Rajasthan High Court - Jodhpur
National Insurance Company Limited vs Smt. D Shreedevi & Ors on 11 August, 2016
Author: Arun Bhansali
Bench: Arun Bhansali
1
IN THE HIGH COURT OF JUDICATURE FOR
RAJASTHAN AT JODHPUR
:JUDGMENT:
S.B. CIVIL MISC. APPEAL NO.439/2000
National Insurance Co. Ltd.
Vs.
Smt. D. Shreedevi & Ors.
Date of Judgment :: 11.08.2016
PRESENT
HON'BLE MR. JUSTICE ARUN BHANSALI
Mr. Sanjeev Johari, for the appellant - Insurer.
Mr. N.L. Joshi, for the respondents.
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BY THE COURT:
This appeal has been filed by the appellant - Insurance Company aggrieved against the award dated 22.04.2000 passed by the Motor Accident Claims Tribunal, Anoopgarh, District - Sriganganagar ('the Tribunal'), whereby the Tribunal has awarded a sum of Rs.2,85,000/- as compensation to the claimants for death of R. Raghuvaran Nayar and the appellant - Insurance Company has been held liable for payment of compensation.
The application for compensation was filed by wife of the deceased R. Raghuvaran Nayar with the 2 averments that the deceased was travelling on his Cycle, when the Jeep No.RJ-10-C-0274, which was being driven by Prithvidas rashly and negligently, struck the said R. Raghuvaran Nayar, which resulted in his death. The claimants claimed compensation to the tune of Rs.12,16,600/-.
The claim was resisted by the driver, owner and the Insurance Company. While the driver and owner denied that the accident occurred on account of rash and negligent driving by the driver, the Insurance Company indicated that the conditions of the policy were violated and the Jeep was being used as unauthorized Taxi, which was not covered under the policy.
The Tribunal framed four issues. On behalf of the claimants, three witnesses were examined and on behalf of the non-claimants, the owner - Ram Chandra was examined as NAW-1, on behalf of the Insurance Company, Y.K. Kaushik was examined as NAW-3/1 and one Jeewan Kumar was examined as NAW-3/2.
After hearing the parties, the Tribunal came to the conclusion that the accident occurred on account of rash and negligent driving by the driver Prithvidas. 3 Regarding the plea raised by the appellant-Insurance Company, the Tribunal came to the conclusion that till such time that the Insurance Company proves that the owner was aware of the licence being fake, the Insurance Company cannot be permitted to disown its liability towards third party and based on the said finding, rejected the submissions made by the Insurance Company. After determining the compensation, the claim as indicated hereinbefore, the award was passed.
It is submitted by the Learned counsel for the appellant that the Tribunal fell in error in holding the appellant - Insurance Company liable for payment of compensation, inasmuch as, from the documentary evidence available on record, it was proved that the licence, which was produced by driver Prithvidas was a fake licence and as the policy condition has been violated by the owner of the vehicle, the Insurance Company cannot be held liable. It is further submitted that by the evidence of Y.K. Kaushik (NAW-3/1), Branch Manager of the Insurance Company and Jeewan Kumar (NAW-3/2), Clerk of the Registering and Licensing Authority, Una, it was proved on record that 4 the licence was fake and in such circumstances, the Insurance Company cannot be held liable.
Learned counsel for the respondent - claimants opposed the submissions made by the learned counsel for the appellant. It was submitted that the parameters for holding the Insurance Company liable even in cases of fake licence has been laid down by the Hon'ble Supreme Court in the case of National Insurance Co. Ltd. v. Swaran Singh & Ors.: (2004) 3 SCC 297, wherein it has been held that 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 and 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, which fact has not been proved by the appellant - Insurance Company and, therefore, the Insurance Company is not entitled to claim exoneration in the present case.
I have considered the submissions made by the learned counsel for the parties and have perused the 5 material available on record.
From the reply, which was filed by the Insurance Company, it is apparent that the Insurance Company in the additional pleas, took the plea that the driver was not in possession of driving licence, which has resulted in violation of policy conditions, the Jeep was being unauthorizedly use as Taxi and, therefore, the Insurance Company was not liable.
It appears that in the reply, which was filed on 05.02.1993, no plea regarding the licence being fake was taken by the appellant - Insurance Company. In the cross-examination of the owner of the vehicle - Ram Chandra, who appeared as NAW-1, he was asked two questions in the cross-examination, wherein he responded that it is wrong to suggest that at the time of accident, the driver was not in possession of driving licence and that the licence was fake. The said cross- examination was held on 31.01.1997. Though the appellant - Insurance Company was in possession of the report dated 27.07.1994 (Ex. A-1/NAW-3) indicating that the licence in question was fake, however, the owner was not confronted with the said report and no further cross-examination regarding any 6 due care having been taken by him at the time of engaging the driver was made. Whereafter the witnesses were produced for producing the report (Ex. A-1/NAW-3) and (Ex. A-3/ NAW-3).
The requirement for the Insurance Company to seek exoneration of its liability based on licence being fake has been considered by Hon'ble Supreme Court in the case of Swaran Singh (supra), wherein while summarising the findings, it was laid down as under :
"110. The summary of our findings to the various issues as raised in these petitions are as follows:
(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.
(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. "
Whereafter, the issue was again examined by Hon'ble Supreme Court in the case of Pepsu Road Transport Corporation v. National Insurance Company 7 Ltd.: (2013) 10 SCC 217, wherein after considering the judgments in the case of Swaran Singh (surpa) as well as other law on the subject, it was laid down as under:-
"10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh's case. If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation."
Further, this Court while relying on the judgment in the case of Pepsu Road Transport Corporation (supra) in National Insurance Company Ltd. v. Tafajjul Hussain & Ors.: 2016(1) ACTC (Raj.) 226, again held 8 as under:-
"12. As stated earlier, in the instant case, the insurance company has failed to prove that at the time of employing the driver Jasbeer Singh, the owner of the truck was aware about the fact that the driver was not possessing any valid licence or was in possession of the face driving licence. Therefore, in view of the law laid down by the Hon'ble Supreme Court in Pepsu Road Transport Corporation vs. National Insurance Company (supra), this Court does not find any merit in this appeal."
In view of the criteria laid down by the Supreme Court for determining the liability of the Insurance Company in cases of fake licence and even where it was proved on record that the licence in fact was fake, the burden has been cast on the Insurance Company to prove that the owner was negligent and/or despite there being fake licence, he allowed the driver to drive the vehicle.
In the present case, the owner has appeared in the witness-box and was cursorily cross-examined, wherein he denied the suggestion made by the appellant - Insurance Company. The evidence available on record, does not suggest that the owner was aware about the fact of the licence being fake and in those circumstances and law laid down by Hon'ble Supreme Court in the case of Swaran Singh (supra), Pepsu Road Transport Corporation (supra) and this Court in Tafajjul 9 Hussain (supra), the Insurance Company cannot seek exoneration from its liability towards payment of compensation to the claimants.
In view of the above discussion, there is no substance in the appeal, the same is, therefore, dismissed.
(ARUN BHANSALI), J.
PKS-105