Iffco Tokio General Insurance Co ... vs Munnydevi Chandrapalsinh ...
2021 Latest Caselaw 17983 Guj

     C/FA/2912/2021                              JUDGMENT DATED: 02/12/2021




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                      R/FIRST APPEAL NO. 2912 of 2021
                                   With
                CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
                     In R/FIRST APPEAL NO. 2912 of 2021

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE VIPUL M. PANCHOLI

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1    Whether Reporters of Local Papers may be allowed
     to see the judgment ?

2    To be referred to the Reporter or not ?

3    Whether their Lordships wish to see the fair copy
     of the judgment ?

4    Whether this case involves a substantial question
     of law as to the interpretation of the Constitution
     of India or any order made thereunder ?

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               IFFCO TOKIO GENERAL INSURANCE CO LTD
                               Versus
             MUNNYDEVI CHANDRAPALSINH RAJAVAT THAKUR
==========================================================
Appearance:
MR. ALKESH N SHAH(3749) for the Appellant(s) No. 1
MR PARESH M DARJI(3700) for the Defendant(s) No. 1,2
NOTICE SERVED(4) for the Defendant(s) No. 3
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    CORAM:HONOURABLE MR. JUSTICE VIPUL M. PANCHOLI

                             Date : 02/12/2021

                            ORAL JUDGMENT

1. This appeal is filed under Section 173 of the Motor Vehicle Act (hereinafter referred to as "the Act" for short) by the appellant - Insurance Company, wherein the appellant has prayed that the judgment

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and award dated 2.4.2019 passed by the Motor Accident Claim Tribunal (Auxi.), Gandhinagar in MACP No.38 of 2010, be quashed and set aside.

2. The brief facts leading to filing of this appeal are as under:

2.1 The present opponent nos.1 and 2 filed claim petition being M.A.C.P.No.38 of 2010 under Section 166 of the Act against the present appellant-insurance company and opponent no.3 herein. It is mainly stated that on the date of incident i.e. 12.11.2009, when the deceased Bantisang @ Vedpal was travelling from Harsoli to Dahegam in Autorickshaw bearing no.GJ.18AT.4022, near Uttam dairy, the rickshaw driver was rashly and negligently driving the said autorickshaw and the said autorickshaw dashed with one pick- up jeep. In the said accident, Bantisang sustained grievous injuries as a result of which, he died. It is stated that the deceased was earning Rs.4000/- per month and therefore the claimants prayed that Rs.5 lacs be awarded by way of compensation to them.

2.2 On issuance of notice, the appellant-original opponent no.2- insurance company filed written statement at Exh.4 and during the course of proceedings, the parties led the documentary evidence as well as oral evidence before the Claims Tribunal. The Claims Tribunal, by way of impugned judgment and award dated 2.4.2019, allowed the said claim petition and thereby held that both the original opponents are jointly and severally liable to pay the compensation to the claimants. The total amount of Rs.4,83,600/- by way of compensation was awarded with 9% interest p.a. The appellant-insurance company has, therefore, filed the present appeal.

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3. Heard learned advocate Mr.Alkesh Shah for the appellant and learned advocate Mr.Paresh Darji for the respondent nos.1 and 2. Though served, none appears for respondent no.3.

4. Learned advocate for the appellant has, though tried to contend the case of the appellant-insurance company on merits, restricted his arguments that the original appellant no.1-present respondent no.3 herein i.e. driver of the vehicle of autorickshaw bearing number GJ.18AT.4022 was not holding a valid and effective driving licence to drive the same and therefore, the Tribunal ought to have exonerated the present appellant-insurance company or in the alternative, it is contended that the Tribunal ought to have directed the appellant to pay the amount of compensation to the claimants and thereafter ought to permit the appellant-insurance company to recover the same from the owner/driver of the offending vehicle. At this stage, learned advocate for the appellant has placed on record the licence issued to the original opponent no.2 and also placed on record the judgment and award dated 3.7.2020 passed by the M.A.C.T.(Aux.), Ahmedabad Rural in MACP No.699 of 2010. It is submitted that in the very same accident, one Kalubhai Meliyabhai Amaliyar also sustained injury and he filed claim petition before the Claims Tribunal at Ahmedabad (Rural) and while passing the judgment and award, the concerned Tribunal, on the basis of the evidence adduced before it, specifically observed that the driver of the offending vehicle was not holding valid and effective driving licence at the time of accident and therefore the insurer of the offending vehicle i.e. the present appellant-insurance company was not held liable and ultimately, the claim petition was dismissed qua the present appellant. Learned advocate has, therefore, urged that the impugned judgment and award passed by the Claims Tribunal be modified and the appellant-insurance company be

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permitted to recover the amount of compensation from the owner/driver of the offending vehicle.

5. Learned advocate Mr.Darji for the respondent nos.1 and 2, though initially opposed this appeal, ultimately contended that if this Court is of the view that after payment of compensation to the claimants by the present appellant-insurance company, if the insurance company is permitted to recover the same from the driver/owner of the vehicle in question, then he has no objection.

6. Having heard learned advocates for the parties and having gone through the material placed on record, it would emerge that the Claims Tribunal has held both the original opponents jointly and severally liable to pay Rs.4,83,600/- by way of compensation to the claimants. In the impugned judgment and award, it has been specifically observed that the insurance company has examined witness Surekhaben, driving licence of the original opponent no.1 was produced and vide Exh.29, the relevant document with regard to the licence of the original opponent no.1 was also placed on record. It is further revealed that for the same accident, another Claims Tribunal, after considering the documentary and oral evidence produced before it, exonerated the present appellant-insurance company, by observing that the driver was not holding any valid or effective driving licence at the time of accident.

7. At this stage, this Court would like to refer to the decision of the Hon'ble Supreme Court in case of National Insurance Company Ltd. Vs. Swaran Singh & Ors., reported in (2004) 3 SCC 297, wherein the Hon'ble Supreme Court has observed in Paragraph No.110 as under, "110.The summary of our findings to the various issues as

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raised in these petitions is as follows:

(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

(ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter alia in terms of Section 149(2)

(a)(ii) of the said Act.

(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, 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 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, however, with a view to avoid their liability must not only establish the available

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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.

(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case.

(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under section 149(2) of the Act.

(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.

(ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in

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respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.

(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of

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land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.

(xi) The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims."

8. The aforesaid shows that, as held by the Apex Court in the aforesaid decision, the Tribunal can enable the insurer to recover the amount from the insured unless the insured has proved otherwise for taking all reasonable care and cautions on his part. Mr.Darji, the learned counsel for the respondent Nos.1 and 2, contended that in view of the observations made at para (iii) of para 110 of the aforesaid decision, the defence would be available to the insured to repudiate the liability. He submitted that there is no blanket proposition that if the licence is found to be fake, the insurance company shall be at the liberty to recover the amount from the owner of the vehicle i.e. insured.

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9. As such, the interpretation, as put forward, cannot be accepted because the observations made in para (iii) of para 110 of the aforesaid decision are for enabling the insurance company to repudiate the liability if such is satisfactorily proved. At this stage, I may refer to the decision of the Apex Court in the case of Pepsu Road Transport Corporation Vs. National Insurance Company, reported in (2013) 10 SCC 217, wherein, the Apex Court, in paras 9 and 10 observed thus:

"9. Swaran Singh case was subsequently considered by a two-Judge Bench of this Court in National Insurance Company Limited vs. Laxmi Narain Dhut. It was explained that: (Swaran Singh case, SCC p. 341 para

110) "110. (iii) ... 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 by duly licensed driver or one who was not disqualified to drive at the relevant time."

10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is

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liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singhs case. If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation."

10. Thus keeping in view the aforesaid decisions rendered by the Hon'ble Supreme Court, if the facts of the present case are carefully seen,

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it is revealed that the original opponent no.1 i.e. the driver/owner of the vehicle in question have not entered into the witness box for showing the Tribunal that all care and caution were taken for verifying the genuineness of the licence or otherwise. Under these circumstances, the contention raised for availability of the defence even if accepted is on a non-existence premise because no evidence has been led on behalf of the owner of the vehicle in question for such purpose before the Tribunal. Thus, it was required for the Tribunal to enable the Insurance Company to recover the amount from the owner and driver of the vehicle in question in accordance with law after the payment is made to the original claimants as per the award. Therefore considering the facts of the present case, as discussed hereinabove, since the aforesaid aspect has not been expressly provided, the impugned award passed by the Tribunal deserves to be modified to that extent.

11. In view of the aforesaid observations and discussion, the present First Appeal stands allowed party. The impugned judgment and award dated 2.4.2019 passed by the Motor Accident Claim Tribunal (Aux.), Gandhinagar in MACP No.38 of 2010 is hereby modified to the extent that after the payment of the amount as per the impugned judgment and award is made by the appellant - Insurance Company to the original claimants i.e. the respondent nos.1 and 2 herein, it would be open for the appellant - Insurance Company to recover the amount from the respondent no.3 herein - driver/owner of the vehicle in question in accordance with law. No order as to costs.

12. In view of the final disposal of the First Appeal, Civil Application stands disposed off.

(VIPUL M. PANCHOLI, J) SRILATHA