Delhi High Court
Oriental Insurance Company Ltd. vs Baby Komal & Anr. on 27 November, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 13th August, 2012
Pronounced on: 27th November, 2012
+ MAC.APP. 167/2008
ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
BABY KOMAL & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 168/2008
ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SOMPAL & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 169/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
RAM AVTAR & ANR. ..... Respondents
MAC APP 167/2008 Etc. Page 1 of 33
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 170/2008
ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
BISHAMBAR & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 171/2008
ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. CHEENA & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 172/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
MAHINDER & ANR. ..... Respondents
MAC APP 167/2008 Etc. Page 2 of 33
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 173/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SOMPAL & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 197/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. SUMARTI DEVI & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimants.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 199/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. AMARWATI & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
MAC APP 167/2008 Etc. Page 3 of 33
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 200/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SHRI VIJENDER & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 201/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. SAVITRI & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 202/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
MAC APP 167/2008 Etc. Page 4 of 33
SMT. CHANDRA DEVI & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimants.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 203/2008
ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. PREMWATI & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimants.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 204/2008
ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. SANTOSH & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimants.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 205/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
MAC APP 167/2008 Etc. Page 5 of 33
versus
SOMPAL & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 209/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
MASTER ABHISHEK & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 210/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SURESH & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimants.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 211/2008
MAC APP 167/2008 Etc. Page 6 of 33
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
MASTER ANKIT & ANR. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
+ MAC.APP. 212/2008
THE ORIENTAL INSURANCE COMPANY LTD. ..... Appellant
Through: Mr. Joy Basu, Advocate
versus
SMT. AMARWATI & ORS. ..... Respondents
Through: Ms. Manjeet Chawla, Advocate for
Claimant.
Mr. P.K. Seth, Advocate for
Respondent/Tagore International School.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. These 19 Appeals (MAC APP.167/2008, 168/2008, 169/2008, 170/2008,
171/2008, 172/2008, 173/2008, 197/2008, 199/2008, 200/2008,
201/2008, 202/2008, 203/2008, 204/2008, 205/2008, 209/2008,
210/2008, 211/2008 and 212/2008) are directed against a common
judgment dated 30.11.2007 whereby the Appellant‟s plea of breach of the
terms and conditions of the policy in 19 Claim Petitions (in Suit Nos.
335/2007, 336/2007, 337/2007, 338/2007, 339/2007, 340/2007,
341/2007, 342/2007, 343/2007, 344/2007, 345/2007, 346/2007,
347/2007, 348/2007, 349/2007, 350/2007, 351/2007, 352/2007 and
353/2007) was rejected and the Claim Petitions were allowed.
2. Before turning to the legal question raised in the Appeals, I may delve
into the facts of the case and the plea taken by the respective parties.
3. Nineteen Claim Petitions were filed with the allegation that some
residents of Dakshinpuri, New Delhi had travelled to Gogamedi, for a
pilgrimage, in Swaraj Mazda No.DL-IV-2571, a school bus, on
19.08.1999. On 20.08.1999, they were on their return journey. At about
11:00 A.M. the bus reached near the Electricity Board Office, Bhadra. It
is alleged that Fazal Haque, the driver of the bus was driving the same in
a rash and negligent manner. While taking a turn near the Electricity
Board Office, the driver lost control of the bus which went off the road
and collided against a house resulting in grievous injuries to the
occupants. Some of the occupants succumbed to the injuries.
4. Respondent Tagore International School (the owner of the bus hereinafter
referred to as the „School‟) contested the Claim Petitions by way of filing
separate written statements. While denying negligence on the part of its
driver Fazal Haque (who died during pendency of the Claim Petitions)
the school took up the plea that the bus was sent to Kali Banga where
some of its students had gone to study the remains of Harappa, an ancient
civilization. In the evening of 18.08.1999 an intimation was received that
there was acute shortage of drinking water and food for the students. It
was decided to send some drinking water and food packets. On the next
day, the school arranged food packets and drinking water and stacked it
in the dicky of the earlier said bus. Later on, the school authorities came
to know that the bus met with an accident and a number of persons were
travelling in the said bus at that time. It was revealed that some poor
people had requested the driver for a lift up to Gogamedi where a
traditional fair was being organized, which was on way to Kali Banga.
On humanitarian grounds, the driver had offered them lift without any
charge or reward. The school took up the plea that neither the
management of the school nor any person from the school authorized the
driver to give lift or to allow any person to board the bus on the way.
5. The school also took up the plea that a number of Claim Petitions arising
out of the same accident filed before the Motor Accident Claims Tribunal
(the Claims Tribunal) Shahpura, District Jaipur were settled before the
Lok Adalat and, therefore, the Appellant Insurance Company was
estopped from denying its liability.
6. The Appellant Insurance Company (Respondent No.3 before the Claims
Tribunal) contested the Claim Petitions on the ground that the School (the
insured) committed breach of terms and conditions of the policy and was
therefore, not liable to pay any compensation to the Claimants. A plea
was also raised that since the Appellant had covered risk of 32 passengers
only and more than 32 passengers were found travelling in the bus at the
time of the accident, it would be liable to pay compensation (in case its
liability is proved) to not more than 32 passengers. This plea is not of
any consequence as it is admitted case of the parties that only 11 Claim
Petitions were filed before the Claims Tribunal, Shahpura and 19 before
the Claims Tribunal, Delhi.
7. On the basis of pleadings of the parties, the following issues were framed
by an order dated 06.05.2003.
"(i) Whether deceased Sh. Ramcharan suffered fatal injuries in an
accident which took place on 20.8.99 due to rash and negligent
driving of vehicle No.DL IV 2571, driven by R1 owned by R2
and insured with R3? OPP.
(ii) Whether R3 is not liable to pay compensation on account of
preliminary objections No.2 and 3, taken in its written
statement? OPR.
(iii) Whether Petitioner is entitled for compensation? If so, what
amount and from whom?
(iv) Relief."
8. Thereafter, by an order dated 23.08.2003 a preliminary issue was framed
which is treated as Issue No.(iii) and Issue No.(iii) was re-numbered as
Issue No.(iv). The same is extracted hereunder:-
"Whether Respondent No.3 is estopped from contesting the
petition for the reasons that 11 cases pertaining to the same
accident have already been settled by R.No.3, in the Court of Ld.
Motor Accident Claim Tribunal, Shahpura, Distt. Jaipur,
Rajasthan?"
9. On appreciation of evidence and while relying on State of Haryana
through Secretary Transport Chandigarh v. Sudesh Raizada & Ors. 1991
ACJ 54; State of Punjab v. Mehar Devi & Ors. 1990 ACJ 274 the Claims
Tribunal held that the finding on negligence having attained finality in a
connected case is binding in the subsequent case and cannot be
challenged in subsequent proceedings arising out of the same accident.
The Claims Tribunal further relied on a judgment of the Karnataka High
Court in Sandhya v. Karnataka State Road Transport Corporation 2000
ACJ 1565 where it was held that the finding on negligence as in an earlier
Claim Petition cannot be re-agitated being res judicata.
10. While dealing with the issue of liability, the Claims Tribunal held that the
onus was on the Appellant Insurance Company to prove that there was
breach of the terms and conditions of the Insurance Policy on the part of
the insured which the Appellant failed to establish. The Claims Tribunal
relied upon the report of the Supreme Court in Chaggan Lal Keshav Lal
Mehta v. Patel Narain Dass Hari Bhai AIR 1982 SC 121 and held that the
plea of breach of the terms and conditions of policy having not been
taken in the earlier Claim Petitions at Shahpura, the Appellant was
estopped from raising a plea of breach of terms and conditions of the
policy in this case as it cannot be permitted to shift stands in different
Claim Petitions. Thus, the Claim Petitions were allowed and various
amount of compensation were awarded in different Claim Petitions.
11. The finding on negligence is not challenged by the Appellant Insurance
Company. The same has, therefore, attained finality.
12. The quantum of compensation has also not been challenged by the
Appellant Insurance Company. However, some Appeals have been filed
by the Claimants for enhancement of compensation which are to be taken
up for disposal after decision of these Appeals.
13. The question for consideration in the instant Appeals are :-
(i) Whether the Appellant is estopped from raising plea of breach of
terms and conditions of policy on account of settlement of 11
Claim Petitions before the Claims Tribunal, Shahpura, Rajasthan.
(ii) If it is not estopped from raising such a plea, whether the Appellant
successfully proved the breach of the terms and conditions of the
policy.
QUESTION NO.1:
14. Section 149 of the Act enjoins the insurer of a motor vehicle to satisfy
judgments and awards against persons insured in respect of third party
risk when a policy of insurance is obtained in respect of any motor
vehicle. Sub-section 2 permits the insurer to avoid indemnification of the
insured in case of breach of the specified conditions of the policy as laid
down under Section 149 (2)(a) and (b) of the Act. Section 149(2) of the
Act is extracted herein:-
"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 organized 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 non-disclosure of a
material fact or by a representation of fact
which was false in some material
particular."
15. Section 66 of the Act makes it mandatory for owners of certain vehicles
to obtain permit in order to ply it in any public place. Sub-section 3,
which is in the shape of proviso to Section 66 of the Act exempts the
vehicles owned by Central Government/State Government etc. and those
used for govt. purposes and unconnected with any commercial enterprises
from obtaining the permit as stated in sub-section 1. This accident took
place on 19th August 1998. At that time Clause (h) of sub-Section 3
exempted educational institution to obtain any permit for any transport
vehicle owned by it provided the same was used solely for the purpose of
the educational institution. Clause (h) as it was on the statute book at the
relevant time (omitted w.e.f. 11th August 2000), reads as under:-
Section 66 (3):- The provision of sub section (1) shall not apply-
(h) to any transport vehicle owned by, and used
solely for the purposes of any educational
institution which is recognised by the Central of
State Government or whose managing committee
is a society registered under the Societies
Registration Act, 1860 (21 of 1860) or under any
law corresponding to that Act in force in any part
of India.
16. It is urged by the learned counsel for the Appellant that there cannot be
any estoppel against a statute. Even for waiver there has to be conscious
relinquishment of the right. The learned counsel argues that if for any
reason, the Appellant Insurance Company, either under some mistake or
for any other reason failed to take the defence of breach of the terms and
conditions of the policy on the part of the insured, it cannot be asked to
perpetuate the mistake particularly when the earlier claim petitions
(before Shahpura Court) were not decided on merits.
17. The Appellant‟s plea is that the school had allowed the bus to be used for
the purpose of carrying certain passengers on hire to a place called
Gogamedi. Thus, the school used the vehicle for a purpose other than
that of the educational institution; the school was, therefore, required to
have a permit as the exemption granted under Clause (h) mentioned
above vanished.
18. On the other hand, it is contended by Mr. P.K. Seth, learned counsel for
the school that since the school was exempted from obtaining any permit
there could not be any violation of Section 149 (2)(a)(i)(c) of the Act and
the Appellant ought to have proved that the bus was being used for hire
and reward under Section 149 (2)(a)(i)(c) of the Act in order to avoid the
liability.
19. I would examine a little later whether the school required the permit if the
school bus was being used for a purpose other than that of the educational
institution. At this juncture, I would deal with the issue whether the
Appellant is estopped from raising a plea of breach of the terms and
conditions of the policy.
20. In support of his contention that there cannot be any estoppel against a
statute, the learned counsel for the Appellant places reliance on K.
Kochunni @ Muppil Nayyar v. K. Kuttanunni @ Elaya Nayar & Ors. AIR
(35) 1948 PC 47, Vanguard Fire & General Insurance Co. Ltd. v. Sarla
Devi & Ors. AIR 1959 Punjab 297, Collector of Customs and Central
Excise, West Bengal & Ors. v. Hindustan Motors Ltd. & Anr. 1979 ELT
(J313), Kolhapur Cane Sugar Works Ltd. & Anr. v. UOI & Ors. 1986
(24) ELT 205 (Del), Maheshwari Meals Ltd. v. Union of India, 1992 (59)
ELT 9 (Gujarat) and Chhaganlal Keshavlal Mehta v. Patel Narandas
Haribhai AIR 1982 SC 121.
21. In K. Kochunni (Supra), the Privy Council held that when no one was
misled into doing anything to his detriment as a result of the mistaken
view; there was no representation; no acting on it; no misleading; no
change of position on such representation; there can neither be any
estoppel nor waiver nor acquiescence. Similarly in Sarla Devi (Supra)
while holding that there cannot be any estoppel against the statute, the
Punjab High Court held that on plaintiffs‟ failure to rely specifically on a
statutory provision (Section 96 of the Motor Vehicles Act in the said
case) the Appellant cannot invoke the principle of estoppel.
22. In Hindustan Motors Ltd. (Supra) the facts were that in March 1969, 21
drums of primary nickel were shipped from Bulgaria against orders
placed by Hindustan Motors Ltd. They also opened the letter of credit in
terms of the licence. The goods were cleared by Customs Authorities
from the bonded warehouse after full payment of customs duty from time
to time. Between October 4, 1969 and October 22, 1969 there were
searches and seizures (of documents) by the Enforcement Directorate of
the Central Government at the factory premises, the office premises of
Hindustan Motors Ltd., and the residence of some of the officers of the
company under Section 19D of the Foreign Exchange Regulation Act,
1947. Thereafter, the Customs Authorities effected a seizure of 9 drums
of primary nickel under Section 110 of Customs Act, 1962. The Customs
Authorities took the plea that permission to clear the goods was given by
mistake. The Calcutta High Court held that the assessee cannot raise the
plea of estoppel and cannot claim protection, as it was contrary to law and
it was his duty to obey the law.
23. In Chhaganlal (Supra) the facts can be extracted from paras 2 to 7 of the
judgment hereunder:-
"2. The property in dispute, situated in Baroda
city, originally belonged to Motibhai Bapubhai
Shibandi Baxi (for short „Motibhai‟). He created a
mortgage with possession of the disputed property
in favour of one Nanaji Balwant Pilkhanewala (for
short „Nanaji‟) in 1871 for a sum of Rs 800. In
1890 a second mortgage was created in favour of
the same mortgagee and the amount secured by
this second mortgage was Rs 375. Somewhere
between 1890 and 1912 the original mortgagee
Nanaji died leaving behind his two sons Hari and
Purshottam as his heirs and legal representatives.
The two sons of Nanaji sold the entire mortgagee
rights and interest to one Ganpatram Mugutram
Vyas (for short "Ganpatram" [AIR 1930 Bom 466:
(1930) 54 Bom 625] on July 4, 1912. Ganpatram
in his turn sold the mortgagee rights in a part of the
mortgaged property, viz. common latrine, to one
Vamanrao Laxmanrao Nirkhe (for short
„Vamanrao‟).
3. Ganpatram died and his son Chhotalal
Ganpatram (for short „Chhotalal‟) sold away his
rights as a mortgagee in possession in respect of
the rest of the properties which still remained with
him, to Chhaganlal Keshavlal Mehta (for short
„Chhaganlal Mehta‟).
4. Mortgagor Motibhai also died leaving behind
his son Chimanrai Motibhai Baxi (for short
„Chimanrai‟). Chimanrai died leaving behind his
widow Chhotiba and a daughter Taralaxmibai. On
September 12, 1950 Taralaxmibai sold her right,
title and interest in the suit property to one
Shantilal Purshottamdas Dalia (for short
"Shantilal"). Later on Shantilal conveyed his right,
title and interest in the property to the plaintiff,
Narandas Haribhai Patel (for short „Narandas‟)"
5. It appears that during the lifetime of Chimanrai,
Ganpatram, the mortgagee, had sent a notice, Ex.
77, dated April 15, 1913 to Chimanrai informing
him that the mortgaged property was in a
dilapidated condition and required repairs. He had
already spent some amount towards repairs but
still substantial repairs were needed and the same
should be got done by him or he should pay the
mortgage amount and redeem the property. On
receipt of this letter Chimanrai made the following
endorsement:
"During the lifetime of my father, I had become
separated from him without taking any kind of the
movable or immovable property belonging to him
and even after his death, I have not taken any kind
of his properties nor have I kept my right over the
said properties and so I am not in any way
responsible for your any transaction whatsoever in
connection with his properties. Be it known to you.
And while giving you a definite assurance to that
effect I have made attestation on the aforesaid
document in respect of purchase of the mortgagee's
rights, which may also be known to you".
6. Long after the death of Chimanrai, Chhotalal,
son of Ganpatram, gave a similar notice, Ex. 68,
October 6, 1933 to Chhotiba, the widow of
Chimanrai calling upon her to redeem the
mortgage in question. On this notice similar
endorsement on behalf of Chhotiba was made on
October 10, 1933 by Lomeshprasad Hariprasad
Desai (for short „Lomeshprasad‟), her daughter's
son, as had been made by Chimanrai earlier on the
notice given by Ganpatram. Yet another notice,
Ex.78, dated September 21, 1933 was sent by
Chhotalal to Taralaxmibai, daughter of Chimanrai
to the same effect. In her reply, Ex. 73, dated
October 3, 1933 to the notice, Taralaxmibai stated
inter alia that her father Chimanrai had forgone all
rights whatsoever in the property of his father,
Motibhai, during his lifetime and hence she had no
concern with the property of Motibhai. It was
further stated that her own mother Chhotiba was
alive (in October 1933) and, therefore she had no
concern whatsoever with the property of Motibhai
or the liabilities arising out of the dealings of
Motibhai.
7. Narandas after the purchase of the mortgagor's
rights from Shantilal filed a suit for redemption
impleading both the assignees of the mortgagee's
rights, Chhaganlal Keshavlal Mehta, as the 1st
defendant, and Vamanrao Laxmanrao Nirkhe, as
the 2nd defendant."
The High Court held that estoppel deals with questions of fact and
not of rights. A person cannot be estopped from asserting his right even
if at any time he had represented that he would not assert it. The
Supreme Court laid down eight essential conditions to be satisfied in
order to entitle a party to raise a plea of estoppel. Paras 22 and 23 of the
report are extracted hereunder:-
22. It may by pointed out that estoppel deals with
questions of facts and not of rights. A man is not
estopped from asserting a right which he had said
that he will not assert. It is also a well-known
principle that there can be no estoppel against a
statute. After the death of Motibhai his son
Chimanrai succeeded in law.
23. To bring the case within the scope of estoppel
as defined in S. 115 of the Evidence Act: (1) there
must be representation by a person or his
authorised agent to another in any form - a
declaration, act or omission; (2) the representation
must have been of the existence of a fact and not
of premises de futuro or intention which might or
might not be enforceable in contract; (3) the
representation must have been meant to be relied
upon; (4) there must have been belief on the part of
the other party in its truth; (5) there must have
been action on the faith of that declaration, act or
mission, that is to say, the declaration, act or
mission must have actually caused another to act
on the faith of it, and to alter his former position to
his prejudice or detriment; (6) the
misrepresentation or conduct or omission must
have been the proximate cause of leading the other
party to act to his prejudice; (7) the person
claiming the benefit of an estoppel must show that
he was not aware of the true state of things. If he
was aware of the real state of affairs or had means
of knowledge, there can be no estoppel; (8) Only
the person to whom representation was made or for
whom it was designed can avail himself of it. A
person is entitled to plead estoppel in his own
individual character and not as a representative of
his assigned.
24. There cannot be any dispute about the proposition of law that there
cannot be any estoppel against a statute. The eight conditions enumerated
in para 23 in Chhaganlal must be satisfied before a party can be
permitted to raise a plea of estoppel.
25. Turning to the facts of the instant case, it is not in dispute that 11 claim
petitions were filed before the Claims Tribunal, Shahpura, Rajasthan.
The claim petitions before the Claims Tribunal, Delhi were filed on 20th
January, 2000. The written statement by the Appellant Insurance
Company was filed on 7th September 2001, which shows that it was
aware of filing of several claim petitions in different cities in 2001. The
proposal for settlement in Shahpura Court was made on 19th July 2002
and settlement was reached in the Lok Adalat on 28 th September 2002.
The settlement of the claims of 11 petitioners was an admission of
negligence (of the driver) and liability was of the Insurance Company to
pay the compensation.
26. The claim petitions before Shahpura Court were contested by the school.
Thus from the Appellant‟s admission, there was a representation made by
it to the school regarding admission of driver, negligence and its liability
to pay the compensation. As urged by the learned counsel the school was
entitled to dispute its liability on the factum of negligence on the part of
its driver. An admission of negligence and liability was a representation
made by the Appellant which was relied upon by the school. There could
not be any doubt about its truth. On account of the representation made
by the Appellant, the school is now estopped from challenging the finding
on negligence. Thus the representation made by the Appellant would
prejudice the school if it is now permitted to take the plea that there is
breach of terms and conditions of insurance policy by the school.
27. Of course, there cannot be any estoppel against the statute, but there can
be estoppel against factual assertion made by the party. In the instant
case, since there was an admission of the liability there is no question of
estoppel against the statute. The authorities relied upon by the learned
counsel for the Appellant are thus not attracted to the facts of the case. In
the circumstances, in my view the Claim Tribunal rightly held that the
Appellant is estopped from raising the plea of breach of the terms and
conditions of the policy.
QUESTION NO.II
28. Even if it is assumed that the Appellant is not estopped from raising the
plea of breach of the policy; has it succeeded in proving willful breach of
the terms and conditions on the part of the school i.e. the insured. It is
urged by the learned counsel for the Appellant that it was impossible for
the school bus to cover a distance of 349 Kms from Delhi to Gogamedi
and Kali Banga and then another 300 Kms from Gogamedi to Bhadra (the
place of accident) in a period of just one day.
29. No evidence was brought in by the Appellant Insurance Company to
prove that the distance upto Bhadra could not be travelled from
19.08.1999 (11.00 AM) to 20.08.1999 (11:30 AM). In order to prove that
the school bus carried water and food packets to the students at Kali
Banga the school examined RW1 Nalin Chester.
30. The learned counsel for the Appellant states that a vehicle for carrying a
group of passengers to a destination is always booked in advance. Thus,
the hiring of the bus could not have been done without the active
participation, connivance and knowledge of the insured (the school).
The learned counsel for the Appellant drew my attention to the Claim
Form Ex.R1W1/X1R3 and urged that many columns like; for what
purpose the vehicle was being used at the time of accident; was the
vehicle plied for hire; number of passengers carried; number of
passengers permitted etc. were left blank which would go to show that the
school(the insured) tried to hide important information and an inference
of guilty intention on the part of the insured must be drawn.
31. The learned counsel for the Appellant stated that although the insured
tried to build up a case that the school children had gone to Kali Banga on
an educational trip to study the remains of Harappa an ancient
civilization, yet neither any teacher, nor any student nor even the
conductor or the driver of the bus who carried the teachers and the
students to Kali Banga were produced to prove these facts. Thus, it is
argued that the plea raised by the school that the bus was sent to Kali
Banga with packets of food and water is only a made-up story and cannot
be believed.
32. The learned counsel for the Appellant referred to the testimony of SI
Abdul Kayum Khan, the Investigating Officer (R3W4) of the accident
case who testified that from his investigation it transpired that the
passengers had booked the bus from Delhi to Gogamedi to visit a fair and
the bus met with the accident on its return journey. The learned counsel
stated that the IO of the case was an independent witness and from the
result of the investigation, it was evident that the insured committed
breach of the terms and conditions of the policy. The learned counsel
urged that the Claims Tribunal erred in rejecting the report Ex.R3W5/15
of Imtiaz Ahmed, Investigator appointed by the Insurance Company. He
stated that the report of the Investigator could have been taken into
consideration at least to corroborate other evidence produced by the
Appellant to prove breach of the terms and conditions of the policy.
33. On the other hand, the learned counsel for the School (the insured) stated
that no reliable, cogent and convincing evidence was produced by the
Appellant Insurance Company to prove the breach of the terms and
conditions of the policy. The Appellant not having discharged the onus
of proving the breach cannot shift the onus on the insured. The insured
led sufficient evidence to prove that it did not allow the school bus to be
used for carrying the passengers.
34. The Appellant Insurance Company examined Neeraj Bidani (R3W1),
UDC, Transport Department, Rajpur Road, Delhi and M.John (R3W3),
Assistant Secretary RTO, Rajpur Road, Delhi to prove that the school bus
was exempted from obtaining permit and that it was also exempted from
payment of road tax. R3W1 proved a number of conditions imposed on
the school so as to avail the exemption from the payment of road tax as
Ex.R3W2/2 which, inter alia, included that the bus could not be used
even by any other branch of the same school. While dealing with the
question whether there was any breach of the terms and conditions of the
policy, I am not concerned whether the conditions imposed for obtaining
exemption from payment of road tax were complied with by the school or
not. It goes without saying that a recognized educational institution was
exempted from taking a permit for any transport vehicle owned by it,
provided, it was used only for the purpose of the educational institution.
Once it is proved by the Appellant that the school bus was being used for
a purpose other than that of educational institution, the exemption granted
under Section 66(3)(h) of the Act would become ineffective and the
educational institution would be required to have a permit for such a
transport vehicle. I would agree with the learned counsel for the
Appellant Insurance Company that if it is proved that the school bus was
being used for purpose other than that of educational institution, that is,
for hire and reward or even for any other purpose, the exemption granted
would disappear.
35. Before analyzing the evidence adduced by the parties, it would be
appropriate to have a look at the law as to the onus of proving the breach
of the terms and conditions of the policy.
36. Section 146 of the Act makes it mandatory for every person using a
motor vehicle (except as a passenger) to have a policy of insurance
complying with the requirement of Chapter 11 of the Act. Failure to
obtain an insurance policy has been made a criminal offence punishable
under Section 196 of the Act. Section 147 of the Act deals with the
requirement of the insurance policy and the limits of liability; an
authorised insurer is not empowered to issue an insurance policy which
does not cover the risk as provided under Section 147 of the Act. Section
149(i) of the Act makes it obligatory on the insurer to satisfy the claim in
respect of the third party after a certificate of insurance has been issued
under Section 147(c) of the Act. Sub-section (2) of Section 149 entitles
an insurer to avoid its liability to indemnify the insured on the grounds as
mentioned in the said Sub-section. The Supreme Court has interpreted
Sub-section (2) that the infringement or violation of permits or breach of
the terms and conditions of the policy on the part of the insured must be
established by the Insurance Company. Further the insurer must show
that the violation or breach on the part of the insured is wilful.
37. In Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21; the three Judge
Bench decision of the Supreme Court while referring to Section 96 (2) (b)
(ii) of the Motor Vehicles Act, 1939 held that this Section cannot be
interpreted in a technical manner. Section 96 (2) (b) (ii) only enables the
Insurance Company to defend the liability to pay the compensation on the
grounds mentioned in sub-section (2) including that there has been a
contravention of the condition excluding the vehicle being driven by any
person who is not duly licensed. It was held that if the person who has got
the vehicle insured has allowed the vehicle to be driven by a person who
is not duly licensed then only that clause shall be attracted. The Supreme
Court held that the insurer has to satisfy the Tribunal that such violation
or infringement on the part of the insured was willful. The relevant part of
the report is extracted hereunder:-
"12. .......According to us, Section 96(2)(b)(ii) should not be
interpreted in a technical manner. Sub-section (2) of Section 96
only enables the insurance company to defend itself in respect of
the liability to pay compensation on any of the grounds mentioned
in sub-section (2) including that there has been a contravention of
the condition excluding the vehicle being driven by any person who
is not duly licensed. This bar on the face of it operates on the
person insured. If the person who has got the vehicle insured has
allowed the vehicle to be driven by a person who is not duly
licensed then only that clause shall be attracted. In a case where
the person who has got insured the vehicle with the insurance
company, has appointed a duly licensed driver and if the accident
takes place when the vehicle is being driven by a person not duly
licensed on the basis of the authority of the driver duly authorised
to drive the vehicle whether the insurance company in that event
shall be absolved from its liability? The expression „breach‟
occurring in Section 96(2)(b) means infringement or violation of a
promise or obligation. As such the insurance company will have to
establish that the insured was guilty of an infringement or violation
of a promise. The insurer has also to satisfy the Tribunal or the
Court that such violation or infringement on the part of the insured
was wilful. If the insured has taken all precautions by appointing a
duly licensed driver to drive the vehicle in question and it has not
been established that it was the insured who allowed the vehicle to
be driven by a person not duly licensed, then the insurance
company cannot repudiate its statutory liability under sub-section
(1) of Section 96. In the present case far from establishing that it
was the appellant who had allowed Rajinder Pal Singh to drive the
vehicle when the accident took place, there is not even any
allegation that it was the appellant who was guilty of violating the
condition that the vehicle shall not be driven by a person not duly
licensed. From the facts of the case, it appears that the appellant
had done everything within his power inasmuch as he has engaged
a licensed driver Gurbachan Singh and had placed the vehicle in
his charge. While interpreting the contract of insurance, the
tribunals and courts have to be conscious of the fact that right to
claim compensation by heirs and legal representatives of the
victims of the accident is not defeated on technical grounds. Unless
it is established on the materials on record that it was the insured
who had wilfully violated the condition of the policy by allowing a
person not duly licensed to drive the vehicle when the accident
took place, the insurer shall be deemed to be a judgment-debtor in
respect of the liability in view of sub-section (1) of Section 96 of
the Act......."
38. Similarly, in National Insurance Company Limited v. Swaran Singh &
Ors., (2004) 3 SCC 297, the Supreme Court observed that in order to
avoid its liability it is not sufficient for insurer to show that the person
driving at the time of the accident was not duly licensed but it must
further be established that there was breach on the part of the insured.
39. Now I turn to the facts of the instant case.
40. It has come in the evidence of Nalin Chester (RW1) that the distance
between Delhi and Gogamedi was about 300 kms. If the school‟s
version is to be accepted, then the bus would have travelled from Delhi to
Gogamedi without any instructions and authorization from the school and
then to Kali Banga. Thereafter the driver must have picked up passengers
from Gogamedi on his way back to Delhi when the bus met with an
accident near the Electricity Board Office at Bhadra. The exact distance
from Kali Banga to Bhadra has not come on record. Moreover, it is not
proved by the Appellant Insurance Company by producing any evidence
that the distance of 600 to 700 kms could have been travelled by a bus in
about 24 hours. Thus, it cannot be said that the bus had straightway gone
to Kali Banga and was returning from there when it met with the
accident.
41. With regard to the circumstances under which the school bus travelled to
Kali Banga and met with an accident at Bhadra, the school examined
Nalin Chester, its Administrative Officer as RW1. Mr. Nalin Chester
swore his affidavit as RW1/A. He testified that an educational cum
leadership development tour of some students of the school went to Kali
Banga (Rajasthan). The students were accompanied by a teacher who
travelled to Kali Banga in another vehicle. In the evening of 18.08.1999,
the school received an intimation that the students were facing an acute
shortage of drinking water and suitable food. He deposed that it was
decided by the Principal that some food packets and water will be sent to
the students on the morning of 19.08.1999. The material was arranged
and packed in Swaraj Mazda No.DL-IV-2571. The driver of Swaraj
Mazda was instructed to immediately deliver the food material and then
return to the school. He testified that the driver left the school on
19.08.1999. On 20.08.1999, he (RW1) received a call from the police
that the vehicle had met with an accident and a number of people
travelling in the bus had suffered injuries. The witness deposed that the
driver of the school bus on humanitarian grounds without any charges
and without any permission or authority of the school gave lift to a few
people who wanted to go to Gogamedi for some fair and while the said
bus was returning it met with an accident. In cross-examination, this
witness deposed that they made inquiries from the driver as to how the
passengers came in the school bus. The driver informed them that some
people were standing on the way as their bus had broken down and that
he (the driver) had given lift to them on humanitarian grounds. In further
cross-examination, RW1 admitted that in the claim form they had not
mentioned the description of the person and the capacity in which they
were travelling in the bus. The witness admitted that he had not brought
any circular or notice to show that the school bus had gone for the trip.
The witness denied that the school had violated the terms and conditions
of the insurance policy. Thus, no substantial evidence could be brought
in the cross-examination of RW1 to show that there was willful breach of
the terms of the policy.
42. The Appellant heavily relies on the testimony of SI Abdul Kayum Khan
(R3W4) who was IO of the case FIR No.368/99 under Section 279,
337/304A IPC. In his examination-in-chief, he did testify that from his
investigation he came to know that the passengers travelling in the bus
had booked the bus from Delhi to Gogamedi fair on a pilgrimage. In
cross-examination on behalf of the Claimants, the IO stated that by
booking of the bus, he meant that the bus was hired by the passengers. In
cross-examination on behalf of the school, R3W4 stated that he did not
know the name of the persons who had hired the bus. He stated that the
witnesses had not told the name of the person who had hired the bus. He
was given a suggestion that the passengers had not told him that they had
hired the bus to travel from Delhi to Gogamedi which of course was
denied by him. Thus, a perusal of the IO‟s testimony reveals that he
could not disclose the name of the persons who informed him about
hiring of the bus. No such statement under Section 161 Cr.P.C. was
recorded by the IO nor placed on record by the Appellant Insurance
Company.
43. As against the IO‟s testimony, some of the Respondents (Claimants) who
were eye witnesses to the accident and had travelled in the bus came
forward to appear as their own witnesses. PW1 Sompal, an injured filed
his affidavit Ex.PW1/X1. In para 9 of the affidavit, he testified that the
driver of the bus had informed them that he was driving the bus to Kali
Banga for some school work as per the direction of the school authorities.
In para 10 of the affidavit, Sompal PW1 deposed that the driver told them
that he was going without passengers and he offered them a lift as
requested by the passengers on humanitarian grounds. In cross-
examination, Sompal denied the suggestion that he paid any hire charges
to travel in the bus. To the same effect is the testimony of Premwati
(PW2), Ram Avtar (PW3), Amravati (PW7), Chandra Devi (PW8),
Suresh (PW9) Savitri(PW11), Mahender (PW12), Vijender (PW13) and
Bishambar (PW16). In view of the overwhelming evidence of the
Claimants (the injured), it is difficult to believe that the passengers were
carried for hire and reward.
44. It is true that the school did not produce any teacher or student to prove
that any group of students had gone to Kali Banga for any study, but it is
not material in view of the fact that initial onus was on the Appellant
Insurance Company to prove breach of the terms and conditions of the
policy which the Appellant Insurance Company has failed to prove in
view of the law which is well-settled.
45. I have before me the claim form Ex.R1W1/X1R3. It is true that a number
of columns on page 2 have been left blank. The Appellant Insurance
Company should have returned the claim form to the school for getting it
filled up. Moreover, a perusal of the column shows that a large number
of columns which were left blank were totally immaterial and had
nothing to do with the manner of the accident. In the circumstances, I am
not inclined to attach much importance to the same. In any case, it does
not show that there was any willful breach of the terms and conditions of
the policy.
46. In order to prove breach of the terms and conditions of policy the
Appellant also examined Imtiyaz Ahmed (R3W6) an investigator and
relied on his report Ex.R3W5/15. The Claims Tribunal rejected his
evidence holding that it was not credible and was only hearsay evidence.
In para 27 of the impugned judgment, the Claims Tribunal held as under:-
"27. The Insurance Company also examined R3W6 Sh. Imtiyaz
Ahmad who is the investigator for the Insurance Company. He
submitted his report alongwith the photographs Ex.R3W5/15. The
objections were raised regarding the inadmissibility of the
evidence as the entire evidence was hearsay evidence.
Interestingly, in his cross examination witness stated that the
accident pertains to the year 1999 and he had for the first time
visited the site on 12.5.07. Admittedly, he is not the eye witness
and he had investigated the matter on behalf of Insurance
Company after expiry of about eight years. The evidence of the
witness is based on the statement of other witness who were not
examined by the Insurance Company, therefore, his evidence is
firstly inadmissible and secondly not reliable and no credence can
be given to his evidence."
47. The evidence of R3W6 was in the nature of hearsay evidence. The
Claims Tribunal rightly discarded the same.
48. In view of the forgoing discussion, I am of the view that the Appellant is
estopped from taking up the plea that there was any breach of the terms
and conditions of the policy. Even if the Appellant was entitled to take
such a plea, it has failed to prove conscious and willful breach of the
terms and conditions of the policy.
49. The Appeals, therefore, have to fail; the same are accordingly dismissed.
50. Fifty percent of the compensation awarded has already been released in
favour of the Claimants. Rest of the compensation shall be released in
terms of the order passed by the Claims Tribunal.
51. Statutory amount, if any, shall be refunded to the Appellant Insurance
Company.
52. Pending Applications stand disposed of.
(G.P. MITTAL)
JUDGE
NOVEMBER 27, 2012
vk/ag/pst
