Tata Aig General Insurance Co Ltd. vs Harpal Singh & Ors.
2014 Latest Caselaw 731 Del

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*   IN THE HIGH COURT OF DELHI AT NEW DELHI

%                               Judgment delivered on: 7th February, 2014

+                                 MAC.APP. 1/2012

       TATA AIG GENERAL INSURANCE CO LTD.          ..... Appellant
                    Represented by: Mr.Vipin Nandwani, Advocate.

                           Versus

       HARPAL SINGH & ORS.                                   ..... Respondents
                    Represented by:             Mr.H.S. Sharma, Advocate
                                                for Respondent Nos. 1 and 2.

CORAM:
HON'BLE MR. JUSTICE SURESH KAIT

SURESH KAIT, J. (Oral)

1. The present appeal is directed against the impugned award dated 14.10.2011, whereby the learned Tribunal has granted compensation for a sum of Rs.5,58,000/- with interest at the rate of 9% per annum from the date of filing of the claim petition till realization of the amount.

2. Learned counsel appearing on behalf of the appellant/Insurance Company argued the present appeal only on the ground that respondent No.3/driver of the offending vehicle was not holding valid driving licence on the date of the accident, i.e., 31.12.2005 and in such eventuality, the learned Tribunal ought to have exonerated the appellant/Insurance Company from paying any compensation. However, directed the appellant to pay the

compensation amount and then recover the same from respondent Nos. 3 and 4, i.e., driver and owner of the offending vehicle.

3. The issue of no licence, fake licence or invalid driving licence has been dealt with by the Apex Court in catena of judgments.

4. This Court also dealt this issue in case bearing MAC. APP. No.805/2010, titled as 'Santosh Chhabra & Ors. Vs. Abhisheko Gureja & Ors.' decided on 04.10.2013, wherein it is held as under:-

"21. Law is settled on the issue of no licence, fake licence or invalid driving licence in the case of New India Insurance Company Ltd. v. Darshana Devi 2008 ACJ 1388. The offending vehicle at the time of accident was being driven by son of the owner of the vehicle, who was not holding any licence to drive the same. Ld. Tribunal, while awarding the compensation held that the amount shall be payable by the insurer initially, however, the insurer will be at liberty to recover the same from the owner of the offending vehicle. The award passed by ld. Tribunal was challenged by the Insurance Company, same was affirmed by the High Court and also upheld by the Supreme Court.

22. In New India Assurance Co. Ltd. v. Kamla and Ors. etc. 2001 ACJ 843, wherein it is held as under:

"The position can be summed up thus: The insurer and 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.."

23. In National Insurance Co. Ltd. v. Swarn Singh, 2004 ACJ 1 while deciding the issue of driving licence, the Apex Court has held as under:

"(iii) The breach of policy condition e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time. (iv) The insurance companies are, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle; the burden of proof wherefor would be on them.

In V. Mepherson vs. Shiv Charan Singh [1998 ACJ 601 (Del.)], the the owner of the vehicle was held not to be guilty of violating the condition of policy by willfully permitting his son to drive the car who had no driving licence at the time of accident. In that case, it was held that the owner and insurer both were jointly and severally liable."

24. In Oriental Insurance Co. Ltd. v. Rakesh Kumar & Ors., 2012, ACJ, 1268, the Coordinate Bench of this court in Para 44 has held as under:

"44. (ii) Even when there is a willful breach of the terms of the policy under Section 149 (2) (a) of the Act, the Insurance Company is under obligation to indemnify the

liability towards the third parties and recover the same from the owner.

(iii) Once the Insured proves that the driver did not hold any driving licence to drive the Class of vehicle involved in the accident or that the driving licence was fake; requires the owner and driver to produce the driving licence and if they failed to produce the same, the onus of proving breach of policy would be deemed to be discharged. Onus would then shift on the owner to establish that he was not guilty of breach of the terms of policy. In the absence of any evidence being produced by the Insured, in such cases, it will be presumed that he was guilty of a willful breach. The Insured in such cases, would be entitled to recover the compensation paid to third party in discharge of its statutory liability.

(iv) Where policy is avoided on proof or facts which renders the Insurance policy void under Section 149 (2)

(b) of the Act, the Insurance Company would not be under obligation to pay even to third parties, as in such cases the contract of insurance is non est."

5. Admittedly, recovery rights have been granted in favour of the appellant/Insurance Company.

6. Considering the law settled by the Apex Court, the dictum of this Court in the case noted above and the facts and circumstances of the case, this court finds no discrepancy in the impugned order dated 14.10.2011 passed by the learned Tribunal.

7. Finding no merit in the instant appeal, the same is accordingly dismissed.

8. Accordingly, the Registry of this Court is directed to release the

statutory amount in favour of the appellant/Insurance Company and balance compensation amount in favour of the respondents/claimants with up-to-date interest accrued thereon in terms of the order dated 14.10.2011 passed by the learned Tribunal.

SURESH KAIT, J.

FEBRUARY 07, 2014 Sb/jg