Jharkhand High Court
The New India Assurance Company ... vs Sinda Mahto @ Sindha Mahto on 12 August, 2022
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M. A. No. 280 of 2010
The New India Assurance Company Ltd., Ranchi .... .... Appellant
Versus
1. Sinda Mahto @ Sindha Mahto
2. Tara Devi
.... .... Respondents
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CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY
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For the Appellant : Mr. Alok Lal, Advocate
For the Respondents : Mr. Umesh Kr. Choubey, Advocate
C.A.V. ON 05.08.2022 PRONOUNCED ON 12 / 08 / 2022
1. This appeal has been preferred by the Insurance Company
against the judgment and award of compensation passed in Compensation
Case No. 172 of 2006 whereby and whereunder, the Insurance Company
has been held liable to pay the compensation amount to the victim
claimant for permanent disablement he suffered in the motor vehicle
accident involving tractor bearing Registration No. BR 14K 0609 on
which he was travelling at the relevant time of accident.
2. As per the claimant's case the accident took place on
22.03.2006 in the morning. Claimant Sinda Mahto @ Sindha Mahto along
with other co-villager going on a tractor bearing Registration No. BR 14K
0609 which met with an accident due to rash and negligent driving of the
driver. The claimant sustained grievous injuries and during course of his
treatment, his left leg was amputated and he became permanently disabled
at the young age of 35 years. It is averred that the claimant is a
businessman and he is also an agriculturist and was earning Rs.3000/- per
month.
3. Learned Tribunal after enquiry has awarded compensation of
Rs.1,77,800/- with interest at the rate of 6% per annum on the awarded
amount from the date of the application.
4. The factum and the manner of accident is not under challenge
before this Court. The Insurance Company has preferred appeal mainly on
two grounds:
Firstly, the driver was not having a driving licence at the
relevant time of accident. In this view of the matter, reliance has been
placed in Beli Ram Vs. Rajinder Kumar and Ors. (Civil Appeal Nos.
7220-7221/2011) and Ram Babu Tiwari Vs. United Indian Insurance
Co. Ltd. & Ors. (2008 0 ACJ 2654). In view of these ratios it is
submitted that there was breach of terms of insurance policy in which the
Insurance Company was not liable to pay amount to the owner of the
vehicle
Second ground on which the appeal has been preferred is that as per
the case of the claimant as well as the evidence on record, the accident
took place when the claimant was travelling on the tractor as gratuitous
passenger. Law is settled on this point that the vehicle was intended to be
used only for agricultural purpose and not for commercial purpose like
transporting goods and passengers. As per claimant's case and the
findings recorded by the learned Tribunal, the deceased was travelling on
trailer when the accident took place. In this way, there was a definite
breach of terms and conditions of Insurance Policy and therefore, the
Insurance Company cannot be held liable for paying compensation to the
claimant.
5. As far as driving licence is concerned, there is a long line of
judicial precedents that unless there is negligence on the part of the owner
of the vehicle, liability for paying compensation cannot be saddled on him
merely because the driver was not found to have a valid driving licence.
2013 0 Supreme (SC) 784 Pepsu Road Transport Corporation
Versus National Insurance Company that where the employer had
employed the driver in 1994 and in the process of employment he had
been put to a driving test and had been imparted training also, in such
circumstances, it cannot be said that the insured is at fault in having
employed a person whose licence has been proved to be fake by the
Insurance Company.
Kulwant Singh v. Oriental Insurance Co. Ltd., (2015) 2 SCC 186
9. In S. Iyyapan [S. Iyyapan v. United India Insurance Co. Ltd.,
(2013) 7 SCC 62 : (2013) 3 SCC (Civ) 359 : (2013) 3 SCC (Cri) 11] the
question was whether the driver who had a licence to drive "light
motor vehicle" could drive "light motor vehicle" used as a commercial
vehicle, without obtaining endorsement to drive a commercial vehicle.
It was held that in such a case, the insurance company could not
disown its liability. It was observed: (SCC p. 77, para 18)
"18. In the instant case, admittedly the driver was holding a valid
driving licence to drive light motor vehicle. There is no dispute that the
motor vehicle in question, by which accident took place, was Mahindra
Maxi Cab. Merely because the driver did not get any endorsement in
the driving licence to drive Mahindra Maxi Cab, which is a light motor
vehicle, the High Court has committed grave error of law in holding
that the insurer is not liable to pay compensation because the driver
was not holding the licence to drive the commercial vehicle. The
impugned judgment [Civil Misc. Appeal No. 1016 of 2002, order dated
31-10-2008 (Mad)] is, therefore, liable to be set aside."
Amrit Paul Singh v. TATA AIG General Insurance Co. Ltd., (2018) 7
SCC 558
17. The three-Judge Bench summed up its conclusions and we think
it appropriate to reproduce the relevant part of the same: (Swaran
Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3
SCC 297 : 2004 SCC (Cri) 733] , SCC pp. 341-42, para 110)
"110. (iii) The breach of policy condition e.g. disqualification of the
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 a duly licensed driver or one who was not disqualified to drive at the
relevant time.
***
(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."
Rishi Pal Singh Vs. New India Assuracne Company Limited
Civil Appeal No.4919 of 2022 that the owner of the vehicle is expected
to verify the driving skills and not to run to the licensing authority to
verify the genuineness of the driving licence before appointing a driver.
Therefore once the owner is satisfied that the driver is competent to
drive the vehicle it is not expected of the owner thereafter to verify the
genuineness of driving licence issued to the driver.
In the present case the appellant Insurance Company has failed
to lead evidence showing negligence on the part of the owner of the
vehicle to verify the driving licence at the time of engaging. The evidence
on record shows that the drving licence was renewed on different dates
starting from 1991 and last renewal was from 2.5.2000 to 1.5.2005 but
was not renewed when the accident took place on 22.3.2006. This by itself
shows that the driver had a valid driving licence since long and the owner
cannot be faulted on this count of engaging a driver without a valid
driving licence.
6. With regard to the second ground taken on behalf of the
insurance company, it is the consistent case of the claimant that accident
took place when the claimant along with other villagers on the tractor
which overturned due to rash and negligent driving by the driver.
Witnesses (AW-1&2) have also deposed that the victim was sitting in the
trailer when it overturned. From this it is apparent that the claimant was
travelling on the tractor as a gratuitous passenger and the insurance policy
did not cover such passengers. The owner of the said tractor shall be liable
to pay the compensation amount. However in view of the fact that the
vehicle was under insurance cover therefore the appellant insurance
company shall pay the compensation amount to the claimant and shall be
at liberty to recover the amount so paid from the owner of the vehicle..
7. On perusal of the judgment and award it appears that a
compensation of Rs.1,77,800/- has been awarded in favour of the claimant
with interest at the rate of 6% per annum on the said amount from the date
of admission of the application under section 166 of the MV Act. The
compensation has been assessed by accepting a monthly income of ₹
1500. It is the consistent case of the claimant that he was a young labour
aged 35 years with a monthly income of Rs.3000/- per month. The
claimed income cannot be called exaggerated by any count. It is to be kept
in mind that Motor Vehicle Act is a social welfare legislation and strict
rules of CPC or Evidence Act do not apply. The primary object of a
tribunal is to award just compensation considering the materials on record.
Here in the present case no reason has been assigned for not accepting the
income of Rs.3000 as claimed and accepting only Rs.1500 per month. As
per the disability certificate (Ext.3) the claimant suffered 60% permanent
physical disablement on account of amputation of his left leg below the
knee. Considering the occupation of the claimant, the amputation of lower
limb of a labour will amount to hundred percent functional disability.
Taking Rs.3000 per month as income, 35 years as the age and hundred
percent functional disability the compensation amount shall work out as
under.
Sl. Heads Calculations
No.
1. Annual Income Rs.3000 X12= Rs.36,000/-
2. 40% Future Prospects 40% of 36,000 = Rs.14,400/-
3. Applying multiplier of Rs.36,000 +14,400= Rs.50,400/-
16 X 16= Rs.8,06,400
7. Grand Total Rs.8,06,400
The claimants shall therefore be entitled to compensation of
Rs.806,400/- with interest at the rate of 7.5 % from the date of filing of the
claim application, from the owner of the offending tractor (Respondent
no.2) on the trailer of which the claimant was travelling at the relevant
time of accident as a passenger. Although AW2 has deposed that he was
travelling on the tractor as a labour but this is not been stated either in the
claim application or in the deposition by the claimant himself. In view of
the fact that passengers were not covered under the insurance policy
therefore owner will be liable to pay the compensation amount.
However since the vehicle was under the insurance cover of the
appellant Insurance Company therefore it is directed to pay the
compensation amount to the Tribunal within a month of this order and
will be at liberty to recover the amount so paid from the owner of the
vehicle. The Tribunal shall pay the compensation amount to the claimant
after proper identification and verification. In order to ensure that amount
so paid is properly utilised by the claimant, at least 50% of the total
amount deposited in a term deposit scheme of nationalised bank for a
period of five years.
With the above modification, the appeal is partly allowed. The
appellant Insurance Company is permitted to withdraw the statutory
amount deposited in this Court.
(Gautam Kumar Choudhary, J.)
Jharkhand High Court, Ranchi
Dated the 12th August, 2022
AFR / AKT
