Gujarat High Court
Heirs Of Decd. Danabhai Bijalbhai ... vs Ashokbhai Hakabhai Laljibhai ... on 14 February, 2025
NEUTRAL CITATION
C/FA/532/2013 ORDER DATED: 14/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 532 of 2013
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HEIRS OF DECD. DANABHAI BIJALBHAI MAKWANA & ORS.
Versus
ASHOKBHAI HAKABHAI LALJIBHAI PADHERIYA & ANR.
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Appearance:
DECEASED LITIGANT THROUGH LEGAL HEIRS/ REPRESTENTATIVES
for the Appellant(s) No. 3
MR PARESH M DARJI(3700) for the Appellant(s) No. 1,2,3.1,3.2,3.3
MR. ALKESH N SHAH(3749) for the Defendant(s) No. 2
RULE SERVED for the Defendant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 14/02/2025
ORAL ORDER
1. Aggrieved and dissatisfied with the judgment and award dated 6.12.2012 passed by the Motor Accident Claims Tribunal, Surendranagar in M.A.C.P. No. 65 of 2008.
2. Learned advocate for the appellant would submit that the learned Tribunal has committed serious error in exonerating the insurance company on the ground that the driver of the jeep was not holding valid and effective licence on the date of accident. He would further submit that the learned Tribunal has failed to consider the ratio laid down by the Hon'ble Apex Court in case of National Insurance Co. Ltd. v. Swarn Singh and Ors., (2004) 3 SCC 297, whereby the Hon'ble Apex Court has laid down guidelines. He has also cited the judgment in case of Pappu Versus Vinod Kumar Lamba reported in 2018 (3) SCC 208 to Page 1 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025 NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined submit that the Hon'ble Apex Court again reiterated the principle laid down in case of Swarn Singh (supra) and submit that in case, if it is established that the driver of the offending vehicle was not holding valid and effective driving licence, it would be a case fit to pass the order of penalty. Upon such submission, he prays to allow this First Appeal.
3. On the other hand, learned advocate Mr. Alkesh Shah for respondent No.2 while supporting the impugned judgment and award, would submit to dismiss the appeal.
4. Having heard learned advocates for both the parties, what could be noticed that the learned Tribunal has exonerated the insurance company on the ground that the driver of the offending vehicle was not holding effective and valid licence to drive the offending vehicle and it is proved from the deposition of the driver at Exh.39. Para 12 of the impugned judgment and award is relevant, which reads as under:-
"12. So far as contention of not having driving licence by the opponent jeep driver raised by Mr.Bhadeliya, LA.,is concerned, the opponent No.1, who is the driver-cum- owner of the offending jeep is examined by opponent No.2 Insurance Co., vide Exh.39, wherein, the jeep driver has clearly stated the fact that at the time of accident, he was not having driving licence to drive the vehicle. Hence, the fact of not having driving licence by the opponent driver is not disputed. This Tribunal has minutely perused the judgments cited by learned advocates of the respective parties and from which, Mr.Bhadeliya, L.A.,appears right in submitting that in the present case, when it is proved by examining the opponent driver-cum-owner that he was not having licence at all to driver the vehicle, the Insurance Co., Page 2 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025 NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined can not be held liable to pay the compensation. Though, Mr.Halani, L.A.,has relied upon the judgment of Swarna Singh's, considering the judgments cited by Mr.Bhadeliya, L.A., reported in 2008 ACJ 1307 SC (supra) and 2008 ACJ 2654 SC (supra) and 2011 ACJ 981 (supra), wherein, the Swarna Singh's case is referred. Further, cited cases by Mr.Bhadeliya, L.A., are squarely applicable in the present case, wherein, it is held by Hon'ble Apex Court that in such cases, the claimants are entitled to compensation from driver and owner of vehicle. For the reasons aforementioned, this Tribunal is left with no option, but to dismiss the claim against the opponent No.2-Insurance Co., which is accordingly.exonerated from the liability to compensate the applicants and the opponent No.1-the driver-cum-
owner is held liable to pay the accrued amount of compensation."
5. In case of Pappu (supra), in para 14, considering the judgment in case of Swarn Singh (supra), the Hon'ble Apex Court observed as under:-
"14. The next question is: whether in the fact situation of this case the insurance company can be and ought to be directed to pay the claim amount, with liberty to recover the same from the owner of the vehicle (respondent No.1)? This issue has been answered in the case of National Insurance Company Ltd. (supra). In that case, it was contended by the insurance company that once the defence taken by the insurer is accepted by the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle. However, this Court held that even if the insurer succeeds in establishing its defence, the Tribunal or the Court can direct the insurance company to pay the award amount to the claimant(s) and, in turn, recover the same from the owner of the vehicle. The three-Judge Bench, after analysing the earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle. In paragraph 107, the Court then observed thus:Page 3 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025
NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined "We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realize the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it has not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given an opportunity to defend at all. Such a course of action may also be resorted to when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage." Further, in paragraph No.110, the Court observed thus:
110. 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 Page 4 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025 NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined 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 where for 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 Page 5 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025 NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined 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 "the rule of main purpose" and the concept of "fundamental 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 fulfil the requirements of law or not will have to be determined in each case.
(viii) xxx
(ix) xxx
(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 Page 6 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025 NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined 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." (emphasis supplied) "
5.1 In the case on hand, it is established by the insurance company that the driver of the offending vehicle was not holding valid and effective driving licence, but the insurance company has failed to prove that the owner of the offending vehicle having knowledge that the driver of the offending vehicle has no licence to drive the jeep and yet permitted the driver to drive the vehicle. Thus, it is a fit case where the learned Tribunal ought to have passed of pay and recover.
6. For the foregoing reasons, present First Appeal is partly allowed. The finding of the learned Tribunal directing the opponent No.1 to deposit the decretal amount is maintained. Further, the findings of exoneration of the insurance company is also maintained. The impugned judgment and award is modified to the extent that the insurance company shall at the first instance deposit the entire amount of compensation including interest and cost and shall be entitled to recover the same from the owner on the strength of this judgment. The insurance Page 7 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025 NEUTRAL CITATION C/FA/532/2013 ORDER DATED: 14/02/2025 undefined company is directed to deposit the decretal amount with interest and cost within six weeks from today before the learned Tribunal.
7. On depositing the decretal amount, the learned Tribunal is directed to disburse the entire amount to the claimant after due verification and after deducting Court fee.
8. R & P, if any, to be sent back to the concerned Court immediately.
(J. C. DOSHI,J) SHEKHAR P. BARVE Page 8 of 8 Uploaded by SHEKHAR P. BARVE(HC00200) on Sat Feb 15 2025 Downloaded on : Mon Feb 17 23:37:02 IST 2025