Chattisgarh High Court
Iffco-Tokio Genral Insurance Company ... vs Smt. Chandrawati Verma on 2 May, 2025
1
Digitally signed
by BHOLA
NATH KHATAI
Date:
2025.05.05
16:32:05 +0530
2025:CGHC:20256
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
MAC No. 792 of 2019
IFFCO-TOKIO Genral Insurance Company Ltd. Through Branch
Manager, 1st Floor Galaxy Heights, Near ICICI Bank, Vyapar
Vihar, Bilaspur, Chhattisgarh ................ (Insurer Of Motor Cycle
No. C.G. 28 3209)
... Appellant
versus
1. Smt. Chandrawati Verma W/o Late Hiralal Verma Aged About 32
Years Jevra, Kawarkanpa, Bemetara, Currently R/o Village Koni,
Thana Koni, Tahsil And Distrtict- Bilaspur, Chhattisgarh ............
(Claimant W/o Deceased)
2. Ku. Mahadevi Verma D/o Late Hiralal Verma Aged About 3 Years
Jevra, Kawarkanpa, Bemetara, Currently, R/o Village Koni, Thana,
Koni, Tahsil And Distrtict- Bilaspur, Chhattisgarh ............
(Claimant No.2 D/o Deceased)
3. Devendra Kumar Verma S/o Late Hiralal Verma Aged About 5
Years Jevra, Kawarkanpa, Bemetara, Currently, R/o Village Koni,
Thana, Koni, Tahsil And Distrtict- Bilaspur, Chhattisgarh ............
(Claimant No.3 S/o Deceased)
4. Ramnath Lodhi S/o Late Hagru Ram Aged About 63 Years Jevra,
Kawarkanpa, Bemetara, Currently, R/o Village Koni, Thana, Koni,
Tahsil And Distrtict- Bilaspur, Chhattisgarh ............ (Claimant No.4
F/o Deceased)
2
5. Sukhnandan Sahu S/o Bakhru Sahu R/o Village Karhi Dhapai,
P.O. Pandarbhattha, Tahsil And District- Mungeli,
Chhattisgarh ............... (Owner Of Platina Motor Cycle No. C.G.
28-3209)
... Respondent(s)
For Appellant : Mr. Vaibhav Shukla, Advocate, along with
Ms. Shrejal Gupta, Advocate
For Respondent(s) : None
Hon'ble Shri Justice Sanjay Kumar Jaiswal
Order on Board
02/05/2025
1. It is an insurer's appeal under section 173 of the Motor Vehicles Act
challenging the award dated 26.10.2018 passed by the Motor
Accident Claims Tribunal, Bilaspur (CG) in MACT No.98/2017. By
the impugned award, learned Tribunal has awarded Rs.10,78,000/-
as compensation to the respondents 1 to 4/claimant on account of
death of deceased Hiralal Verma in an unfortunate accident which
took place on 31.05.2016 on account of rash and negligent driving
of driver Santosh Sahu by offending motorcycle bearing
Registration No. C.G. 28/3209, owned by respondent No.5
Sukhnandan Sahu and insured with the appellant/insurance
company.
2. The offending vehicle Bajaj Platina No. CG-28-3209 was being
driven by Santosh. As Santosh also died in the accident, the
offence registered against him was closed by the police.
3. In the case, deceased Hiralal Verma was driving motorcycle No. CG
07 LN 0461 and after his death in the accident, a claim application
was filed by his legal representatives. The insurance company of
the offending vehicle i.e. the appellant herein took the defence that
since the driver Santosh did not possess a valid and effective
driving license, the insurance conditions were violated. However,
the Tribunal held that the burden of proof was on the appellant -
insurance company which failed to prove the breach of insurance
conditions. The said finding is challenged in this appeal.
4. Learned counsel for the appellant argues that as per Section 134C
of the Motor Vehicles Act, no information has been given by the
driver to the appellant - insurance company regarding the accident.
Since, in the case, the driver of the offending vehicle, Santosh, has
died, the appellant insurance company would not get any benefit of
the provisions of section 134C of the Motor Vehicles Act.
5. As far as the question of driver Santosh having a valid and effective
driving license is concerned, it is noteworthy that driver Santosh
has also died and the crime registered against him has been closed
by the police. There is no mention in the documents submitted by
the claimants party that any driving license in the name of driver
Santosh has been seized. In the written statement submitted by
Sukhnandan, the owner of the offending vehicle, there is no clear
information that driver Santosh had a valid and effective driving
license to drive the offending vehicle at the time of accident. He has
also not appeared as a witness. As such, the owner had not taken
reasonable care to check whether driver Santosh possessed a
valid and effective driving licence before handing over the offending
motorcycle to him.
6. In the matter of Pappu and Others Vs. Vinod Kumar Lamba and
Another reported in 2018 (3) SCC 208, in respect of the burden of
proof regarding a valid license, the Hon'ble Supreme Court has
held that the onus would shift on the Insurance Company only after
the owner of the offending vehicle pleads and proves the basic fact
within his knowledge that the driver of the offending vehicle was
having a valid driving licence at the relevant time and observed as
follows:
"12. This Court in the case of National
Insurance Co. Ltd. Vs. Swaran Singh and
Ors., (2004) 3 SCC 297, has noticed the
defences available to the Insurance Company
under Section 149(2)(a)(ii) of the Motor Vehicles
Act, 1988. The Insurance Company is entitled to
take a defence that the offending vehicle was
driven by an unauthorised person or the person
driving the vehicle did not have a valid driving
licence. The onus would shift on the Insurance
Company only after the owner of the offending
vehicle pleads and proves the basic facts within
his knowledge that the driver of the offending
vehicle was authorised by him to drive the
vehicle and was having a valid driving licence at
the relevant time.
13. In the present case, the respondent No.1
owner of the offending vehicle merely raised a
vague plea in the Written Statement that the
offending vehicle DIL-5955 was being driven by a
person having valid driving licence. He did not
disclose the name of the driver and his other
details. Besides, the respondent No.1 did not
enter the witness box or examine any witness in
support of this plea. The respondent No.2
Insurance Company in the Written Statement has
plainly refuted that plea and also asserted that
the offending vehicle was not driven by an
authorised person and having valid driving
licence. The respondent No.1 owner of the
offending vehicle did not produce any evidence
except a driving licence of one Joginder Singh,
without any specific stand taken in the pleadings
or in the evidence that the same Joginder Singh
was, in fact, authorised to drive the vehicle in
question at the relevant time. Only then would
onus shift, requiring the respondent No.2
Insurance Company to rebut such evidence and
to produce other evidence to substantiate its
defence. Merely producing a valid insurance
certificate in respect of the offending Truck was
not enough for the respondent No.1 to make the
Insurance Company liable to discharge his
liability arising from rash and negligent driving by
the driver of his vehicle. The Insurance Company
can be fastened with the liability on the basis of a
valid insurance policy only after the basic facts
are pleaded and established by the owner of the
offending vehicle - that the vehicle was not only
duly insured but also that it was driven by an
authorised person having a valid driving licence.
Without disclosing the name of the driver in the
Written Statement or producing any evidence to
substantiate the fact that the copy of the driving
licence produced in support was of a person
who, in fact, was authorised to drive the
offending vehicle at the relevant time, the owner
of the vehicle cannot be said to have extricated
himself from his liability. The Insurance Company
would become liable only after such foundational
facts are pleaded and proved by the owner of the
offending vehicle."
7. In the case of Nirmala Kothari v. United India Insurance
Company Limited, (2020) 4 SCC 49, the Hon'ble Supreme Court
has clearly held that the owner has to check whether the driver has
a valid driving licence or not, thereafter he has to satisfy himself as
to the competence of the driver and if satisfied in that regard also, it
can be said that the owner had taken reasonable care in employing
a person who is qualified and competent to drive the vehicle. In
Para - 9, 10 & 12 it has been observed as under:
"9. Having set forth the facts of the present case,
the question of law that arises for consideration is
what is the extent of care/diligence expected of
the employer/insured while employing a driver?
To answer this question, we shall advert to the
legal position regarding the liability of the
Insurance Company when the driver of the
offending vehicle possessed an invalid/fake
driving licence. In the case of United India
Insurance Co. Ltd. Vs. Lehru & Ors. a two
Judge Bench of this court has taken the view that
the Insurance Company cannot be permitted to
avoid its liability on the ground that the person
driving the vehicle at the time of the accident was
not duly licenced. It was further held that the
willful breach of the conditions of the policy
should be established. The law with this respect
has been discussed in detail in the case of Pepsu
RTC vs. National Insurance Co. We may
extract the relevant paragraph from the
Judgment: (Pepsu case, (2013) 10 SCC p. 223,
para 10)
"10. In a claim for compensation, it is certainly
open to the insurer under Section 149(2)(a)(ii)
to take a defence that the driver of the vehicle
involved in the accident was not duly licensed.
Once such a defence is taken, the onus is on
the insurer. But even after it is proved that the
licence possessed by the driver was a fake
one, whether there is liability on the insurer is
the moot question. As far as the owner of the
vehicle is concerned, when he hires a driver,
he has to check whether the driver has a valid
driving licence. Thereafter he has to satisfy
himself as to the competence of the driver. If
satisfied in that regard also, it can be said that
the owner had taken reasonable care in
employing a person who is qualified and
competent to drive the vehicle. The owner
cannot be expected to go beyond that, to the
extent of verifying the genuineness of the
driving licence with the licensing authority
before hiring the services of the driver.
However, the situation would be different if at
the time of insurance of the vehicle or
thereafter the insurance company requires the
owner of the vehicle to have the licence duly
verified from the licensing authority or if the
attention of the owner of the vehicle is
otherwise invited to the allegation that the
licence issued to the driver employed by him
is a fake one and yet the owner does not take
appropriate action for verification of the matter
regarding the genuineness of the licence from
the licensing authority. That is what is
explained in Swaran Singh's case (supra). If
despite such information with the owner that
the licence possessed by his driver is fake, no
action is taken by the insured for appropriate
verification, then the insured will be at fault
and, in such circumstances, the insurance
company is not liable for the compensation."
10. While the insurer can certainly take the defence
that the licence of the driver of the car at the time of
accident was invalid/fake however the onus of proving
that the insured did not take adequate care and
caution to verify the genuineness of the licence or
was guilty of willful breach of the conditions of the
insurance policy or the contract of insurance lies on
the insurer.
12. While hiring a driver the employer is expected to
verify if the driver has a driving licence. If the driver
produces a licence which on the face of it looks
genuine, the employer is not expected to further
investigate into the authenticity of the licence unless
there is cause to believe otherwise. If the employer
finds the driver to be competent to drive the vehicle
and has satisfied himself that the driver has a driving
licence there would be no breach of 149(2)(a)(ii) and
the Insurance Company would be liable under the
policy. It would be unreasonable to place such a high
onus on the insured to make enquiries with RTOs all
over the country to ascertain the veracity of the
driving licence. However, if the Insurance Company is
able to prove that the owner/insured was aware or
had notice that the licence was fake or invalid and still
permitted the person to drive, the insurance company
would no longer continue to be liable."
8. In the light of the aforesaid principle of law laid down by their
Lordships of the Supreme Court, the burden of proof was on the
owner to prove that he had given the vehicle to a driver holding a
valid and effective license. In this case, no particulars have been
produced by owner Sukhnandan regarding driving license of driver
Santosh. The owner has not even examined himself as a witness.
9. Rahul Kaushik has been examined on behalf of the insurance
company who has stated that he had sent a notice (Exhibit D-2)
through registered post to owner Sukhnandan demanding the
vehicle documents and driving licence of the driver. But despite the
said notice, no driving license of driver Santosh was produced nor
any information was given by owner Sukhnandan. Therefore, this
Court finds that the burden which was primarily on the owner has
not been discharged by him whereas the insurance company,
while discharging the burden on its part, had demanded the driving
licence of the driver from the owner, which has not been made
available to insurance company. In view of the same, it is held that
at the time of the accident, driver Santosh did not have a valid and
effective driving license due to which the terms and conditions of
insurance have been violated. Hence, the conclusion of the
Tribunal regarding liability is not found to be proper and it is held
that the insurance company is not liable for payment of
compensation.
10. However, from the record it is clear that the offending vehicle was
duly insured with the Insurance Company but due to breach of
policy conditions the appellant-Insurance Company has been
exonerated from its liability. Considering the principles laid down by
the Hon'ble Supreme Court in the case of Amrit Paul Singh and
Another Vs. Tata AIG General Insurance Company Limited and
others reported in (2018) 7 SCC 558, this Court is of the opinion
that in the larger interest of justice it would be appropriate to pass
an order of pay and recover.
11. Accordingly, it is directed that the Insurance Company of the
offending vehicle shall first pay the compensation awarded to the
claimants and then recover the same from the registered owner
(respondent No.5 Sukhnandan Sahu) of the vehicle in question.
12. In the result, the appeal is partly allowed to the extend indicated
herein-above.
13. Records of the Tribunal along with a copy of this order be sent back
forthwith for compliance and necessary action, if any.
Sd/-
(Sanjay Kumar Jaiswal)
JUDGE
Khatai
