 149, 163A, 166, 165, 168,169 and 174 of the Act, referred to a large number of judicial precedents and culled out the following propositions:
The summary of our findings to the various issues as raised in these petitions are 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 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 conditions, 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 circumstances 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 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 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 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 bodily injury or damage to property of third party arising from 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 oh 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 infer 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.
(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 the other amounts which it has been compelled to pay to the third party under the award of the Tribunal. 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 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 there under 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 the defences of insurer against insured by relegating them to the remedy before Regular Court in cases whereon given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.
(Emphasis supplied)
11. A reading of proposition No. (iii) makes it clear that mere absence, fake or invalid driving licence or disqualification of the driver for driving the vehicle at the relevant time cannot be treated as sufficient to absolve the Insurance Company of its liability and the onus lies on it to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding use of vehicle by duly licensed driving or one who was not disqualified to drive at the relevant time.
12. In United India Insurance Co. Ltd. v. Balwant Singh (supra), a Division Bench of this Court considered the question whether failure of the driver of the offending vehicle to appear as his own witness, who was summoned by the Insurance Company, could be made a ground to relieve the latter of the duty to compensate the claimants and answered the same in the negative. The relevant extracts of that judgment are reproduced below:
When the licence itself has not been produced how can anyone say that the licence was not a valid one. It is not the case of either of the parties that the driver of the offending vehicle did not possess a licence. The plea taken is that his licence was not valid and that is why the issue framed was whether the driver possessed a valid driving licence. Since, the driver did not appear in the witness box and the licence has not been produced the Insurance Company has failed to prove that the driver was not holding a valid driving licence at the time of accident. The Tribunal was, therefore, right in deciding this issue against the Insurance Company. In Surinder Pal’s case (supra) the plea of the Insurance Company from the very beginning was that the driver of the vehicle therein did not hold a valid driving licence at all and even evidence was led in support of that plea.
13. The same view has been expressed by the learned Single Judge in Miss Navroop Kaur v. Dharam Pal (supra). The facts of that case show that even though the Insurance Company had pleaded that the driver of the vehicle did not hold a valid driving licence, no evidence was produced by it to show that the insured had violated the terms and conditions of the policy. The learned Single Judge held that failure of the Insurance Company to produce cogent evidence to prove the violation of the conditions of policy was sufficient to hold it liable to compensate the claimants.
14. The facts of the present case show that even though, in the written statement filed on behalf of respondent No. 3, it was pleaded that respondent No. 2 did not hold valid driving licence, no evidence was produced by it to prove that the owner had violated the terms and conditions of the policy or that he was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of policy regarding use of the vehicle by duly licensed driver. Therefore, the mere fact that the owner and the driver of the vehicle did not produce the driving licence despite^ the direction given by the Tribunal, the latter was not entitled to draw an adverse inference against them and relieve respondent No. 3 of its obligation to compensate the claimants. Consequently, the impugned award is liable to be set aside to the extent it makes the owner and the driver only liable to pay compensation.
15. The two judgments on which reliance has been placed by Mr. Harsh Aggarwal must be read as confined to the facts of those cases and the same cannot be made basis for absolving respondent No. 3 of its liability to compensate the claimants in accordance with the insurance policy because in Swaran Singh’s case (supra), the Supreme Court has unequivocally declared that the Insurance Company is duty-bound to prove that insurer was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding use of vehicle by duly licensed driver or one who was not disqualified to drive at the relevant time and as mentioned above, respondent No. 3 did not adduce any evidence in this regard.
16. As a result of the above discussion, the appeal is allowed qua respondent No. 3. The impugned award is modified and it is declared that respondent No. 3 shall be liable to compensate the claimants in terms of the direction contained in the award. This would necessarily mean that respondent No. 3 shall not only pay the amount of compensation but also pay interest in terms of the direction given by the Tribunal.