Karnataka High Court
The Tata Aig General Insurance Co. Ltd vs Shivagangavva And Ors on 2 August, 2024
Author: S. Sunil Dutt Yadav
Bench: S. Sunil Dutt Yadav
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MFA No. 200865 of 2022
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 2ND DAY OF AUGUST, 2024
PRESENT
THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV
AND
THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
MISC. FIRST APPEAL NO.200865 OF 2022 (MV-D)
BETWEEN:
THE TATA AIG GENERAL INSURANCE CO. LTD.,
THROUGH ITS AUTHORISED SIGNATORY,
PENINSULA CORPORATE PARK,
NICHOLAS PIRAMAL TOWER, 9TH FLOOR,
GANAPATRAO KADAM MARG,
LOWER PAREL,
MUMBAI- 400013.
...APPELLANT
(BY SRI SUBHASH MALLAPUR, ADVOCATE)
AND:
Digitally signed
by SUMITRA
SHERIGAR
Location: HIGH
1. SHIVAGANGAVVA
COURT OF W/O BHIMAPPA PUJARI,
KARNATAKA
AGE: 35 YEARS,
OCC: HOUSEHOLD WORK.
2. MALLIKARJUN BHIMAPPA PUJARI
AGE: 13 YEARS.
3. SHRUSHTI
D/O BHIMAPPA PUJARI,
AGE: 9 YEARS.
4. PANDIT BHIMAPPA PUJARI,
AGE: 7 YEARS.
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MFA No. 200865 of 2022
SINCE PETITIONERS 2 TO 4 ARE MINORS
REPRESENTED BY U/G R1
ALL ARE R/O. KUMATHE,
TQ. BABALESHWARA,
DISTRICT: VIJAYAPURA- 586 101.
5. M/S. MICRO LABS
PROPRIETOR,
SURIYA A. KOTHARI,
PLOT NO.1-G-1B, KUPWAD MIDC,
TQ. MIRAJ,
DIST: SANGLI- 416 410.
...RESPONDENTS
(BY SRI SANGANAGOUDA V. BIRADAR, ADVOCATE, FOR R1;
R2 - R4 ARE MINORS REPRESENTED BY R1;
R5 - SERVED)
THIS MFA IS FILED UNDER SECTION 173(1) OF THE
MOTOR VEHICLE ACT, PRAYING TO ALLOW THE APPEAL BY
SETTING ASIDE THE JUDGMENT AND AWARD DATED
20.11.2021, IN MVC NO.1637/2019 PASSED BY THE IV ADDL.
SENIOR CIVIL JUDGE AND MACT NO.XV, VIJAYAPUR.
THIS APPEAL HAVING BEEN RESERVED FOR JUDGMENT,
COMING ON FOR PRONOUNCEMENT THIS DAY,
RAMACHANDRA D. HUDDAR J., DELIVERED/PRONOUNCED
THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV
AND
HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR
CAV JUDGMENT
(PER: HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR)
The appellant-Insurance Company has assailed the
judgment and award dated 20.11.2021 passed in MVC
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No.1637/2019 by the IV Additional Senior Civil Judge and
Member, MACT-XV, Vijayapura, (Hereinafter referred to as
'Tribunal' for short) on the ground that the liability
fastened on the appellant (respondent No.2 before the
Tribunal) is incorrect and illegal and prays to set aside the
said judgment and award.
2. Briefs facts leading to filing of this appeal are as
under:
a) Respondent Nos.1 to 4 herein, who are wife and
children of one Bhimappa Mallikarjun Pujari, filed claim
petition before the Tribunal in MVC No.1637/2019 under
Section 166 of MV Act, 1988, claiming compensation of
Rs.50.00 lakhs on account of death of Bhimappa
Mallikarjun Pujari in a road traffic accident on 03.10.2019
at about 01:10 p.m., near Government Hospital, Indian Oil
Petrol Pump on Mudhol-Mahaligapur Road at Mudhol. It
was the case of the claimants that, the deceased was
proceeding on his motorcycle bearing Reg. No.KA-48/R-
8198 by riding slowly and cautiously, at that time a truck
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bearing registration No.MH-10/AW-7881 came from his
hind side in rash and negligent manner and dashed
against his motorcycle, as a result of it Bhimappa
sustained fatal injuries. Immediately, he was shifted to
Government Hospital, Mudhol. Thereafter he was taken to
Kumareshwar Hospital, Bagalkot for further treatment,
then to Yashodhara Hospital, Vijayapura and thereafter to
BLDE Hospital, Vijayapura, where, he died while under
treatment because of the fatal injuries sustained in the
accident.
b) According to the claimants for treatment of the
deceased they have spent more than Rs.4,00,000/- and
Rs.40,000/- towards funeral expenses. It is stated by the
claimants that, the deceased was aged 35 years at the
time of accident and was earning Rs.15,000/- per month
and he was the only bread earner in the family. The
claimants being wife and children are deprived of their
livelihood because of untimely death of deceased
Bhimappa. Therefore, claimants prayed to award
compensation as prayed for.
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c) Before the Tribunal despite service of notice
respondent No.1-owner of offending lorry remained absent
and he was placed ex-parte. Whereas, respondent No.2,
the appellant herein, appeared and contested the petition
by filing detailed objection statement. So far as issuance
of the policy is admitted and that the policy was valid as
on the date of the accident is also admitted. The other
allegation with regard to rash and negligent driving of the
offending truck is denied. There was no proximate cause
of death of the deceased because of rash and negligence
directed against said offending truck driver. It is
contended that, there was no negligence on the part of
driver of insured vehicle. The deceased was not
possessing effective driving license at the time of accident.
Thus, there is violation of policy conditions by the owner of
the said vehicle. The claim made by the claimants is
excessive and on imaginary grounds. Thus, it was prayed
by the Insurance Company to dismiss the petition.
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d) Based upon the rival pleadings of both the
parties, the Tribunal framed four issues. They read as
under:
"1. Whether petitioners prove that accident
occurred due to rash and negligence
driving of the truck No.MH-10/AW-7881 by
its driver?
2. Whether petitioners prove that as a result
of said accident Bhimappa Mallikarjun
Pujari was died?
3. Whether petitioners are entitled for
compensation? If so, to what extent and
from whom?
4. What order or award?"
e) Before the Tribunal, claimant No.1 examined as
PW1 and got marked the documents at Exs.P1 to P12, so
also examined PW2 eyewitness to the said accident and
closed claimants' evidence. The Deputy Manager of
respondent No.2 was examined as RW1 and in his
evidence Exs.R1 and R2 were marked. The Tribunal
considering the entire oral and documentary evidence was
held that the said accident has been caused because of
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rash and negligent driving of the driver of offending truck
and held that the claimants are entitled for total
compensation of Rs.21,65,500/- with interest at the rate
of 6% per annum from the date of petition till its
realization and fastened the liability on the Insurance
Company to indemnify the award amount. The Tribunal
also ordered apportionment of the award amount. Being
aggrieved about the liability fastened on it, the Insurance
Company has filed this appeal.
3. It is the contention of the appellant that the
deceased was not possessing valid and effective license to
drive two wheeler, therefore, there is violation of the
policy conditions by the deceased/owner of the said two
wheeler. It is further contended that though the Tribunal
has held that the Insurance Company is liable to pay the
compensation, as there is violation of the policy conditions
the Insurance Company is not liable for payment of
compensation, but it is the owner of the said two wheeler
who is to pay compensation.
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4. Learned counsel for the appellant in addition to
the grounds urged in the appeal memo submits that, in
view of clear evidence brought on record through RW1 so
also the cross-examination of PWs.1 and 2, it shows that
there is violation of the policy conditions by the owner of
the two wheeler as the deceased was not possessing
effective driving license, also there is violation of Section 3
of the Motor Vehicles Act by the deceased, hence,
deceased himself is responsible in causing the said
accident. Therefore, he submits to allow the appeal. He
further submits that, driver of the offending lorry was also
not possessing effective driving license. Hence, there is
violation of policy conditions by the owner of lorry.
5. As against this submission, the learned counsel
for the claimants-respondent No.1 to 4 vehemently
submits that, the Tribunal has assessed the evidence of
both the parties and has come to the right conclusion that
the insurer of the offending lorry i.e., the appellant herein
is liable to pay the compensation. He submits that the
findings of the trial Court do not require any interference
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by this Court and that whatever the award being passed
by the Tribunal is to be confirmed.
6. Refuting the submission of the claimants, the
counsel for the appellant submits that the charge-sheet
was filed against the driver of the said offending truck
alleging offences under Sections 279, 337 and 304(A) of
IPC and Section 3 read with Section 181 of Motor Vehicles
Act ('M.V. Act' for short). It is submitted that, a case was
registered against the driver of the offending vehicle.
Therefore, it is prayed to allow the appeal.
7. We have given our anxious consideration to the
arguments on both the side and meticulously perused the
records.
8. The only point that would arise for our
consideration is,-
whether the fastening of the liability on the
Insurance Company to pay the
compensation as ordered by the Tribunal
requires interference by this Court?
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9. So far as the accident occurred at 01:10 p.m.,
on 03.10.2019 near Government Hospital, Indian Oil Petrol
Pump on Mudhol-Mahalingapur Road at Mudhol, causing
fatal injuries to the deceased Bhimappa resulting his death
is not in dispute. It is also not in dispute that the driver of
the offending truck was not possessing valid and effective
driving license at the relevant point of accident. To that
effect, the learned counsel for the Insurance Company
relies upon the charge-sheet, wherein, the driver was
charge-sheeted for the offence under Section 279, 332
and 304(A) of IPC and Section 3 read with Section 181 of
the MV Act. That means, the driver of the offending truck
was not possessing valid and effective driving license to
drive the truck, thereby, the owner of the said offending
truck has violated the policy conditions as per the
submission of the learned counsel for the Insurance
Company. So far as other aspects with regard to the age
and income of the deceased, etc., are concerned, it is not
denied by the appellant. The claimants are in all four
persons, who are the wife and minor children of the
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deceased. Now the question is "whether the Tribunal is
right in holding that respondent Nos.1 and 2 are jointly
and severally liable to pay the compensation and
respondent No.2 to indemnify the same?".
10. The Tribunal with regard to the liability to
indemnify the award amount has elaborately discussed
that respondent No.1 being the owner of the offending
lorry and respondent No.2 being the Insurer, both are
jointly and severally liable to pay the compensation. It is
observed that RW1 has produced Insurance Policy of the
offending lorry, which is marked as Ex.R2, which shows
that the said policy was valid as on the date of the
accident. It is further observed that respondent No.2 -
Insurance Company has not substantiated its contention
that there is violation of the terms and conditions of the
policy. Therefore, respondent No.1 is primarily liable to
pay the compensation and it is ordered that respondent
No.2 to indemnify the award amount.
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11. RW1 is consistent in his evidence that there is
violation of policy conditions as the driver of the offending
lorry was not possessing effective driving license.
Therefore, the Police have filed charge-sheet against the
driver of the said lorry, not only for the offences under the
Indian Penal Code, so also under the provisions of M.V.
Act. Section 3 of the M.V. Act specifies with regard to
possession of the effective driving license. It is the
bounded duty of the drivers or riders of the vehicles to
possess valid and effective driving license issued by the
competent authority, then only they be permitted to drive
vehicles. But in this case charge-sheet was filed against
the driver of the offending lorry bearing registration
No.MH-10/AW-7881. It is stated in the charge-sheet that,
the driver of the offending truck was not possessing the
valid driving license. Even it is stated in the charge-sheet
that as the driver was not possessing valid and effective
driving license, in the check report at Sangli, Maharashtra,
the owner of the said lorry has paid fine of Rs.2,000/-.
This fact is not denied. This contention in the charge-
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sheet is not rebutted by the claimants so also respondent
No.1 being owner of the lorry. He has not appeared
before the Tribunal and he has been placed ex-parte. To
prove that the driver of the said lorry was really
possessing valid and effective driving license, except self
serving say of the claimants, no evidence is placed on
record.
12. Learned counsel for the appellant relies upon
the judgment of the Hon'ble Apex Court in the case of
PAPPU AND OTHERS Vs. VINOD KUMAR LAMBA AND
ANOTHER1, wherein, it is held that, if there is violation of
the policy conditions, the Insurance Company can be
fastened with the liability on the basis of valid Insurance
Policy only after basic facts pleaded are established by the
owner of the offending vehicle that vehicle was duly
insured and the insurer can recover the same from the
owner of the offending vehicle if there is violation of policy
conditions. In the instant case, it is proved by the
2018 Volume 3 SCC 208
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Insurance Company that, though the insurance policy was
in force as on the date of the accident, but the driver of
the offending lorry was not possessing valid and effective
driving license. That means there is violation of the policy
conditions by the owner of the offending lorry. If the
claimants are able to prove about the validity of the
insurance policy as well as the driving license, then the
Insurance Company would become liable. Therefore, in
view of the facts brought on record by the claimants as
well as Insurance Company, it is now proved by the
Insurance Company that there is violation of the policy
conditions by the owner of the offending lorry. However,
it is held in Para No.17 to 20 of the said judgment that, if
insurer is directed to pay the award amount to the
claimants at the first instance, and thereafter to recover
the same from the owner of the offending vehicle in
accordance with law, it would meet the ends of justice.
For better appreciation, it is just and proper to incorporate
the observations made by the Hon'ble Apex Court in Para
Nos.17 to 20 of the said decision.
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"17. This issue has been answered in the case
of National Insurance Company Ltd. 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 paragraph 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 realize the awarded amount from
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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 has 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."
18. Further, in para 110, the Court in
National Insurance Co. Ltd. observed thus: (SCC
pp.341-42)
110. The summary of our findings to the various
issues as raised in these petitions are as
follows:
(i) Chapter XI of the Motor Vehicles Act,
1988 providing compulsory insurance of
vehicles against third party risks is a social
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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 163A or
Section 166 of the Motor Vehicles Act, 1988
inter alia in terms of Section 149(2)(a) 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 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.
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(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 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 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 insured 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
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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 proviso thereunder and Sub-
section (5) which are intended to cover
specified contingencies mentioned therein to
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enable the insurer to recover amount paid
under the contract of insurance on behalf of the
insured can be taken recourse of by the Tribunal
and be extended to claims and defences of
insurer against 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."
(emphasis supplied)
19. In the present case, the owner of the vehicle
(respondent No.1) had produced the insurance
certificate indicating that vehicle No. DIL- 5955 was
comprehensively insured by the respondent No.2
(Insurance Company) for unlimited liability.
Applying the dictum in the case of National
Insurance Company Ltd. (supra), to subserve the
ends of justice, the insurer (Respondent No.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 No.1) in accordance with law.
20. Accordingly, the appeal is allowed to the extent
that the compensation amount awarded by the
Tribunal and confirmed by the High Court shall be
paid and satisfied by the insurer (Respondent No.2)
in the first instance, with liberty to recover the same
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from the owner of the vehicle (Respondent No.1) in
accordance with law."
13. By applying the principles laid down in the
aforesaid judgment and also in view of the facts brought
on record by the appellant, the appeal filed by the
Insurance Company is to be allowed in part.
14. However, the appellant being the Insurance
Company is liable to pay the compensation to the
claimants at the first instance by depositing the same
before the Tribunal and then recover the said amount from
owner of the offending vehicle in accordance with law.
15. Accordingly, the point raised by this Court is
answered partly in affirmative. Resultantly, we pass the
following:
ORDER
i. Appeal is allowed in part.
ii. The appellant/Insurance Company is
directed to deposit the compensation
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amount with accrued interest so awarded
by the Tribunal within 06 [six] weeks from
today.
iii. Appellant is at liberty to recover the said
amount from respondent No.4 - owner of
the offending lorry in accordance with law.
Registry is directed to transmit the amount deposited
before this Court forthwith.
Pending I.As., if any, does not survive for
consideration and accordingly they are disposed off.
Send copy of this order to the Tribunal forthwith.
Sd/-
(S. SUNIL DUTT YADAV)
JUDGE
Sd/-
(RAMACHANDRA D. HUDDAR)
JUDGE
SBS
CT:BN
