Neelam Kumari And Others vs The National Insurance Company
2021 Latest Caselaw 3659 HP

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

F.A.O. No.42 of 2013 Judgment reserved on: 22.07.2021

.

Decided on: 06.08.2021

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Neelam Kumari and others .......Appellants

Versus

The National Insurance Company .......Respondent

Coram:

Whether approved for reporting? 1 Yes For the appellants:

For the respondent:

r to The Hon'ble Mr. Justice Satyen Vaidya, Judge.

Mr. Vijay Chaudhary, Advocate.

Mr. Jagdish Thakur, Advocate.

(Through Video Conferencing) Satyen Vaidya, Judge

This appeal has been filed under Section 173 of the Motor

Vehicles Act, 1988 against the award dated 19.12.2012 passed by

learned Motor Accident Claims Tribunal, Fast Track Court, Chamba,

H.P. (for short 'Tribunal') in M.A.C. No. 72/12/11 whereby the claim

petition filed by the appellants/claimants, was dismissed.

2. Brief facts of the case are that the appellants filed claim

petition No.72/12/11 seeking compensation to the tune of

Rs.8,00,000/- under Section 166 of the Motor Vehicles Act, 1988 (for

Whether the reporters of the local papers may be allowed to see the Judgment?

short 'Act') on account of death of Sh. Sunil Kumar S/o Sh. Dharam

Pal in the capacity of his legal representatives.

3. It was stated in the claim petition that the deceased was

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the owner of the vehicle involved in the accident and he himself was

driving the vehicle. The vehicle was insured with the respondent.

4. Respondent contested the petition on the grounds that

the petition was not maintainable. Insured had intentionally made

breaches of the terms and conditions of the policy. The petition under

Section 166 of the Act was not maintainable in view of the provisions

of Section 147 of the Act. The driver-cum-owner i.e. the deceased

Sunil Kumar was not possessing valid and effective driving license to

drive the vehicle at the time of the accident and in case some license

was produced, the same was bogus and fake having not been issued

by the competent authority. The vehicle at the time of the accident

was being plied in violation of the Act and Rules framed thereunder

besides other grounds. It was, however, averred in alternative without

admitting the liability that the petitioners were entitled for a limited

amount of Rs.2,00,000/- only as per the terms, limits and conditions

of the insurance policy and that also before the special forum.

5. In rejoinder, the petitioners controverted the objections

raised by the respondent in generality.

6. The learned Motor Accident Claims Tribunal below

framed the following issues:

1. Whether deceased Sunil Kumar had died on 10.11.2020 on account of use of vehicle No.HP-01C-0116 (Taxi Alto) at about 9.15 P.M. near Lakar Mandi, Dalhousie? OPP

2. If issue No.1 is proved in affirmative, whether the petitioners

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are entitled for the grant of compensation, if so, to what amount? OPP

3. Whether the petition is not maintainable as alleged? OPR

4. Whether the offending vehicle was being driven in violation of the provisions of Motor Vehicle Act and terms and conditions of Insurance Policy as alleged? OPR

5. Whether the liability of the Insurance Company was

restricted to Rs. Two Lacs in terms of Insurance Policy, as alleged? OPR

6. Whether the driver was not holding valid and effective driving licence to drive the offending vehicle as alleged? OPR

7. Whether four persons were traveling in vehicle as an

unauthorized occupants or gratuitous passengers as alleged? OPR

8. Relief.

7. Issues Nos. 1, 2, 5 and 7 were answered in negative,

whereas the issues Nos. 3, 4 and 6 were answered in affirmative. The

claim petition was accordingly, dismissed.

8. The appellants/claimants examined five witnesses.

Appellant No.1 appeared as PW-1 and reiterated the contents of the

petition in her examination-in-chief by way of affidavit Ext.PW-1/A.

In her cross-examination, nothing material could be elicited. PW-2

Tilak Raj submitted his examination-in-chief by way of affidavit Ext.

PW-2/A. He stated, on oath, that he was one of the occupants of

ill-fated vehicle at the time of the accident. He corroborated the

version of PW-1. In cross-examination, he stated that in accident he

received minor injuries, but he was not medically examined by the

doctor. He had not got registered the FIR. He denied that the accident

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occurred on account of negligence of the deceased. PW-4 Sonu Kumar,

through his examination-in-chief by way of affidavit Ext.PW-4/A

reiterated the version of PW-1 and PW-2. In cross-examination, he

stated that he had also received injuries in the accident and was

medically examined. He admitted that he has not placed on record of

the case any document in this regard. He denied that the accident

occurred due to negligence of deceased Sunil Kumar.

9. PW-3 Dr. Vipan Thakur proved the copy of postmortem

report Ext. PW-3/A and he was not cross-examined. PW-5 MHC Arun

Kumar, Police Station, Dalhousie, District Chamba proved the

factum of registration of FIR, a copy of which was exhibited as

Ext.PW-5/A.

10. Respondent did not choose to lead any oral evidence.

Learned counsel for the respondent placed on record documents i.e.

copy of Insurance Policy Ext. R-1 and copy of Registration Certificate

Ext. R-2. No further evidence was led on behalf of the respondent.

11. I have heard learned counsel for the parties and have also

gone through the records of the case.

12. It has been submitted by the learned counsel for the

appellants that the claim petition has been wrongly dismissed. It has

been argued with vehemence that the findings recorded by the

learned Tribunal below on issue No.6, were perverse as the

respondent had failed to discharge the burden of proving the said

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issue. It has further been argued that the petition was maintainable

under Section 166 of the Act and in alternative, award of

Rs.2,00,000/- could not have been denied to the appellants in view

of the specific admission made by the respondent and also the law

applicable in the facts of the case.

13. Per contra, learned counsel for the respondent has

submitted that the claim petition under Section 166 of the Motor

Vehicles Act was not maintainable in view of the provisions of

Sections 147, 149 and 165 of the Act. According to him, a petition

under Section 166 of the Act could be maintained only in respect of

the claim of third party and since, in the instant case, deceased

himself was insured, he did not qualify to be termed as third party.

It has further been argued on behalf of the respondent that the award

passed by the learned Tribunal did not suffer from any legal infirmity

and hence, deserves to be upheld.

14. In addition, it has also been contended on behalf of

respondent that the Tribunal was not competent to grant relief, if any,

arising out of personal accident risk of insured as the same was

justiciable only under the Consumer Protection Act before

appropriate forum.

15. The record reveals that the respondent had taken a

specific objection in the reply filed by it before the Tribunal, which

reads as under:

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"4. That the driver-cum-owner of the vehicle bearing registration No. HP-01C-0116 (Taxi) alleged to be involved

in the accident was not holding valid and effective driving licence to drive such vehicle at the time of alleged accident and in case any licence is produced the same bogus and fake license and having not been issued by any competent authority."

In rejoinder, the contents of para-4 of the preliminary

objections were denied being incorrect. Issue No.6 was framed and

the onus to prove the said issue was rightly placed on the respondent.

16. Despite having raised a specific defence under Section

149 (2) of the Act, respondent did not lead any evidence to prove such

issue in order to avoid its liability. During the entire trial, no steps

were taken by the respondent to seek information about the driving

license, if any, possessed by the deceased Sunil Kumar.

17. It is settled that the onus to prove breach of condition(s)

off the policy of insurance is always on the insurer. Reference can be

made to the judgment passed by this Court in Surender Singh vs.

Smt. Jai Manti Devi and others 2008 (2) Shim.L.C. 533, in which

it was held as under:

"12. The onus to prove the issue whether the Insurance Company was not liable to pay the awarded compensation for the reason that

the driver of the truck was not holding a valid driving license was heavy on the Insurance Company and rightly so fixed by the Tribunal.

[13] In Narcinva v. Kamat v. Alfredo Antonio Doe Martins,

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1985 3 SCR 951, the Apex Court has held that the insured is under

no obligation to furnish evidence so as to enable the insurance company to wriggle out of its liability under the contract of insurance. Mere failure on the part of the owner to produce the driving licence,

when called upon to do so in the cross-examination would not discharge the burden and no adverse inference to the effect that the driver did not have a valid licence can be drawn. The insurance company should have got evidence to substantiate its allegation.

[14]

Applying the test who would fail if no evidence is led, the Court held that it would be the insurance company.

In National Insurance Co. Ltd. v. Swaran Singh and Ors.,

2004 AIR(SC) 1531, the Apex Court has held that once the assured

proves that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within its exception. The Insurance Company, which alleges the breach must prove the

same and is required to establish the said breach by cogent evidence. Failure to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of

its liability. The Insurance Company with a view to avoid the liability must not only establish the available defences raised in the

proceedings but must also establish the breach on the part of the owner of the vehicle."

18. Similar view has been taken by this Court in Anita Abrol

and others vs. Rishi Co-operative Societies Limited and others

Latest HLJ 2009 (HP) 1342, wherein it was held as under:

"9. The learned Motor Accident Claims Tribunal has erred in law by shifting the burden to prove whether there was breach of terms of the policy or not upon the owner. It is settled law that it is for the Insurance Company to prove that there was breach of terms of

the policy and the driver did not have valid licence. In the present case the Insurance Company has not produced any evidence to prove the breach. The Counsel appearing for respondent No. 3 had not produced any evidence. Respondent No. 3 has not filed any

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application seeking details of the driving licence issued in favour

of respondent No. 2.

10. Their Lordships of the Hon'ble Supreme Court in Narchinva

V. Kamat and Anr. v. Alfredo Antonio Doe Martins and Ors., 1985 AIR(SC) 1281 have held as under:

"15. To sum up the insurance company failed to prove that there was a breach of the term of the contract of

insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award

under the comprehensive policy of insurance."

[11] It was necessary for the Insurance Company to give notice to the owner or the driver to give the details of the driving licence. The Insurance Company has also not moved any application

under Order 11 Rule 12 of the Code of Civil Procedure for production of document. The onus of proving that the driver of the bus did not have the valid licence to drive the vehicle lied on the

Insurance Company, because it was the Insurance Company which sought to avoid its liability under the policy on the ground

that the terms of the policy had been violated.

It was not sufficient for respondent No.3-company to

make assertion that the driver was not holding driving licence without adducing necessary proof and escape its liability under the policy. In the present case the driver was already arrayed as respondent No. 2. The requirement for holding the owner vicariously liable is that the driver was in the employment of the owner. This fact has not been denied by the owner."

19. In view of the aforesaid legal position, the findings

returned by the learned Tribunal below on issue No.6 cannot be

sustained and are accordingly reversed. It is held that respondent

had failed to prove the breach of policy on the ground that the

insured-cum-driver was not having valid and effective driving license

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at the time of the accident.

20. On the question of non-maintainability of petition,

learned counsel for respondent has placed reliance on the judgments

Ramkhiladi and another vs. United India Insurance Company

Ltd. 2020 (1) ACJ 627, CMA No. 1848/2017, NIC Ltd. Vs. Rani

and others, decided on 12.3.2020, New India Assurance

Company Ltd. Vs. Asha Rani, 2003, ACJ (1) (para 27), Oriental

Insurance Company Ltd. Vs. Premlata Shukla, 2007 (13) SCC

476 (Paras 12-15), Oriental Insurance Company Ltd. Vs. Smt.

Kamlo and others 2005, SLC 134 (HP) and Dhan Raj vs. New

India Assurance Company Ltd. 2004 (8) SCC 553.

21.

Insofar as the claim under Section 166 of the Act raised

by the appellants/claimants is concerned, the same has been rightly

denied by the learned Tribunal. The conjoint reading of Sections 147,

149 and 165 of the Act, leads to inescapable conclusion that the

claim under Section 166 of the Act on behalf of the legal

representatives of the deceased, who himself was owner of the vehicle

was not maintainable. The Act provides for the right of insured to be

indemnified by the insurer against the third party risk. The only

exception being in respect of the claims which arise out of the special

contract between the insured and insurer beyond the coverage of

third-party risk.

22. There is no hesitation in holding that the claim of the

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appellants/claimants on account of death of Sunil Kumar was not

maintainable as the deceased Sunil Kumar was himself the owner-

cum-driver of the vehicle involved in the accident and hence his legal

representatives had stepped into his shoes, therefore, were not

entitled to seek indemnification from the insurer.

23. Now the question that remains to be decided is whether

the Tribunal could have awarded a sum of Rs 2,00,000/- to the

appellants/claimants on account of special contract existing between

the parties? It is not in dispute that respondent had received

premium for insuring the owner's personal risk to the maximum limit

of Rs. 2,00,000/-.

24.

The Act mandates the policy coverage of third-party risks

but at the same time does not prohibit the insurer to enter into a

special contract of insurance with insured to cover risks of the

persons and property over and above the statutory coverage as

provided under Sections 146 and 147 of the Act. The expression used

in proviso (ii) to Section 147 (1) "Provided that the policy shall not be

required to cover any contractual liability", does not mean that the

insurer is prohibited by the Act to enter into a special contract of

insurance with the insured beyond the statutory limit prescribed

under the Act. In other words, Sections 146 and 147 of the Act,

prescribe the minimum statutory requirement of the insurance policy

covering third party risks subject to the limits provided under sub

.

section (2) of Section 147. In addition, sub section (5) of Section 147

of the Act, reads as under:

"(5) Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified

in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons".

25. Section 165 of the Act enables the constitution of

Tribunals. Sub section (1) of Section 165 of the Act cannot be said to

be exhaustive for the reasons that in explanation appended thereto,

the claims under Sections 140 and 163A of the Act have also been

included.

26. Sections 140 and 163A of the Act have their applicability

even without proof of negligence, which otherwise is opposed to the

very principle of strict liability and vicarious liability under law of

torts, on which rests the entire edifice of jurisdiction of Tribunals to

award damages/compensation.

27. This Court is thus unable to concur with the contention

raised on behalf of the respondent that even the claim of

Rs.2,00,000/- on account of personal accidental risk of the deceased

covered under the policy Ext. R-1 was not maintainable before the

Tribunal. Reference can be made to the judgment rendered in

Dhanraj vs. New India Assurance Company Ltd. and another AIR

2004 SC 4767 wherein Hon'ble Apex Court has held as under:

.

"8...In the case of Oriental Insurance Co. Ltd. v. Sunita Rathi and Ors. [1998 ACJ 121] it has been held that the liability of an Insurance Company is only for the purpose of indemnifying the insured against

liabilities incurred towards third person or in respect of damages to property. Thus, where the insured i.e. an owner of the vehicle has no liability to a third party the Insurance Company has no liability also. [9] In this case, it has not been shown that the policy covered any

r to risk for injury to the owner himself. We are unable to accept the contention that the premium of Rs. 4,989/- paid under the heading "Own damage" is for covering liability towards personal injury. Under the heading "Own damage", the words "premium on

vehicle and non-electrical accessories" appear. It is thus clear that this premium is towards damage to the vehicle and not for injury to the person of the owner. An owner of a vehicle can only claim provided a personal accident insurance has been taken out.

In this case, there is no such insurance."

28. Similarly, the Hon'ble Supreme Court in National

Insurance Company Ltd. Vs. Ashalata Bhowmik and others

(2018) 9 SCC 801 in para-9, has held as under:

"9...Therefore, the High Court was not justified in directing the

appellant/insurer to pay the compensation determined by the Tribunal. Since the indemnification extended to personal accident of the deceased is limited to Rs.2,00,000/-under the contract of insurance, the respondents are entitled for the said amount towards compensation. Hence, the appellant is directed to deposit the said sum of Rs. 2,00,000/- with interest @ 9 per cent per annum from the date of the Claim Petition till the date of deposit with the Tribunal within a period of four weeks from today."

29. Even the judgment relied upon on behalf of the

respondent in Ramkhiladi and another vs. United India

Insurance Co. Ltd. and another 2020 ACJ, 627, the Hon'ble

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Supreme Court has held in paras 5.9 and 6 as under:

"5.9. Now, so far as the submission made on behalf of the claimants

that in a claim under Section 163A of the Act mere use of the vehicle is enough and despite the compensation claimed by the heirs of the owner of the motorcycle which was involved in the accident resulting in his death, the claim under Section 163A of the Act would be

maintainable is concerned, in view of the decision of this Court in Rajni Devi (supra), the aforesaid cannot be accepted. In Rajni Devi (supra), it has been specifically observed and held that the provisions of Section 163A of the Act cannot be said to have any application

with regard to an accident wherein the owner of the motor vehicle

himself is involved. After considering the decisions of this Court in the cases of Oriental Insurance Co. Ltd. V. Jhuma Saha, 2007 9 SCC 263; Dhanraj (supra); National Insurance Co. Ltd. V. Laxmi Narain

Dhut, 2007 3 SCC 700 and Premkumari v. Prahlad Dev, 2008 3 SCC 193, it is ultimately concluded by this Court that the liability under Section 163A of the Act is on the owner of the vehicle as a person

cannot be both, a claimant as also a recipient and, therefore, the heirs of the owner could not have maintained the claim in terms of

Section 163A of the Act. It is further observed that, for the said purpose, only the terms of the contract of insurance could be taken recourse to. In the recent decision of this Court in the case of Ashalata

Bhowmik (supra), it is specifically held by this Court that the parties shall be governed by the terms and conditions of the contract of insurance. Therefore, as per the contract of insurance, the insurance company shall be liable to pay the compensation to a third party and not to the owner, except to the extent of Rs.1 lakh as observed hereinabove.

[6] In view of the above and for the reasons stated above, the present appeal is partly allowed to the aforesaid extent and it is observed and held that the original claimants shall be entitled to a sum of Rs.1

lakh only with interest @ 7.5 per cent per annum from the date of the claim petition till realization. In the facts and circumstance of the present case, there shall be no order as to costs."

.

30. Even this Court in ICICI Lombard General Insurance

Company Ltd. Vs. Parul Sharma and others 2018 ACJ 635 has

held as under:

"21. The Apex Court in the case titled as Oriental Insurance Co. Ltd. versus Rajni Devi and others, 2008 ACJ 1441,

held that where compensation is claimed for the death of the owner or another passenger of the vehicle, the claim of the insurance company would depend upon the terms of the insurance policy. It is worthwhile to reproduce paras 6 and 11

of the judgment herein:

"6. It is now a well settled principle of law that in a case where third party is involved, the liability of the insurance company would be unlimited. Where, however, compensation is claimed for the death of the

owner or another passenger of the vehicle, the contract of insurance being governed by the contract qua contract, the claim of the insurance company would depend upon the terms thereof.

7 to 10. Xx xxx xxx

11. According to the terms of contract of insurance, the liability of the insurance company was confined to Rs. 1,00,000 (rupees one lakh). It was liable to the

said extent and not any sum exceeding the said amount."

[22] Applying the test to the instant case, the insurance policy of the offending vehicle is on the record as Ext. R1E, the perusal of which does disclose that the owner insured has paid extra premium covering the insurance of the owner to the extent of Rs. 2,00,000/. As discussed hereinabove, deceased Vijay Sharma had stepped into the shoes of the owner, thus,

his risk was covered to the extent of Rs. 2,00,000/ and the claimants, being the legal representatives of the owner, are entitled to compensation only in terms of the conditions contained in the insurance policy.

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[23] Viewed thus, it is held that the claimants are entitled to compensation to the tune of Rs. 2,00,000/ with interest @ 7.5% per annum from the date of the claim petition till its

finalization."

31. Since the insurer had failed to prove the breach of

conditions of the policy, as noted above, the claim of Rs.2,00,000/-

on account of coverage of personal risk under the policy in question

should have been allowed in favour of the appellants/claimants. The

impugned award dated 19.12.2012 is thus modified to the extent that

the respondent -National Insurance Company is liable to pay a sum

of Rs.2,00,000/- to the claimants/appellants on account of personal

accidental coverage along with interest at the rate of 7.5% per annum

from the date of filing of the petition. It is further held that the

amount so payable by the respondent to the appellants/claimants

shall be apportioned in the following ratio:

(i) Appellants/claimants No.1 to 3 each shall be paid 25% of the

award amount and ;

(ii) the remaining 25% shall be apportioned equally between the

32. The appeal is accordingly disposed of in the aforesaid

terms with no order as to costs. Pending miscellaneous application(s)

if any, also stand disposed of.

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    6th August, 2021                        (Satyen Vaidya)
       (GR)                                      Judge





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