Telangana High Court
United India Insurance Co Ltd vs Jaidu Venkatamma And 4 Ors on 22 July, 2024
Author: G.Radha Rani
Bench: G.Radha Rani
THE HONOURABLE DR.JUSTICE G.RADHA RANI
CIVIL MISCELLANEOUS APPEAL No.776 of 2012
JUDGMENT:
This Civil Miscellaneous Appeal is filed by the appellant - Insurance
Company - Opposite Party No.2 (for short O.P.2) aggrieved by the orders in
W.C.No.27 of 2008 dated 16.04.2012 passed by the Commissioner for
Employee's Compensation and Deputy Commissioner of Labor at
Mahabubnagar.
2. The respondents 1 to 4 were the wife, son, mother and sister of
late Jaidu Yellaiah @ Yellappa.
3. The case of the respondents 1 to 4 / claimants was that late Jaidu Yellaiah
@ Yellappa was employed by opposite party No.1 (for short O.P.1) as driver on
his tractor bearing registration No.AP-27-N-3370. On 16.06.2008 at
05:00 PM, while late Jaidu Yellaiah @ Yellappa was ploughing agricultural
land of O.P.1 by driving the tractor and was proceeding from one channel to
another channel, he lost control over the said vehicle, due to which the vehicle
over turned and Yellaiah @ Yellappa fell down under the tractor, sustained
grievous bodily injuries resulting in his instantaneous death on the spot. Police,
Marikal registered a case in Crime No.40 of 2008 under Section 304-A of IPC.
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The respondents - claimants claimed compensation of Rs.4.00 lakhs with
interest @ 18 % per annum contending that the age of the deceased at the time
of death was 30 years and he was being paid a monthly wage of Rs.5,000/- plus
Rs.100/- as batta per day.
4. The respondent No.5 - respondent No.1 in W.C. filed counter admitting
the employment of late Yellaiah @ Yellappa as driver on his tractor bearing
registration No.AP-22-N-3370. He contended that the monthly wages were
Rs.4,000/-, but not Rs.5,000/- and he was paying batta of Rs.30/- per day, but
not Rs.100/- per day. He contended that the driver possessed a valid driving
license and that his tractor was insured with O.P.2 and the policy was valid from
09.11.2007 to 08.11.2008 covering the date of accident on 16.06.2008. As
such, the O.P.2 was liable to indemnify him and liable to pay compensation to
the applicants and prayed to dismiss the application against him.
5. The appellant - Insurance Company - O.P.2 filed his counter contending
that late Yellaiah @ Yellappa was not possessing a valid driving license at the
time of the accident and that he was travelling as an un-authorized passenger on
the tractor at the time of the accident. The O.P.2 further contended that as per
the final report one P.Sreenivasulu was said to be the new owner / purchase of
the vehicle from O.P.1, but the same was not transferred in his name in
Registration Certificate and Insurance Policy. Thus, there was no relationship
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of employer and employee between the deceased and the registered owner of
the vehicle and prayed to dismiss the application.
6. The applicant No.1 - the wife of the deceased was examined as AW.1.
She got examined a co-worker of the deceased as AW.2 and got marked Exs.A1
to A3 - the certified copies of the FIR, inquest and PME reports on her behalf.
The Divisional Manager of the Insurance Company was examined as RW.1 and
the copy of the insurance policy was marked as Ex.R1. An employee from the
RTO Office, Mahabubnagar was examined as RW.2.
7. On considering the oral and documentary evidence on record, the learned
Commissioner for Employee's Compensation and Deputy Commissioner of
Labor, Mahabubnagar held that late Jaidu Yellaiah @ Yellappa was employed
by O.P.1 as a driver on his tractor bearing registration No.AP-27-N-3370. As
such, there was an employer and employee relationship between them and that
late J.Yellaiah @ Yellappa died due to the fatal accident caused to him on
16.06.2008 in the course of his employment and both O.Ps.1 and 2 were jointly
and severally liable to pay compensation of Rs.6,11,601/- and directed both
O.Ps.1 and 2 to deposit the said compensation amount within a period of 30
days from the date of receipt of the order.
8. Aggrieved by the said order passed by the learned Commissioner, the
Insurance Company - O.P.2 preferred this appeal.
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9. Heard Sri V.Sambasiva Rao, learned counsel for the appellant -
Insurance Company and Sri Venkatesh Gupta, learned counsel for the
respondents 1 to 4 - claimants and Ms. Sowmya, learned counsel for the
respondent No.5 - owner of the vehicle.
10. Learned counsel for the appellant - Insurance Company contended that
the Commissioner grossly erred in awarding the compensation and fixing the
liability on the Insurance Company along with the owner of the tractor. The
learned Commissioner failed to see that the deceased was driving the tractor
without having any driving license at the time of the accident against the terms
and conditions of the policy. The owner of the tractor having participated in the
proceedings before the Commissioner did not file the driving license of the
deceased. Accordingly, the Commissioner ought to have fixed the liability on
the owner of the tractor alone as per the settled principles of law. The learned
Commissioner failed to see that in the final report, it was mentioned that the
owner of the vehicle was imposed a fine of Rs.1,000/- under Section 180 of the
Motor Vehicles Act, 1988, since the owner had handed over the tractor to an
un-licensed driver. Accordingly, the Commissioner ought to have fixed the
liability on the owner of the tractor alone as per the conditions of the policy and
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relied upon the judgments of the Hon'ble Apex Court in Sardari v. Sushil
Kumar 1 and Beli Ram V. Rajinder Kumar and Another 2.
11. Learned counsel for the respondents 1 to 4 - claimants contended that the
owner of the vehicle filed written statement admitting the employer and
employee relationship, wages paid by him and that he possessed a valid driving
license at the time of the accident. The learned Commissioner on considering
all the facts and evidence on record passed a reasonable order. No substantial
question of law would arise to set aside the said order passed by the
Commissioner. As the Workmen's Compensation Act, 1923 is a beneficial
legislation, even if this Court considers that there was breach of any policy
conditions, "pay and recovery" might be ordered and prayed to dismiss the
appeal.
12. Learned counsel for the respondent No.5 - owner of the vehicle
contended that the order of the Commissioner was reasonable and all the
questions raised by the Insurance Company were answered by the learned
Commissioner in his order, no substantial questions of law would be arising and
prayed to dismiss the appeal.
13. The main point on which the Insurance Company is contending in this
appeal is whether the learned Commissioner is justified in fixing the liability on
2008 Law Suit (SC) 206
AIR 2020 SC 4453
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the Insurance Company even after proving by way of pleadings and adducing
evidence through RWs.1 and 2 to show that the deceased J.Yellaiah @ Yellappa
was driving the tractor without any driving license at the time of the accident.
14. Admittedly, the appellant - Insurance Company had taken a plea in its
counter that late Yellaiah @ Yellappa was not having any driving license to
drive the vehicle at the time of the accident and got examined the Divisional
Manager of the Insurance Company as RW.1 and an employee from the RTO
Office, Mahabubnagar as RW.2.
15. RW.1 stated that late Yellaiah @ Yellappa was not having a valid license
to drive the vehicle and that the police had imposed a fine of Rs.1,000/- on the
owner of the vehicle - O.P.1 and the O.P.1 - owner of the vehicle violated the
terms and conditions of the Insurance Policy issued to him. RW.2, the
employee from the RTO Office, Mahabubnagar stated that as per the records of
their office, no driving license was issued to Yellaiah @ Yellappa, R/o.Kistapur
Village, Dhanwada Mandal, Mahabubngar District.
16. The O.P.1 - owner of the vehicle had not adduced any evidence to show
that the driver possessed a valid driving license at the time of the accident, as
contended by him in his counter.
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17. The Division Bench of the Hon'ble Apex Court in Sardari & Others v.
Sushil Kumar & Others (cited supra) on considering the facts of the case,
which are similar to this case, held that:
7. The concurrent finding of fact herein is that Sushil Kumar
never held a license. The owner of the vehicle has a statutory
obligation to see that the driver of the vehicle whom he
authorized to drive the same holds a valid license. Here again, a
visible distinction may be noticed, viz. where the license is fake
and a case where the license has expired, although initially
when the driver was appointed, he had a valid license.
The question came up for consideration before this Court
in United India Insurance Co. Ltd. Vs. Gian Chand and
Others [(1997) 7 SCC 558], wherein it was held;
"12. Under the circumstances, when the insured
had handed over the vehicle for being driven by
an unlicensed driver, the Insurance Company
would get exonerated from its liability to meet
the claims of the third party who might have
suffered on account of vehicular accident caused
by such unlicensed driver...."
A three Judges' Bench of this Court in National Insurance Co.
Ltd. Vs. Swaran Singh and Others [(2004) 3 SCC 297], upon
going through the provisions of the Act as also the precedents
operating in the field, laid down the following dicta;
"84. We have analysed the relevant provisions
of the said Act in terms whereof a motor vehicle
must be driven by a person having a driving
licence. The owner of a motor vehicle in terms
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of Section 5 of the Act has a responsibility to see
that no vehicle is driven except by a person who
does not satisfy the provisions of Section 3 or 4
of the Act. In a case, therefore, where the driver
of the vehicle, admittedly, did not hold any
licence and the same was allowed consciously to
be driven by the owner of the vehicle by such
person, the insurer is entitled to succeed in its
defence and avoid liability. The matter,
however, may be different where a disputed
question of fact arises as to whether the driver
had a valid licence or where the owner of the
vehicle committed a breach of the terms of the
contract of insurance as also the provisions of
the Act by consciously allowing any person to
drive a vehicle who did not have a valid driving
licence. In a given case, the driver of the vehicle
may not have any hand in it at all e.g. a case
where an accident takes place owing to a
mechanical fault or vis major. (See Jitendra
Kumar 22 .)"
In National Insurance Co. Ltd. Vs. Kusum Rai and
Others [(2006) 4 SCC 250], a Bench of this Court (wherein
one of us was a member) held;
"11. It has not been disputed before us that the
vehicle was being used as a taxi. It was,
therefore, a commercial vehicle. The driver of
the said vehicle, thus, was required to hold an
appropriate licence therefor. Ram Lal who
allegedly was driving the said vehicle at the
relevant time, as noticed hereinbefore, was
holder of a licence to drive a light motor vehicle
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only. He did not possess any licence to drive a
commercial vehicle. Evidently, therefore, there
was a breach of condition of the contract of
insurance. The appellant, therefore, could raise
the said defence."
14. This Court in Swaran Singh clearly laid down that the
liability of the Insurance Company vis-vis the owner would
depend upon several factors. The owner would be liable for
payment of compensation in a case where the driver was not
having a licence at all. It was the obligation on the part of the
owner to take adequate care to see that the driver had an
appropriate licence to drive the vehicle.
The question as regards the liability of the owner vis- a -vis the
driver being not in possession of valid license has also been
considered in para 89 in Swaran Singh (supra).
8. Yet again in New India Assurance Co. Ltd. Vs. Prabhu
Lal [2007 (13) JT 246], the Court stated the law in the
following terms:-
"33. In the present case, all the facts were before
the District Forum. It considered the assertion of
the complainant and defence of the Insurance
Company in the light of the relevant
documentary evidence and held that it was
established that the vehicle which met with an
accident was a 'transport vehicle'. Ram Narain
was having a licence to drive Light Motor
Vehicle only and there was no endorsement as
required by Section 3 of the Act read with Rule
16 of the Rules and Form No. 6. In view of
necessary documents on record, the Insurance
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Company was right in submitting that Ashok
Gangadhar does not apply to the case on hand
and the Insurance Company was not liable."
However, Swaran Singh (supra) has been distinguished by this
Court in some cases holding that where the owner of the
vehicle himself is involved, insurance company will not be
liable.
In Premkumari & Ors. Vs. Prahlad Dev & Ors. [(2008) 1
SCALE 531], a Bench of this Court following Kusum
Rai (supra), opined;
"10. In the case of National Insurance Co. Ltd.
v. Kusum Rai and Ors. (2006) 4 SCC 250, the
vehicle was being used as a taxi. It was,
therefore, a commercial vehicle. The driver of
the said vehicle was required to hold an
appropriate licence therefor. Ram Lal, who
allegedly was driving the said vehicle at the
relevant time, was holder of a licence to drive
light motor vehicle only. He did not possess any
licence to drive a commercial vehicle.
Therefore, there was a breach of condition of the
contract of insurance. In such circumstances, the
Court observed that the appellant-National
Insurance Co. Ltd., therefore, could raise the
said defence while considering the stand of the
Insurance Company. This Court, pointing out
the law laid down in Swaran Singh (supra)
concluded that the owner of the vehicle cannot
contend that he has no liability to verify the fact
as to whether the driver of the vehicle possessed
a valid licence or not. However, taking note of
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the fact that the owner has not appeared, the
victim was aged only 12 years, the claimants are
from a poor background and to avoid another
round of litigation applying the decision
in Oriental Insurance Co. Ltd. v.
Nanjappan (2004) 13 SCC 224 and finding that
though the appellant-Insurance Company was
not liable to pay the claimed amount as the
driver was not possessing a valid licence and the
High Court committed an error in holding
otherwise, in the peculiar facts and
circumstances of the case and in exercise of
jurisdiction under Article 136 of the Constitution
declined to interfere with the impugned
judgment therein and permitted the appellant-
Insurance Company to recover the amount from
the owner of the vehicle."
In Oriental Insurance Co. Limited Vs. Prithvi Raj [2008 (1)
SCALE 727], however, noticing Swaran Singh (supra), it was
opined;
"10. In the instant case, the State Commission
has categorically found that the evidence on
record clearly established that the licensing
authority had not issued any license, as was
claimed by the Driver and the respondent. The
evidence of Shri A.V.V. Rajan, Junior Assistant
of the Office of the Jt. Commissioner &
Secretary, RTA, Hyderabad who produced the
official records clearly established that no
driving license was issued to Shri Ravinder
Kumar or Ravinder Singh in order to enable and
legally permit him to drive a motor vehicle.
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There was no cross examination of the said
witness. The National Commission also found
that there was no defect in the finding recorded
by the State Commission in this regard."
In Ishwar Chandra & Ors. Vs. The Oriental Insurance Co.
Ltd. & Ors. [2007 (4) SCALE 292], this Court held;
"9. From a bare perusal of the said provision, it
would appear that the licence is renewed in
terms of the said Act and the rules framed
thereunder. The proviso appended to Section
15(1) of the Act in no uncertain terms states that
whereas the original licence granted despite
expiry remains valid for a period of 30 days
from the date of expiry, if any application for
renewal thereof is filed thereafter, the same
would be renewed from the date of its renewal.
The accident took place 28.04.1995. As on the
said date, the renewal application had not been
filed, the driver, did not have a valid licence on
the date when the vehicle met with the
accident."
and dismissed the appeal.
18. The 3-Judge Bench of the Hon'ble Apex Court in Beli Ram v. Rajinder
Kumar and Another (cited supra), held that:
15. We are of the view that once the basic care
of verifying the driving licence has to be taken
by the employer, though a detailed enquiry may
not be necessary, the owner of the vehicle would
know the validity of the driving licence as is set
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out in the licence itself. It cannot be said that
thereafter he can wash his hands off the
responsibility of not checking up whether the
driver has renewed the licence. It is not a case
where a licence has not been renewed for a short
period of time, say a month, as was considered
in the case of National Insurance Company
Limited v. Swaran Singh and Others [(2004)
3 SCC 297] where the benefit was given to a
third party by burdening the insurance company.
The licence in the instant case, has not been
renewed for a period of three years and that too
in respect of commercial vehicle like a truck.
The appellant showed gross negligence in
verifying the same.
16. We are conscious of the fact that in the
present case the beneficiary is the driver himself
who was negligent but then we are not dealing
with a claim under the Motor Vehicles Act but
under the Compensation Act, which provides for
immediate succor, not really based on a fault
theory with a limited compensation as specified
being paid. We are, thus, in the present
proceedings not required to decide the share of
the burden between the appellant as the owner
and the first respondent as the driver as may
happen in a proceeding under the Motor
Vehicles Act.
The Hon'ble Apex Court further held that:
"18. When an employer employees a driver, it is
his duty to check that the driver is duly licensed
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to drive the vehicle. Section - 5 of the Motor
Vehicles Act provides that no owner or person
incharge of a motor vehicle shall cause or permit
any person to drive the vehicle if he does not
fulfil the requirements of Sections 3 and 4 of the
Motor Vehicles Act. The owner must show that
he has verified the licence. He must also take
reasonable care to see that his employee gets his
licence renewed within time. In my opinion, it is
no defence for the owner to plead that he forgot
that the driving licence of his employee had to
be renewed. A person when he hands his motor
vehicle to a driver owes some responsibility to
society at large. Lives of innocent people are put
to risk in case the vehicle is handed over to a
person not duly licensed. Therefore, there must
be some evidence to show that the owner had
either checked the driving licence or had given
instructions to his driver to get his driving
licence renewed on expiry thereof. In the present
case, no such evidence has been led. In view of
the above discussion, I am clearly of the view
that there was a breach of the terms of the policy
and the Insurance Company could not have been
held liable to satisfy the claim."
19. The above judgment is pertaining to the case, where the driver had a
license, but failed to renew his license for a period of three (03) years and the
employer had not checked whether the driver had renewed his license or not
and considered it as a gross negligence on the part of the employer. But the
present case is that the owner of the tractor without even checking whether the
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driver had a license to drive the tractor, had handed over his tractor to the
deceased driver. As such, the negligence on the part of the employer is gross in
nature than the facts of the case of the Hon'ble Apex Court.
20. As such, this Court considers that the respondent No.5 - O.P.1 - owner
of the vehicle had violated the terms and conditions of the insurance policy. As
such, he is alone liable to pay compensation to the claimants.
21. However, considering that the Workmen's Compensation Act, 1923 is a
beneficial legislation and as the compensation amount was already deposited by
the Insurance Company while preferring this appeal, this Court finds it
reasonable to direct the Insurance Company to recover the same from the
respondent No.5 - O.P.1 - owner of the vehicle in Execution Proceedings. The
O.P.2 - Insurance Company is at liberty to recover the amount of compensation
already deposited by it from the owner of the vehicle in Execution Proceedings
and the respondents 1 to 4 - claimants are permitted to withdraw the balance
amount, if any deposited by the Insurance Company.
22. In the result, the Civil Miscellaneous Appeal is allowed exonerating the
Insurance Company from its liability, as the respondent No.5 - O.P.1 had
committed breach of the terms and conditions of the insurance policy.
However, as the entire amount was deposited by the Insurance Company at the
time of preferring the appeal, the respondents 1 to 4 - claimants are permitted to
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withdraw the balance amount, if any and the appellant - Insurance Company is
permitted to recover the same from respondent No.5 - O.P.1 - owner of the
vehicle in Execution Proceedings.
No order as to costs.
As a sequel, miscellaneous applications pending in this appeal, if any
shall stand closed.
_____________________
Dr. G. RADHA RANI, J
Date: 22nd July, 2024
Nsk.
