Andhra Pradesh High Court - Amravati
Komisetty Padmalatha 3 Others vs N.Seenivasulu Another on 10 September, 2024
1
* THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
&
*THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
+ MOTOR ACCIDENT CIVIL MISCELLANEOUS
APPEAL NO:2988 OF 2012
% 10.09.2024
# Between:
Komisetty Padmalatha and others
...APPELLANT(S)
AND
1. N. Sreenivasulu and another
...RESPONDENT(S)
!Counsel for the appellants : Sri Sri Dr.P.B. Vijay Kumar
^ Counsel for the respondents : Smt A. Jayanthi,
S.C for the 2nd respondent
<Gist:
>Head Note:
? Cases referred:
1
(2004) 3 SCC 297
2 (2017) 14 SCC 663
3
AIR 2023 SC 5545
4
(2017) 16 SCC 680
5
(2024) 1 SCC 818
6
2023 SCC OnLine SC 1140
7
AIR 2018 Sc 3789
8
(2018) 18 SCC 130
9
(2021) 11 SCC 780
10
(2015) 1 SCC 539
11
(2021) 6 SCC 188
12
(2021) 2 SCC 166
2
HIGH COURT OF ANDHRA PRADESH
****
MOTOR ACCIDENT CIVIL MISCELLANEOUS
APPEAL NO:2988/2012
DATE OF JUDGMENT PRONOUNCED: 10.09.2024
SUBMITTED FOR APPROVAL:
THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
&
THE HON'BLE SRI JUSTICE NYAPATHY VIJAY
1. Whether Reporters of Local newspapers Yes/No
may be allowed to see the Judgments?
2. Whether the copies of judgment may be Yes/No
marked to Law Reporters/Journals
3. Whether Your Lordships wish to see the Yes/No
fair copy of the Judgment?
____________________
RAVI NATH TILHARI, J
__________________
NYAPATHY VIJAY,J
3
THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
&
THE HON'BLE SRI JUSTICE NYPATHY VIJAY
M.A.C.M.A.No.2988 OF 2012
JUDGMENT:
per the Hon‟ble Sri Justice Ravi Nath Tilhari:-
Heard Dr. P.B. Vijay Kumar, learned senior counsel,
assisted by Sri K.R.S. Prakash Rao, learned counsel for the
appellants and Smt A. Jayanthi, learned standing counsel for the
2nd respondent-the New India Assurance Company Limited.
2. This appeal under Section 173 of the Motor Vehicles Act,
1988 (for short, "the M.V Act") was filed by the claimants-
appellants, challenging the award dated 03.10.2011, in M.V.O.P.
No.582 of 2007, passed by the Motor Accident Claims Tribunal-
cum-Principal District Judge, Kadapa (in short, "the Tribunal").
3. The Tribunal partly allowed the claim petition of the
appellants-claimants for an amount of Rs.21,83,840/- with interest
thereon @ 6% p.a against the 1st respondent-owner of the
offending vehicle but dismissing the same against the New India
Assurance Company Limited-2nd respondent.
4. The facts briefly stated are that the deceased Bandaru
Sreeram Lakshmi Radha Krishna, of whom the appellants are the
legal representatives, died in a road accident which occurred on
24.08.2007 at about 6.30 p.m, while he was coming on
motorcycle, when TATA Sumo Jeep bearing No.AP 03-U-4182
coming from the opposite direction at high speed being driven in
a rash and negligent manner by its driver dashed the vehicle of
the deceased. He was aged about 45 years and was working as
Lecturer in S.K.M. Junior College, Sidhout, earning Rs.14,210/-
per month. The claimants claimed, total compensation of
Rs.30,00,000/- under different heads.
5. 1st respondent the owner of the offending vehicle remained
ex parte. No representation in this appeal as well.
6. 2nd respondent insurer filed counter denying the petition
averments. It was the case of the insurance company that the
deceased was over taking the offending vehicle which caused the
accident. The driver of the offending vehicles possessed only
Light Motor Vehicle non transport, whereas the offending vehicle
was a passenger carrying transport vehicle. So, there was
violation of the main condition of the policy by handing over the
vehicle by the owner to a person not having the valid driving
license. The insurance company claimed no liability to indemnify.
7. The Tribunal framed the following issues:
"1. Whether the deceased Bandaru Sreeram Lakshmi
Radha Krishna, S/o. Late B. Sreeramulu died due to rash
and negligent driving of the driver of TATA SUMO bearing
No.AP03-U-4182 owned by Respondent No.1 on
24.08.2007 at about6.30 p.m at Kanumakopalli on Kadapa-
Tirupati road?
2. Whether respondents 1 and 2 are jointly and
severally liable for the compensation claimed by the
petitioners?
3. Whether the petitioners 1 to 4 are entitled for
compensation as claimed by them?
4. To what relief?"
8. In order to prove the case of the claimants, the 1st claimant
wife who gave the report Ex.A.1 examined as P.W.1. They also
examined P.W.2 the Principal of the College in which the
deceased was working as Lecturer and who also happened to be
the brother of the deceased. They marked Exs.A.1 to A/.3
certified copies of First Information Report, P.M report, charge
sheet, Ex.A.4 the salary certificate, Ex.A.5 the pass book of
Andhra Bank, Ex.A.6 is the proceedings of the Director of
Intermediate Education, Ex.A.7 the S.S.C certificate, Ex.A.8 the
Proceedings of the Correspodnent of the College, Ex.A.9 the
Joint report, Ex.A.10 the Transfer Certificate and Ex.A.11 and
Ex.A.12 the certified copies of inquest report and the M.V.I report,
Ex.A.13 proceedings of the correspondent of the college, Ex.A.14
periodical increment certificate, Ex.A.15 the revised scales of pay
Rules, 2005, Ex.A.16 Statement of fixation of pay revised scales
of pay rules, 2005, Ex.A.17 the Form No.16-A issued by L.I.C,
Ex.A.18 form No.16-A issued by L.I.C, and Ex.A.19 letter of L.I.C
issued by the Branch Manager, Rajampet.
9. In order to prove the case of respondent No.2 Insurance
Company, Assistant Manager of the Insurance Company was
examined as R.W.1. The Administrative Officer of R.T.O‟s office,
Kadapa was examined, and as R.W.2. Ex.B.1 attested copy of
the Policy, ex.B.2 extract of driving license, Ex.X.1 Registration
Certificate Extract of the offending vehicle, Ex.X.2 the permit,
were marked.
10. The Tribunal based on the evidence recorded finding that
the accident was caused due to the rash and negligent driving of
the offending vehicle by its driver. The Tribunal, held that the
driver of the offending vehicle was possessing the Non-Transport
Light Motor Vehicle License, but he was driving a Maxi Cab, as
per Ex.X.2. Though the Maxi Cab was considered to be Light
Motor Vehicle, but was a transport vehicle and as such at the
time of the accident, as per Ex.B.2, (the license of the driver of
the offending vehicle) the driver was not authorized to drive a
transport vehicle. Consequently, it was held that the insurance
company was not liable to indemnify.
11. On the point of compensation, the Tribunal recorded that
the deceased was aged about 45 years. He was working as
lecturer. His net income was taken as Rs.12,880/- per month.
Towards future prospectus, 30% was added. 1/4th was deducted
towards personal expenses of the deceased. The multiplier of
„14‟ was applied. After adding the amount under the head of loss
of consortium etc, the total compensation of Rs.21,63,840/- was
awarded with interest @ 6% p.a. from the date of petition till the
date of payment.
12. Learned senior counsel for the appellants submitted that
the challenge to the judgment and award is on two grounds.
13. Firstly, that, the dismissal of the claim petition against the
2nd respondent the insurance company on the ground that the
driver of the offending vehicle was not having valid driving
licence, is legally not sustainable. He submitted that the driver
had the license of Light Motor Vehicle (Non Transport) which
shall be valid and effective for L.M.V, (Transport) as well. So, the
insurance company would be liable to pay compensation. He
placed reliance in National Insurance Co., Limited vs. Swaran
Singh and others1, Mukund Dewangan vs. Oriental Insurance
Company Limited2 and IFFCO Tokio General Insurance Co.
Ltd. Vs. Geeta Devi3 to support his contention.
14. Secondly, that under the conventional heads, the amount
has not been awarded as per law, and the interest @ 6% p.a is
also on the lower side. He placed reliance in the case of National
Insurance Company Limited vs. Pranay Sethi and others4.
15. Learned counsel for the 2nd respondent fairly submitted that
the legal position has been well settled in Mukund Dewangan
(supra), to which she has no submission. She has also not
disputed that the Maxi Cab, the offending vehicle, is Light Motor
Vehicle though transport.
16. Learned counsel for the 2nd respondent, however,
submitted that the interest @ 6% p.a is correct and deserves not
to be enhanced. She submitted that the liability was not fastened
on the insurance company. If the appeal is allowed and the
interest amount is enhanced, then that would be an additional
liability on the insurance company, whereas if such liability had
been imposed by the Tribunal, the insurance company might
(2004) 3 SCC 297
(2017) 14 SCC 663
AIR 2023 SC 5545
(2017) 16 SCC 680
have complied with the order by making the payment and
consequently at this stage, the interest liability could not be more
on the insurance company. Non deposit of compensation amount
with 6% p.a interest by the insurance company is for no fault of
the insurance company.
17. We have considered the aforesaid submissions advanced
by the learned counsels for the parties and perused the material
on record.
18. The points for determination are as follows:
(A) Whether the driver of offending vehicle with driving
license of L.M.V (non-transport) driving LMV (transport) Max Cab,
in law, held, valid and effective driving license at the time of
accident, so as to make the insurance company (R-2) liable for
payment of compensation to the claimant/appellants?
(B) Whether the compensation awarded is just and fair in
the light of the submission advanced?
(C) Whether the interest rate deserves to be granted @
9% p.a?
ANALYSIS:
POINT-'A'
19. The issue in Point „A‟ is no more res-integra.
20. In Mukund Dewangan (supra), one of the questions
referred to the larger Bench was, as under:
"(i) What is the meaning to be given to the
definition of "light motor vehicle" as
defined in Section 2(21) of the M.V. Act?
(ii) Whether transport vehicles are excluded
from it?"
21. We may refer Paras 52 and 53 of Mukund Dewangan
(supra) which read as under:
52. In S. Iyyapan [S. Iyyapan v. United India Insurance Co. Ltd., (2013) 7
SCC 62 : (2013) 3 SCC (Civ) 359 : (2013) 3 SCC (Cri) 11] , this Court has
considered the decisions in Ashok Gangadhar [Ashok Gangadhar
Maratha v. Oriental Insurance Co. Ltd., (1999) 6 SCC 620 : 1999 SCC (Cri)
1170] , Annappa Irappa Nesaria [National Insurance Co. Ltd. v. Annappa
Irappa Nesaria, (2008) 3 SCC 464 : (2008) 1 SCC (Civ) 945 : (2008) 2 SCC
(Cri) 99] as well as Prabhu Lal [New India Assurance Co. Ltd. v. Prabhu Lal,
(2008) 1 SCC 696 : (2008) 1 SCC (Civ) 385 : (2008) 1 SCC (Cri) 308] and
has laid down thus: (S. Iyyapan case [S. Iyyapan v. United India Insurance
Co. Ltd., (2013) 7 SCC 62 : (2013) 3 SCC (Civ) 359 : (2013) 3 SCC (Cri) 11]
, SCC p. 77, para 18)
"18. In the instant case, admittedly the driver was holding a valid
driving licence to drive light motor vehicle. There is no dispute that the
motor vehicle in question, by which accident took place, was Mahindra
Maxi Cab. Merely because the driver did not get any endorsement in the
driving licence to drive Mahindra Maxi Cab, which is a light motor
vehicle, the High Court has committed the grave error of law in holding
that the insurer is not liable to pay compensation because the driver was
not holding the licence to drive the commercial vehicle. The impugned
judgment [Civil Misc. Appeal No. 1016 of 2002, order dated 31-10-2008
(Mad)] is, therefore, liable to be set aside."
This Court has rightly held in S. Iyyapan [S. Iyyapan v. United India
Insurance Co. Ltd., (2013) 7 SCC 62 : (2013) 3 SCC (Civ) 359 : (2013) 3 SCC
(Cri) 11] that it was not necessary for the driver to get any endorsement in the
driving licence to drive Mahindra maxi cab as he was authorised to drive a
light motor vehicle.
53. In Kulwant Singh v. Oriental Insurance Co. Ltd. [Kulwant
Singh v. Oriental Insurance Co. Ltd., (2015) 2 SCC 186 : (2015) 1 SCC (Civ)
798 : (2015) 1 SCC (Cri) 860] , this Court has referred to the decisions in S.
Iyyapan [S. Iyyapan v. United India Insurance Co. Ltd., (2013) 7 SCC 62 :
(2013) 3 SCC (Civ) 359 : (2013) 3 SCC (Cri) 11] and Annappa Irappa
Nesaria [National Insurance Co. Ltd. v. Annappa Irappa Nesaria, (2008) 3
SCC 464 : (2008) 1 SCC (Civ) 945 : (2008) 2 SCC (Cri) 99] and has laid
down that once the driver is holding a licence to drive light motor vehicle, he
can drive commercial vehicle of that category. In Kulwant Singh [Kulwant
Singh v. Oriental Insurance Co. Ltd., (2015) 2 SCC 186 : (2015) 1 SCC (Civ)
798 : (2015) 1 SCC (Cri) 860] it has been laid down thus: (SCC p. 188, paras
8-11)
"8. We find that the judgments relied upon cover the issue in favour of
the appellants. In Annappa Irappa Nesaria [National Insurance Co.
Ltd. v. Annappa Irappa Nesaria, (2008) 3 SCC 464 : (2008) 1 SCC (Civ)
945 : (2008) 2 SCC (Cri) 99] , this Court referred to the provisions of
Sections 2(21) and (23) of the Motor Vehicles Act, 1988, which are
definitions of "light motor vehicle" and "medium goods vehicle"
respectively and the Rules prescribing the forms for the licence i.e. Rule
14 and Form 4. It was concluded: (SCC p. 468, para 20)
„20. From what has been noticed hereinbefore, it is evident that
"transport vehicle" has now been substituted for "medium goods vehicle"
and "heavy goods vehicle". The light motor vehicle continued, at the
relevant point of time to cover both "light passenger carriage vehicle" and
"light goods carriage vehicle". A driver who had a valid licence to drive a
light motor vehicle, therefore, was authorised to drive a light goods vehicle
as well.‟
9. In S. Iyyapan [S. Iyyapan v. United India Insurance Co. Ltd., (2013)
7 SCC 62 : (2013) 3 SCC (Civ) 359 : (2013) 3 SCC (Cri) 11] , the question
was whether the driver who had a licence to drive "light motor vehicle"
could drive "light motor vehicle" used as a commercial vehicle, without
obtaining endorsement to drive a commercial vehicle. It was held that in
such a case, the insurance company could not disown its liability. It was
observed: (SCC p. 77, para 18)
„18. In the instant case, admittedly the driver was holding a valid
driving licence to drive light motor vehicle. There is no dispute that the
motor vehicle in question, by which accident took place, was Mahindra
Maxi Cab. Merely because the driver did not get any endorsement in the
driving licence to drive Mahindra Maxi Cab, which is a light motor
vehicle, the High Court has committed grave error of law in holding that
the insurer is not liable to pay compensation because the driver was not
holding the licence to drive the commercial vehicle. The impugned
judgment [Civil Misc. Appeal No. 1016 of 2002, order dated 31-10-2008
(Mad)] is, therefore, liable to be set aside.‟
10. No contrary view has been brought to our notice.
11. Accordingly, we are of the view that there was no breach of any
condition of insurance policy, in the present case, entitling the insurance
company to recovery rights."
Though, as held above, and for the reasons assigned by us, the conclusion
in Kulwant Singh [Kulwant Singh v. Oriental Insurance Co. Ltd., (2015) 2
SCC 186 : (2015) 1 SCC (Civ) 798 : (2015) 1 SCC (Cri) 860] was correct,
however, for the post-amended position after 28-3-2001 also the law continues
to be the same for LMV class of vehicles.
22. In Mukund Dewangan (supra), the Hon‟ble Apex Court
answered the repeal in para 60 of the report, which is as under:
60. Thus, we answer the questions which are referred to us thus:
60.1. "Light motor vehicle" as defined in Section 2(21) of the Act
would include a transport vehicle as per the weight prescribed in Section
2(21) read with Sections 2(15) and 2(48). Such transport vehicles are not
excluded from the definition of the light motor vehicle by virtue of
Amendment Act 54 of 1994.
60.2. A transport vehicle and omnibus, the gross vehicle weight of either
of which does not exceed 7500 kg would be a light motor vehicle and also
motor car or tractor or a roadroller, "unladen weight" of which does not
exceed 7500 kg and holder of a driving licence to drive class of "light motor
vehicle" as provided in Section 10(2)(d) is competent to drive a transport
vehicle or omnibus, the gross vehicle weight of which does not exceed 7500
kg or a motor car or tractor or roadroller, the "unladen weight" of which does
not exceed 7500 kg. That is to say, no separate endorsement on the licence
is required to drive a transport vehicle of light motor vehicle class as
enumerated above. A licence issued under Section 10(2)(d) continues to be
valid after Amendment Act 54 of 1994 and 28-3-2001 in the form.
60.3. The effect of the amendment made by virtue of Act 54 of 1994 w.e.f.
14-11-1994 while substituting clauses (e) to (h) of Section 10(2) which
contained "medium goods vehicle" in Section 10(2)(e), "medium passenger
motor vehicle" in Section 10(2)(f), "heavy goods vehicle" in Section 10(2)(g)
and "heavy passenger motor vehicle" in Section 10(2)(h) with expression
"transport vehicle" as substituted in Section 10(2)(e) related only to the
aforesaid substituted classes only. It does not exclude transport vehicle,
from the purview of Section 10(2)(d) and Section 2(41) of the Act i.e. light
motor vehicle.
60.4. The effect of amendment of Form 4 by insertion of "transport
vehicle" is related only to the categories which were substituted in the year
1994 and the procedure to obtain driving licence for transport vehicle of class
of "light motor vehicle" continues to be the same as it was and has not been
changed and there is no requirement to obtain separate endorsement to
drive transport vehicle, and if a driver is holding licence to drive light
motor vehicle, he can drive transport vehicle of such class without any
endorsement to that effect.
23. The Hon‟ble Apex Court held that the light motor vehicle as
defined in Section 2(21) of the M.V. Act would include a transport
vehicle as per the weight prescribed in Section 2(21) read with
Section 2(15) and 2(48) of the M.V. Act. Such transport vehicles
are not excluded from the definition of the Light Motor Vehicle. It
was further held that the amendment made by virtue of Act 54 of
1994 with effect from 14.11.1994, did not exclude transport
vehicle from the purview of Section 10(2)(d) and Section 2(41) of
the M.V. Act. The holder of a driving license to drive a Class of
Light Motor Vehicle is competent to drive a transport vehicle or
omnibus, as provided in Section 10(2)(d) and no separate
endorsement to drive such transport vehicle of LMV class was
required. A license issued under Section 10(2)(d), continued to
be valid after Amendment Act, 54 of 1994.
24. We are not oblivious that the judgment in Mukund
Dewangan (supra) has been referred to the Constitution Bench in
Bajaj Alliance General Insurance Company Limited vs.
Rambha Devi and others5.
25. On the point of Binding precedent of the judgment referred
to a larger bench, during the pendency of the reference, in Union
Territory of Ladakh v. Jammu and Kashmir National
Conference6 the Hon‟ble Apex Court held inter alia that mere
reference to the Larger Bench does not unsettle the declared law.
Paras-32 and 35 are reproduced as under:
"32. The Court would categorically emphasize that no
litigant should have even an iota of doubt or an impression
(rather, a misimpression) that just because of systemic
delay or the matter not being taken up by the Courts
resulting in efflux of time the cause would be defeated, and
the Court would be rendered helpless to ensure justice to
the party concerned. It would not be out of place to
mention that this Court can even turn the clock back, if the
situation warrants such dire measures. The powers of this
Court, if need be, to even restore status quo ante are not
in the realm of any doubt. The relief(s) granted in the lead
opinion by Hon. Khehar, J. (as the learned Chief Justice
then was), concurred with by the other 4 learned Judges,
in Nabam Rebia and Bamang Felix v. Deputy Speaker,
Arunachal Pradesh Legislative Assembly, (2016) 8 SCC
(2024) 1 SCC 818
2023 SCC OnLine SC 1140
1 is enough on this aspect. We know full well that a 5-
Judge Bench in Subhash Desai v. Principal Secretary,
Governor of Maharashtra, 2023 SCC OnLine SC 607 has
referred Nabam Rebia (supra) to a Larger Bench.
However, the questions referred to the Larger Bench do
not detract from the power to bring back status quo ante.
That apart, it is settled that mere reference to a larger
Bench does not unsettle declared law. In Harbhajan
Singh v. State of Punjab, (2009) 13 SCC 608, a 2-Judge
Bench said:
"15. Even if what is contended by the learned
counsel is correct, it is not for us to go into the said
question at this stage; herein cross-examination of the
witnesses had taken place. The Court had taken into
consideration the materials available to it for the
purpose of arriving at a satisfaction that a case for
exercise of jurisdiction under Section 319 of the Code
was made out. Only because the correctness of a
portion of the judgment in Mohd. Shafi [(2007) 14 SCC
544 : (2009) 1 SCC (Cri) 889 : (2007) 4 SCR 1023 :
(2007) 5 Scale 611] has been doubted by another
Bench, the same would not mean that we should
wait for the decision of the larger Bench, particularly
when the same instead of assisting the appellants runs
counter to their contention."
"35. We are seeing before us judgments and orders by High
Courts not deciding cases on the ground that the leading
judgment of this Court on this subject is either referred to a
larger Bench or a review petition relating thereto is pending. We
have also come across examples of High Courts refusing deference
to judgments of this Court on the score that a later Coordinate
Bench has doubted its correctness. In this regard, we lay down the
position in law. We make it absolutely clear that the High Courts will
proceed to decide matters on the basis of the law as it stands. It is not
open, unless specifically directed by this Court, to await an outcome
of a reference or a review petition, as the case may be. It is also not
open to a High Court to refuse to follow a judgment by stating that it
has been doubted by a later Coordinate Bench. In any case, when
faced with conflicting judgments by Benches of equal strength of
this Court, it is the earlier one which is to be followed by the High
Courts, as held by a 5-Judge Bench in National Insurance
Company Limited v. Pranay Sethi, (2017) 16 SCC 6805. The High
Courts, of course, will do so with careful regard to the facts and
circumstances of the case before it."
26. We therefore proceeded to decide, considering Mukund
Dewangan (supra).
27. There is another aspect. In Swaran Singh (supra) on the
point of imposition of liability on the insurer, on which also reliance
was placed by learned counsel for the appellants, the Hon‟ble Apex
Court, in Para 110 recorded summary of findings as under:-
"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 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, 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 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.
(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 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 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 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 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."
28. In IFFCO Tokio General Insurance Company Limited
(supra), the Hon‟ble Apex Court referring to Swaran Singh (supra)
and Ram Chandra Singh vs. Rajaram and others7 observed and
held as under in paras 14 to 16:
"14. More recently, in Ram Chandra Singh v. Rajaram5, the issue before
this Court was whether an insurance company could be absolved of liability
on the ground that the insured vehicle was being driven by a person who did
not have a valid driving licence at the time of the accident. This Court found
that no attempt was made to ascertain whether the owner was aware of the
fake driving licence possessed by the driver and held that it is only if the
owner was aware of the fact that the licence was fake but still permitted such
driver to drive the vehicle that the insurer would stand absolved. It was
unequivocally held that the mere fact that the driving licence was fake, per se,
would not absolve the insurer.
15. Applying the aforestated edicts to the case on hand, it may be noted
that the petitioner-insurance company did not even raise the plea that the
owner of the vehicle allowed Ujay Pal to drive the vehicle knowing that his
licence was fake. Its stand was that the accident had occurred due to the
negligence of the victim himself. Further, the insurance policy did not require
the vehicle owner to undertake verification of the driving licence of the driver
of the vehicle by getting the same confirmed with the RTO. Therefore, the
claim of the petitioner-insurance company that it has the right to recover the
compensation from the owners of the vehicle, owing to a willful breach of the
condition of the insurance policy, viz., to ensure that the vehicle was driven by
a licenced driver, is without pleading and proof.
16. As already pointed out supra, once a seemingly valid driving licence is
produced by a person employed to drive a vehicle, unless such licence is
demonstrably fake on the face of it, warranting any sensible employer to
make inquiries as to its genuineness, or when the period of the licence has
already expired, or there is some other reason to entertain a genuine doubt
as to its validity, the burden is upon the insurance company to prove that
there was a failure on the part of the vehicle owner in carrying out due
diligence apropos such driving licence before employing that person to drive
the vehicle. Presently, no evidence has been placed on record whereby an
inference could be drawn that the deceased vehicle owner ought to have
gotten verified Ujay Pal's driving licence. Therefore, it was for the petitioner-
insurance company to prove willful breach on the part of the said vehicle
owner. As no such exercise was undertaken, the petitioner-insurance
company would have no right to recover the compensation amount from the
present owners of the vehicle. The impugned order passed by the Delhi High
AIR 2018 Sc 3789
Court holding to that effect, therefore, does not brook interference either on
facts or in law."
29. Applying the principles of law as settled, in the facts of the
present case, if the insurer had to avoid its liability on the ground
that the driver of the offending vehicle violated the terms of the
policy or license, it ought to have pleaded and proved that the
owner had the knowledge that the driver was not having the
license to drive a transport vehicle and was guilty of negligence
and failed to exercise reasonable care in the matter of fulfilling the
conditions of the policy regarding the use of vehicle by a duly
licensed driver or that he was disqualified to drive at the relevant
time. In the absence of such pleading and evidence, the insurer
cannot avoid the liability towards the insured or the third party.
30. From the aforesaid angle also, though we are of the view
that the driver having valid driving license to drive (LMV non
transport) was having valid driving license to drive the vehicle of
LMV category (transport), the insurer cannot avoid its liability for
payment of compensation to the claimants.
POINT-'B':-
31. Under the conventional heads, the Tribunal awarded the
following amount:
i) Rs.15,000/- to widow towards loss of consortium and
ii)Rs. 5,000/- towards funeral expenses.
32. In view of Pranay Sethi (supra); Magma General
Insurance Company Limited vs. Nanu Ram alias Chuhru Ram
and others8 and United India Insurance Co. Ltd. vs. Satinder
Kaur @ Satwinder Kaur and Ors,9 under the head of loss of
consortium of the applicants are entitled to Rs.40,000/- each, and
towards funeral expenses Rs.15,000/- and for loss of estate
Rs.15,000/- with enhancement @ 10% on every three years, thus
as on today @ 20% in total, which amount comes to Rs.48,000/-
X 4 = Rs.1,92,000/- + Rs.18,000/- + Rs.18,000/- = Rs.2,28,000/-.
33. The appellants-claimants in our view are entitled to the
following amount of compensation being just and fair
compensation.
S. Head Compensation Awarded
No.
1. Loss of dependency after Rs.21,63,840/-
deduction, as per award
2. Conventional Heads:
i) Loss of Consortium Rs. 1,92,000/-
(2018) 18 SCC 130
(2021) 11 SCC 780
(Rs. 48,000/- x 4)
ii) Loss of Estate Rs. 18,000/-
iii) Funeral expenses Rs. 18,000/-
3. Total Compensation Rs. 23,91,840/-
POINT-(C):
34. The Tribunal has awarded 6% interest per annum. In
Kumari Kiran vs. Sajjan Singh and others,10 the Hon‟ble Apex
Court set aside the judgment of the Tribunal therein awarding
interest @ 6% as also the judgment of the High Court awarding
interest @7.5% and awarded interest @ 9% p.a. from the date of
the claim petition. In Rahul Sharma & Another vs. National
Insurance Company Limited and Others,11 the Hon‟ble Apex
Court awarded @ 9% interest p.a. from the date of the claim
petition. Also, in Kirthi and another vs. Oriental Insurance
Company Limited,12 the Apex Court allowed interest @ 9% p.a.
which is upheld.
(2015) 1 SCC 539
(2021) 6 SCC 188
(2021) 2 SCC 166
35. We do not find force in the submission of the learned counsel
for the respondent No.2, that the interest be not enhanced as
there would be more liability for payment which was initially not
imposed on it by the Tribunal, and if it was so made liable the
payment of compensation with interest @ 6% would have been
made. We are of the view that once the claimants are entitled for
the interest @ 9% per annum and the liability is of the insurer to
pay the compensation amount, the claimants cannot be denied
just rate of interest as per the settled law. We award interest @
9% p.a from the date of claim petition till payment.
36. In view of above consideration, our conclusions are and we
hold, as under:-
'Point-A': The insurance company shall be liable to pay
compensation to the claimants.
'Point-B': The claimants are entitled to the compensation of
Rs.23,91,840/- as per para No.33 of this judgment with interest.
'Point-C': The rate of interest deserves to be enhanced to 9%
per annum.
37. IN THE RESULT:-
i). The appellants-claimants are awarded in total
Rs.23,91,840/- as compensation with interest thereon at 9% per
annum from the date of filing of the claim petition till the date of
realisation/payment.
ii). The respondents 1 and 2 are jointly and severally
liable to make the payment of the amount in total, as per this
judgment. The 2nd respondent shall deposit the amount with
interest within two months.
iii). The appellants-claimants shall be allowed to
withdraw the compensation amount with interest in the
following proportion:
a) 1st appellant-widow shall be entitled to Rs.8,91,840/-
with interest @ 9% p.a thereon,
b) 2nd, 3rd and 4th appellants, the daughters shall be
entitled to Rs.5,00,000/- each as per the award with
interest @ 9% p.a thereon.
iv). The appeal is partly allowed with costs through out in
favour of the claimant/appellant No.1.
As a sequel thereto, miscellaneous petitions, if any
pending, shall also stand closed.
____________________
RAVI NATH TILHARI, J
__________________
NYAPATHY VIJAY, J
Dated:10.09.2024
Note:
L.R copy to be marked.
B/o.
Gk
THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
&
THE HON'BLE SRI JUSTICE NYPATHY VIJAY
M.A.C.M.A.No.2988 OF 2012
Date:10.09.2024.
Gk.
