New India Assurance Company Ltd vs Bhikha Ram & Ors on 19 November, 2009

[Cites 12, Cited by 0]

Rajasthan High Court - Jodhpur

New India Assurance Company Ltd vs Bhikha Ram & Ors on 19 November, 2009

Equivalent citations: AIR 2010 (NOC) 274 (RAJ.), 2010 AIHC (NOC) 538 (RAJ.)

Bench: Vineet Kothari

             (i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati
             Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd.
             vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 -
             NIA Co. Ltd. vs.Smt. Kanta & Ors.                                    DATE OF JUDGMENT : 19/11/09


                                                            1/15

              IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                                                      JODHPUR
                                                  JUDGMENT
             New India Assurance Co. Ltd.                     vs.          Smt. Magi & Ors.
                     S.B.CIVIL MISC. APPEAL NO. 848/1999
             New India Assurance Co. Ltd.                     vs.          Shri Bhagwati Prasad &
                                                                           Ors.
                     S.B.CIVIL MISC. APPEAL NO.843/1999
             New India Assurance Co. Ltd.                    vs.           Smt. Joju & Ors.
                     S.B.CIVIL MISC. APPEAL NO.844/1999
             New India Assurance Co. Ltd.                     vs.          Bhikha Ram & Ors.
                     S.B.CIVIL MISC. APPEAL NO.846/1999
             New India Assurance Co. Ltd.                     vs.          Shri Dhana Ram & Ors.
                     S.B.CIVIL MISC. APPEAL NO.847/1999
             New India Assurance Co. Ltd.                      vs.         Smt. Kanta & Ors.
                     S.B.CIVIL MISC. APPEAL NO.849/1999


             DATE OF JUDGMENT                                    :         19th November, 2009

                                                    PRESENT

                           HON'BLE DR.JUSTICE VINEET KOTHARI
REPORTABLE

             Mr.R.K.Mehta, for the appellant Insurance Company.

             Mr. Shambhoo Singh ]
             Mr.Rajesh Panwar,    ] for the claimants
             Mr.Sunil Mehta, for United India Insurance Co.
 (i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati
Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd.
vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 -
NIA Co. Ltd. vs.Smt. Kanta & Ors.                                    DATE OF JUDGMENT : 19/11/09


                                               2/15

BY THE COURT :

1. These appeals arise out of the award of MACT, Bali dated 17/8/1999 deciding case no. 2/93 (Magi & ors. vs. Usman Khan & Ors.) and other connected claim petitions. In an accident, which took place on 30/10/1992 bus no. RPA 8555 carrying 30-40 passengers going from Pindwara to Sadri, at about 12.15 pm was hit by another bus no. RJ-22 P 0089 (Old No.PAB 3195) belonging to G.N.Travels and by the said accident passengers sitting in bus No.RPA 8555 suffered injuries. The present appellant is insurer of offending vehicle - bus no. RJ 22 P 0089 (Old No.PAB 3195).

2. The main contention of learned counsel for the appellant is that the driver of the offending vehicle Usman Khan son of Shri Fakir Mohd. - respondent no.1 was not having a valid driving license at the time of accident as his license was only to drive a light motor vehicle, whereas, the bus in question was a heavy motor vehicle. The said license is on record as Ex.D/2. He submitted that there was, thus, a violation of terms of policy and, therefore, the appellant Insurance Company was not liable to pay the compensation determined by the

(i) National Insurance Co. Ltd. vs. Kusum Rai & Ors. - 2006 ACJ 1336;

(ii) Oriental Insurance Co. Ltd. vs. Syed Ibrahim & Ors. - 2007 ACJ 2816;

(iii) New India Assurance Co. Ltd. vs. Prabhu Lal - 2008 ACJ 627;

(iv) Bhuwan Singh vs. M/s Oriental Insurance Co. Ltd. & Anr. -

MACD 2009 (SC) 168 &

(v) New India Assurance Co. Ltd. vs. Suresh Chandra Agarwal -

2009 (3) T.A.C. 586 (S.C.).

3. Relying on the aforesaid decisions he submitted that the Hon'ble Apex Court in number of decisions now held that where the driver of the offending vehicle is not having a valid driving license, the Insurance Company is not liable to pay compensation. He also submitted that the earlier trend of the Courts to direct the Insurance Company to pay the compensation first even if the driver was not having a valid driving license and then to recover the said compensation paid to the claimants from the owner of the insured

(i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd. vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 - NIA Co. Ltd. vs.Smt. Kanta & Ors. DATE OF JUDGMENT : 19/11/09 4/15 vehicle has also changed and the recent trend of the decisions of Apex court is to completely exonerate the Insurance Company from payment of compensation in such cases where the driver does not have a valid driving license and leave it for the claimants to recover the amount of compensation in question from the owner of the offending vehicle. He also drew the attention of the Court towards the fact that no counsel is appearing on behalf of owner of the vehicle despite service of notices.

4. He also submitted that under the interim order passed by this Court on 22/11/99, which was confirmed later on, the execution of award against the appellant insurance company has been stayed by this Court subject to payment of Rs.25,000/- before the Tribunal as per the requirement of Section 173 of the Motor Vehicle Act.

5. Learned counsel for the claimants and insurer of other vehicle - United India Insurance Company, which was hit by the offending vehicle do not dispute the legal position as aforesaid. However, learned counsel for the claimants submitted that the owner of the

6. Having heard learned counsels at length and in view of the judgments of Apex Court, the relevant extracts of which are reproduced below for ready reference, this Court is of the opinion that the present appeals of the appellant Insurance Company deserve to be allowed.

7. The license held by the driver of the offending vehicle, which is on record as Ex.D/2, clearly shows that he had the license to drive only light motor vehicle on the relevant date of accident i.e. 30/10/1992, whereas, he was driving heavy motor vehicle in question, which was insured. Even though the insurance policy is comprehensive in nature, on account of driver being incompetent to drive the vehicle in question, there was violation of terms of policy of insurance, therefore, the insurance company could not be held liable to pay the compensation in question.

8. The extract of the ratio of following aforesaid judgments are as under:

In New India Assurance Co. Ltd. vs. Prabhu Lal - 2008 ACJ 627 after discussing the various definitions in the Act and distinguishing the decision in the case of Ashok Gangadhar Maratha vs. Oriental Insurance Co. Ltd. [2000 ACJ 319 (SC) ] the Apex Court held in para no. 31 and 32 as under:

"31. It is no doubt true that in Ashok Gangadhar Maratha's case (supra), in spite of the fact that the driver was holding valid driving license to ply light motor vehicle (LMV), this court upheld the claim and ordered the insurance company to pay compensation. But, in our considered opinion, the learned counsel for the insurance company is right in submitted that it was because of the fact that there was neither pleading nor proof as regards the permit issued by the Transport Authority. In absence of pleading and proof, this Court held that, it could not be said that the driver had no valid license to ply the vehicle which met with an accident and he could not be deprived of the compensation.

(i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd.

vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 - NIA Co. Ltd. vs.Smt. Kanta & Ors. DATE OF JUDGMENT : 19/11/09 7/15

32. In our judgment, Ashok Gangadhar Maratha's, 2000 ACJ 319 (SC), did not lay down that the driver holding license to drive a light motor vehicle need not have an endorsement to drive transport vehicle and yet he can drive such vehicle. It was on the peculiar facts of the case, as the insurance company neither pleaded nor proved that the vehicle was transport vehicle by placing on record the permit issued by the Transport Authority that insurance company was held liable."

The Apex Court then concluded in para 46 as under:

"46. For the foregoing reasons, all the three appeals are allowed and the orders passed against the insurance company are set aside holding that the insurance company cannot be held liable. There shall, however, be no order as to costs."

9. In a recent judgment in case of New India Assurance Co. Ltd. vs. Suresh Chandra Agarwal - 2009 (3) T.A.C. 586 (S.C.). another Division Bench of Apex Court again distinguishing the previous judgment in the case of Ashok Gangadhar Maratha's case held in para

"20.We also find force in the contention of learned counsel for the appellant that the ratio of the decision of this Court in Ashok Gangadhar's case (supra), relied upon by the National Commission, does not apply to the case at hand. In that case, the appellant was the owner of a Light Motor Vehicle, which was insured with the Insurance Company.

The vehicle met with an accident and a claim was lodged by the complainant before the Consumer Commission. It was contended by the Insurance Company that the truck was a "goods carriage" or a "transport vehicle" and since the driver of the truck was holding a driving licence to drive only "Light Motor Vehicle", he was not authorized to drive transport vehicle without an endorsement on his driving licence authorizing him to drive such transport vehicle. The claim of the insured having been rejected by the Insurance Company which was upheld by the National Commission, the complainant approached this Court. Allowing the appeal, it was held that the driver of the vehicle was holding a valid driving licence for driving a Light Motor Vehicle and there was no material on record

(i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd. vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 - NIA Co. Ltd. vs.Smt. Kanta & Ors. DATE OF JUDGMENT : 19/11/09 9/15 to show that he was disqualified from holding an effective and valid driving licence at the time of accident. On those facts, the Court held that the policy, which was not even placed on record, did not insist on the driver to have a licence to drive a transport vehicle by obtaining a specific endorsement and therefore, the Insurance Company was not justified in rejecting the claim by the insured. It was observed that the Insurance Company had neither pleaded nor proved that the vehicle was a transport vehicle. The permit issued by the transport authority had not been placed on record. In the present case, it stands proved that the driver did not have an effective and valid driving licence on the date of accident."

10. Yet another Division Bench of Apex Court in Oriental Insurance Co. Ltd. vs. Syed Ibrahim & Ors. - 2007 ACJ 2816 while holding that the insurance company is not liable to pay such compensation, however, directed that the quantum of compensation already deposited by the Insurance Company is not disturbed. Relevant para 10 reads as under:

(i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd.

vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 - NIA Co. Ltd. vs.Smt. Kanta & Ors. DATE OF JUDGMENT : 19/11/09 10/15 "10. In view of what has been stated in Swaran Singh's case, 2004 ACJ 1 (SC), we are of the view that the appellant insurer was not liable to indemnify the award. However, at this juncture it would be relevant to take note of paras 9 and 17 of National Insurance Co. Ltd. v. Kusum Rai, 2006 ACJ 1336 (SC). The quantum, as awarded by the Tribunal and deposited pursuant to the order of this Court dated 29.4.2005, maintained. The claimants shall be permitted to withdraw the amount so deposited along with accrued interest."

11. In another judgment in case of Bhuwan Singh vs. M/s Oriental Insurance Co. Ltd. & Anr. - MACD 2009 (SC) 168, the Apex Court dealing with the case of expired license also similarly held that the insurance company cannot be bound down to reimburse the insured in terms of the contract of insurance. Para 13 and 14 deals with the definition of `effective license' as defined in Section 3 of the Act and use of word `duly licensed' in sub-section (2) of Section 149 of the Act. The Court also dealt with the previous judgment in the case of National Insurance Co. Ltd. vs. Swaran Singh & Ors. - (2004 ) 3 SCC 297. Para 13 and 14 are as follows:

(i) CMA Nos.848/99 - NIA Co.Ltd. vs. Smt. Magi & Ors. (ii) CMA No.843/99 - NIA Co. Ltd. vs. Bhagwati Prasad & Ors.(iii) CMA No.844/99 - NIA Co. Ltd. vs. Smt.Joju & Ors.(iv) CMA No.846/99 - NIA Co. Ltd.

vs.Bhikha Ram & Ors. (v) CMA No.847/99 - NIA Co. Ltd. vs. Dhana Ram & Ors.(vi) CMA No.849/99 - NIA Co. Ltd. vs.Smt. Kanta & Ors. DATE OF JUDGMENT : 19/11/09 11/15 "13. The word effective license is defined in Sec. 3 of the Act. Sub-section 2 of Sec. 149, however, uses the word duly licensed. In Swaran Singh (supra), a three Judge Bench of this court has drawn a distinction between the said two terms.

14. The Act provides for grant of learner's license. It indisputably is a licence within the meaning of provisions thereof. A person holding a learner's licence is also entitled to drive a vehicle but it is granted for a specific period. The terms and conditions for grant of a learner's licence are different from those of a regular licence. Holding of a learner's licence is imperative for filing an application for grant of licence as provided for in Rule 4 of the Rules. Converse however is not true. Only because the appellant held a learner's licence which had expired and was not valid on the date of accident, he cannot be said to be duly licensed. It is true that despite expiry of a regular licence, it may be renewed, but no provision has been brought to our notice providing for automatic renewal of learner's licence."

12. In National Insurance Co. Ltd. vs. Kusum Rai & Ors. - 2006

"17.Although, thus, we are of the opinion that the appellant was not liable to pay the claimed amount as the driver was not possessing a valid licence and the High Court was in error in holding otherwise, we decline to interfere with the impugned award, in the peculiar facts and circumstances of the case, in exercise of our jurisdiction under Article 136 of the Constitution of India but we direct that the appellant may recover the amount from the owner in the same manner as was directed in Janjappan, 2004 ACJ 721 (SC)."

13. From the above, it is clear that if the driver of the offending vehicle is not having an effective and valid license to drive the vehicle in question like in the present case, where driver Usman Khan holding license to drive only light motor vehicle but he was driving a

14. The premise on which the learned Tribunal proceeded that since the insurance company had charged Rs.75/- extra for any damage to the property of third party, therefore, it was liable to unlimited extent is absolutely erroneous. As far as proving of driving license is concerned, there was nothing for the insurance company to prove the driving license held by the respondent driver, which was already seized and produced on record by the policy authorities in the present case. A bare perusal of the license produced on record shows that the driver was only authorised to drive light motor vehicle, whereas, at the time of accident he was driving a heavy motor vehicle, which was insured by the appellant insurance company. Thus, the finding on issue no.4 by the learned Tribunal holding the insurance company liable to unlimited extent only on this ground is erroneous and such finding deserves to be set aside by this Court.

15. Accordingly, these appeals are allowed and insurance company is exonerated from its liability altogether under the impugned award passed by the learned Tribunal. The amount of Rs.25,000/- already deposited by the insurance company as per the requirement of Section 173 of the Act shall be recoverable from the owner of the insured vehicle and appellant insurance company can recover the same from the owner of the insured vehicle without taking any execution proceedings by requesting the Tribunal to direct the Transport Authorities to seize the vehicle in question. The claimants in whose favour award is passed by the learned Tribunal shall also be free to recover the said compensation from the owner of the offending vehicle. They can also make a similar request to direct for seizure of the vehicle in question without taking any separate execution proceedings. Since the owner is not represented here, all the parties may appear before the learned Tribunal in first instance on 14/12/2009 and the learned Tribunal may issue necessary summons to the owner of the offending vehicle and Transport Authorities, as the case may be, and proceed to ensure recovery of the amount of

(DR.VINEET KOTHARI), J.

item no. 38-43 baweja/-

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Rajasthan High Court - Jodhpur