New India Insurance Company Ltd vs Arjanbhai Hansrajbhai Dawariya
2022 Latest Caselaw 2769 Guj

     C/FA/3599/2013                               CAV JUDGMENT DATED: 11/03/2022




               IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                      R/FIRST APPEAL NO. 3599 of 2013


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE SANDEEP N. BHATT

==========================================================

1 Whether Reporters of Local Papers may be allowed No to see the judgment ?

2      To be referred to the Reporter or not ?                            No

3      Whether their Lordships wish to see the fair copy                  No
       of the judgment ?

4      Whether this case involves a substantial question                  No

of law as to the interpretation of the Constitution of India or any order made thereunder ?

========================================================== NEW INDIA INSURANCE COMPANY LTD Versus ARJANBHAI HANSRAJBHAI DAWARIYA & 2 other(s) ========================================================== Appearance:

MR GC MAZMUDAR(1193) for the Appellant(s) No. 1 MR HG MAZMUDAR(1194) for the Appellant(s) No. 1 MR.HIREN M MODI(3732) for the Defendant(s) No. 1 RULE SERVED for the Defendant(s) No. 2,3 ==========================================================

CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

Date : 11/03/2022

CAV JUDGMENT

1. The present First Appeal, under Section 173 of Motor Vehicles Act, 1988, is preferred by the appellant-New India Insurance Co. Ltd. (Original Opponent No.3), being aggrieved and dissatisfied with the judgment and award dated

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11.09.2013 passed by the Motor Accident Claims Tribunal (Aux.), Junagadh in Motor Accident Claim Petition No.185 of 2004 under the provisions of Section 166 of the Motor Vehicles Act, 1988, by which the Tribunal has awarded Rs.1,67,600/- with 9% per annum interest to the claimant, by holding Opponent Nos.1 to 3 liable, jointly and severally.

2. Brief facts of the case are as under:

2.1 On 25.02.2004 at about 8:45 a.m., the claimant- Arjanbhai Hansrajbhai Dawariya as a pillion rider alongwith Opponent No.1-Vajubhai Hirabhai Dawariya (driver of the Hero Honda Motorcycle) were going to Chanaka from Kathroth by Hero Honda Motorcycle bearing registration No.GJ-11-AA-4575 which is in the ownership of opponent No.2-Alpesh Vrujlal Dawariya. When they reached near place of accident, Hear Honda Motorcycle collided with stone, on the side of road and therefore, the applicant has fallen down from the motorcycle and due to that, he has received various injuries in the back and on the hand also. He has also lost his eye vision. Therefore, he has filed the claim petition against the driver of Hero Honda Motorcycle. At the time of accident, claimant-Arjanbhai Hansrajbhai Dawariya was doing the job of agriculture work and due to accident, he has received permanent disability and has undergone various minor treatments. Therefore, he has suffered financially and mentally both.

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Therefore, the claim petition has been filed by the claimant for compensation.

2.2 Notices were served to the opponents. Opponent Nos.1 and 2 have filed their written statement at Exh.19, denying the averments made in the claim petition. They have also disputed the age, income and injury caused to the claimant. They have also disputed that Opponent Nos.1 and 2 are negligent in causing the accident as alleged by the claimant. If any compensation is required to be paid, then, it is liability of Opponent No.3-Insurance Company to pay the amount of compensation. Opponent No.3-Insurance Company has also filed its written statement at Exh. 22 by contending that the particulars of the claim petition are illogical and not bonafide. Further, the age, income and injury of the claimant as averred in claim petition are also disputed. Involvement of the Opponent No.1's vehicle has also been disputed by the insurance company as Opponent No.1 and the claimant are the relatives. It has also contended that there is no permanent disability caused to the claimant, therefore, the claim petition is required to be dismissed.

2.3 Issues were framed by the Tribunal for its determination. The claimant has deposed in support of his claims at Exh.33, who was also cross-examined by learned advocate for the insurance company. Learned advocate for the insurance company has also examined Opponent No.1-

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Vajubhai Hirabhai Dawariya at Exh.57 and various documentary evidence; like certificate issued by Dr. Sanjay at Exh.34, certificate issued by Civil Hospital, Junagadh at Exh.39, certificate issued by Government Hospital, Rajkot at Exh.40, certificate issued by Dr. Rajesh for the treatment of eye at Exh.41, Panchnama at Exh.43, copy of charge-sheet at Exh.44, the insurance policy of Hero Honda Motorcycle at Exh.45 to 46, F.I.R. at Exh.47 etc.

2.4 The Tribunal, after considering the oral and documentary evidences, came to the conclusion that the claimant is entitled to get compensation of Rs.1,67,600/- with 9% p.a. interest by holding Opponent Nos.1 to 3 liable, jointly and severally.

2.5 Hence, the present appeal is preferred by the appellant-New India Insurance Co. Ltd.

3.1 I have heard learned advocate Mr. H.G. Mazmudar appearing for the appellant-insurance company has submitted that the Tribunal has erred in awarding the compensation to the claimant, on the erroneous and illegal ground. The Tribunal has not considered the material evidence available on record and has erred in not dismissing the claim petition of the claimant.

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3.2 Further, he has submitted that the claimant has filed the F.I.R. after delay of 86 days. It is also required to be considered that the claimant and Opponent Nos.1 and 2 are near relatives. Further, he has submitted from the certificate issued by Civil Hospital, Junagadh at Exh.39, where the date and time of accident is recorded as 25.02.2004 about 4:25 a.m., but he has drawn attention towards F.I.R. at Exh.47, where the date and time of the accident is recorded as 25.02.2004 at about 8:45 a.m. Thereafter, he has submitted that F.I.R. at Exh.47 clearly indicates that the accident occurred on 25.2.2004 and the complaint was filed on 03.03.2004. There is no explanation about the long delay in filing the F.I.R. Further, he has submitted from the record in cross-examination of the complainant himself that he has not given any reason for lodging the complaint after delay of about 8 days.

3.3 Further, he has also admitted that when the accident has occurred, other vehicle was coming from the opposite side, i.e. one Bus and has also admitted that the accident is not actually occurred due to collision with the bus but his motorcycle, by which he was going as a pillion rider, had collided with stone on the roadside.

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3.4 Further, he has indicated from the deposition of the witness that the deposition of Opponent No.1 clearly reveals that he has already admitted in his examination-in-chief that he was not having any valid and effective driving licence at the time of accident.

3.4 Further, he has submitted that when the driver was not holding any valid and effective driving licence, the question of holding insurance company liable, could not be arisen as per the decision in the case of National Insurance Company Ltd. Vs. Swaran Singh & Ors. reported in 2004 (1) GLH 691. Further, he has submitted that our own High Court has considered the identical situation in the case of Mohmad Rafik Munnebhai Ansari Vs. Gujarat State Road Transport Corp. rendered in Civil Application No.801 of 2021 in First Appeal No.3173 of 2021, by which the insurance company has been exonerated in absence of driving licence of the driver. Further, he has placed reliance upon the decision of our High Court in the case of National Insurance Company Ltd. Vs. Bharatbhai Bhimjibhai Songara & Ors. rendered in First Appeal No.2180 of 2012 where also, this Court has considered the case of Swaran Singh(supra), Mohmad Rafik Munnebhai Ansari & Ors. (supra) and has found that if there is no valid and effective driving licence with the driver of the offending vehicle, then the insurance company is required to be exonerated from payment of

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compensation.

3.5 Further, he has submitted that as per Sections 147 to 149 of the Motor Vehicles Act, 1988, the insurance company cannot be held liable, in the facts and circumstances of the present case, to pay the amount of compensation. Therefore, he prays that the present appeal may be allowed by exonerating the insurance company from its liability and also by directing to refund the amount which is already deposited by the insurance company.

4.1 Per contra, learned advocate Mr. Hiren M. Modi for the respondent No.1 has submitted that the driver is examined as a witness of the insurance company. He has submitted that though that is not sufficient to prove that the driver was not holding valid and effective driving licence. Further, he has submitted that some officers from the R.T.O. is required to be examined to prove its contention about not holding valid and effective driving licence.

4.2 Further, he has submitted that at the most, if it is found that there is some breach of conditions as the driver is not holding any valid and effective driving licence, then the insurance company can be directed to pay the amount of compensation and then it can recover from the owner of the vehicle.

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4.3 Further, he has relied upon the decisions of the Hon'ble Apex Court in the case of (i) Lal Singh Marabi Vs. National Insurance Co. Ltd. & Ors. reported in 2017 ACJ 1362,(ii) Iffco Tokio General Insurance Co. Ltd. Vs. Kaljibhai Janabhai Rathva & Anr. reported in 2020 ACJ 2294, (iii) S. Iyyapan reported in 2013 ACJ 1944, (iv) Kusum Lata & Ors. Vs. Satbir & Ors. reported in 2011 ACJ 926, and (v) Pappu & Ors. reported in 2018 ACJ 690 and has submitted that as per the abovementioned decisions, this Court can pass the order on the principle of 'Pay and Recover' by directing the insurance company to Pay first and then Recover from the opponents tort-feasor(s). Further, he has submitted that the amount which is awarded by the Tribunal is otherwise just and proper and on very conservative side.

4.4 Further, he has submitted that the pleadings of the parties cannot be considered stricto sensu in the proceedings under the Motor Vehicles Act, 1988. As per the decision of Hon'ble Apex Court in the case of Anita Sharma v. New India Assurance Co. Ltd. reported in (2021) 1 SCC 171, he has submitted that the amount of compensation awarded by the Tribunal is otherwise just and proper and on the ground of non-holding valid and effective driving licence, no interference is required to be called for and in alternative, the order of 'Pay and Recover' can be passed in the facts and circumstances of the present case.

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5.1 I have heard learned advocates for the respective parties. I have considered the pleadings of the parties. I have also considered the oral and documentary evidence available on record. I have perused record and proceedings. The contention raised by learned advocate Mr. Mazmudar about the delay in filing the F.I.R. of 8 days is found germane. In the background that Respondent Nos.1 and 2 are also admittedly relatives to the claimant. The mentioning of date and time of occurrence of accident was different in the record of Hospital as well as in the F.I.R., which also creates suspicion. Not only that but the admission of the claimant in the cross-examination also also supports it. Initially the claimant has come up with the version that his motorcycle, where he was sitting as pillion rider, has met with an accident due to collision with bus, whereas, he has admitted in the cross-examination that the accident has occurred, as motorcycle is dashed with stone on the roadside. That itself is sufficient to belief that the claimant has not come with clean hands before the Tribunal.

5.2 Furthermore, if we see the deposition of Opponent No.1, who is examined by the insurance company at Exh.56, he has specifically admitted in his examination-in-chief that he was not having any type of valid and effective driving licence at the time of accident. Therefore, in the present case, in absence of any documentary evidence to show that

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the Opponent No.1 was not having driving licence at the time of accident, particularly his admission in the examination-in-chief which clearly indicates that the driver was not holding valid and effective driving licence at the time of accident. Therefore, I found clear breach of conditions of the insurance policy in view of the decision of Hon'ble Apex Court in the case of Swaran Singh & Ors. (supra), more particularly para 82 and 83, which are relevant and therefore are reproduced as under:

"82. Proviso appended to sub-section (4) of Section 149 is referable only to sub-section (2) of Section 149 of the Act. It is an independent provision and must be read in the context of Section 96(4) of the Motor Vehicles Act, 1939. Furthermore, it is one thing to say that the insurer will be entitled to avoid its liability owing to breach of terms of a contract of insurance but it is another thing to say that the vehicle is not insured at all. If the submission of the learned counsel for the petitioner is accepted, the same would render the proviso to sub-section (4) as well as sub-section (5) of Section 149 of the Act otiose, nor any effective meaning can be attributed to the liability clause of the insurance company contained in sub-section (1). The decision in Kamla's case (supra) has to be read in the aforementioned context.

83. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does mean that

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it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned counsel for the petitioner, which is in negative language may now be noticed. The said provision must be read with sub-section (1) thereof. The right to avoid liability in terms of sub- section (2) of Section 149 is restricted as has been discussed herein before. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading."

5.3 Further, there is also relevant judgment on the same issue by considering the aspect of the situation, when admittedly no driving licence was obtained by driver in the case of Mohmad Rafik Munnebhai Ansari (supra). Relevant para 11 is reproduced as under:

"11. Tribunal while answering the issue regarding liability, has held that insurer of the motorcycle had failed to prove that driver

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of the motorcycle was not holding valid and effective driving license at the time of the accident. It has also been further held that in the light of the driving license produced at Exh. 43 and 67 which was for the period from 26.06.2009 to 25.06.2009 that driver of the motorcycle was not disqualified for obtaining such driving license. The defence which is available to the insurer to stave off the liability to be fastened on it by virtue of the insurance policy taken on the motorcycle is traceable to section 149(2)(a)(ii) of Motor Vehicle Act, 1988, which mandates that driver of the offending vehicle is required to have effective and valid driving license as on the date of the accident. The Hon'ble Apex Court in the case of National Insurance Co. Ltd. versus Swaran Singh and Others reported in 2004(1) GLH 691, has held to the following effect : -

"WHEN ADMITTEDLY NO LICENCE WAS OBTAINED BY A DRIVER:

82. We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle admittedly did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive

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a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand at all, e.g. a case where an accident takes place owing to a mechanical fault or vis-major. 83. In V. Mepherson v. Shiv Charan Singh [1998 ACJ 601 (Del.)] 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. 84. In New India Assurance Co. Ltd. vs. Jagtar Singh and Others, [1998 ACJ 1074], Hon'ble M. Srinivasan, CJ, as His Lordship then was, dealing with the case where a duly licensed driver was driving a vehicle but there was a dispute as to who was driving the vehicle. In that case the court referred to the judgment in Kashiram Yadav vs. Oriental Fire & General Insurance Co. Ltd. [1989 ACJ 1078 (SC)] and expressed its agreement with the views taken therein. 85. In National Insurance Co. Ltd. vs. Ishroo Devi and Others, [1999 ACJ 615] where there was no evidence that the society which employed the driver was having knowledge that the driver was not holding a valid licence, it was held the insurance company is liable. The court relied upon the decisions of this Court in Kashiram Yadav's case (supra), Skandia's case (supra) and Sohan Lal Passi's case (supra)."

5.4 Further, the above judgments were followed by this Court in the case of National Insurance Co. Ltd. Vs. Bharatbhai Bhimjibhai Songara & Ors. rendered in First Appeal No.2180 of 2012 dated 18.01.2022 and has observed more particularly in para 8 as under:

"8. In case on hand also it clearly transpires that the driver

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of offending vehicle had no license on the date of accident. As per the provision of the Motor Vehicles Act leverage of 30 days was given on license having expired whereas in this case one year has passed and same has not renewed. It is an admitted position that driver of offending vehicle did not possess any license on the date of accident. Following the ratio laid down by the Coordinate Bench of this court in the case of Mahmad Rafik Munnebhai Ansari (supra), the appellant- Insurance Company cannot be therefore, held liable to indemnify the award. The conclusion arrived at by the Tribunal that the license was not cancelled also is against the provision of Act and that would not create any liability of the appellant. In light of the aforesaid, therefore, the appellant cannot be held to be liable to satisfy the award and appellant Insurance Company therefore, deserves to be exonerated. It goes without saying that the opponent nos. 1 and 2 would be jointly and severely liable to satisfy the award. In light of the above fact, the contention raised by Mr. Patel that order of pay and recovery deserves to be passed, cannot be accepted. That as per the order dated 18.09.2012 passed in Civil Application No.7758 of 2012, the appellant Insurance Company has deposited whole awarded amount with interest and no disbursement is made in favour of the claimant. However, the respondent claimant was permitted to withdraw the interest that may be accrued on such deposit. If any such interest is permitted to be disbursed in favour of the claimant, as per the order dated 18.09.2012 in Civil Application No. 7758 of 2012, the same cannot be recovered from the claimant. Rest of the amount

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be refunded back to the appellant Insurance Company forthwith with proportionate costs and interest. The impugned judgment and award is hereby quashed and set aside. Appeal is thus, partly allowed to the aforesaid extent. Registry is directed to transmit back the Record and Proceedings of the case to the Tribunal forthwith."

5.5 The judgments which are cited by learned advocate Mr. Modi are on the issue, where the background of the fact that the driver is having driving licence either expired or fake or having driving licence to drive different class of vehicle. Here, in the present case, there is no licence at all and as per the decision of Hon'ble Apex Court in case of Swaran Singh & Ors. (Supra) and other decisions, the insurance company cannot be held liable, as there is clear fundamental breach of terms of the insurance policy and in view of the provisions of Sections 147 to 149 of the Motor Vehicles Act, 1988, the insurance company is required to be exonerated from its liability to pay the amount of compensation.

5.6 Accordingly, the appeal requires consideration and the present appeal deserves to be succeeded and the appellant cannot be held liable to pay the awarded amount. Therefore, the appellant-insurance company deserves to be exonerated and opponent Nos.1 and 2 would be liable, jointly and severally to satisfy the award in light of the aforesaid legal position.

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6. With the above observations, the following order is passed:

6.1 The present First Appeal No.3599 of 2013 is partly allowed, with no order as to costs.

6.2 The impugned judgment and award passed by the Tribunal in Motor Accident Claim Petition No.185 of 2004 is set aside to the aforesaid extent, qua the appellant- Insurance Company.

6.3 Whichever, amount is paid to the claimant, pursuant to the earlier order passed in the present appeal, cannot be recovered from the claimant.

6.4 The amount, if any lying in the FDR and/or with the Tribunal shall be refunded back to the appellant-insurance company, with proportionate cost, with accrued interest, in due procedure.

6.5 Record and Proceedings be sent back to the concerned Tribunal, forthwith.

(SANDEEP N. BHATT,J) DIWAKAR SHUKLA