Delhi High Court
National Insurance Company Ltd vs Shamsher Singh & Ors. on 30 August, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 30th August, 2012
+ MAC. APP. 568/2008
NATIONAL INSURANCE COMPANY LTD....... Appellant
Through: Mr. Pankaj Seth, Adv.
versus
SHAMSHER SINGH & ORS. ..... Respondents
Through Nemo.
+ MAC. APP. 608/2008
NATIONAL INSURANCE COMPANY LTD....... Appellant
Through: Mr. Pankaj Seth, Adv.
versus
SHAMSHER SINGH & ORS. ..... Respondents
Through Nemo.
+ MAC. APP. 612/2008
NATIONAL INSURANCE COMPANY LTD....... Appellant
Through: Mr. Pankaj Seth, Adv.
versus
SUMAN LATA & ORS. ..... Respondents
Through Nemo.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
MAC. APP. 568, 608 & 612/2008 Page 1 of 9
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. These three Appeals arise out of a common judgment dated 04.07.2008
passed by the Motor Accident Claims Tribunal (the Claims Tribunal)
whereby three Claim Petitions titled Shamsher Singh & Ors. v. Suraj
Bhan & Ors. (Suit No.248/2001), Shamsher Singh v. Suraj Bhan & Ors.
(Suit No.249/2000) and Smt. Suman Lata & Ors. v. Suraj Bhan & Ors.
(Suit No.250/2001) were decided and compensation was awarded in
favour of the Claimants.
2. The only ground of challenge is that the Appellant Insurance Company
by examining R4W1 Akshaya Kumar Ramtaraya proved that the initial
driving licence (issued in the year 1984), held by the First Respondent
Suraj Bhan, who was the driver of the bus No.HR-39-4628 at the time of
the accident on 07.05.2001, was fake. Thus, it is contended that the
subsequent renewal on the basis of the initial fake licence cannot validate
the forgery and even the subsequent licence would become invalid.
3. Before dealing with the legal question, a few facts need to be noticed.
First Respondent Suraj Bhan was an employee of the Haryana Govt. and
was employed as a driver under the General Manager, Haryana
Roadways, Bhiwani Depot.
4. The Claim Petitions were filed in the year 2001 immediately after the
accident. The written statement was filed by the First Respondent (Suraj
Bhan, driver of the Haryana Roadways Bus) denying negligence on his
part; the accident, however, was admitted. Respondents No.2 and 3, that
is, General Manager Haryana Roadways also denied the negligence on
the part of the First Respondent. In Para 11 of the Preliminary Objection
it was specifically pleaded that the First Respondent was holding a valid
driving licence at the time of the accident and the liability if any, would
be of the Insurer (the Appellant herein) as the Haryana Roadways had
obtained an insurance policy which was valid from 14.03.2001 to
13.02.2002; which covered the period of accident. The Appellant, who
was Respondent No.4 before the Claims Tribunal, filed a written
statement after the written statement filed by Respondent No.1 and a joint
written statement filed by Respondents No.2 and 3. There was not even a
whisper by the Appellant that the driver did not possess a valid driving
licence or that there was a condition in the insurance policy that if the
driver did not possess a valid and effective driving licence, it would be
entitled to avoid the liability of the insurance policy.
5. After filing its written statement, the First Respondent preferred not to
contest the proceedings. He was ordered to be proceeded ex-parte. He
was still concerned about the case and the interest of his employer
Respondents No.2 and 3, he, therefore, examined himself as R2W1. He
deposed that the accident was not caused because of his negligence. He
stated that he was holding a valid driving licence at the time of the
accident. He also proved a photocopy of the driving licence as
Ex.R2W1/A. In cross-examination, the First Respondent testified that the
driving licence Ex.R2W1/A was issued on the basis of a previous licence
issued from Cuttack. The previous licence was issued by the MLO,
Cuttack in the year 1984. A suggestion was given to the First Respondent
that his previous driving licence was fake. Thus, it was for the first time
on 20.04.2007 that the Respondent Insurance Company without any
pleading tried to set up a case that the driving licence possessed by the
driver was on the basis of a previous driving licence issued by the
Cuttack Transport Authority was fake.
6. The Appellant Insurance Company produced R4W1 Akshay Kumar
Ramtaraya who stated that the driving licence No.S-11572/DL dated
21.08.1984 Ex.R2W1/A has not been issued by them as per their record.
He also produced copy of the driving licence issued by MLO Cuttack on
21.08.1984. The testimony of this witness was not challenged in cross-
examination by Respondents No.1 to 3. No evidence was produced by
Haryana Roadways, not even a plea was taken that it was mandatory for a
driver to take a test before one could be employed with the Haryana
Roadways. No plea was taken that the driving licence produced by the
First Respondent was verified or that it was believed to be genuine and
that the First Respondent had qualified the test. It goes without saying
that it is a normal practice to undertake a test for appointment as a driver
for any Govt. job.
7. The Claims Tribunal, however, rejected R4W1's testimony on the ground
that all the licences issued on 21.07.1984 are for motorcycle and LTV as
per the driving licence Register Ex.R4W1/1 and therefore, there must be
some other register maintained by RTO, Cuttack Authority for issuance
of the licence for HTV. Para 32 of the impugned order is extracted
hereunder:-
32 It is argued on behalf of insurance company/R-4 that offending
vehicle was being driven by respondent no.1 without a valid D/L,
hence, they are not liable to pay the compensation. It is argued on
behalf of petitioners that liability remains with that of the
respondent no.4/insurance company to pay the compensation and
they can recover the same from the insured in case it is found that
vehicle was driven under invalid driving licence with the
knowledge of the insured. In order to prove that licence was fake
respondent no.4/insurance company has examined R4W1, and also
summoned the record from the RTO, Katak . R4W1 had brought
the record of 1984-1985 from April and has proved on record the
licences issued on 21.7.1984 as Ex.R4W1/A (10 pages). He has
submitted that D/L Ex.R2W1/A is fake. The driver has examined
himself. He has stated that he was having valid D/L at the time of
accident and has proved it as Ex.R2W1/A. He has submitted that
he got the licence from Katak and in the year 1984 and on the
basis of that D/L he got it issued /renewed from Hissar. The
insurance company has examined witness from RTO, Katak. He
has proved on record the register in which the D/L for motorcycle
and LTV have been issued Ex.R4W1/A (10 pages). It is clear from
these documents that no D/L of HTV had been issued vide this
register. It clearly shows that Authority must be maintaining two
separate registers for licences of LTV, motorcycle and for HTV.
D/L of respondent no.1/driver of offending vehicle was for HTV
and insurance company has not summoned any register of the
relevant period by which licences for HTV had been issued. It is
well known fact that the authorities maintains two separate
registers one for LTVs and two-wheelers and other for HTVs. It
clearly shows that insurance company had failed to discharge the
burden placed upon them under law."
8. As stated earlier, R2W1's testimony was not challenged. Thus, the
Claims Tribunal's findings that there must be another register for driving
licences for HTV, to say the least, was perverse. I am not able to
subscribe to the views of the Claims Tribunal.
9. But, at the same time, the Insurance Company was under an obligation to
prove its defence by legal evidence. As stated earlier, The Appellant
Insurance Company did not take up the plea that the First Respondent's
initial driving licence was fake. It also did not try to amend its written
statement by taking a specific plea in this regard. It was only at the end
of the day after seven years when the First Respondent himself proved his
driving licence that the Appellant Insurance Company came up with the
plea that the driving licence was fake. The Insurance Company did not
even proved the insurance policy. The question for consideration is, can
in such a situation, the Insurer avoid its liability?
10. Under Section 147 of the Motor Vehicles Act, 1988 (the Act) every
owner of a motor vehicle is under obligation to obtain a policy of
insurance. The liability of Insurer was made unlimited with the
introduction of the Motor Vehicles Act, 1988.
11. Section 149 of the Act enjoins an Insurer to satisfy the judgments and
award against persons insured in respect of a third party risk and entitles
it to raise limited defence as mentioned in sub-Section (2) of Section 149
of the Act. Sub-Section (4) prohibits an Insurer to impose any condition
in the Insurance policy except as mentioned in Section 149 (2) of the Act.
Section 149 (2) and (4) of the Act are extracted hereunder:-
"149. Duty of insurers to satisfy judgments and awards against
persons insured in respect of third party risks.
(1) .....................
(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 of 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) that there has been a breach of a specified condition of the
policy, being one of the following conditions, namely:-
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date of the
contract of insurance a vehicle not covered by a permit to ply for
hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle
is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor
cycle; or
(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 disqualification; or
(iii) a condition excluding liability for injury caused or contributed
to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the
nondisclosure of a material fact or by a representation of fact
which was false in some material particular.
(3) ..............................
(4) Where a certificate of insurance has been issued under sub-
section (3) of section 147 to the person by whom a policy has been
effected, so much of the policy as purports to restrict the insurance
of the persons insured thereby by reference to any condition other
than those in clause (b) of sub-section (2) shall, as respects such
liabilities as are required to be covered by a policy under clause
(b) of sub-section (1) of section 147, be of no effect:
Provided that any sum paid by the insurer in or towards the
discharge of any liability of any person which is covered by the
policy by virtue only of this subsection shall be recoverable by the
insurer from that person."
12. Thus, it would be seen that the Insurance Company can put a condition
for excluding the use of the vehicle for hire or reward where the vehicle is
not covered by a permit to ply it for hire or reward or for organized racing
and speed testing or for any purpose not allowed by the permit. It can also
impose the condition excluding driving by a named person or by any
person who is not duly licensed. The liability under the contract of
insurance depends upon the terms of the contract. The owner can always
take any policy for extending the risk by paying an additional premium. I
am fortified in this view by the Supreme Court report in National
Insurance Company Ltd. v. Prembai Patel (2005) 6 SCC 172; where a
three Judge Bench of the Supreme Court held that under Section 147
(1)(b) of the Act the owner is under obligation to take a policy to cover
the risk of an employee arising only under the Workmen's Compensation
Act, 1923. The owner could take any policy for extending the risk by
paying an additional premium.
13. In the instant case, as stated earlier, the Insurance Company not only
failed to give any notice to the Insurer (Haryana Roadways) to produce
the policy of insurance but also failed to prove the insurance policy in its
possession.
14. Thus, the Appellant failed to prove that it had imposed any condition as
laid down under Section 149 (2) (a) (ii) of the Act.
15. In Tejinder Singh Gujral v. Inderjit Singh (2007) 1 SCC 508, the
Insurance Company failed to prove the policy of insurance. The Supreme
Court approved the finding of the High Court where a presumption was
taken that the liability of the Insurer was unlimited. Similarly, in Chandro
Devi & Ors. v. Jit Singh & Ors., 1989 ACJ 41, this Court held that in the
absence of proof of insurance policy by the Insurance Company, it shall
be presumed that the liability of the Insurance Company was unlimited.
16. Since the Appellant Insurance Company failed to prove that its policy
was subjected to the conditions as stated earlier, it cannot be permitted to
say that the Respondents were guilty of breach of the condition of policy.
17. The Appeals therefore, have to fail; the same are accordingly dismissed.
18. The statutory deposit of `25,000/-, if any, shall be refunded to the
Appellant Insurance Company.
19. Pending Applications stand disposed of.
(G.P. MITTAL)
JUDGE
AUGUST 30, 2012
vk
