Allahabad High Court
National Insurance Comp Ltd Through Its ... vs Smt. Golana And Another on 30 August, 2012
Bench: Devi Prasad Singh, Vishnu Chandra Gupta
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Reserved on :09.08.2012 Delivered on : 30.08.2012 A.F.R. HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH, LUCKNOW F.A.F.O. No.-346 of 2010 District-Lucknow National Insurance Co. Ltd Through its Regional Manager ,Regional Office At 4th Floor , L.I.C. Building, Naval Kishore Road, Hazratganj, Lucknow ------Appellant/Insurer Vs. 1.Smt. Golana, Widow of Late Ram Baran, R/O Vill. & Post - Bhelsar, Tehsil & P.S. - Rudauli, District - Faizabad, Preasent Address - D/O Late Dukhi, Vill. Seewar, Tehsil - Sohawal, District - Faizabad (Claimant) 2.Ghanshyam Rawat S/O K. Lal Originally R/O 565-K.L/141, Amrudahibagh, Singarnagar, Lucknow & Present Address - Grade 1, Technician, Northern Railway Electricity Loco Workshop, Lucknow (owner). ------Respondents/Claimants Counsel for Appellant :- Sri R.P. Singh,Advocate Counsel for Respondents :- Shakeel Ahmad Ansari, Advocate Coram:-Hon'ble Devi PrasadSingh,J. Hon'ble Vishnu Chandra Gupta,J.
(Delivered By Hon'ble Vishnu Chandra Gupta, J.) JUDGMENT (1) This appeal under Section 173 Motor Vehicle Act,1988(for short 'MV Act') has been preferred by National Insurance Co. Ltd. against the award dated 3.12.2009 passed by Motor Accidents Claims Tribunal / Additional District Judge, Court No.4, Faizabad (For short 'Tribunal') in Claim Petition No. 76 of 2008 (Smt. Golana V/S National Insurance Co. & Another) awarding compensation of Rs. 1,54,500/- with pendente-lite and future simple interest at the rate of 7.50% per annum to Smt. Golana, the sole claimant-respondent on account of death of her daughter Gudiya.
(2) The factual matrix of the case is that deceased Gudiya, aged about 12 years along with her mother Golana was returning after listening the preach of Sati Baba and proceeding towards their village and when reached near the house of Dr. Akhtiyar on Faizabad - Lucknow highway on 31.05.2005 at 11.00 AM, a motorcycle having registration No. 32-AG-7325 driven by its driver in rash and negligent manner hit Gudiya from behind. The driver of the motorcycle stopped for a short while and on the pretext of making arrangement of conveyance fled away from spot. Gudiya was taken to District Hospital, Faizabad, where after few hours during treatment she succumbed to be injured.
(3) Smt. Golana claimant lodged the first information report of this accident on 01.06.2005 at 18.05 hours in Police Station Radauli having Crime No. 93 of 2005 under Section 279, 336, 304A I.P.C.. The petition was filed under Section 166 MV Act for compensation of Rs. 5,32,064/- with interest at the rate of 9% per annum.
(4) The petition was contested by National Insurance Company ,the Appellant and owner of the motorcycle, Respondent No.2. The owner of the motorcycle Ghanshyam Rawat, Respondent No. 2 pleaded that he is owner of the motorcycle involved in accident. The same was duly insured on the date of accident with Appellant's Insurance Company. He further pleaded that his motorcycle was stolen in between 7.15 AM to 4.50 PM from Loco Railway Station, Lucknow. He also lodged first information report of theft of motorcycle in Police Station Alambag on next day. Subsequently, after recovery of the motorcycle by the Police, he got it released from the court . On this basis, it has been pleaded that motorcycle was not in his control and possession at the time of accident. Therefore, he is not liable. The liability would be of Appellant Company.
(5) The National Insurance Company disowned the accident and alleged to be doubtful and also stated that the driver of the vehicle was not having any valid and effective driving license and the Insurance Company would not be liable.
(6) The Tribunal framed different issued and recorded the findings thereon on the basis of evidence and material available on record.
(7) Issue No. 1 was relating to accident, negligence of driver of motorcycle and death of Gudiya, which was decided in affirmative and in favour of the claimant.
(8) Issue No.2, which relates to insurance of motorcycle with Appellant company was decided in affirmative and held therein that motorcycle was duly insured at the time of accident.
(9) While deciding Issue No. 3 ,which was related to breach of terms of policy and liability to pay compensation, it was held that O.P. No. 2 was not driving the vehicle in question at the time of accident because motorcycle was stolen so admittedly owner was not aware as to who was driving the motorcycle at the time of accident. Therefore, the fact that who was the driver of the vehicle and whether that person was possessing any driving license of the motorcycle or not could not be proved.
(10) Finally, under issue No. 4, the Tribunal determined compensation of Rs. 1,54,500 and liability to pay was fastened upon the appellant. The petitioner Golana was found entitled to the compensation.
(11) Heard learned counsel for the parties and perused the record of the Tribunal and of this court.
(12) The fact relating to theft of motorcycle in question on the date of accident is not in dispute among the parties. The sole controversy in between the parties is, whether owner of the motorcycle can be held guilty for commission of breach of terms of policy as stated by the Insurance Company ?
(13) The counsel for the appellant submitted that at the time of accident the person driving the motorcycle was not having any driving license. It is the duty of the owner to keep his vehicle safe and free from its misuse by any body. In this case, the owner himself admitted that vehicle was stolen and the person driving the stolen vehicle caused the accident. It is not possible for the Insurance Company to establish that the driver of the motorcycle was not having any driving license, specially when neither the owner nor the claimant proved as to who was driving the vehicle at the time of accident.
(14) In this connection the Insurance Company relied upon the judgment delivered by Apex Court in Bhuwan Singh Vs. Oriental Insurance Company Ltd (2009) 5 SCC page 136.
(15) In this case this fact is not in dispute that the deceased was going on road when motorcycle hit the deceased Gudiya, who succumbed to the injuries. Therefore, admittedly, she will come within the category of third party and case would be covered under third party risk case.
(16) It is, now, well settled that in third party risk case when statutory policy is there the Insurance Company indemnify the owner's liabilities.
(17) However, before we proceed to decide the question in controvery hereinabove, it is necessary to look into some of the provisions of the M.V. Act.
(18) Section 2(30) of the Act defines the "owner":
"2. (30) ''owner' means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement;"
(19) Chapter XI of the Act deals with the provisions of insurance of motor vehicles against third-party risks. Relevant portions of Sections 146 and 147 thereof are reproduced hereinbelow:
"146. Necessity for insurance against third-party risk.--(1) No person shall use, except as a passenger, or cause or allow any other person to use, a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of this Chapter:
* * *
147. Requirements of policies and limits of liability .-- (1) In order to comply with the requirements of this Chapter, a policy of insurance must be a policy which--
(a) is issued by a person who is an authorised insurer; and
(b) insures the person or classes of persons specified in the policy to the extent specified in sub-section (2)--
(i) against any liability which may be incurred by him in respect of the death of or bodily injury to any person, including owner of the goods or his authorised representative carried in the vehicle or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place;
(ii) against the death of or bodily injury to any passenger of a public service vehicle caused by or arising out of the use of the vehicle in a public place:
Provided that a policy shall not be required--
(i) * * *
(ii)to cover any contractual liability.
Explanation.--For the removal of doubts, it is hereby declared that the death of or bodily injury to any person or damage to any property of a third party shall be deemed to have been caused by or to have arisen out of, the use of a vehicle in a public place notwithstanding that the person who is dead or injured or the property which is damaged was not in a public place at the time of the accident, if the act or omission which led to the accident occurred in a public place.
(2) Subject to the proviso to sub-section (1), a policy of insurance referred to in sub-section (1), shall cover any liability incurred in respect of any accident, up to the following limits, namely:
(a) save as provided in clause (b), the amount of liability incurred;
(b) in respect of damage to any property of a third party, a limit of rupees six thousand:"
(20) Section 149 of the Act casts a duty on the insurer to satisfy the judgment and award against persons insured in respect of third-party risks.
Section 157 of the Act deals with transfer of certificate of insurance, reproduced hereinbelow:
"157. Transfer of certificate of insurance.--(1) Where a person in whose favour the certificate of insurance has been issued in accordance with the provisions of this Chapter transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of its transfer.
Explanation.--For the removal of doubts, it is hereby declared that such deemed transfer shall include transfer of rights and liabilities of the said certificate of insurance and policy of insurance.
(2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance."
(21) Now the question arises whether in given circumstances of the case in hand owner can be held liable for breach of the terms of the policy?
(22) Third-party rights have been considered by the Apex Court in several judgments and the law on the said point is now fairly well settled.
(23) The Apex Court in Guru Govekar v. Filomena F. Lobo(1988) 3 SCC 1 after considering the provisions of old M.V.Act of 1939 has held that: ( paras 8 & 13-14) "8. ... Thus if a policy is taken in respect of a motor vehicle from an insurer in compliance with the requirements of Chapter VIII of the Act, the insurer is under an obligation to pay the compensation payable to a third party on account of any injury to his/her person or property or payable to the legal representatives of the third party in case of death of the third party caused by or arising out of the use of the vehicle at a public place. The liability to pay compensation in respect of death of or injury caused to the person or property of a third party undoubtedly arises when such injury is caused when the insured is using the vehicle in a public place. It also arises when the insured has caused or allowed any other person (including an independent contractor) to use his vehicle in a public place and the death of or injury to the person or property of a third party is caused on account of the use of the said vehicle during such period, unless such other person has himself taken out a policy of insurance to cover the liability arising out of such an accident.
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13. ... This meant that once the insurer had issued a certificate of insurance in accordance with sub-section (4) of Section 95 of the Act the insurer had to satisfy any decree which a person receiving injuries from the use of the vehicle insured had obtained against any person insured by the policy. He was liable to satisfy the decree when he had been served with a notice under sub-section (2) of Section 96 of the Act about the proceedings in which the judgment was delivered.
14. ... Any other view will expose innocent third parties to go without compensation when they suffer injury on account of such motor accidents and will defeat the very object of introducing the necessity for taking out insurance policy under the Act."
(24) The Hon'ble Supreme Court in a Judgment reported in United India Insurance Company Ltd. v. Santro Devi (2009) 1 SCC 558 after considering the provisions of new M.V.Act of 1988 has held as under in para 16 and 17, reproduced herein blow:
"16. The provisions of compulsory insurance have been framed to advance a social object. It is in a way part of the social justice doctrine. When a certificate of insurance is issued, in law, the insurance company is bound to reimburse the owner. There cannot be any doubt whatsoever that a contract of insurance must fulfil the statutory requirements of formation of a valid contract but in case of a third-party risk, the question has to be considered from a different angle.
17. Section 146 provides for statutory insurance. An insurance is mandatorily required to be obtained by the person in charge of or in possession of the vehicle. There is no provision in the Motor Vehicles Act that unless the name(s) of the heirs of the owner of a vehicle is/are substituted on the certificate of insurance or in the certificate of registration in place of the original owner (since deceased), the motor vehicle cannot be allowed to be used in a public place. Thus, in a case where the owner of a motor vehicle has expired, although there does not exist any statutory interdict for the person in possession of the vehicle to ply the same on road; but there being a statutory injunction that the same cannot be plied unless a policy of insurance is obtained, we are of the opinion that the contract of insurance would be enforceable. It would be so in a case of this nature as for the purpose of renewal of insurance policy only the premium is to be paid. It is not in dispute that quantum of premium paid for renewal of the policy is in terms of the provisions of the Insurance Act, 1938.
(25) Their Lordships in this case observed that in case where the owner of the motor vehicle passed away, although there does not exist any statutory interdiction for the person in possession of the vehicle to plied the same on road but there being a statutory injunction that the same cannot be plied unless a policy of insurance is obtained however, the contract of insurance would be enforceable even after death of registered owner.
(26) The Apex Court explained the incorporation of Sec 2(30), 147, 149 and 157 of M.V.Act taking into consideration the rights of third party and makes it clear that so far as third-party risk cases are concerned insurance companies cannot escaped from its statutory liabilities on mere pleadings. To show that insurance company is not liable, the proof of breach of the terms of policy required to be proved by the insurer .
(27) It is true that in Bhuwan Singh's case(Supra) it has been observed by their Lordships that the fact as to who was driving the vehicle at the time of accident would be in the exclusive knowledge of the owner of the vehicle . So if the owner did not disclose the fact in his exclusive knowledge ,i.e, the name of the driver and about the validity of driving licence, onus to prove breach of terms of policy would not shift upon the insurance company. The relevant paragraphs No.16, 17 and 18 of Bhuwan Singh's Case (Supra) are reproduced below:-
"16. The appellant herein raised a specific plea that he was not driving the vehicle and one Diwan Singh was driving the same. The said fact was within his special knowledge. The burden of proof, therefore, to prove the same was on him. He did not examine Diwan Singh. The claimants in their claim petition described the appellant as the owner as well as the driver of the vehicle.
17. The Insurance Company, as noticed hereinbefore, has also categorically raised the plea that the appellant was not holding a valid and effective licence.
18. The burden of proof ordinarily would be on the Insurance Company to establish that there has been a breach of conditions of the contract of insurance. In this case, however, the burden in terms of Section 106 of the Evidence Act was on the appellant. He failed to discharge the said burden. As indicated hereinbefore, not only a criminal case was pending against him, he was also charge-sheeted."
(28) The learned counsel for appellant tried to emphasize the application of Doctrine of Frustration in the circumstances of this case . The theories of Doctrine of Frustration evolved by English Courts but in deciding the cases in India , the only doctrine the courts have to go by is that of supervening impossibility or illegality as laid down in Section 56 of the Indian Contract Act, taking the word 'impossible' in its practical and not literal sense as held in golden law laid down by of our Apex Court in Satyabrata Ghose Vs. Mugneeram Bangur & Company, AIR 1954 SC 44, which still holds good.
(29) Here in the case in hand the contract of insurance is not purely contractual but is also statutory. In a contract based on agreement of parties, a party , for whom its performance become more onerous generally, is never the less bound to perform. Hardship entitles the disadvantaged party to request the other party to enter into renegotiation of the original terms of contract with a view to adapting them to the changed circumstances. Of course the request should be made without undue delay indicating the grounds on which the request is sought subject to principal of good faith and the duty of co-operation.
(30) In statutory contracts the rights of the parties are governed by the provisions of particular statute under which the contract has been entered into between the parties. In such cases doctrine enshrined in section 56 of Indian contract Act cannot be invoked. The similar view has been taken in Sunnam Sarttaih vs State of A.P., AIR 1980 AP 18.
(31) The legal maxim 'impossibilium nulla obligatio est' [means that there is no obligation of doing an impossible act] and another maxim of law 'Impotentia excusat legem' [means when a person is unable to perform an act the incapability of doing such act may be an answer to it] in given facts and circumstances of this case are applicable and favours the owner of the vehicle involved in this case. We fortified our view from a judgment of Apex Court reported in AIR 2007 SC 269, Kishan Singh Tomer Vs.Municipal Corporation of City of Ahemdabad , wherein it has been observed that the maxim of law impotentia excusat legem is intimately connected with another maxim of law lex non cogit ad impossibilia. Impotentia excusat legem is that when there is a necessary or invincible disability to perform the mandatory part of the law that impotentia excuses. The law does not compel any one to do which one cannot possibly perform. "Where the law creates a duty or charge, and the party is disabled to perform it, without any default in him." Therefore, when it appears that the performance of the formalities prescribed by a statute has been rendered impossible by circumstances over which the persons interested had no control, the circumstances will be taken as a valid excuse.
(32) While interpreting the statutory provision of compulsory insurance of vehicle their Lordships after taking into consideration the several judgment of Supreme Court in its judgment in UPSRTC Vs. Kulsum and others ,(2011) 8 SCC 142 observed in paragraph 31 at page 152 as under:-
"31. The liability to pay compensation is based on a statutory provision. Compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate insurance policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice."
(33) In the case in hand the situation is some how peculiar. In this case it is not in dispute that offending motor cycle belongs to Ghanshyam,the respondent No.2 . It is also not denied that he kept the motorcycle in safe custody of parking agent of the office of Loco Railway Station, Lucknow from where the motor cycle was stolen and recovered after the accident and handed over to owner through process of Court. The respondent No.2 also lodged FIR of this incident against the parking agent. In this criminal case police submitted closer report because the person causing accident as well as the person who committed theft could not be traced out by the police. The Final Report was accepted. The stolen motorcycle was returned to the Respondent no.2. In such circumstances it could not be said that Respondent no.2 was in exclusive knowledge of the fact as to who was driving the motor cycle at the time of accident. It is well settled proposition of law that a person cannot be compel to do which is not possible to be done. In such situation the Appellant cannot take advantage of Bhuwan Singh's Case (Supra) and cannot escaped from its liability by mere pleadings of alleged breach of terms of policy of insurance.
(34) No other point was pressed nor argued by Appellant.
(35)Consequently, this appeal lacks merit and is dismissed. However, in the peculiar fact and circumstances of this case there shall be no order as to costs.
(36) The statutory amount or any other amount deposited in this court in this appeal be remitted to the Tribunal by the Registry. The entire amount of compensation including interest after adjusting the amount already paid should be deposited within one month from the date of this order in appeal, by the appellant which shall be paid to the claimant in terms of the award of the Tribunal with in one month thereafter.
S.Kumar / Date: 30. 8.2012