Vinay Singh vs Mahesh Kumar & Ors
2023 Latest Caselaw 595 j&K

       HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                       AT JAMMU

                                         Reserved on: 16.03.2023
                                       Pronounced on: 31.03.2023

                                                MA No. 92/2010


Vinay Singh                                 .....Appellant(s)/ Petitioner(s)

      Through: -           Mr. Anil Gupta, Advocate

     Vs.


Mahesh Kumar & Ors.                               ...Respondent(S)

      Through: -           Mr. D. S. Chauhan, Advocate
                           Ms. Damini Chauhan, Advocate

CORAM: HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE

                                JUDGMENT

1) This appeal is directed against award dated 9th July, 2009 passed by the

Presiding Officer, Motor Accident Claims Tribunal, Jammu (hereinafter to be

referred as the Tribunal), whereby the owner, respondent No. 1 herein, has

been directed to pay the compensation of Rs 4,96,000/-to the appellant along

with interest @ 7.5% from the date of filing of the claim petition till its

realization.

2) The award has been impugned by the appellant on the ground that the

learned Tribunal has ignored the material evidence on record regarding

income of the appellant and further that the learned Tribunal has not

appreciated that absence of licence in not a defence available to the insurer

against the third party.

3) Mr. Anil Gupta, learned counsel for the appellant during the course of

arguments confined his submissions only to the extent that the award was

required to be passed against the respondent-Insurance Company with a

liberty to recover the same from the owner-respondent No. 1.

4) Mr. D. S.Chauhan, learned counsel for the respondent-Insurance

Company submitted that as the vehicle in question was being plied in

violation of the terms and conditions of policy of insurance, so the Insurance

Company cannot be saddled with any liability to satisfy the award.

5)    Heard and perused the record.


6)    The issue No.3 is reproduced as under:

"Whether the driver of the offending vehicle at the time of accident was not holding a valid and effective driving licence? OPR"

7) A perusal of the award would reveal that the respondent-Insurance

Company has led the evidence that the driver of the offending vehicle was not

having a licence at the time of accident and as such, the learned Tribunal

decided issue No. 3 in favour of the respondent-Insurance Company and

directed the respondent No.1-owner to satisfy the award.

8) The only issue that is required to be considered is as to whether the

Insurance Company can be directed to satisfy the award with liberty to

recover the same from the owner, when the vehicle was being driven by a

person without licence. The Hon'ble Apex Court was confronted with an

almost identical situation in Pappu & Ors. vs. Vinod Kumar Lamba &

Ors, JKJ ONLINE 34848, where the owner of the offending vehicle could

not prove that the vehicle was being driven by an authorized person and the

award was passed against the owner and the Insurance Company was

exonerated by the Tribunal. The said award was subsequently upheld by the

High Court. It was held as under:

14. The next question is whether in the fact situation of this case the insurance company can be and ought to be directed to pay the claim amount, with liberty to recover the same from the owner of the vehicle (Respondent 1)? This issue has been answered in National Insurance Co. Ltd. [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297] In that case, it was contended by the insurance company that once the defence taken by the insurer is accepted by the Tribunal, it is bound to discharge the insurer and fix the liability only on the owner and/or the driver of the vehicle. However, this Court held that even if the insurer succeeds in establishing its defence, the Tribunal or the court can direct the insurance company to pay the award amount to the claimant(s) and, in turn, recover the same from the owner of the vehicle. The three-Judge Bench, after analysing the earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle. In para 107, the Court then observed thus : (SCC p. 340) "107. We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it had not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given an opportunity to defend at all. Such a course of action may also be resorted to when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage."

Further, in para 110, the Court in National Insurance Co. Ltd. [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297] observed thus :

"110. The summary of our findings to the various issues as 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 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.

(iv) Insurance companies, however, with a view to avoid their liability must not only establish the available 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 where for would be on them.

(v) The court cannot lay down any criteria as to how the 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 the 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 insurer 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)-(ix) ***

(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 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 the proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the 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 the insurer against the 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."

15. In the present case, the owner of the vehicle (Respondent 1) had produced the insurance certificate indicating that Vehicle No. DIL 5955 was comprehensively insured by Respondent 2 (insurance company) for unlimited liability. Applying the dictum in National Insurance Co. Ltd. [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297] , to subserve the ends of justice, the insurer (Respondent 2) shall pay the claim amount awarded by the Tribunal to the appellants in the first instance, with liberty to recover the same from the owner of the vehicle (Respondent 1) in accordance with law."

9) Thus, it is evident that the Insurance Company can be directed to

satisfy the award passed in favour of appellant/claimant with liberty to

recover the same from the owner of the offending vehicle in accordance with

law.

10) In view of the above, the award passed by the learned Tribunal is

modified to the extent that the respondent-Insurance Company shall make the

payment of compensation awarded in favour of the claimant/appellant within

period of one month with liberty to recover the same from the owner-

respondent No. 1 in accordance with law.

11)    Disposed of.


                                               (RAJNESH OSWAL)
                                                    JUDGE
Jammu
31.03.2023
Karam Chand/Secy.
                        Whether the order is speaking:        Yes/No
                        Whether the order is reportable:      Yes/No