Oriental Insurance Co. Ltd. vs Bharat Singh Negi & Ors.
2014 Latest Caselaw 5094 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                             Date of decision : October 13, 2014
+      MAC.APP. 413/2006

       ORIENTAL INSURANCE CO. LTD.                ..... Appellant
                    Through  Mr.L.K.Tyagi, Advocate.

                      versus

       BHARAT SINGH NEGI & ORS.                ..... Respondents

Through Ms.Monika, Advocate for R-3 & 4.

+      MAC.APP. 415/2006

       ORIENTAL INSURANCE CO. LTD.               ..... Appellant
                    Through  Mr.L.K.Tyagi, Advocate.

                               versus

       VEENA DEVI & ORS.                                    ..... Respondents
                     Through                Ms.Monika, Advocate for R-3 & 4.

+      MAC.APP. 467/2006
       ORIENTAL INSURANCE CO. LTD.              ..... Appellant
                    Through  Mr.L.K.Tyagi, Advocate.

                               versus

       SHIV KUMAR &ORS.                                      ..... Respondents
                    Through                 Ms.Monika, Advocate for R-3 & 4.

       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH




MAC APP.Nos.413/2006, 415/2006 & 467/2006                             1 of 6
 JAYANT NATH, J(Oral)

1. The present appeals are filed seeking to impugn the Award dated 14.02.2006.

2. The brief facts leading to the filing of the present petitions are that the deceased with some other persons like waiters along with cooking tools, utensils, equipments and eatables were travelling in a tempo. At Rao Tula Ram Marg at night as the driver of the tempo was driving the tempo at a very high speed, he could not control the vehicle. An accident took place.

3. Three petitions were clubbed and heard together and disposed of by a common Award. In all the three cases the deceased died. Hence the present three appeals have been filed. MAC APP. 413/2006 is filed by the parents of the deceased Rajender Singh Negi (original claim petition No.152/2001 before the Tribunal), MAC.APP. 467/2006 is filed by parents of the deceased Ajay Kumar (Original claim petition no. 385/2001) and MAC.APP. 415/2006 is filed by widow and children of the deceased Parmanand Sharma (original claim petition No.73/2002).

4. The Tribunal in Mac.App.No.413/2006 awarded a total compensation of Rs.2,37,800/-, in Mac.App.No.467/2006 amount awarded was Rs.2,69,000/- and in Mac.App.No.415/2006 compensation of Rs.6,18,200/- was awarded.

5. Learned counsel appearing for the appellant has made one submission common to all the appeals, namely, that the appellant Insurance Company is not liable. He submits that admittedly as per the FIR and other documents on record, there were more than 50 persons travelling on the offending vehicle. Hence, he submits that these are gratuitous passengers and the fact that they

MAC APP.Nos.413/2006, 415/2006 & 467/2006 2 of 6 were travelling on the vehicle was in direct breach of the terms and conditions of the insurance policy. He relies upon the judgment of the Supreme Court in the case of National Insurance Co. Ltd. vs. Cholleti Bharatamma I (2008) ACC 225(SC) and National Insurance Co. Ltd. vs. Rattani & Ors. I (2009) ACC 417 (SC) to contend that the appellant insurance company is not liable.

6. The Tribunal noted that in the written submission filed by the appellant/Insurance Company it does not plead that the deceased were travelling as gratuitous passengers in the goods vehicle. The evidence of PW-4 Gopal Kumar was also noted, who stated that the occupants of the vehicle were waiters, sweet makers and were returning in the tempo along with goods and utensils. This witness was not cross-examined by the appellant Insurance Company. The Tribunal also noted that the onus was on the appellant to prove that the persons were travelling as gratuitous passengers. The Tribunal relied upon the judgment of the Supreme Court in the case of National Insurance Company Ltd. vs. Baljeet 2004 ACJ 428. The contention of the appellant was hence rejected.

7. A perusal of the evidence on record shows that PW-4 Gopal Kumar has stated that on 07.05.2001 they were all travelling in the tempo. PW-4 states that he was sitting in the cabin with the driver. They were coming from Gurgaon and were proceeding towards village Munirka. He admits that there were 35 people in the tempo and the occupants were all waiters, sweet makers and were returning in the tempo along with their goods and utensils. He was not cross-examined by the counsel for the appellant No.1. Further, as observed by the Tribunal, the appellant has not produced any evidence to rebut the evidence of PW4 to prove that the deceased persons were not

MAC APP.Nos.413/2006, 415/2006 & 467/2006 3 of 6 travelling as owners of the goods. It is to be noted that the appellant in their written statement have also not pleaded that the deceased were travelling as gratuitous passengers.

8. In view of the above there is no reason to take a different view from the reasoning of the Tribunal. Accordingly, the reasoning of the Tribunal appears to be in order.

9. Coming to the issue of liability, in the case of National Insurance Co. Ltd. v. Cholleti Bharatamma (supra), the Supreme Court held that the risk of the owner of the goods or his representative would be covered only if he travels in the cabin with the driver. Thus, only two persons could have been carried in the vehicle as owner of the goods.

10. PW4 in his statement states that 35 people were travelling in the tempo. A perusal of the FIR also shows that 50 people were travelling in the said tempo. Thus there is a clear breach of the terms and conditions of the policy.

11. Reference may be had to the judgment of this Court in the case of New India Assurance Co. Ltd. vs. Harpal Singh & Ors., 2013 (138) DRJ 362: MANU/DE/2811/2013 which in para 24 held as follows:

"24. 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., MANU/SC/1533/2006MANU/SC/1533/2006 : (2006) 4 SCC 250, National Insurance Company Limited v. Vidhyadhar Mahariwala & Ors., MANU/SC/8054/2008MANU/SC/8054/2008 : (2008) 12 SCC 701; Ishwar Chandra & Ors. v. The Oriental Insurance

MAC APP.Nos.413/2006, 415/2006 & 467/2006 4 of 6 Company Limited & Ors., MANU/SC/7204/2007MANU/SC/7204/2007 : (2007) 10 SCC 650 and Premkumari & Ors. v. Prahalad Dev & Ors., MANU/SC/7081/2008MANU/SC/7081/2008 : (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."

12. Reference may also be had to the judgment of the Supreme Court in the case of National Insurance Company Limited vs. Swaran Singh, (2004)3 SCC 297 which in paragraph 110 noted as follows:-

"110 The summary of our findings to the various issues as raised in these petitions are as follows:-

       (i)     ...

       (ii)    ...

(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has 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 the 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

MAC APP.Nos.413/2006, 415/2006 & 467/2006 5 of 6 by duly licensed driver or one who was not disqualified to drive at the relevant time.

13. Keeping in view the judgment of the Supreme Court in the cases of Jawahar Singh vs. Bala Jain & Ors 2011 (5) Scale 494 and United India Insurance Company Limited vs. Rakesh Kumar Arora and Ors 2008 (1) CCC 359, in my opinion, it would be in the interest of justice if recovery rights are granted to the appellant.

14. In view of the above discussion, there is no manner of doubt that the liability of the Insurance Company to satisfy the award in the first instance is statutory; it is bound to satisfy the same but will be entitled to recover the amount of compensation from the driver and the owner of the offending vehicle.

15. The appellants have already as per order of this court dated 17.05.2006 deposited the award amount with the Registrar General of this Court and the same was kept in a fixed deposit for six months as per the directions of this Court in the order dated 23.07.2009. A sum of Rs.50,000/- was released to the claimants as per order dated 02.09.2009. The remaining amount as well as the statutory amount was also directed to be kept in the fixed deposit with UCO Bank, Delhi High Court Branch. The balance amount may be released as per the directions in the Award with accumulated interest to the claimants.

16. On compliance of the award the appellants shall be entitled for recovery rights from the owner and driver of the offending vehicle.

17. The present appeal is dismissed.

JAYANT NATH, J OCTOBER 13, 2014/rb/sh

MAC APP.Nos.413/2006, 415/2006 & 467/2006 6 of 6