Delhi High Court
Oriental Insurance Co. Ltd. vs Rakesh Kumar Mishra & Ors. on 14 January, 2016
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 14th January, 2016
+ MACA 1007/2012
ORIENTAL INSURANCE CO. LTD. ..... Appellant
Through: Mr. Tarkeshwar Nath &
Mr. Onkar Nath, Advs.
versus
RAKESH KUMAR MISHRA & ORS. ..... Respondents
Through: Mr. R. Sathish, Adv. for R-3.
CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA
JUDGMENT
R.K.GAUBA, J (ORAL):
1. This appeal by Oriental Insurance Company Ltd. raises a short
question as to its liability to pay awarded compensation in favour of the
first respondent (the claimant), in lieu of the third respondent (the owner
of the offending vehicle) in terms of the award passed by the Motor
Accident Claims Tribunal (hereinafter referred to as "the Tribunal") in
MACT case No. 458/2006 by judgment dated 2nd June, 2006.
2. The claim petition under Sections 166 and 140 of the Motor
Vehicles Act, 1988 (hereinafter referred to as "MV Act") was preferred
by the claimant before the Tribunal seeking compensation on account of
injuries suffered in a motor vehicular accident that occurred on 8.7.2006
involving Jeep make Mahindra bearing registration No. UP15X9678
(hereinafter referred to as the "offending vehicle") driven at the relevant
point of time by the second respondent (the driver). During the inquiry
before the Tribunal, the insurance company admitted that the owner of
the offending vehicle had taken out an insurance policy but denied its
liability to pay compensation on the grounds that the driver did not have
a valid driving license inasmuch as the driving licence (Ex.R3W1/4)
which was presented by him (driver) to the police which investigated the
FIR that had been registered concerning the accident, upon verification
was found to be fake and also for the reason that the offending vehicle
did not carry a valid permit in terms of the requirements of the MV Act
even though it was being used as a goods carriage commercial vehicle.
Both the contentions of the insurance company were rejected by the
learned Tribunal thus holding it liable to pay compensation awarded in
terms of the insurance policy.
3. The insurance company had requested for stay of the execution of
the impugned award. But the same was declined by order dated 11th
September, 2012 with observations that in case the appellant succeeded,
it would be entitled to recovery rights against the owner and driver of
the offending vehicle.
4. Against the above backdrop, the appeal has been resisted only by
the owner (the third respondent). The driver (the second respondent)
was duly served but has chosen not to appear or contest.
5. Arguments have been heard on both sides. The learned counsel,
in the course of their submissions, have taken me through the record of
the Tribunal.
6. It is not disputed by the owner (the third respondent) that the
driving licence (Ex.R3W1/4), as was presented by the driver to the
investigating police purported to have been issued by Licensing
Authority, Meerut, UP was found to be fake. This fact has been duly
established on the basis of the evidence of Vikram Singh (R3W1) as
also verified by a report dated 18th January, 2012 received by the
Tribunal from the concerned Licensing Authority of Motor Vehicles
Department of Meerut, UP, pursuant to summons sent to it for
production of the record. The contention of the owner, however, has
been that he had exercised due diligence and that before engaging the
second respondent (the driver) on the offending vehicle he had seen his
driving licence which appeared to be genuine and since the second
respondent had been a local resident in the same locality and he had
seen him working as a driver for last 15-20 years, he believed the
driving licence thus shown to be genuine and therefore allowed him to
use the vehicle.
7. The Tribunal agreed with the defence of the owner of the above
vehicle and held that the fact that driving licence produced by the
second respondent was fake will not come in the way of the insurance
company being asked to discharge its liability in terms of the insurance
policy.
8. In so far as the above aspect is concerned, I find no error in the
view taken by the Tribunal. Reference need be made only to the
following observations of the Supreme Court of India in United India
Insurance Co. Ltd. vs. Lehru & others (2003) 3 SCC 338:-
"20. When an owner is hiring a driver he will therefore have to
check whether the driver has a driving licence. If the driver
produces a driving licence which on the face of it looks genuine,
the owner is not expected to find out whether the licence has in
fact been issued by a competent authority or not. The owner
would then take the test of the driver. If he finds that the driver is
competent to drive the vehicle, he will hire the driver. We find it
rather strange that insurance companies expect owners to make
enquiries with RTOs, which are spread all over the country,
whether the driving licence shown to them is valid or not. Thus
where the owner has satisfied himself that the driver has a licence
and is driving competently there would be no breach of Section
149(2)(a)(ii). The insurance company would not then be
absolved of liability. 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."
9. Noticeably, the appellant (insurer) did not lead any evidence to
show that the owner of the vehicle had prior knowledge that the driving
licence was forged.
10. The second contention concerning the requirement of valid permit
was rejected by the Tribunal with the observation that "as the offending
vehicle is a jeep, therefore, it does not require any permit". But, as
pointed out by learned counsel for the appellant, the offending vehicle is
registered, per the certificate (PW-1/F), with the Transport Department,
UP as "light goods vehicle". The insurance was also taken out by the
owner under the package policy "goods carriage commercial vehicle".
Concededly, the liability of the insurer would be subject to compliance
by the registered owner of the vehicle with all the requirements of the
MV Act. Section 2(47) of the MV Act defines "transport vehicle" to
mean a public service vehicle, goods carriage or educational institution
bus etc. Section 66 of the MV Act stipulates the necessity for permit in
respect of a motor vehicle intended to be used as "transport vehicle in
any public place". The expression "permit" is defined in Section 2(31)
of the MV Act to mean a permit issued by a State or Regional Transport
Authority or authority prescribed in this behalf under the act authorising
the use of a motor vehicle as a transport vehicle.
11. In view of the above position, and the facts and circumstances of
the case, it was not correct on the part of the Tribunal to proceed on the
assumption that a jeep would not require a permit. On being asked, the
learned counsel for the third respondent (the owner) submits that the
registered owner did have a valid permit issued by the Transport
Authority in respect of the offending vehicle for the period in question.
12. The above contention of the registered owner of the vehicle
would need to be inquired into and adjudicated upon. In these
circumstances, the limited question as to whether the offending vehicle
was used for carriage of goods on a public place under the cover of a
valid permit on the date of accident is remitted for inquiry and
adjudication to the Tribunal. Needless to say, if the answer to the
question is found to be in the negative, the liability to pay the awarded
compensation would have to be fastened on the owner of the offending
vehicle and the insurance company will be entitled to recover the
compensation paid to the claimant in terms of the impugned award.
13. The parties are directed to appear before the Tribunal for further
proceedings in above light on 22nd February, 2016.
14. The statutory amount of ₹ 25,000/- ,if deposited, shall be refunded
to the appellant.
15. The appeal is disposed of with above observations/directions.
16. The trial court record be returned.
R.K. GAUBA
(JUDGE)
JANUARY 14, 2016/nk
