Karnataka High Court
Vijayakumar vs Dhananjaya on 15 December, 2023
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MFA No. 5948 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE C M JOSHI
MISCELLANEOUS FIRST APPEAL NO. 5948 OF 2022 (MV-D)
BETWEEN:
VIJAYAKUMAR S/O SINGRAIAH,
AGED ABOUT 54 YEARS,
R/AT 2ND CROSS,
NEAR SHADI MOHALLA,
VALLABAI ROAD, HASSAN-573201.
...APPELLANT
(BY SRI. SHIVAKUMAR N, ADVOCATE)
AND:
1 . DHANANJAYA
S/O LATE JAVARAIAH,
AGED ABOUT 58 YEARS,
2 . NEELA
D/O DHANANJAYA,
AGED ABOUT 35 YEARS,
Digitally signed by
VIJAYALAKSHMI
BN
Location: High
3 . VARA
Court of D/O DHANANJAYA,
Karnataka
AGED ABOUT 31 YEARS,
4. SUNILA S/O DHANANJAYA,
AGED ABOUT 29 YEARS,
RESPONDENTS NO.1 TO 4 ARE R/AT
ANKANAHALLI VILLAGE,
SALIGRAMA HOBLI,
K.R.NAGARA TALUK,
MYSORE DISTRICT-517604.
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MFA No. 5948 of 2022
5. ORIENTAL INSURANCE CO.LTD.,
S.S.COMPLEX, SUBHASH SQUARE,
HASSAN CITY, HASSAN-573201.
REPRESENTED BY ITS MANAGER.
6. SAMPATTU S/O THIMMEGOWDA,
AGED ABOUT 32 YEARS,
GANIGARAHOSALLI VILLAGE,
SHANTHIGRAMA HOBLI,
HASSAN TALUK & DISTRICT-573234.
...RESPONDENTS
(BY SRI. B.C.SHIVANNEGOWDA, ADVOCATE FOR
SRI. A.M.VENKATESH, ADVOCATE FOR R5;
R1 TO R4, R6 ARE SERVED AND UNREPRESENTED)
THIS MFA IS FILED U/S 173(1) OF MOTOR VEHICLE ACT,
PRAYING TO SET ASIDE THE JUDGMENT DATED 05.10.2018 IN
M.V.C 1409/2016 PASSED BY THE PRINCIPAL SENIOR CIVIL
JUDGE AND ADDITIONAL MACT AT HASSAN AND ETC,.
THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS
DAY, C M JOSHI, J., DELIVERED THE FOLLOWING:
JUDGMENT
Being aggrieved by the judgment and award passed
in MVC No.1409/2016 dated 05.10.2018 by the learned
Prl. Senior Civil Judge & MACT, Hassan, the owner of the
vehicle has approached this Court in appeal.
2. The brief facts of the case are that the wife of
the petitioner No.1 and mother of petitioner Nos.2 to 4
was standing on the left side of the Hassan-Holenarasipura
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road to go to her daughter's house on 08.02.2013 at
about 6.00 p.m. The driver of the Tata Sumo bearing
Reg.No.KA-35-M-8504 came from Hassan side in a rash
and negligent manner and dashed to the said Rajamma
and her daughter Leelavathi and caused accident. As a
result the said Rajamma and Leelavathi sustained injuries.
They were brought to Govt. Hospital, Hassan in 108
Ambulance and later shifted to NIMHANS Hospital,
Bengaluru for treatment; and thereafter they were shifted
back to Government Hospital, Hassan. At about 2.30 a.m.
the said Rajamma succumbed to the injuries. The
petitioners who are the dependents of the deceased
Rajamma filed a claim petition before the Tribunal
contending that they are entitled for the compensation.
They contended that the accident was due to the rash and
negligent driver of the Tata Sumo vehicle and it belongs to
respondent No.1 and insured by respondent No.2 and
therefore they are jointly and severally liable to pay the
compensation.
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3. The respondent No.1 appeared through counsel
but did not file any objection to the petition.
4. The respondent No.2 contended that the driver
of the vehicle at the time of accident was not having valid
driving licence and in fact the accident had happened since
the respondent No.1 had placed the vehicle in a hands of a
person who was not having a valid driving licence. It was
contended that the driver of the vehicle is also a necessary
party. The insurance company also contended that the
name of driver of the vehicle was not disclosed in the FIR
but the petitioners have not made the driver of the vehicle
as a party. It is contended that the vehicle was in the
hands of one Dinesha S/o Swamygouda and while driving,
he had stopped the vehicle at Hosakoppalu and had gone
to a coffee shop. After returning back he had found that
the vehicle was stolen on 08.02.2013 at about 5.30 p.m.
and he gave a complaint before the Hassan Town Police
Station and police had registered a case in Crime
No.41/2013. Therefore, the said driver (who had stolen
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the vehicle) of the vehicle was also a necessary party and
there has been violation of the terms and conditions of the
policy. Therefore it was contended that the insurance
company is not responsible for payment of the
compensation to the petitioners.
5. Therefore the petitioners impleaded the
respondent No.3 who was a driver of the vehicle and who
had stolen and he also did not appear despite service of
notice.
6. On the basis of the above contentions, the
Tribunal framed the appropriate issues and the petitioner
No.2 was examined as PW1 and Ex.P1 to Ex.P10 were
marked. The respondent No.1 has not lead any evidence
and has not got marked documents. The respondent No.2
did not lead any evidence in the matter.
7. After the hearing the arguments by both the
sides and also looking to the pleadings of the parties and
evidentiary material placed on record, the Tribunal
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awarded a compensation of Rs.8,62,500/- and fastened
the liability on the owner of the vehicle i.e. respondent
No.1.
8. Being aggrieved by the said judgment, the
respondent No.1 has approached this Court in appeal. The
respondent No.2 insurance company has appeared
through its counsel on being issued with the notice and the
claimants have not appeared before this Court.
9. The arguments by learned counsel appearing
for the appellant owner of the vehicle were heard and also
the learned counsel appearing for the respondent No.5-
insurance company were heard and also perused the Trial
Court records and appeals papers.
10. The learned counsel appearing for the
appellant-owner contended that the Trial Court has
wrongly come to the conclusion that the respondent No.1
has to prove that as on the date of the accident the
respondent No.3 was holding valid and effective driving
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licence to drive the vehicle and that he had not violated
the provisions of the M.V.Act in handing over the vehicle
to the driver. It is contended that the impugned judgment
and award suffers from grave illegality as the liability of
the insurance company is allowed to be absolved on the
ground that the person who drove the vehicle in rash and
negligent manner causing the accident in question was not
only a thief but also he did not have valid and effective
driving licence. It is submitted that the Tribunal failed to
notice the dictum of the Apex Court in the case of United
India Insurance Company V/s Lehru And Ors1., to
contend that the insurer is liable even in the case of the
theft of the vehicle. It is contended there are plethora of
judgments making the law very clear that the plea of lack
of valid and effective driving licence ordinarily is not
admitted as a defence in the teeth of the limited defense
clause enacted under Section 149(2) of M.V.Act and
therefore, the impugned judgment and award in absolving
the liability of the insurer suffer from apparent error.
2003 (3) SCC 338
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11. The learned counsel for the insurance company
contended that unless the petitioners or the owner of the
vehicle establish that there was no such connivance
between the owner of the vehicle and the petitioners, such
a contention does not hold good. He has defended the
impugned judgment contending that the terms and
conditions of the policy have been violated and therefore
the insurance company is not liable to pay any
compensation to the petitioners and therefore a liability of
the insurance company has to be absolved. He further
contended that the person who was driving the Tata Sumo
was not having driving licence and this aspect could not be
ignored.
12. The written statement filed by the insurance
company discloses that one Dinesha S/o Swamygouda was
the driver and while he had gone to hotel to have coffee
after parking the vehicle, it was stolen and accordingly on
08.02.2013 a complaint was lodged by him at Hassan
Police Station in Crime No.41/2013. Therefore, it was
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contended that at the time of the accident, the vehicle was
not in the custody of the first respondent or the driver of
the first respondent and as such the terms and conditions
of the policy were violated. Therefore, it had sought for
absolving the liability. It is relevant to note that this is a
case wherein the accident in question had happened as a
person unauthorizedly took away the vehicle and drove it
rashly and negligently. This aspect is admitted in the
written statement of the insurance company. The records
also reveal that the police after the investigation had filed
the charge sheet on Sampath S/o Timmegouda who is
none else than the respondent No.3 herein. He is the
person who had stolen the vehicle. Though the charge
sheet is produced at Ex.P9 is for the offences punishable
under Section 279, 337, 304-A of IPC and Section 181(3)
of the M.V.Act, the charge reveal that he had stolen the
vehicle. A separate case was registered regarding the
theft of the vehicle. The fact that the vehicle was stolen
is not in dispute as it is stated in the written statement of
the insurance company itself. In a similar situation, the
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Apex Court had held that the insurance company is still
liable. In the case of United India Insurance Co. Ltd.
v. Lehru2, it was stated in para 18 as below:
"18. Now let us consider Section 149(2). Reliance
has been placed on Section 149(2)(a)(ii). As seen,
in order to avoid liability under this provision it
must be shown that there is a "breach". As held
in Skandia [(1987) 2 SCC 654] and Sohan Lal
Passi [(1996) 5 SCC 21 : 1996 SCC (Cri)
871] cases the breach must be on the part of the
insured. We are in full agreement with that. To hold
otherwise would lead to absurd results. Just to take
an example, suppose a vehicle is stolen. Whilst it is
being driven by the thief there is an accident. The
thief is caught and it is ascertained that he had no
licence. Can the insurance company disown
liability? The answer has to be an emphatic "No".
To hold otherwise would be to negate the very
purpose of compulsory insurance. The injured or
relatives of the person killed in the accident may
find that the decree obtained by them is only a
paper decree as the owner is a man of straw. The
owner himself would be an innocent sufferer. It is
for this reason that the legislature, in its wisdom,
has made insurance, at least third-party insurance,
(2003) 3 SCC 338
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compulsory. The aim and purpose being that an
insurance company would be available to pay. The
business of the company is insurance. In all
businesses there is an element of risk. All persons
carrying on business must take risks associated
with that business. Thus it is equitable that the
business which is run for making profits also bears
the risk associated with it. At the same time
innocent parties must not be made to suffer or loss.
These provisions meet these requirements. We are
thus in agreement with what is laid down in the
aforementioned cases viz. that in order to avoid
liability it is not sufficient to show that the person
driving at the time of accident was not duly
licensed. The insurance company must establish
that the breach was on the part of the insured."
13. The Apex Court has clearly ruled that the
insurance company is still liable. If in such cases the
liability is fastened upon the owner himself, he would be
an innocent sufferer. Thus, the above dictum of the Apex
Court is a clear answer to the contention of the respondent
No.2-insurance company. A perusal of section 149(2) of
the M.V.Act clearly shows that the insurance company
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should establish that the owner of the vehicle has
committed the breach of the conditions of the policy. If
such breach of the conditions of the policy is shown, then
alone the insurance company is liable to be exonerated
from liability. If there is no such breach of the
requirements of law, then the insurance company cannot
be exonerated from the liability. In the case on hand,
evidently the appellant owner of the vehicle had not
intended or had given the vehicle into the hands of a
person who was having valid driving licence. Therefore,
there was no such breach. It was the theft of the vehicle
which landed the vehicle in wrong hands. There is no
evidence to show that the there was any nexus between
the driver who had stolen the vehicle and the owner of the
vehicle. Under these circumstances, the limited defence
available in Section 149(2) of the M.V.Act cannot be
invoked by the insurance company. Thus, the impugned
judgment is apparently suffered from erroneous
application of law.
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14. The Tribunal obviously had not bestow its
attention on the limited liability clause which is
incorporated in Section 149(2) of the M.V.Act. In that
view of the matter, the appeal has to succeed.
15. The learned counsel appearing for the
respondent No.2 insurance company submits that the
owner of the vehicle had not informed about the accident
or theft to the insurance company as required under
Section 146 of the M.V.Act. Therefore, he submits that
the interest cannot be fastened on the insurance company.
I am unable to appreciate this argument of the learned
counsel appearing for respondent No.2 for the simple
reason that the respondent No.2 insurance company has
narrated about the theft in the written statement. The
owner of the vehicle had lodged the complaint. Therefore,
this argument by learned counsel appearing for the
insurance company is not tenable in law. Moreover, not
informing about the theft to the insurance company
immediately after such theft is not a fundament breach of
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conditions of policy. Hence, this argument cannot be
accepted.
16. For these reasons, the appeal succeeds. As a
consequence, the following order is passed;
ORDER
The appeal is allowed.
The impugned judgment and award
passed by the Tribunal is modified and the
liability on the appellant-owner of the vehicle is
absolved and the liability is fastened upon the
respondent No.2-insurance company. The
insurance Company shall deposit the
compensation amount along with 6% interest
before the Tribunal within 6 weeks.
All other conditions regarding the
quantum, apportionment, deposit remain
unaltered.
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The statutory deposit made before this
court be refunded to the appellant.
Sd/-
JUDGE
SMP
