Jammu & Kashmir High Court

National Insurance Co. Ltd vs Santosh Devi And Others on 10 March, 2021

                                                             Sr. No.

             HIGH COURT OF JAMMU AND KASHMIR
                         AT JAMMU

                                                           MA No. 01/2019
National Insurance Co. Ltd.
                                                             ...Appellant(s)



                              Through:- Mr. Rajesh Kumar, Advocate
             v/s

Santosh Devi and others
                                                           .... Respondent(s)


                              Through:- Mr. V. Bhushan Gupta, Advocate


Coram: HON'BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE

                               JUDGMENT

1. In this appeal filed under Section 30 of the Workmen‟s

Compensation Act, 1923 award dated 31.10.2018, passed by the Court of

Commissioner under Employees Compensation Act, 1923 (Assistant Labour

Commissioner), Kathua (for brevity „Commissioner‟) is under challenge,

wherein appellant has been directed to pay a compensation of Rs.9,53,819/-

within 30 days failing which interest @ 12% p.a on the order till the time it is

actually realized to the claimants/respondents l to 5, herein.

2. The appeal is being filed on the premise that in the claim petition

filed by the respondents 1 to 5 for grant of compensation on account of death

of one Sandeep Kumar s/o Gian Chand, before the Commissioner, the

claimants contended that the deceased Sandeep Kumar while being in the

employment of respondent No.6 herein died in a vehicular accident while

driving a heavy goods vehicle owned by respondent No. 6 on 14.08.2017. The

said deceased-driver has been stated to be the employee of respondent No. 6

of the age of 28 years earning a monthly salary of Rs. 15,000/-.

3. The employer/respondent No. 6 herein is stated to have appeared

before the Commissioner and in the objections filed admitted the factum of

employment, accident and death of the deceased-driver, however, admitted the

monthly salary drawn by the deceased as Rs. 8000/- instead of Rs. 15,000/-.

The respondent No. 6 is further stated to have contended in the objections that

the vehicle stands insured with the appellant-company herein and as such the

claim has to be indemnified by the appellant-company.

4. It is being stated in the appeal that the appellant being

respondent before the Commissioner appeared and contested the claim

petition inter alia on the grounds that the terms and conditions of the contract

of insurance stand violated by the insured as the deceased-driver was not

holding a valid and effective driving licence at the time of accident.

5. The Commissioner is stated to have framed following four

issues:-

"1. Whether the deceased falls within the definition of employee as per the provisions of Employee‟s Compensation Act? OPP

2. What was the age and wages of the deceased at the time of accident? OPP

3. Whether there is any violation of terms and conditions of the insurance policy? OPR-2

4. Relief ?

6. The evidence in the matter is stated to have been led by the

contesting parties, whereupon the Commissioner is stated to have passed the

impugned award.

7. The award (supra) in the instant appeal is being questioned on the

grounds which are in extenso extracted and reproduced hereunder:-

"A)That the Hon'ble Court below has not appreciated the law as well as facts on record properly, thus award impugned is not sustainable and deserves to beset-aside.

B) That the impugned award is against the law and facts of the case in so for as liability of the appellant is concerned, thus requires to be set-aside.

C) That in order to discharge the burden of proof as cast upon the appellant by virtue of issue no.3 framed in the said claim petition, the appellant placed on record the certificate issued by the licensing authority Lakhanpur, Kathua categorically reflecting that the driving license of the driver Sandeep Kumar who was authorized to drive MCWG (NT), LMV(NT), TRANS(TR), the validity of Tr was w.e.f. 23.01.2014 to 22-01-2017.

D) That the appellant in order to prove the violations of M.V. Act, the policy conditions and the liability to indemnify the owner, examined the witnesses Sukhvinder Singh, Junior Assistant RTO office Kathua (R2W1), who appeared along with the record of DL of the deceased driver and stated on oath that as per record tallied with the certificate of RTO the driver Sandeep Kumar could not drive Heavy Goods vehicle after 22-01-2017. The certificate

issued by the RTO was proved, the validity of DL and the limitations to ply the vehicle was proved and the violation was proved.

E) That the appellants also examined Sh. Sovit Kumar, Administrative Officer, National Insurance Company Ltd. (R2W2), Who categorically stated that on verification of the DL from the ARTO Lakhanpur the DL was neither found valid nor effective at the time of accident, the owner allowed the vehicle to drive the same whose DL was not effective and valid, the insured owner has committed breach of insurance policy conditions as such the appellant company is not liable to indemnify or pay the claim.

F) That the appellant company substantially proved the issue no.3 by leading cogent evidence but Commissioner (ALC) Kathua below did not appreciated the same and decided the issue as against the appellant herein.

G) That the appellant being insurer was not liable to indemnify the respondent no.2 herein being insured owner of the offending vehicle since there was a patent breach of terms conditions of the Policy of Insurance committed by him on the ground that he had allowed/permitted the plying of his vehicle by such a person who was not holding a valid driving license and the above driving license which he was holding was not valid and renewed after 22.01.2017 as per the records of issuing authority. The insured owner/respondent no.6 has committed breach of the conditions of policy conditions and M.V. Act as such the appellant had succeeded in discharging the burden of proof as cast upon it by virtue of Issue no.3 and as such was not liable to indemnify the respondent no.6 under the terms

conditions of the policy of insurance, thus the impugned award suffers from error of law and deserves to be set-aside.

H) That the finding as returned by the Hon'ble Court below towards Issue no.3is not only incorrect but also contrary to the law, facts and record of the claim and the finding has been returned by ignoring the fact that the appellant had proved the issue by leading the cogent, thus the impugned award is not sustainable and the appellant in order to prove the statutory defenses as available under section 149 (2) of The Motor Vehicle Act, 1988could not have saddle the appellant with any liability to indemnify the insured or pass any direction against the appellant for satisfying the impugned award, thus the burdening the appellant with the liability to indemnify the insured/respondent no.6 is not only patently illegal but also against the principles of natural Justice.

I) It is submitted that validity of driving license is a requirement under the contract between the appellant being insurer and the respondent r\6.2 herein and liability to indemnify the respondent no.2 herein was subject to fulfillment of terms and conditions of the contract of insurance but this settled position of law has been ignored by the Court below and un-mindful of the facts, evidence and position of law, the court below has directed to pay the compensation in favour of the respondent no. l thereby causing irreparable loss to the appellant, thus the impugned award is not sustainable and liable to be set aside."

8. The following substantial question of law in the memo of appeal

is framed by the appellant stated to have arisen therein the appeal:-

"Whether the appellant being insurer was liable to indemnify the insured or under any obligation to pay the compensation in favour of the claimants under the contract of insurance, when the owner permitted to drive the vehicle by a person/driver who was not holding a valid and effective driving license?"

Heard learned counsel for the parties and perused the record.

Respondent No. 6 despite service has chosen not to appear and,

accordingly, has been set ex-parte on 01.05.2019.

9. The proposition of law is no more res integra that the dependents

of a deceased as per Section 167 of the Motor Vehicles Act are entitled to

claim compensation either under the Motor Vehicle Act or Workmen‟s

Compensations Act.

10. The Workman‟s Compensation Act, 1923 is a piece of welfare

legislation intended to provide immediate relief to an injured workman or the

dependants of a deceased workman who is injured or meets his death by an

accident arising out of an in the course of his employment. Section 9 of the

Act provides that the compensation awarded by the Commissioner under the

Act, shall not in any way be capable of being assigned or charged or liable to

attachment. Section 4 makes it obligatory for the employer to pay

compensation to the injured workman or dependants of the deceased workman

within 30 days from the date the compensation has become due, even without

waiting for the workman or his legal representatives to file the claim petition.

If the employer finds the claimed amount excessive and exorbitant, the

employer is to deposit such amount as is acceptable to him. It needs to be

pointed out that the compensation becomes due on the date of its accident.

The employer can delay payment of compensation beyond 30 days at the risk

of his being saddled with the responsibility to pay interest on the

compensation amount and even penalty to the extent of 50% of the

compensation amount. The Act lays down the scheme for determination of

the compensation payable to the injured workman or dependants of the

deceased workman which is less time consuming, hassle free and intended to

ensure that the claim is dealt with and disposed of with the proper dispatch.

Underlying object is that the injured workman or dependants of a deceased

workman should not be left high and dry without any source to fall back upon.

It is as part of the said object, that the employer against whom an award is

made is required o deposit the compensation with the Commissioner under the

Act, and the employer is deprived of right to file appeal against the award

unless and until the employer in the first instance makes deposit of the

compensation amount with the Commissioner under the Act. The purpose

again is to ensure that the payment of compensation determined by the

Commissioner under the Act, is paid/disbursed to the workman is not thwarted

by procedural wrangles and further litigation and very purpose of the Act

frustrated.

11. The moot question that would beg consideration of this Court in

the instant appeal fundamentally would be the question (supra) framed by the

appellants in the memo of appeal, in that, no other aspect or issue is being

raised by the appellant. The questions so framed in essence has relevance to

issue No. 3 framed by the Commissioner onus whereof to prove the same had

been on the appellant herein.

12. Before dealing with the said question, it would be appropriate to

refer and scan the record including the evidence led by the parties in general

and appellant in particular before the Commissioner.

13. A perusal of the record reveals that the respondent No. 6 herein

being respondent No. 1 before the Commissioner has filed objections and

admitted that the deceased was employed as a driver and that the said driver

died in the accident and that the driver was drawing Rs. 8000/- per month in

lum sum from the said respondent.

14. The perusal of the record further reveals that the appellant while

contesting the claim of the claimants resisted and denied to indemnify the

insured and in the process to pay the compensation to the claimants on the

ground that the insured violated the conditions of the insurance policy by

contending that the license of the deceased-driver was valid up to 22.01.2017

w. e. f. 23.01.2014, and had not be renewed thereafter, thus not being effective

on the date of accident i.e. 14.07.2017. Mr. Sovit Kumar, Administrative

Officer-R2W2 of the insurance company has been examined by the appellant

who has deposed before the Commissioner that upon verification of the

driving licence of the deceased-driver from ARTO Lakhanpur, the licence was

found neither valid nor effective at the time of accident and that the terms and

conditions of the contract of insurance were observed in breach by the insured

making the insurance company not to indemnify or to pay the claims. One

Sukhinder Singh, Junior Assistant RTO Office Kathua - R2W1 has also

appeared as the witness of the appellant before the Commissioner along with

the record of driving licence of the deceased-driver deposing that the

deceased-driver could not drive the heavy vehicle after 22.01.2017, as the said

licence was renewed only up to that date.

15. The appellant herein admittedly has properly discharged the onus

of proof qua the issue No. 3, by leading credible and cogent evidence

suggesting that the respondent-insured/owner violated the terms and

conditions of the contract of insurance while allowing the vehicle to be plied

by the deceased-driver not being in possession of valid driving licence, which

having expired on 22.01.2017. Therefore, there was no occasion and reason

for the Tribunal to have disbelieved and discredited the said evidence of the

appellant-company and to fasten the liability upon the appellant-company.

The Commissioner thus, has grossly erred while fastening the liability upon

the appellant-company.

16. A reference to the judgment of the Hon‟ble Supreme Court

reported in 2020 SCC Online SC 769, Beli Ram vs. Rajinder Kumar and

another, would be appropriate and advantageous, wherein at paras 16 to 22

following is noticed:-

"16.We are conscious of the fact that in the present case the beneficiary is the driver himself who was negligent but then we are not dealing with a claim under the MV Act but under the Compensation Act, which provides for immediate succor, not really based on a fault theory with a limited compensation as specified being paid. We are, thus, in the present proceedings not required to decide the share of the burden 5 (supra) between the appellant as the owner and the first respondent as the driver as may happen in a proceeding under the MV Act.

17. We now turn to the views of some of the High Courts, which have come to our notice on our own research!

18. The Delhi High Court in Tata AIG General Insurance Co. Ltd. v. Akansha & Ors.6 found that the driving licence having expired led to the natural finding that there was no valid driving licence on the date of the accident. The initial onus was discharged by the insurance company in view of the licence not being valid on the date of the accident. The onus, thereafter, shifted to the owner/insured to prove that he had taken sufficient steps to ensure that there was no breach of the terms and conditions of the insurance policy. Since no evidence had been led in this behalf, a presumption was drawn that there was willful and conscious breach of the terms and conditions of the insurance policy.

19. The Allahabad High Court in The Oriental Insurance Co. Ltd. v. 6 2015 SCC OnLine 6758 : (2015) 2 TAC 52 Manoj Kumar & Ors.7 again dealt with the case of an expired driving licence. The endeavour to rely on the principle set forth in a fake licence case was held not applicable in the case of an expired licence since the owner was supposed to be aware that the driving licence of the driver had expired and, thus, it was held that it was the duty of the owner to have ensured that the driver gets the licence renewed within time. In the absence of a valid driving licence, the vehicle was being driven in breach of the condition of the policy, requiring the vehicle to be driven by a person who is duly licensed, and thus, there was breach of Section 149(2)

(a)(ii) of the MV Act, the consequence being that the insurance company could not he held liable.

20. The last judgment is of the Himachal Pradesh High Court in National Insurance Co. Ltd. v. Hem Raj & Ors. 8 This was, once again, a case of an originally valid licence, which had expired, there was no question of a fake licence. It was opined that the conclusions to be drawn from the observations of the judgment in the Swaran Singh9 case of this Court, were that the insurance company can defend an action on the 7 (2015) 111 ALR 275 (authored by Krishna Murari, J., as he then was) 8 : 2012 ACJ 1891 (authored by Deepak Gupta, J., as he then was) 9 (supra) ground that the driver was not duly licensed on the date of the accident, i.e., an expired licence having not been renewed within thirty (30) days of the expiry of the licence as provided in Sections 14 & 15 of the MV Act. In this context it was observed that the Swaran Singh.10 case did not deal with the consequences if the licence is not renewed within the period of thirty (30) days. If the driving licence is not renewed within thirty (30) days, it was held, the driver neither had an effective driving licence nor can he said to be duly licenced. The conclusion, thus, was that the driver, who permits his licence to expire and does not get it renewed till after the accident, cannot claim that it should be deemed that the licence is renewed retrospectively.

21. The learned Judge debated the question of the consequences of the MV Act being a beneficial piece of legislation. Thus, if two interpretations were possible, it was opined that the one which is in favour of the claimants should be given, but violence should not be done to the clear and plain language of the statute. Thus, while protecting the rights of the claimants by asking the insurance company to deposit the amount, the recovery of

the same from the insured would follow as the 10 (supra) sympathy can only be for the victim of the accident. The right which has to be protected, is of the victim and not the owner of the vehicle. It was, thus, observed in para 18 as under:

"18. When an employer employees a driver, it is his duty to check that the driver is duly licensed to drive the vehicle. Section- 5 of the Motor Vehicles Act provides that no owner or person incharge of a motor vehicle shall cause or permit any person to drive the vehicle if he does not fulfil the requirements of Sections 3 and 4 of the Motor Vehicles Act. The owner must show that he has verified the licence. He must also take reasonable care to see that his employee gets his licence renewed within time. In my opinion, it is no defence for the owner to plead that he forgot that the driving licence of his employee had to be renewed. A person when he hands his motor vehicle to a driver owes some responsibility to society at large. Lives of innocent people are put to risk in case the vehicle is handed over to a person not duly licensed. Therefore, there must be some evidence to show that the owner had either checked the driving licence or had given instructions to his driver to get his driving licence renewed on expiry thereof. In the present case, no such evidence has been led. In view of the above discussion, I am clearly of the view that there was a breach of the terms of the policy and the Insurance Company could not have been held liable to satisfy the claim."

22. We have reproduced the aforesaid observations as it is our view that it sets forth lucidly the correct legal position and we are in complete agreement with the views taken in all the three judgments of three different High Courts with the culmination being the elucidation of the correct legal principle in the judgment in the Hem Raj case."

17. In view of the law laid down by the Supreme Court in Beli

Ram's case (supra) and in the light of the analysis made hereinabove, appeal

succeeds, and the respondent No. 6, the employer of the deceased-driver of

the offending vehicle is held liable under the Act to indemnify the claimants.

18. The matter is remitted back to the Commissioner under the Act,

with the direction to proceed in the matter in the light of the observations

made in this judgment and work out the amount of compensation to which the

claimants are entitled thereto recoverable from respondent No.6-