Hdfc Ergo General Insurance ... vs Ranju Kumari
2023 Latest Caselaw 1838 Jhar

     IN THE HIGH COURT OF JHARKHAND AT RANCHI
            (Civil Miscellaneous Appellate Jurisdiction)
                    Misc. Appeal No. 312 of 2018

HDFC ERGO General Insurance Company Limited, office at 6 th Floor, Leela
Business Park, Andheri, Kurla Road, P.O. and P.S. Andheri (East), Mumbai-
400059, through its authorised signatory, Mr. Safdar Ismail, son of Md.
Ismail Khan, aged 28 years, Assistant Manager-Claim, resident of Kantatoli,
P.O. Kantatoli, P.S. Lower Bazar, District Ranchi-834001, District Ranchi-
834001                                                     ..... ...... Appellant
                                    Versus
1. Ranju Kumari, wife of late Shailesh Kumar Singh, aged about 36 years,
Caste General Bhumihar Brahman;
2. Writhika, daughter of late Shailesh Kumar Singh;
3. Varun, son of late Shailesh Kumar Singh;
Nos. 2 and 3, are minors, they are represented through their natural guardian,
Respondent No.1, Smt. Ranju Kumari;
4. Sidhu Singh, son of late Chamaru Singh;
5. Sudama Devi, wife of Sidhu Singh;
Respondent No.4 is represented through Respondent No.1;
Nos.1 to 5, all residents of New Karmik Nagar, Saraidhella, P.S. Saraidhella,
P.O. and P.S. Dhanbad, District Dhanbad, Jharkhand-826001.
6. Ajay Prasad, son of Krishna Prasad, resident of Near 4 Rail Gate, Texmaco
Estate, SQ 26, Belgharia, P.O. and P.S. Belgharia, District North 24 Parganas-
700056, West Bengal; (Owner of Truck bearing registration No. NL-02L-
5572)                                            ....         .... Respondents
                                      ------

CORAM : HON'BLE MR. JUSTICE KAILASH PRASAD DEO

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For the Appellant : Mr. Siddhartha Jyoti Roy, Advocate For the Respondent No.6 : Mr. Bibhash Kumar, Advocate

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The matter is being taken up through Video Conferencing. Learned counsel for the parties have no objection with it and submitted that audio and video qualities are good.

Order No.06/Dated: 1st May, 2023 Heard, Mr. Siddhartha Jyoti Roy, learned counsel appearing on behalf of the appellant and Mr. Bibhash Kumar, learned counsel on the instruction of Mr. Akash Deep, learned counsel for the respondent No.6.

The appellant- HDFC ERGO General Insurance Company Limited has preferred this Miscellaneous Appeal against the award dated 25.08.2017, passed by the learned District Judge-XII-cum-Motor Vehicle Accident Claims Tribunal Judge, Dhanbad in T(M.V.) S. No. 362 of 2014, whereby the claimants namely, 1.Ranju Kumari, wife of Late Sailesh Kumar Singh, 2. Writhika, daughter of late Shailesh Kumar Singh, 3. Varun, son of late Shailesh Kumar Singh, 4. Sidhu Singh, son of late Chamaru Singh and 5. Sudama Devi, wife of Sidhu Singh have been awarded compensation to the tune of Rs.64,79,768/- which comes to Rs.51,83,814/- after deducting 20%

T.D.S. of Rs.12,95,954/- which has been directed to be paid within two months, failing which, the compensation amount shall also carry interest @ 6% per annum from the date of award dated 25.08.2017.

Mr. Siddhartha Jyoti Roy, learned counsel appearing on behalf of the appellant- Insurance Company has submitted that in terms of order passed by this Court on 02.12.2019, a notice has been issued upon the respondent No.6, namely, Ajay Prasad, son of Krishna Prasad, who is the owner of the offending vehicle bearing Registration No. NL-02L-5572, who is being represented by Mr. Akash Deep, learned counsel.

Learned counsel for the appellant has further submitted that though the issue No.4 has been framed by the learned Tribunal i.e. whether the driver of the truck bearing Registration No. NL-02L-5572 had valid and effective driving licence, but the same has wrongly been decided by the learned Tribunal at paragraph No.11 of the award by holding that from perusal of these documents also it is evident that the offending truck was plying with all valid papers. Since the copy of driving license of the driver is not available on record, as such, issue No.4 is decided negative and, therefore, the Insurance Company has preferred this appeal against the finding of the learned Tribunal with respect to issue No.4, so that the right to recover the awarded amount from the owner of the vehicle after indemnifying the same as the driver of the offending vehicle had no driving license, may remain intact.

In reply, Mr. Bibhash Sinha, learned counsel on the instruction of Mr. Akash Deep, learned counsel for the respondent No.6 has submitted, that no evidence has been brought on record by the Insurance Company to prove that the driver of the offending vehicle had no valid driving licence at the time of accident.

Learned counsel for the respondent No.6 has relied upon the judgment passed by the Hon'ble Apex Court in the case of Nirmala Kothari Vs. United India Insurance Company Limited reported in (2020) 24 SCC 49, paras 7, 8, 9, 10 and 11 which may profitably be quoted hereunder:

"7. Breach of conditions under Section 149(2)(a) of the Motor Vehicles Act, 1988 absolves the insurer of its liability to the insured. Section 149(2)(a)(ii) deals with the conditions regarding driving licence. In case the vehicle at the time of accident is driven by a person who is not duly licenced or by a person who has been disqualified from holding or obtaining a driving licence during the period of disqualification, the insurer is not liable for compensation. In the instant case it is a matter of fact that no record of the licence bearing no. P03041288753070 was found with the licensing

authority.

8. Having set forth the facts of the present case, the question of law that arises for consideration is what is the extent of care/diligence expected of the employer/insured while employing a driver? To answer this question, we shall advert to the legal position regarding the liability of the Insurance Company when the driver of the offending vehicle possessed an invalid/fake driving licence. In the case of United India Insurance Co. Ltd. v. Lehru a two Judge Bench of this court has taken the view that the Insurance Company cannot be permitted to avoid its liability on the ground that the person driving the vehicle at the time of the accident was not duly licenced. It was further held that the willful breach of the conditions of the policy should be established. The law with this respect has been discussed in detail in the case of Pepsu RTC v. National Insurance Co. (2013) 10 SCC217, We may extract the relevant paragraph from the Judgment: (Pepsu case, SCC pp. 223-24, para 10) "In a claim for compensation, it is certainly open to the insurer under Section 149(2) (a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh's case (2004) 3 SCC 297. If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation."

9. While the insurer can certainly take the defence that the licence of the driver of the car at the time of accident was invalid/fake however the onus of proving that the insured did not take adequate care and caution to verify the genuineness of the licence or was guilty of willful breach of the conditions of the insurance policy or the contract of insurance lies on the insurer.

10. The view taken by the National Commission that the law as settled in the Pepsu case (Supra) is not applicable in the present matter as it related to thirdparty claim is erroneous. It has been categorically held in the case of National Insurance Co. Ltd. v. Swaran Singh(2004) 3 SCC 297 (SCC pp.341, para 110) that, "110. (iii)...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 licenced driver or one who was not disqualified to drive at the relevant time."

11. While hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the

employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the Insurance Company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable."

Learned counsel for the respondent No.6 has further submitted that the Hon'ble Supreme Court has considered this aspect of the matter and has held that while hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the Insurance Company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.

Mr. Bibhash Sinha, learned counsel for the respondent No.6 has thus submitted that the Insurance Company has not brought any evidence and, as such, in view of the judgment passed by the Hon'ble Supreme Court in the case of Nirmala Kothari (supra) the right of recovery of compensation amount from the owner of the offending truck, as granted by the learned Tribunal may be set aside.

Considering the submissions advanced by the learned counsel for the parties with respect to right of recovery, this Court perused the impugned award. It has been recorded by the learned Tribunal while deciding issue No.4 at paragraph No.11 of the impugned award that the copy of driving license of the driver is not available on record, as such, the right of recovery as granted by the learned Tribunal in favour of Insurance Company to recover the compensation amount from the owner of the offending truck, shall remain intact.

Learned counsel for the appellant has submitted that the quantum of compensation as considered by the learned Tribunal is on the higher side. The

learned Tribunal has not considered that subsequently the respondent- claimant Ranju Kumari was given appointment on compassionate ground, as such, in view of the judgment passed by the Hon'ble Supreme Court in the case of Bhakra Beas Management Board Vs. Kanta Aggrawal & Ors. reported in (2008) 11 SCC 366, the impugned order may be set aside.

This Court considered the judgment passed by the Hon'ble Supreme Court in the case of Bhakra Beas Management Board (supra). The judgment of Bhakra Beas Management Board (supra) has been considered by the Hon'ble Supreme Court in the case of National Insurance Company Limited Vs. Rakhaben and others reported in (2017) 13 SCC 547, paragraph Nos.22 and 23 profitably be quoted hereunder:

"22.In the present cases, the claimants were offered compassionate employment. The claimants were not offered any sum of money equal to the income of the deceased. In fact, they were not offered any sum of money at all. They were offered employment and the money they receive in the form of their salary, would be earned from such employment. The loss of income in such cases cannot be said to be set off because the claimants would be earning their living. Therefore, we are of the view that the amount earned by the claimants from compassionate appointments cannot be deducted from the quantum of compensation receivable by them under the Act.

23. In the cases before us, compensation is claimed from the owner of the offending vehicle who is different from the employer who has offered employment on compassionate grounds to the dependants of the deceased/ injured. The source from which compensation on account of the accident is claimed and the source from which the compassionate employment is offered, are completely separate and there is no co-relation between these two sources. Since the tortfeasor has not offered the compassionate appointment, we are of the view that an amount which a claimant earns by his labour or by offering his services, whether by reason of compassionate appointment or otherwise is not liable to be deducted from the compensation which the claimant is entitled to receive from a tortfeasor under the Act. In such a situation, we are of the view that the financial benefit of the compassionate employment is not liable to be deducted at all from the compensation amount which is liable to be paid either by the owner/ the driver of the offending vehicle or the insurer."

Thus, the judgment relied upon by the learned counsel for the appellant is of no help in the present case.

The Hon'ble Supreme Court in the case of Vimal Kanwar Vs. Kishore Dan reported in (2013) 7 SCC 476 at paragraph No.21 has held as under:

"21. "Compassionate appointment" can be one of the conditions of service of an employee, if a scheme to that effect is framed by the employer. In case, the employee dies in harness i.e. while in service leaving behind the dependants, one of the dependants may request for compassionate appointment to maintain the family of the deceased employee who dies in harness. This cannot be stated to be an advantage receivable by the heirs on account of one's death and have no correlation with the amount receivable under a statute occasioned on account of accidental death. Compassionate appointment may have nexus with the death of an employee

while in service but it is not necessary that it should have a correlation with the accidental death. An employee dies in harness even in normal course, due to illness and to maintain the family of the deceased one of the dependants may be entitled for compassionate appointment but that cannot be termed as "pecuniary advantage" that comes under the periphery of the Motor Vehicles Act and any amount received on such appointment is not liable for deduction for determination of compensation under the Motor Vehicles Act."

As such, the plea taken by the learned counsel for the appellant is hereby rejected.

Learned counsel for the appellant has further submitted that no issue was framed with regard to the contributory negligence as two vehicles have collided.

Since no material to that effect nor such plea was taken in the written statement nor issue was firmed nor any evidence has been produced by the Insurance Company, this Court is not inclined to entertain such plea raised by the Insurance Company before this Court in absence of any steps taken before the learned Tribunal and, as such, the same is hereby rejected.

In the gamut of the facts, after hearing the parties and looking into the facts and circumstances of this case, this Court is not inclined to entertain the instant Miscellaneous Appeal preferred by the appellant- Insurance Company, accordingly, the same is hereby dismissed.

The appellant-Insurance Company is directed to indemnify the award to the claimants, if already not indemnified, within a period of 60 days from today as awarded by the learned Tribunal along with the interest in the nationalized bank account of the claimants.

The claimants are directed to provide the bank account number of the nationalized bank to the learned counsel for the Insurance Company or Insurance Company or learned Tribunal/ Executing Court within a period of two weeks from today.

The statutory amount deposited by the appellant-Insurance Company before this Court shall be remitted to the learned Tribunal/ Executing Court for indemnifying the award. If it is found to be in excess of the award, the same shall be remitted to the Insurance Company otherwise the same shall be paid to the claimants.

Let the Lower Court Records be sent back to the learned Court below.

(Kailash Prasad Deo, J.) Madhav/-