Delhi High Court
Iffco Tokio General Insurance Co. ... vs Smt. Sehnaz & Ors. on 13 September, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 13th September, 2012
+ MAC. APP. 844/2011
IFFCO TOKIO GENERAL INSURANCE CO. LTD....... Appellant
Through: Ms. Suman Bagga, Adv.
versus
SMT. SEHNAZ & ORS. ..... Respondents
Through Mr. Nitin Kalra, Adv. for R-7 & 8.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appellant IFFCO Tokio General Insurance Company Ltd. impugns a
judgment dated 18.07.2011 passed by Motor Accident Claims Tribunal
(the Claims Tribunal) whereby a compensation of `9,51,284/- was
awarded in favour of the Respondents No.1 to 6 for the death of Guddu
@ Sartaz, who died in a motor vehicle accident which took place on
02.05.2007.
2. The finding on negligence is not challenged by the Appellant Insurance
Company.
3. There is twin challenge to the impugned judgment. First, that the
compensation awarded towards non pecuniary damages, that is, loss of
love and affection, loss of consortium, loss to estate and funeral expenses
is on the higher side; and second, that the Appellant Insurance Company
successfully proved the breach of the terms of policy, yet instead of
passing a specific order granting recovery rights to the Appellant, the
Claims Tribunal held that "at the most recovery rights, if any may be
given to R-3." It is thus, urged that the Claims Tribunal's order with
regard to the recovery rights was completely vague.
4. After the accident, the deceased was removed to the Trauma Centre and
succumbed to his injuries on 04.10.2007. The award of compensation
towards loss of dependency, towards expenditure of medical treatment
and pain and suffering is not disputed.
5. The Claims Tribunal awarded a sum of `1,50,000/- towards loss of love
and affection, that is, `25,000/- each to the six dependents. Loss of love
and affection can never be measured in terms of money. Thus,
uniformity has to be adopted by the Courts while granting non-pecuniary
damages. The Supreme Court in Sunil Sharma v. Bachitar Singh (2011)
11 SCC 425 and in Baby Radhika Gupta v. Oriental Insurance Company
Limited (2009) 17 SCC 627 granted only ` 25,000/- (in total to all the
claimants) under the head of loss of love and affection. Thus, I would
reduce the compensation under this head to `25,000/- only.
6. In Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr.,
(2009) 6 SCC 121 the Supreme Court laid down that only a notional sum
of `5,000/- to `10,000/- should be awarded towards loss of consortium,
loss to estate and actual expenditure towards funeral expenses should be
given to the Claimants. No evidence with regard to the expenditure
towards funeral expenses was led by the Claimants. In the circumstances,
I award a sum of `10,000/- each towards loss of consortium, loss to estate
and funeral expenses as against an award of `50,000/-, 15,000/- and
`25,000/- respectively.
7. The Claims Tribunal awarded a sum of `55,000/- towards medical bills,
special diet and conveyance and a sum of `50,000/- towards pain and
suffering. The same is maintained.
8. The overall compensation thus comes to `7,66,284/-.
9. The Appellant took up a plea that the driver Satya Prakash (Respondent
No.7) did not possess a valid driving licence to drive the offending
vehicle, that is, Vikram Goods Carrier No.DL-1LF-0322. I have before
me the evidence led by the Appellant before the Claims Tribunal. Paras
16 to 18 of the judgment dealt with the issue, the same are extracted
hereunder:-
"16. R3W1 Sh. Abhishek Kujur, Executive Legal, IFFCO Tokio
Geneal Insurance Company Ltd. has tendered his evidence by way
of Affidavit Ex.R3W1/A. This witness has also relied upon
documents Ex.R3W1/1 to Ex.R3W1/7.
17. R3W2 Sh. Pratap Singh, Dealing Assistant, MLO North East,
Zone-1, Wazirpur, Delhi has brought the summoned record
regarding the licence No.C08041999115495 which is Ex.R3W2/A
and Ex.R3W2/B issued in the name of Sh. Satya Prakash s/o Sh.
Inderpal. This witness has deposed that the said licence was
entitled for driving LMV (NT) and TSR and the said vehicle was
not valid for driver the LGV.
18. R3W3 Sh. Dharampal, Record Keeper, RTO Office, Burari,
Delhi has proved the record regarding the vehicle No.DL1LF-
0322 which is Ex.R3W3/A which was issued in the name of Sh.
Omkar Singh s/o Sh. Omprakash r/o 9A/680, Lal Bagh, Azadpur,
Delhi. This witness has further deposed that said vehicle is LGV as
per RC and the vehicle (VIKRAM) fall in commercial category."
10. R3W1 Sh. Abhishek Kujur, Executive Legal of the Appellant Insurance
Company also proved the insurance policy Ex.R3W1/1, copy of the
notice under Order XII Rule 8 CPC requiring the owner and driver to
produce the insurance policy and the driving licence as Ex.R3W1/2. His
testimony was not challenged in cross-examination as Respondents No.7
and 8 preferred to be proceeded ex-parte. They failed to produce any
driving licence other than Ex.R3W2/A by virtue of which Respondent
No.7 was permitted to drive only LMV (NT), that is, non-transport and a
TSR. R3W2 Pratap Singh was categorical that the holder of this driving
licence was not permitted to drive LGV (light goods vehicle). It is
proved from the RC Ex.R3W3/A and R3W3's testimony that the
offending vehicle was LGV.
11. Thus, the Appellant led sufficient evidence to discharge the initial onus in
order to prove the breach of the terms of policy. Respondents No.7 and 8
(the driver and owner of the offending vehicle) filed a joint written
statement contesting the Claim Petition. They did not produce any
driving licence other than the one which was seized by the police and was
placed on record by Respondents No.1 to 6. During the hearing of the
Appeal, the learned counsel for Respondents No.7 and 8 does not even
dispute the said driving licence. His only contention is that on the
strength of the driving licence Ex.R3W2/A, Respondent No.7 was
authorized to drive a light goods vehicle (LGV).
12. As per Section 149 of the Motor Vehicles Act, 1988 (the Act) as in terms
of the insurance policy, the Appellant Insurance Company is entitled to
avoid the policy on proving the breach of the condition that the driver
was not duly licensed.
13. Admittedly, Respondent No.7 did not possess any driving licence to drive
a Light Motor Transport Vehicle, that is LGV in the instant case.
14. A Light Motor Vehicle is defined under Section 2 (21) as a transport
vehicle or omnibus the gross vehicle weight of either of which or a motor
car or tractor or road-roller the unladen weight of any of which, does not
exceed 7,500 kg. A "transport vehicle" on the other hand has been defined
under Section 2 (47) as a public service vehicle, a goods carriage, an
educational institution bus or a private service vehicle. Section 10 of the
Act says every learner's licence and driving licence, except a driving
licence issued under Section 18, shall be in such form and shall contain
such information as may be prescribed by the Central Government. A
learner's licence shall also be expressed as entitling the holder to drive a
motor vehicle of one or more of the following class. Section 10 of the Act
is extracted hereunder:-
"10. Form and contents of licences to drive.
(1) Every learner's licence and driving licence, except a driving
licence issued under section 18, shall be in such form and shall
contain such information as may be prescribed by the Central
Government.
(2) A learner's licence or, as the case may be, driving licence shall
also be expressed as entitling the holder to drive a motor vehicle of
one or more of the following classes, namely:-
(a) motor cycle without gear;
(b) motor cycle with gear;
(c) invalid carriage;
(d) light motor vehicle;
(e) transport vehicle;
(i) road-roller;
(j) motor vehicle of a specified description."
15. Thus, in order to entitle Respondent No.7 to drive a light goods vehicle,
he ought to have held licence for transport vehicle or at least for light
motor transport vehicle. On the other hand, he possessed a licence to
drive Light Motor Vehicle (NT) and a TSR.
16. A reference may be made to the report of the Supreme Court in
National Insurance Company Limited v. Swaran Singh & Ors., (2004) 3
SCC 297 where the Supreme Court emphasized that the driver must
possess licence for the type of vehicle which is involved in the accident.
Para 89 of the report is extracted hereunder:-
"89. Section 3 of the Act casts an obligation on a driver to hold an
effective driving licence for the type of vehicle which he intends to
drive. Section 10 of the Act enables the Central Government to
prescribe forms of driving licences for various categories of
vehicles mentioned in Sub-section (2) of the said section. The
various types of vehicles described for which a driver may obtain a
licence for one or more of them are: (a) motorcycle without gear,
(b) motorcycle with gear, (c) invalid carriage, (d) light motor
vehicle, (e) transport vehicle, (f) road roller, and (g) motor vehicle
of other specified description. The definition clause in Section 2 of
the Act defines various categories of vehicles which are covered in
broad types mentioned in Sub-section (2) of Section 10. They are
"goods carriage", "heavy goods vehicle", "heavy passenger motor
vehicle", "invalid carriage", "light motor vehicle", "maxi-cab",
"medium goods vehicle", "medium passenger motor vehicle",
"motor-cab", "motorcycle", "omnibus", "private service vehicle",
"semi-trailer", "tourist vehicle", "tractor", "trailer" and "transport
vehicle". In claims for compensation for accidents, various kinds of
breaches with regard to the conditions of driving licences arise for
consideration before the Tribunal as a person possessing a driving
licence for "motorcycle without gear", [sic may be driving a
vehicle] for which he has no licence. Cases may also arise where a
holder of driving licence for "light motor vehicle" is found to be
driving a "maxi-cab", "motor-cab" or "omnibus" for which he has
no licence. In each case, on evidence led before the Tribunal, a
decision has to be taken whether the fact of the driver possessing
licence for one type of vehicle but found driving another type of
vehicle, was the main or contributory cause of accident. If on facts,
it is found that the accident was caused solely because of some
other unforeseen or intervening causes like mechanical failures
and similar other causes having no nexus with the driver not
possessing requisite type of licence, the insurer will not be allowed
to avoid its liability merely for technical breach of conditions
concerning driving licence."
17. In the instant case, it is no where the case of Respondents No.7 and 8 that
the accident was caused on account of some mechanical failure or any
other similar cause, having no nexus with the driver not possessing
requisite type of licence. Thus, the Insurer is entitled to avoid the liability.
18. The issue of satisfying the third party liability even in case of breach of
the terms of insurance policy is settled by three Judge Bench report in
Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21. As per Section
149(2) of the Motor Vehicles Act (the Act), an insurer is entitled to
defend the action on the grounds as mentioned under Section
149(2)(a)(i)(ii) of the Act. Thus, the onus is on the insurer to prove that
there is breach of the condition of the policy. It is well settled that the
breach must be conscious and willful. Even if a conscious breach on the
part of the insured is established, still the insurer has a statutory liability
to pay the compensation to the third party and will simply have the right
to recover the same from the insured/tortfeasor either in the same
proceedings or by independent proceedings as the case may be, as
ordered by the Claims Tribunal or the Court. The question of statutory
liability to pay the compensation was discussed in detail by a two Judge
Bench of the Supreme Court in Skandia Insurance Company Limited v.
Kokilaben Chandravadan, (1987) 2 SCC 654 where it was held that
exclusion clause in the contract of Insurance must be read down being in
conflict with the main statutory provision enacted for protection of victim
of accidents. It was laid down that the victim would be entitled to
recover the compensation from the insurer irrespective of the breach of
the condition of policy. The three Judge Bench of the Supreme Court in
Sohan Lal Passi analyzed the corresponding provisions under the Motor
Vehicles Act, 1939 and the Motor Vehicles Act, 1988 and approved the
decision in Skandia. In New India Assurance Co., Shimla v. Kamla and
Ors., (2001) 4 SCC 342, the Supreme Court referred to the decision of the
two Judge Bench in Skandia, the three Judge Bench decision in Sohan
Lal Passi and held that the insurer who has been made liable to pay the
compensation to third parties on account of issuance of certificate of
insurance, shall be entitled to recover the same if there was any breach of
the policy condition on account of the vehicle being driven without a
valid driving licence. The relevant portion of the report is extracted
hereunder:
"21. A reading of the proviso to sub-section (4) as well as the
language employed in sub-section (5) would indicate that they are
intended to safeguard the interest of an insurer who otherwise has
no liability to pay any amount to the insured but for the provisions
contained in Chapter XI of the Act. This means, the insurer has to
pay to the third parties only on account of the fact that a policy of
insurance has been issued in respect of the vehicle, but the insurer
is entitled to recover any such sum from the insured if the insurer
were not otherwise liable to pay such sum to the insured by virtue
of the conditions of the contract of insurance indicated by the
policy.
22.To repeat, the effect of the above provisions is this: when a
valid insurance policy has been issued in respect of a vehicle as
evidenced by a certificate of insurance the burden is on the insurer
to pay to the third parties, whether or not there has been any
breach or violation of the policy conditions. But the amount so
paid by the insurer to third parties can be allowed to be recovered
from the insured if as per the policy conditions the insurer had no
liability to pay such sum to the insured.
23.It is advantageous to refer to a two-Judge Bench of this Court
in Skandia Insurance Company Limited v. Kokilaben
Chandravadan, (1987) 2 SCC 654. Though the said decision
related to the corresponding provisions of the predecessor Act
(Motor Vehicles Act, 1939) the observations made in the judgment
are quite germane now as the corresponding provisions are
materially the same as in the Act. Learned Judge pointed out that
the insistence of the legislature that a motor vehicle can be used in
a public place only if that vehicle is covered by a policy of
insurance is not for the purpose of promoting the business of the
insurance company but to protect the members of the community
who become suffers on account of accidents arising from the use of
motor vehicles. It is pointed out in the decision that such
protection would have remained only a paper protection if the
compensation awarded by the courts were not recoverable by the
victims (or dependants of the victims) of the accident. This is the
raison d'etre for the legislature making it prohibitory for motor
vehicles being used in public places without covering third-party
risks by a policy of insurance.
24.The principle laid down in the said decision has been followed
by a three-Judge Bench of this Court with approval in Sohan Lal
Passi v. P. Sesh Reddy, (1996) 5 SCC 21.
25.The position can be summed up thus:
The insurer and the insured are bound by the conditions
enumerated in the policy and the insurer is not liable to the insured
if there is violation of any policy condition. But the insurer who is
made statutorily liable to pay compensation to third parties on
account of the certificate of insurance issued shall be entitled to
recover from the insured the amount paid to the third parties, if
there was any breach of policy conditions on account of the vehicle
being driven without a valid driving licence........."
19. Again in United India Insurance Company Ltd. v. Lehru & Ors., (2003) 3
SCC 338, in para 18 of the report the Supreme Court referred to the
decision in Skandia, Sohan Lal Passi and Kamla and held that even
where it is proved that there was a conscious or willful breach as
provided under Section 149(2)(a) (ii) of the Motor Vehicle Act, the
Insurance Company would still remain liable to the innocent third party
but may recover the compensation paid from the insured. The relevant
portion of the report is extracted hereunder:
"18. Now let us consider Section 149(2). Reliance has been
placed on Section 149(2)(a)(ii). As seen, in order to avoid liability
under this provision it must be shown that there is a "breach". As
held in Skandia and Sohan Lal Passi cases the breach must be on
the part of the insured. We are in full agreement with that. To
hold otherwise would lead to absurd results. Just to take an
example, suppose a vehicle is stolen. Whilst it is being driven by
the thief there is an accident. The thief is caught and it is
ascertained that he had no licence. Can the insurance company
disown liability? The answer has to be an emphatic "No". To
hold otherwise would be to negate the very purpose of compulsory
insurance.........."
xxxx xxxx xxxx xxxx xxxx
xxxx xxxx xxxx xxxx xxxx
20...........If it ultimately turns out that the licence was fake, the
insurance company would continue to remain liable unless they
prove that the owner/insured was aware or had noticed that the
licence was fake and still permitted that person to drive. More
importantly, even in such a case the insurance company would
remain liable to the innocent third party, but it may be able to
recover from the insured. This is the law which has been laid
down in Skandia, Sohan Lal Passi and Kamla cases. We are in full
agreement with the views expressed therein and see no reason to
take a different view."
20. The three Judge Bench of the Supreme Court in National Insurance
Company Limited v. Swaran Singh & Ors., (2004) 3 SCC 297 again
emphasized that the liability of the insurer to satisfy the decree passed in
favour of the third party is statutory. It approved the decision in Sohan
Lal Passi, Kamla and Lehru. Paras 73 and 105 of the report are extracted
hereunder:
"73. The liability of the insurer is a statutory one. The liability of
the insurer to satisfy the decree passed in favour of a third party is
also statutory.
xxxx xxxx xxxx xxxx xxxx
xxxx xxxx xxxx xxxx xxxx
105. Apart from the reasons stated hereinbefore, the doctrine of
stare decisis persuades us not to deviate from the said principle."
21. This Court in MAC APP. No.329/2010 Oriental Insurance Company
Limited v. Rakesh Kumar and Others and other Appeals decided by a
common judgment dated 29.02.2012, noticed some divergence of opinion
in National Insurance Company Limited v. Kusum Rai & Ors., (2006) 4
SCC 250, National Insurance Company Limited v. Vidhyadhar
Mahariwala & Ors., (2008) 12 SCC 701; Ishwar Chandra & Ors. v. The
Oriental Insurance Company Limited & Ors., (2007) 10 SCC 650 and
Premkumari & Ors. v. Prahalad Dev & Ors., (2008) 3 SCC 193 and held
that in view of the three Judge Bench decision in Sohan Lal Passi(supra)
and Swaran Singh, the liability of the Insurance Company vis-à-vis the
third party is statutory. If the Insurance Company successfully proves the
conscious breach of the terms of the policy, then it would be entitled to
recovery rights against the owner or driver, as the case may be.
22. In the circumstances, the Insurance Company is under obligation to
satisfy the award in the first instance and to recover the amount of
compensation from the driver and the owner of the offending vehicle
(Respondents No.7 and 8) in execution of this very judgment without
having recourse to independent civil proceedings.
23. The excess amount of `1,85,000/- along with proportion interest and the
interest accrued, if any, during the pendency of the Appeal shall be
refunded to the Appellant Insurance Company.
24. The compensation payable to Respondents No.1 to 6 (the Claimants)
shall be disbursed in terms of the order passed by the Claims Tribunal.
25. The statutory deposit of `25,000/- shall be refunded to the Appellant
Insurance Company.
26. The Appeal is allowed in above terms.
27. Pending Applications also stand disposed of.
(G.P. MITTAL)
JUDGE
SEPEMBER 13, 2012
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