Madras High Court
T.Vinoth Kumar vs S.Sekar on 17 March, 2025
2025:MHC:704
C.M.A.No.413 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 17.03.2025
CORAM
THE HONOURABLE MR.JUSTICE S.SOUNTHAR
C.M.A.No.413 of 2025
T.Vinoth Kumar ... Appellant
vs.
1.S.Sekar
2.M/s.Reliance General Insurance Company Ltd,
Binny Compound,
Kumaran Road,
Tiruppur. ... Respondents
PRAYER: Civil Miscellaneous Appeal is filed under Section 173 of the
Motor Vehicles Act, against the award dated 30.04.2024 passed in MCOP
No.675 of 2018 on the file of Presiding Officer, Motors Accident Claims
Tribunal at Tiruppur.
For Appellant : Mr.K.Myilsamy
For R2 : Mr.P.Suresh Srinivasan
For R1 : Notice Dispensed With
1/18
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C.M.A.No.413 of 2025
JUDGMENT
The Civil Miscellaneous Appeal is filed by the injured/claimant
challenging the award passed by the Motor Accident Claims Tribunal,
dismissing the original petition against the 2nd respondent/Insurance
Company and directing the 1st respondent/owner-cum-driver of the
offending vehicle to pay the compensation amount.
2. It is the case of the claimant that on 08.04.2018, when the claimant
was driving in his two wheeler bearing Registration No.TN 39 BT 2374 in
Bishop School Road, near Dollar Quarters by adhering to the traffic rules
and regulations, the 1st respondent came in his Honda Activa two wheeler
bearing Registration No.TN 39 BT 9015 in a rash and negligent manner and
dashed against the claimant's vehicle. As a result of which, the claimant was
thrown away and sustained grievous injuries. Hence, a claim petition was
filed by the claimant seeking compensation of Rs.5,00,000/- against the
respondents.
3. The 1st respondent remained exparte before the Tribunal and the
claim was resisted by the 2nd respondent/Insurance Company by denying the
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negligence on the part of the 1st respondent. It was also claimed by the 2nd
respondent that the 1st respondent/rider of the vehicle insured with it, did not
posses effective driving license on the date of accident and hence, the 2 nd
respondent was not liable to pay compensation to the claimant. It was also
stated that the accident had occurred only due to the negligence on the part
of the claimant himself.
4. Before the Tribunal, the appellant/claimant was examined as PW.1
and yet another witness was examined as PW.2. On behalf of the claimant,
11 documents were marked as Exs.P1 to P11. The Legal Officer of the 2 nd
respondent/Insurance Company was examined as RW.1 and on behalf of the
2nd respondent/Insurance Company, 4 documents were marked as Exs.R1 to
R4. The copy of the Aadhar Card of PW.2 was marked as Ex.X1.
5. The Tribunal based on the evidence available on record came to the
conclusion that accident had occurred due to the negligence on the part of
the driving of the 1st respondent. However, the Tribunal held that the 1st
respondent did not possess valid driving license on the date of accident and
the same would amount to fundamental breach of the terms of insurance
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with the 2nd respondent-insurance company and hence, the Tribunal
exonerated the 2nd respondent-insurance company from paying
compensation amount. The amount payable to the claimant was quantified
as Rs.3,42,916/-. Aggrieved by the said award, the claimant has come
before this Court.
6. The learned counsel appearing for the appellant/claimant by relying
on the decisions of the Apex Court in National Insurance Co. Ltd., vs.
Swaran Singh and others reported in (2004) 3 SCC 297 and Singh Ram
vs. Nirmala and others reported in 2018 (1) TN MAC 704 (SC), submitted
that the Tribunal committed an error in exonerating the 2nd
respondent/Insurance Company. The learned counsel further submitted that
the amount awarded by the Tribunal towards loss of income is very much on
lower side and the same requires enhancement.
7. In order to prove negligence, the claimant examined himself as
PW.1. He clearly deposed that the accident had occurred only due to the
negligence on the part of the 1st respondent. The evidence of PW.1 is very
well corroborated with the contents of the FIR marked as Ex.P1, which was
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filed against the 1st respondent. It is also seen that final report was also filed
against the 1st respondent after investigation and the same was marked as
Ex.P2. Based on the evidence of PW.1, Exs.P1 and P2, the Tribunal rightly
came to the conclusion that the accident had occurred due to the rash and
negligent driving of the 1st respondent. However, the Tribunal exonerated
the 2nd respondent/Insurance Company from liability on the ground that the
1st respondent failed to possess valid driving license on the date of accident.
8. The liability of the Insurance Company to pay the third party
victims and recover the award amount paid by it from the insured in case of
breach of policy condition has been very well explained by the Apex Court
in National Insurance Co. Ltd., vs. Swaran Singh. The relevant
observation of the Apex Court reads as follows:-
“96. It is, therefore, evident from the discussions made
hereinbefore that the liability of the insurance company to
satisfy the decree at the first instance and to recover the
awarded amount from the owner or driver thereof has been
holding the field for a long time.
97. Apart from the reasons stated hereinbefore the
doctrine of stare decisis persuades us not to deviate from the
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said principle.
99. 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
claims 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 opportunity to defend at all. Such a course of
action may also be resorted 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.
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100. Although, as noticed hereinbefore, there are certain
special leave petitions wherein the persons having the vehicles
at the time when the accidents took place did not hold any
licence at all, in the facts and circumstances of the case, we do
not intend to set aside the said awards. Such awards may also
be satisfied by the petitioners herein subject to their right to
recover the same from the owners of the vehicles in the manner
laid down therein. But this order may not be considered as a
precedent.”
9. After holding so in Paragraph No.102 of the judgment, the Apex
Court summarised it's finding, which reads as follows:-
“102. 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 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) 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.
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(iii) The breach of policy conditions e.g.,
disqualification of driver or invalid driving licence of the
driver, as contained in sub-section (2)(a)(ii) of section 149,
have 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.
(iv) The insurance companies are, 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 wherefor 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
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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 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) If a vehicle at the time of accident was driven by a
person having a learner's licence, the insurance companies
would be liable to satisfy the decree.
(ix) The Claims Tribunal constituted under Section 165
read with Section 168 is empowered to adjudicate all claims in
respect of the accidents involving death or bodily injury or
damage to property of third party arising from use of motor
vehicle. The said power of the tribunal is not restricted to
decide the claims, inter se, between claimant or claimants on
one side and insured, insurer and driver on the other. In the
course of adjudicating the claim for compensation and to
decide the availability of defence or defences to the insurer,
the Tribunal has necessarily the power and jurisdiction to
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decide disputes inter se between insurer and the insured. The
decision rendered on the claims and disputes inter se between
the insurer and insured in the course of adjudication of claim
for compensation by the claimants and the award made
thereon is enforceable and executable in the same manner as
provided in Section 174 of the Act for enforcement and
execution of the award in favour of the claimants.
(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 the 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
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proviso thereunder and sub-section (5) which are intended to
cover specified contingencies mentioned therein to 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.”
10. A close reading of the above judgment would make it clear that
mere breach of policy condition by the insured like disqualification of the
driver, invalid driving licence etc., are not by themselves defences available
to the insurer against either the insured or the third party. 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 conditions of policy. In Paragraph No.102.(vi), it is clearly
mentioned that the insurer would not be allowed to avoid its liability
towards insured unless the said breach or breaches of the condition of
driving licence is/are so fundamental as are found to have contributed to the
cause of the accident.
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11. It is argued by the learned counsel appearing for the 2nd
respondent/Insurance Company by relying on the judgment of this Court in
M.Ananthi and others vs. P.Venkatesan and others reported in 2020 SCC
OnLine Mad 15047, that failure of the insurer to have valid driving licence
at the time of accident would amount to fundamental breach of policy.
Therefore, the Insurance Company is entitled to avoid its liability of
payment.
12. A close scrutiny of judgment of Apex Court in Swaran Singh
case would make it clear that the insurer is not entitled to deny its liability
towards insured unless the breach is so fundamental and also contributed to
the cause of the accident. It means in case of fundamental breach of
condition, the insurer is only entitled to avoid it's liability towards the
insured not its liability towards the third parties under Section 149 (1) of the
Motor Vehicles Act, 1988. The Motor Vehicles Act is a Social Welfare
Legislation aimed at giving some compensation to the victims of road
accident.
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13. Failure of the insured to produce driving licence or failure of the
insured to hold proper driving licence is not the fault of the third party, who
suffered at the hands of the rash and negligent driving of the insured. The
provisions of the welfare legislation has to be interpreted so as to achieve
the object of the enactment (providing compensation to the road accident
victims). Therefore, the Apex Court in the above mentioned case said that in
cases of breach of policy conditions, insurer can be directed to pay the
award amount to the innocent third parties and recover the same from the
insured, who committed breach of policy conditions. Only in cases where
there is a fraud or collusion between the third party and the insured, the
Insurance Company can get its liability exonerated as held by the Apex
Court in Swaran Singh case.
14. The decision of the Apex Court in Swaran Singh case was
followed and reiterated by it in Singh Ram vs. Nirmala case reported in
2018 (1) TN MAC 704 (SC). In Singh Ram case, the owner produced the
driving licence and the same was found to be fake, thereafter, he filed
another driving licence and the same was found to be expired long before
the accident. The Apex Court after recording the owner's failure to take
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reasonable care, affirmed the pay and recovery order passed by the High
Court.
15. In the light of the judgment of the Apex Court in Swaran Singh
and Singh Ram cases cited supra, merely because, the 1st respondent herein
owner-cum-driver of the vehicle failed to appear before the Tribunal and
have not produced valid driving licence before the Tribunal, we cannot
exonerate insurer of it's liability towards the third party claimant.
16. Even assuming, it enables the Insurance Company to avoid its
duty towards the insured as held in Swaran Singh case by virtue of Section
149 of the Motor Vehicles Act, 1988 the 2nd respondent/Insurance Company
shall pay the amount to the innocent third party claimant and the same can
be recovered from the insured. Therefore, I set aside the finding of the
Tribunal exonerating the Insurance Company from its liability of paying the
amount to the claimant. However, the insurer is entitled to recover the
amount paid by it to the claimant from the 1st respondent/insured.
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17. It is seen from the records, the Tribunal noted based on Ex.P3-
Discharge Summary, the claimant suffered fracture of both the bones in his
left leg namely tibia and fibula. The same was treated by closed reduction
with nailing, the claimant was admitted to hospital on 08.04.2018 and got
discharged on 11.04.2018. Ex.P5-Discharge Summary from another hospital
proves the fracture suffered by the claimant was united and his implant was
also removed. The claimant has not appeared before the Medical Board for
assessment of disability. In these circumstances, taking into consideration
the nature of injury suffered by the claimant, the Tribunal awarded a
compensation of Rs.75,000/- towards grievous injuries. The claimant has
not produced any Disability Certificate to establish the disability suffered by
him. The Discharge Summary-Ex.P5 reads that the fracture was united
properly and implant was also removed. However, the Tribunal liberally
granted a lump sum of Rs.75,000/- towards compensation for the grievous
injuries suffered by the claimant. The Tribunal also liberally granted
Rs.75,000/- towards pain and sufferings and loss of amenities (Rs.50,000 +
Rs.25,000). There is no concrete evidence available on record to show that
how long the claimant has been kept out of action due to the injuries.
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18. Taking into consideration the nature of injuries, this Court feels
he would have been kept out of action for atleast three months. Even if his
notional income is fixed at Rs.16,500/- taking into consideration the date of
accident, the amount of Rs.50,000/- awarded by the Tribunal under the head
loss of income appears to be reasonable.
19. In view of the discussions made earlier, the quantum of
compensation awarded by the Tribunal appears to be very reasonable in the
facts and circumstances of the case and the claimant has not made out any
case for enhancement of compensation.
20. Accordingly, the Civil Miscellaneous Appeal is partly allowed by
directing the 2nd respondent/Insurance Company to pay the award amount as
ordered by the Tribunal to the claimant with liberty to recover the same
from the 1st respondent/owner of the vehicle. No costs. The claimant is not
entitled to claim interest for 85 days as per order in C.M.P.No.27598 of
2024.
17.03.2025
Index :Yes
Speaking order :Yes
Neutral Citation :Yes
dm
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To
1.The Presiding Officer, Motors Accident Claims Tribunal,
Tiruppur.
2.M/s.Reliance General Insurance Company Ltd,
Binny Compound,
Kumaran Road,
Tiruppur.
3.The Section Officer,
VR Section,
High Court, Madras.
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S.SOUNTHAR, J.
dm
17.03.2025
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