Kerala High Court
Oriental Insurance Company Ltd. vs Abdul Rasheed on 8 December, 2005
Equivalent citations: II(2006)ACC697, 2006ACJ1476, 2006(1)KLT589
Author: J.M. James
Bench: J.M. James
JUDGMENT J.M. James, J.
1. An interesting question raised before this Court through this appeal is, whether a vehicle, which was stolen from its owner and was latter involved in an accident, while the same was driven by another person, who is either a thief or a person in possession of the stolen vehicle, could be treated as an authorised person entitled to drive, as per the conditions contained in the policy issued by the appellants, the insurer, in favour of the insured, the actual owner of the vehicle and therefore, the insurer is bound to indemnify the insured.
2. The brief facts required for the disposal of this appeal are that the additional third respondent in O.P.(MV)No. 1365/98 on the file of the Motor Accidents Claims Tribunal, Attingal, in short the Tribunal, had reported to the Medical College Police Station, Thiruvananthapuram, that his motor cycle, bearing Regn.No. KL-01/K-3490 was stolen from his flat, No. 1, P.T. Chacko Nagar, Medical College P.O., Thiruvananthapuram. The Medical College Police registered the crime No. 138/97 under Section 3801.P.C. While the said crime case was pending investigation, the owner of the vehicle, O. Rajan, the additional, 3rd respondent in the O.P., filed a claim petition before the insurer for the loss suffered by him, due to the theft of his vehicle. While both the investigation of the crime case, as well as the claim preferred by O. Rajan, before the insurance company were pending, the vehicle which was driven by S.K. Sunil, the first respondent in the O.P. and the second respondent in this appeal, met with an accident. The claimant, who suffered, injuries had preferred the above claim petition, before the Tribunal.
3. The claimant produced nine documents. The respondents produced Exts.B1 and B2. Ext.XI, the CD file was also produced. The Tribunal, after appreciating the same, awarded a compensation of Rs. 31,800/- with 9% interest, and cost of Rs. 750/-. There was a direction to the insurance company, the appellant herein, to deposit the award amount, which is under challenge through this appeal.
4. In Sub-section (5) of Section 147 of the Motor Vehicles Act, 1988, in short the Act, it is stipulated that the insurer is bound to indemnify the insured. However, the contention raised is that there should be the consent of the owner to drive the vehicle, then alone it comes under 'the person or classes of persons' mentioned in Sub-section (5).
5. For clarity, I reproduce below Sub-section 5 of Section 147 of the Act.
Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons.
6. Rule 141 of the Central Motor Vehicles Rules, in short the Central Rules, state that an authorised insurer shall issue to every holder of a policy of insurance, a certificate of insurance in Form 51 in respect of each such vehicle.
7. Form 51, is prescribed as per Rule 141 of the Central Rules, under the caption "certificate of insurance in respect of. Under sl.No. 9, "persons or class of persons entitled to drive; 'stage carriage/contract carriage/private service vehicle' is answered as:
Any person including insured:
Provided that a person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence.
8. Thus, a person, who is holding an effective driving licence at the time of the accident, and is not otherwise disqualified from holding or obtaining the driving licence, is entitled to drive the vehicle. The learned Counsel for the appellant submitted that, the insurance company has taken a contention before the Tribunal that the driver of the vehicle was not having an effective driving license as contained under Section 3 of the Act as well as under Rule 141 of the Central Rules. The records reveal that the driver of the vehicle, S.K. Sunil, had not filed a written statement before the Tribunal. Though he received notice, he chose not to appear before this Court also.
9. In National Insurance Company limited v. Swaran Singh 2004 (1) KLT 781 (SC), Apex court had an occasion to consider the position of invalid or fake driving licence, or disqualification of the driver for driving the vehicle under Section 149(2)(a)(ii) of the Act. In the summary of findings, the apex court, under serial no.iii, held that the breach of policy conditions showed in the above section have to be proved to have been committed by the insured for avoiding liability by the insurer. In the ease at hand, despite the contention of the appellant, insurance company, that the driver of the vehicle was not having a driving licence, because of the peculiar fact that the vehicle was stolen, and the driver had not filed the written statement before the Tribunal as well as he did not appear before this Court, it is to be presumed that he was not having an effective driving licence and the same is sufficient to come to a conclusion that the contention of the appellant, insurance company, as the driver not having a valid driving licence at the time of the accident, is to be accepted.
10. The owner of the vehicle, O.Rajan, had already made a claim, as discussed above, before the insurance company and also got a criminal case registered, regarding the theft of his vehicle. In such situation, it is for the driver of the vehicle, S.K. Sunil, to prove that circumstances under which he came into possession of the said vehicle; as the person, who is in possession of the stolen vehicle, is either a thief or a person in possession of a stolen property. Though he was represented by a counsel before the Tribunal, he did not file a written statement. Thus, there were no contention before the Tribunal. Hence, there is no explanation available how he came into possession of the vehicle, which was reported as stolen from the possession of O.Rajan. So, he was not a person authourised to drive, by the owner of the vehicle. As he did not proved to have possessed an effective driving licence he was not an entitled person to drive also.
11. The counsel for the claimant submitted, relying on New India Assurance Co. Ltd. v. Rula and Ors. , that though not a party to the contract between the insurer and the insured, the victim, as a third party to the insurance, is statutorily covered under Sections 147(5) and 149(1) of the Act and the claimant, is entitled to receive the compensation amount awarded by the Tribunal from the insurer, who cannot escape the liability of the third party risk. In New India Assurance Co. Ltd. v. Rula and Ors., cited above, the Supreme Court was really considering the position on the dishonoring of the cheque issued by the insured towards the payment of premium. The contention of the insurance company, in that case, was that there was no valid insurance policy as the premium was not effectively paid. Concluding on that matter, after considering the question of law and precedence, including New Asiatic Insurance Company Limited v. Pessumal Dhanamal Aswani it was held that "the rights of the third party to get indemnified can be exercised only against the insurer of the vehicle. It is thus clear that the third party is not concerned and does not come into the picture at all in the matter of payment of premium. Whether the premium has been paid or not is not the concern of the third party, but concerned with the fact that there was a policy issued in respect of the vehicle involved in the accident and it is on the basis of this policy that the claim can be maintained by the third party against the insurer."
12. The learned Counsel for the appellant, relying on Rajasthan State Road Transport Corporation v. Kailash Nath Kothari and Ors. 1997 ACJ 1148, submitted that, when the vehicle was used by another person, other than the insured, there is no liability for the insurer to indemnify the insured and the compensation, if any awarded, should be realised from the person who possess that vehicle. That was a case where the vehicles owned by one Sanjay Kumar were taken on hire by Rajasthan Road Transport Corporation, in short RSRTC. The vehicles and the drivers therein were under the complete control and directions of the RSRTC officials. Therefore, to ply or not to ply the said vehicles were to be decided by the RSRTC. The Apex Court discussing on the facts and the law, came to the conclusion that though Sanjay Kumar was the owner of the vehicles hired by RSRTC and was the insured in respect of the insurance company, the vehicles having been controlled and used by the RSRTC, the liability squarely rest on the RSRTC to compensate the award amount. The counsel, therefore, prayed that the same principle may be applied and S.K. Sunil, the second respondent in this appeal, may be held liable.
13. The provisions of the Act, as amended in 1994, as contained in Section 149(1), cast a statutory responsibility on the insurer to honour the awards passed by the Tribunals and courts awarding compensation to the victims under 147(5) of the Act. The insurer shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability, which the policy covers, in the case of that person or those classes of persons, which include third party. In the case at hand, it is in evidence that O. Rajan did not authorise S.K. Sunil to drive his vehicle. S.K. Sunil was in control of the vehicle, he drove it and caused the accident. Therefore, accepting the principle contained in Rajasthan State Road Transport Corporation v. Kailasnath Kothari and Ors., cited above, the vehicle was fully under the control of S.K. Sunil. Hence he is also liable. But, as the insurance of the vehicle was valid, and in view of Sections 147(5) and 149(1) of the Act, the appellant, the insurance company, shall satisfy the award and then realise the said award amount from S.K. Sunil, who caused the accident.
14. The accident was of the year 1997 and the award was passed by the Tribunal in 2004. The matter was pending for long. Hence, 1 direct the appellant, the insurance company, to remit the award amount as per the law at the earliest and in any case within two months from today.
The appeal is disposed of as above.