The New India Assurance Co. Ltd. vs Smt. Ansuiya Devi & Ors.
2008 Latest Caselaw 1659 Del

*      HIGH COURT OF DELHI : NEW DELHI

    MAC App. No.443 of 2008 & CM No.11245/2008



%            Judgment reserved on: 4th September, 2008

             Judgment delivered on:15th September, 2008


The New India Assurance Co. Ltd.,
415, Main Mathura Road,
Badarpur, New Delhi-44.

Also at:
A-58-59, Sector 16,
Noida,
Gautam Budh Nagar - 201301 (UP)          ....Appellant

                      Through: Mr. P.K. Seth, Adv.


                           Versus

1) Smt. Ansuiya Devi,
   W/o. Lt. Sh. Gobind Singh Negi,

2) Master Ashish Negi,
   S/o. Lt. Sh. Gobind singh Negi,

3) Sh. Kalam Singh Negi,

4) Smt. Leela Devi,

Respondents No.1 to 4,
R/o. 2/48, Prem Nagar,
Near K.M. Pur, New Delhi.

Also at:



MAC App.No.443/2008                           Page 1 of 17
 Village Saur, P.O. Devo Prayag,
Pauri Garwal, Uttarakhand.

5) Sh. Dhani Ram,
S/o. Sh. Tek Chand,
R/o. D-988, Dr. Ambedkar Nagar,
New Delhi.

6) Sh. Harender Singh @ Bijender Singh,
S/o. Sh. Mahender Singh Pradhan,
R/o. Village Ali Badarpur, New Delhi

7) Sh. Tejveer Singh, S/o. Sh. Ram Singh,
R/o. Village Dadupur, Distt. Bulan Shahar, U.P.

                                        ...Respondents

                      Through: Nemo.

Coram:
HON'BLE MR. JUSTICE V.B. GUPTA

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                    Yes

2. To be referred to Reporter or not?                 Yes

3. Whether the judgment should be reported
   in the Digest?                                     Yes

V.B.Gupta, J.

The present appeal under Section 173 of the

Motor Vehicles Act, 1988 (for short as „Act‟) has been

filed by the Insurance Company against the impugned

award dated 7th May, 2008 passed by Sh. J.P.S. Malik,

Judge, MACT (for short as „Tribunal‟), New Delhi.

2. Brief facts of this case are that on 25th March,

1998, deceased Gobind Singh Negi was travelling in

bus No.DL-IP-6046 from Minto Road to Safdarjung

Airport bus stand for going to Prem Nagar there from.

3. It is alleged that the bus was not stopped at

Safdarjung Airport bus stand by the driver and when

deceased requested for stopping the bus, the driver

applied brakes at some distance after crossing the bus

stand. Due to the sudden jerk, the deceased who was

standing nearby the front gate to get down of the bus,

fell down from the bus and was run over and crushed

under the wheels of the bus. It is further alleged that

on falling down of the deceased, the bus driver instead

of stopping the bus, speeded up the bus and took away

the bus without caring for the safety of the deceased.

The bus was driven by respondent No.7/Tejveer Singh

and thus the accident was caused due to rash,

negligent and careless driving of this respondent.

4. Respondent No.5/Dhani Ram was the registered

owner of the bus at the time of the accident, whereas

respondent No.6/Harender Singh was having a Power

of Attorney of the registered owner and the bus was

insured with the appellant/Insurance Company.

5. Respondent No.5/Dhani Ram could not be served

by ordinary process and was ordered to be served by

publication. Publication was effected but none

appeared on his behalf and as such he was proceeded

ex-parte by the trial court.

6. Appearance was given on behalf of respondents

No.6 and 7 on 24th October, 2005 before the trial court

and time was sought for filing of the written statement.

Later on, they did not appear nor did they file the

written statement and they were also proceeded ex-

parte.

7. The appellant/Insurance Company however has

filed its written statement in which it has admitted that

the vehicle in question was insured with it. However,

it has been pleaded that the driver of the offending bus

was not having a valid driving licence on the date of

accident and as such the Insurance Company is not

liable to pay any compensation.

8. Vide impugned judgment, an award for a sum of

Rs.4,61,370/- along with simple interest @ 9% p.a.

from the date of filing of the petition till realization was

passed in favour of the claimants and against all the

respondents. It was further held, that the appellant

being the insurer of the offending vehicle, is liable to

discharge the liability.

9. Aggrieved with the impugned judgment passed by

the Tribunal, the Insurance Company has filed the

present appeal.

10. It has been contended by counsel for the

appellant that the Tribunal has completely failed to

take into consideration that the driver and owner of

the offending vehicle did not appear to contest the

petition before the Tribunal and were proceeded ex

parte and therefore, the stand taken by the appellant

in its written statement that the driver at the time of

accident was not holding a valid driving licence is

deemed to be admitted by the owner of the vehicle and

therefore, the appellant was not required to produce

any evidence to prove that the licence held by the

driver at the time of accident was fake.

11. Further, the Tribunal has also ignored the

material fact available on record that the appellant had

summoned the concerned RTO a number of times as a

witness but they failed to turn up and therefore, the

appellant made efforts to produce the witness from the

concerned Licencing Authority to prove that the

licence held by the driver at the time of accident was

fake.

12. Thus in the facts of the present case, the Tribunal

has erred in law and facts in holding that no value can

be attached to the testimony of R4W1 in the absence of

any witness from the Transport Authority that the

licence held by the respondent no.7 at the time of

accident was fake and therefore, the

appellant/Insurance Company being the insurer of the

offending vehicle to pay the entire amount of

compensation without giving the appellant recovery

rights.

13. Ld. Counsel for the appellant has relied upon the

decision of the Apex Court in National Insurance Co.

Ltd. v. Geeta Bhat & Ors., 2008 (4) SCALE in

support of its contentions.

14. Appellant in its written statement has taken

certain preliminary objections. In objection no.2 it is

stated;

"That the driver Sh. Tejveer Singh was holding D/L No T-4084/BSR/96 issued from RTO Bulandshahr. As per

the report of Ms Vidula Sharma dated 28-4-2005 no such licence was issued by RTO Bulandshahr and since the driver of the offending vehicle was not having a valid driving licence on the date of accident as such the answering respondent is not liable to pay any compensation to the petitioner."

15. Section 149 of the Act provides as follows;

"149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-

(1) x x x (2) No sum shall be payable by an insurer under sub-

section (1)in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court, or as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be

made a party thereto and to defend the action on any of the following grounds, namely:

                      (a)          x      x     x
             x
                            (i)    x      x     x
                            x
                            (ii)      a    condition
                            excluding driving     by
                            a named person or
                            persons or by any
                            person who is not duly
                            licensed, or by any
                            person who has been
                            disqualified for holding
                            or obtaining a driving
                            licence    during    the
                            period                of
                            disqualifications;

16. In a plethora of cases, the Apex Court and various

High Courts have held that if there is a condition in the

insurance policy that only a licensed driver is to drive

the vehicle, the insurance company would not be liable

in case there is a breach.

17. There could be no doubt that in order to escape

liability, not only it should be proved that the driver of

the vehicle was not having a licence at the time of the

accident, but also the insurance company should prove

that the driver was disqualified from holding or

obtaining a licence or never had any licence at all.

Merely proving that on the date of the accident, the

driver did not have a licence, is not enough to hold that

the insurance company is not liable for claim. The onus

of proving that the driver of the vehicle never had a

licence or was disqualified from holding a licence is on

the insurance company.

18. The Apex Court in Narcinva V. Kamat and Anr.

v. Alfredo Antonia Doe Martins and Ors. [1985

ACJ 397], observed;

"When the Insurance Company complains of a breach of the term of contract, which would permit it to disown its liability under the contract of insurance, the burden is squarely on the Insurance Company to prove that the breach has been committed by the other party to the contract. The test in such a situation would be 'who would fail, if no such evidence is led'. With this principle of law in view, the evidence has to be judged. Merely non-production of licence or non-examination of the driver of the vehicle is not enough nor any adverse inference can be drawn against the

person holding that because of non- examination of the driver or non- production of the licence, the burden is discharged by a mere question in cross examination nor the owner is under any obligation to furnish the evidence so as to enable the Insurance Company not to riggle out its liability under the contract of insurance."

19. In National Insurance Co. Ltd. v. Geeta Bhat

& Ors. (supra), cited by the counsel for appellant, the

Apex Court has observed as under;

"The question in regard to the statutory obligation on the part of an owner of a vehicle to obtain an insurance policy to cover a third party risk, vis-`a-vis possession of a fake licence by a driver who had been employed bona fide by the owner thereof had come up for consideration before this Court United India Insurance Co. Ld. v. Lehru and Ors. [(2003) 3 SCC 338]. Lehru's case was noticed in great details by a Three Judge Bench of this Court in National Insurance Co. Ltd. v. Swaran Singh[(2004) 3 SCC 297], holding:

"92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the

question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru case the matter has been considered in some detail.

We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever."

20. On this issue, the findings of the Tribunal are as

under;

"As regard the liability, R4/Insurance company had taken the stand that driving licence of R3 was found to be fake on verification. However, no witness from transport authority has

been summoned by R4/Insurance company and there is no report on record having been given by the transport authority from where driving licence was issued to R3. Only the report of the investigator has been placed on record by the Insurance company through witness R4W1/Harendar Sharma, assistant and even the Investigator has not been examined. In the circumstances, no value can be attached to the testimony of R4W1, Sh. Harender Sharma, which is rejected."

21. Before the Trial Court, for the first time the

matter was listed for respondents‟ evidence for 21st

August, 2007.

22. On 21st August, 2007, Sh.Harender Sharma,

Assistant from the appellant-Insurance Company was

examined as R4W1. No other witness was present and

the matter was adjourned to 17th October, 2007 for

remaining evidence.

23. On 17th October, 2007 no witness of appellant-

Insurance Company was present nor any witness was

summoned. More time was sought for producing the

witnesses. Last opportunity was given for producing

the evidence.

24. On 14th January, 2008, again no witness of the

appellant was present. More time was sought. Last

and final opportunity was granted subject to costs of

Rs.1,000/-.

25. Again on 11th February, 2008, no witness was

present and the process issued was not received back

and matter was adjourned for 4th April, 2008.

26. On that day, no witness of appellant-Insurance

Company was present nor any witness had been

summoned. The Trial Court held that sufficient

opportunity has already been given to the Insurance

Company but honest efforts are not being made by

Insurance Company to summon or examine witnesses

and as such evidence of the appellant in the

circumstances was closed.

27. Thus, the trial court record clearly shows that

despite, various opportunities granted to the

appellant/Insurance Company, it did not produce

sufficient evidence.

28. As stated above, appellant in its written statement

has taken the plea that as per report of their

investigator, Ms.Vidula Sharma, no such license was

issued by RTO, Bulandshahr.

29. Though R4W1 in his statement has stated that the

driving licence was got verified through their

investigator, Ms.Vidula Sharma, Advocate and her

report is Mark B. However, for reasons best known to

appellant, it has not examined investigator, Ms.Vidula

Sharma nor has proved her report, in accordance with

law.

30. Apart from the plea taken in the written statement

that driver of the offending vehicle was not holding a

valid and effective driving licence, the appellant did

nothing to substantiate that the driver at the pertinent

time, was not having a valid driving licence. The

Insurance Company has not examined any witness from

the concerned Transport Authority to prove the same.

31. Thus, the contentions regarding the fake driving

licence made by the appellant counsel are rejected.

32. In view of the above discussion, I do not find any

infirmity or illegality in the impugned judgment passed

by the Tribunal. The compensation awarded by the

Tribunal is just, fair and equitable.

33. Accordingly, the present appeal filed by the

appellant is hereby dismissed with the costs of

Rs.5,000/-.

34. Appellant is directed to deposit the costs of

Rs.5,000/- by way of cross-cheque in the name of

Registrar General of this Court within four weeks.

35. List on 24th October, 2008 for compliance.

36. Trial Court record be sent back.

September 15, 2008 V.B.GUPTA, J.

rs