The Oriental Insurance Co. Ltd. vs Manoj Kumar And Ors.
2015 Latest Caselaw 218 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Reserved
 
F.A.F.O. No. 1240 of 2000
 
The Oriental Insurance
 
Co. Ltd. 				-------				Appellant
 
					Versus
 
Manoj Kumar & Ors.		-------				Respondents
 

 
Hon'ble Krishna Murari, J.

Hon'ble Pratyush Kumar, J.

(Delivered by Hon'ble Krishna Murari, J.)

Heard Shri S.C. Srivastava, learned counsel for the appellant, Shri Siddharth Srivastava, learned counsel for the claimant-respondent nos. 1 to 3 and Shri S.D. Ojha for respondent no. 4.

This appeal under Section 173 of the Motor Vehicles Act (for short the Act) has been filed by Insurance company challenging the judgment and award dated 31.05.2000 passed by Additional District Judge/Motor Accident Claims Tribunal, Meerut awarding a sum of Rs.5,85,500/- as compensation to the claimant-respondent nos. 1 to 3.

Facts, in short, giving rise to the dispute are as under.

A claim petition claiming compensation to the tune of Rs.20 lacs was preferred by the claimant-respondents on the allegation that on 03.09.1997 when deceased Sobha Ram was going on his moped no. U.P. 15D 1960 to his office at about 10 am, when he reached telephone exchange, then near SSD Crossing, Bus No. UHN 1152, which was being driven in rash and negligent manner, hit the moped, which caused grievous injuries and resulted into death of Sobha Ram. It was further pleaded that the deceased was aged 55 years and was working in CDA Pension office and his total income including that of from agriculture was Rs.12,559/- per month. The proceedings were contested by the appellant-insurance company denying the allegations. It was pleaded in the additional pleas that the accident was caused due to own negligence of the deceased and the driver of the bus was not having a valid driving licence. The Tribunal, on the basis of the pleadings of the parties, framed two issues.

(1) Whether the accident was caused due to rash and negligent driving of the offending vehicle UHN 1152.

(2) Whether the claimants were entitled for any compensation and if yes, then how much and from whom.

After analysing the oral and documentary evidence brought on record, the Tribunal returned a finding that the accident was caused due to rash and negligent driving of the driver of the offending vehicle no. UHN 1152, which resulted in the death of Sobha Ram.

On the question of quantum of compensation, on the basis of the documentary evidence brought on record in the form of salary slip, the Tribunal returned a finding that the monthly income of the deceased was Rs.10,252/- and after deducting 1/3rd towards personal expenses, determined his annual income to be Rs.72,000/-. Treating the age of the deceased to be 55 years, the Tribunal in accordance with the Schedule II applied a multiplier of 8 and in this manner, determined the total compensation to be Rs.5,85,500/-.

Learned counsel for the appellants vehemently contended that since the driver of the offending vehicle was not having a valid driving licence, which fact was established before the Tribunal by cogent evidence, hence, the Tribunal committed a manifest error of law in not allowing the right to the appellant to recover the amount of compensation from the owner. It is further submitted that since the vehicle was being driven in violation of the insurance policy as the driver did not have a valid driving licence, as such, it was the insurer, who was liable to pay the compensation and the liability has wrongly been fastened upon the appellant.

A perusal of the award goes to show that it was pleaded and established before the Tribunal that the driving licence of the driver of the offending vehicle expired on 09.09.1996 and admittedly it was renewed from 08.10.1997. The accident, admittedly, took place on 03.09.1997. Thus, what is to be seen is whether the renewal made on 08.10.1997 would relate back to the date of its expiry.

Section 15 of the Act relate to the renewal of the driving licence. The relevant part of Section 15 for the purposes of the case reads as under.

"15. Renewal of driving licences.- (1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of its expiry:

Provided that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal."

A perusal of the aforesaid provision makes it clear that, in case, the renewal is applied, where the application for renewal is made within 30 days from the date of expiry, the renewal shall relate back to the date of expire, otherwise if the application is made beyond 30 days, it would be effected from the date of its renewal. Proviso to Section 15 (1) makes it clear that the original licence granted despite expiry only remain operative only for a period of 30 days from the date of expiry and, in case, if an application is made within this period, it would relate back to the said date, otherwise it would be deemed to be renewed from the date of its renewal.

The accident, in this case, admittedly took place on 03.09.1997. Although, there is nothing on record to indicate as to when the renewal was applied, but this much is clear that the licence was renewed after more than a year from its expiry and, thus, on the date of accident, the driver did not have a valid driving licence.

This view came up for consideration before the Hon'ble Apex Court in the case of Ishwar Chandra & Ors. Vs. Oriental Insurance Co. Ltd. & Ors., 2007 (2) TAC 393 (SC). After considering the provisions of the Act, the Hon'ble Apex Court has observed as under.

"From a bare perusal of the said provision, it would appear that the licence is renewed in terms of the said Act and the rules framed thereunder. The proviso appended to Section 15 (1) of the Act in no uncertain terms states that whereas the original licence granted despite expiry remains valid for a period of 30 days from the date of expiry, if any application for renewal thereof is filed thereafter, the same would be renewed from the date of its renewal. The accident took place on 28.04.1995. As on the said date, the renewal application had not been filed, the driver, did not have a valid licence on the date when the vehicle met with the accident."

Learned counsel for the respondent no. 4, owner relying upon the judgment of the Hon'ble Apex Court in the case of United India Insurance Co. Ltd. Vs. Lehru & Ors., (2003) 3 SCC 338, contended that once the driver had a valid driving licence and he was driving competently, it cannot be said that there was a breach of Section 149 (2) (a) (ii) of the Act and the insurer would not be absolved from liability and the Tribunal rightly fastened the liability of paying the compensation on the insurance company.

The case before the Hon'ble Apex Court was one where the driving licence of the driver of the offending vehicle was found to be fake. Keeping that factor in consideration, the Hon'ble Apex Court in paragraph 20 observed as under.

"When an owner is hiring a driver he will therefore have to check whether the driver has a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that Insurance Companies expect owners to make enquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The Insurance Company would not then be absolved of liability. If it ultimately turns out that the licence was fake the Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly even in such a case the Insurance Company would remain liable to the innocent third party, but it may be able to recover from the insured."

We see no reason as to how the said judgment is of any help to the respondent no. 4 or comes to his rescue. It was a case where the licence was fake and, thus, the Hon'ble Apex Court held that the owner of the vehicle is not expected to verify the driving licence, which on the face of it, looks to be genuine. However, in the case in hand, the owner is supposed to be aware that the driving licence of the driver is to expire and it was his duty to have ensured that the driver gets the licence renewed within the time.

Thus, the reliance placed by respondent no. 4 in the case of Lehru (supra) is misplaced and, as such, the judgment is of no avail to him. Since the driver of the offending vehicle was not having a valid driving licence on the date of accident, the vehicle was being driven in a breach of the condition of the policy requiring the vehicle to be driven by a person, who is duly licenced.

The offending vehicle was clearly being driven in breach of Section 149 (2) (a) (ii) of the Act and, thus, the insurance company cannot be held liable to pay the compensation. The insurance company has already been directed to make payment of the amount to the claimant-respondents. The insurance company shall be liable to recover the same from the owner of the offending vehicle, namely, respondent no. 4.

The appeal stands allowed to the extent directed above.

April 29th ,2015

VKS