Allahabad High Court
National Insurance Co. Ltd. vs Ram Pher And Another on 12 February, 2019
Equivalent citations: AIRONLINE 2019 ALL 1545, (2019) 2 ACC 833, (2019) 2 TAC 568, 2019 (3) ADJ 51 NOC, (2020) 1 ACJ 512
Author: Vikas Kunvar Srivastav
Bench: Vikas Kunvar Srivastav
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 29 Reserved A.F.R. Case :- FIRST APPEAL FROM ORDER No. - 349 of 2002 Appellant :- National Insurance Co. Ltd. Respondent :- Ram Pher And Another Counsel for Appellant :- Alka Verma, Hari Prakash Srivastava Counsel for Respondent :- S.N.Ojha, Anil Kumar Mishra Hon'ble Vikas Kunvar Srivastav,J.
1. This first Appeal from Order under Section 173 of the Motor Vehicle Act, 1988 has arisen from the judgment and award dated 28.02.2002 passed by Motor Accident Claims Tribunal/Ist Additional District Judge, Sultanpur under Section 166 of the Motor Vehicle Act in Motor Accident Claim Petition No.19 of 1999 (Ram Pher and Anr. Vs. National Insurance Co. Ltd.).
2. Learned Motor Accident Claims Tribunal has awarded compensation to the tune of Rs.50,000/- to the claim petitioner whose son aged about 18 years namely Ajay Kumar Verma met the accident with offending motor vehicle, tempo (U.P. 44 A9883). The accident was occurred on 17.4.1998 at 9:00 a.m., while the deceased-Ajay Kumar Verma was driving the aforesaid Tempo in question, due to a sudden burst of tyre, the same flipped over. He fell beneath the Tempo, sustained severe injuries and died. It is alleged in the claim petition that the deceased was earning Rs.3,000/- per month as wages by driving the said tempo.
3. Learned court below has directed the insurer (National Insurance Co. Ltd.) of the offending motor vehicle i.e. Tempo to pay compensation for and on behalf of the owner (the insured) of the said vehicle to the claim petitioner no.2, mother of the deceased.
4. Aggrieved thereby the National Insurance Co. Ltd. has presented this appeal in which the appellant-National Insurance Co. Ltd. has challenged the impugned judgment and award of the Motor Accident Claims Tribunal on following grounds:-
"(1) that the finding of M.A.C.T. is perverse erroneous and contrary to the provision of the Act and law (2) Evidence available on record was not properly appreciated.
(3) The main contention of the appellant in challenging the appeal as given in the memo of appeal is that the appellant cannot be saddled with the responsibility of indemnifying the claimants as the vehicle in question was being driven in violation of motor vehicle Act and Rules.
(4) Further, that the offending vehicle was being driven in contravention to the terms and condition of the policy.
(5) It is also raised while challenging the impugned judgment and award that the deceased was having a driving license for non-commercial motor vehicle while he was driving the Tempo for carrying passengers (6) permit to drive the vehicle was not found valid on the date of the accident as validity of the route permit was only for driving within circumference of 25 K.M. from Jagdishpur.
(7) Lastly, the death was caused due to contributory negligence of the deceased himself and as he negligently overturned rear wheel of the vehicle and got punctured."
5. Heard learned counsel Sri H.P. Srivastava for the appellant and learned counsel Sri Anil Kumar Mishra for the respondents and perused the lower court record.
6. Learned counsel for the appellant in support of his arguments as to the irregularities and illegalities committed by the deceased-Tempo driver regarding permit to ply the vehicle placed reliance on the judgment of Hon'ble Apex Court in (National Insurance Company Vs. Challa Bharathamma) reported in [2005 (1) T.A.C. 4 (S.C)]. He further argued that a vehicle must have certificate of insurance, route permit under law and as such fastening the liability to pay compensation on the insurance company is not proper, the owner of the vehicle should be held liable to pay compensation to the claimants. Para 12 and 13 of the said judgment of Hon'ble Apex Court is being reproduced hereunder:
"12. High Court was of the view that since there was no permit, the question of violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot be placed at a better pedestal vis-a-vis one who has a permit, but has violated any condition thereof. Plying of a vehicle without a permit is an infraction. Therefore, in terms of Section 149(2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of adjudication. The question of policy being operative had no relevance for the issue regarding liability of insurer. High Court was, therefore, not justified in holding the insurer liable.
13. The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executing Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle i.e. the insured. In the instant case considering the quantum involved we leave it to the discretion of the insurer to decide whether it would take steps for recovery of the amount from the insured."
The learned counsel for the appellant has also placed reliance on the decision of this Court in the case of (Chandresh Kumar Agarwal Vs. Yogendra Kumar Srivastava and Anr.) reported in [2005 (2) T.A.C. 6 (All.)], Hon'ble Court in that case has observed as under:-
"I have considered the arguments advanced on behalf of the parties on this point and find force in the contention of the learned counsel for the Insurance Company. The owner of the truck came to the Tribunal with clear allegations that the vehicle was being repaired at Gorakhpur on the date in question and all documents including permit, certificate of fitness, etc. had been surrendered in the office of the R.T.O. at Gorakhpur. It is, therefore, clear that the truck in question was being driven by the driver on the road in an unauthorized manner and against the terms and conditions of the policy and caused accident. Section 76 of the new Act (Section 42 of the old Act) clearly provides that no owner of a transport vehicle shall use or permit the use of the vehicle in any public place except in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority. It means plying of a transport vehicle on the road without valid permit and certificate of fitness is prohibited under the law. It was clearly held by the Apex Court that a person without permit to ply a vehicle cannot be placed at a better pedestal vis-a-vis one who has a permit, but has violated any condition thereof. Plying of a vehicle without a permit is an infraction. Therefore, In terms of Section 149(2) defence is available to the insurer on that aspect. It was also held that the question of policy being operative had no relevance for the issue regarding liability of insurer. Therefore, in view of the clear law laid down by the Apex Court recently in such matters, I am clearly of the opinion that the learned Tribunal committed no error of law in fastening liability to pay compensation on the owner of the vehicle. I find no good ground to interfere with the finding recorded by the Tribunal on this point and it is held that owner of the truck in question is liable to satisfy the claimant."
7. This would not be out of relevance to say that the case in hand is not of plying a motor vehicle without route permit.
8. On perusing the record and hearing the respective arguments, it comes out that the fact, accident of Tempo bearing no. U.P 44 A9883 occurred on 17.04.1998, wherein the driver/Ajay Kumar sustained injuries and later on died, is found proved. Learned court below considered this fact in issue no.2 and 4 and on the basis of evidence find out that while the deceased-Ajay Kumar aged about 18 years was driving the motor vehicle in question i.e. Tempo with passengers from BHEL to Jagdishpur, suddenly the tyre bursted and the tempo flipped over. The driver and passengers fell beneath the tempo, in this accident he sustained serious injuries. He was brought by the police from spot to hospital from where he was referred to Medical College, Lucknow (K.G.M.U.) but he died on the way. The eye witnesses were examined, the police prepared the Panchnama which is on record. There is no rebuttal on record (either documentary or oral) by the appellant before the Motor Accident Claims Tribunal, as such the fact, accident took place due to bursting of tyre and flipping over of tempo by reason thereof stands proved. Further fact of injuries which the driver sustained in the accident led to his unfortunate death is also established. The arguments advanced by learned counsel for the appellant to the effect that evidence on record has not been appreciated properly by the learned Motor Accident Claims Tribunal is thus need to be examined with the scrutiny of materials on record.
9. Other relevant arguments relating to the case are as follows:-
(i) The vehicle in question was being driven in violation of motor vehicle Act and Rules.
(ii) The offending vehicle was driven in contravention to the terms and condition of the policy.
(iii) The deceased was having driving license for non-commercial vehicle while he was driving the same for carrying passengers.
(iv) because the vehicle was being driven without the valid route permit.
10. On the record of motor accident claim petition there is list of documentary evidences filed by the claim petitioners which includes Insurance Certificate, Driving License, Registration Certificate and Route Permit. Further, the claim petitioners have also adduced oral evidences as PW-1/the claim petitioner (father of the deceased/victim of the accident) proved the incident which are co-related with F.I.R. of incident, inquest report of dead body made by the Investigating Officer. The eye witnesses, PW-2 (Raj Bahadur) and PW-3 (Srinath) were also examined to prove the accident how occurred. The documentary evidences such as insurance certificate, route permit, registration certificate of the motor vehicle in question. Prima facie they all tend to show their having been duly issued by the competent authorities as well as valid and effective on the relevant date of accident. Further, there is no rebuttal from the insurance company negating the genuinity of documents stated above.
11. It is seen, the insurance companies use to take several defences, generally in stereo type manner, for the sake of avoiding the claim for compensation in every case, irrespective of any material on record to support them. For example as in the present case, before the learned court below the appellant-Insurance Company has taken objection as to the Tempo having no insurance on the relevant date, the insurance policy has not been proved, the vehicle was being plied in contravention to the provisions of Motor Vehicles Act, 1988 and also as to breach of policy condition, driver not having a valid driving license, the Tempo was driven without valid documents such as R.C., fitness, permit, etc. at the time of alleged accident, however, photo state copies of the insurance policy and driving license were produced as an evidence along with Registration Certificate and route permit. All these papers were proved before learned M.A.C.T but in rebuttal, no evidence either oral or documentary produced by the appellant, despite the fact it had initial burden to prove all the objections taken as plea of defense which are available to it under Section 149 (2) of the Motor Vehicle Act pleaded by it. However, the M.A.C.T examined the documents and found a valid Driving License, Registration Certificate, route permit and insurance coverage to the third party risk and while deciding the issue no.3 to this effect found that the insurance coverage certificate issued by National Insurance Company regarding motor vehicle having Chassis No.41455 and Engine No. R.D.88991 of the motor vehicle (Vikram/Tempo) in question along with Registration Certificate. The said Registration Certificate was effective from 20.11.1997 up to 19.11.1998, whereas the accident occurred on 17.04.1998, as such at the relevant time of accident the said Tempo in question was within coverage period of appellant-Insurance Company. Since, the appellant has neither taken specific plea as to violation of any terms or condition of the insurance policy nor has any case of fake driving license, therefore, the accident when proved to have been occurred during insurance coverage period, the liability to damnify the loss occasioned to third party cannot be denied. Moreover, the objection as to the driving license having not valid for driving commercial vehicle also not tenable at this stage as it was not taken before the court below/learned M.A.C.T.
12. The present case of motor accident claim is pending since 1998, the judgment and award was passed by learned court below on 28.02.2002, since, then claim petitioners are waiting for compensation for their irreparable loss as they have lost their son aged about 18 years in an unfortunate accident, which by evidence established to has been occasioned due to a sudden burst of tyre which is a technical, unexpected, unforeseen incident. There was no fault or negligence on the part of the deceased/victim of the accident who was driving the said motor vehicle. The appellant appears to have preferred this appeal with objection as to illegallity, irregularities in Driving License, Route Permit, Registration Certificate, etc., only for the sake of taking defense as provided under Section 149(2) of the Motor Vehicles Act.
13. From the facts of the case and material on record, it is obvious on the face of record that though the appellant have not taken any specific defense as to the fault of the owner in breach of terms of the insurance policy or in permitting a person to drive a vehicle who did not have a valid driving license, had taken a plea for the first time in this appeal and tried to show that the driver of the vehicle was incompetent to drive the kind of vehicle which is in question.
14. The appellant-Insurance Company has vehemently argued that the deceased-Ajay Kumar Verma was not having a driving license for commercial vehicles and was possessed with ordinary license, though this plea had not been taken and proved before the court below.
15. In this regard, in the case of (National Insurance Company Ltd. Vs. Swaran Singh & Ors.) reported in [(2004) 3 SCC 297] Hon'ble Supreme Court considered the case like the present one before this Court. Para- 64 of the said judgment of Hon'ble Supreme Court runs as under:-
"64. There may be a case where an accident takes place without there being fault on the part of the driver. In such an event, the question as to whether a driver was holding a valid license or not would become redundant."
16. In the case of (Jitendra Kumar Vs. Oriental Insurance Co. Ltd. & Anr.) [(2003) 6 SCC 420] where Court considered the incident where the appellant was the owner of the vehicle insured with the insurance company reads as under:-
"The appellant was the owner of the Maruti Van bearing Registration No.BR-2/5667 which was insured with the respondent-Insurance Company. It is the case of the appellant that on 25.4.1996 at about 9.30 p.m. while returning from Gaya to Jehanabad the vehicle in question caught fire due to mechanical reasons and due to the said fire the said vehicle was burnt beyond repair. An intimation of this accidental fire was made to the respondent-Insurance Company on 14.5.1996. With the said intimation, the appellant also lodged a claim with the respondent for payment of damages. The Insurance Company as per its letter dated 10th of December, 1996 repudiated the said claim of the appellant solely on the ground that the driver did not have a valid licence at the time of the incident in question.
Learned counsel for the appellant contended that the National Commission and the State Commission erred in coming to the conclusion that holding of valid driving licence was a condition precedent to claim any damage from the Insurance Company even when the accident in question has occurred due to no fault/or act of the driver. He submitted that the judgment of this Court in the case of New India Assurance Company (supra) has no application to the facts of this case.
So far as the facts of this case are concerned, there is hardly any dispute, therefore, we can safely proceed on the basis that the vehicle in question was damaged due to a mechanical fault and no fault of the driver. For the purpose of argument, we may also proceed on the basis that the driver of the car did not have a valid driving licence. Question then is : can the Insurance Company repudiate a claim made by the owner of the vehicle which is duly insured with the Company, solely on the ground the driver of the vehicle who had nothing to do with the accident did not hold a valid licence ? Answer to this question, in our opinion, should be in the negative. Section 149 of the Motor Vehicles Act, 1988 on which reliance was placed by the State Commission, in our opinion, does not come to the aid of the Insurance Company in repudiating a claim where driver of the vehicle had not contributed in any manner to the accident. Section 149(2)(a)(ii) of the Motor Vehicles Act empowers the Insurance Company to repudiate a claim wherein the vehicle in question is damaged due to an accident to which driver of the vehicle who does not hold a valid driving licence is responsible in any manner. It does not empower the Insurance Company to repudiate a claim for damages which has occurred due to acts to which the driver has not, in any manner, contributed i.e. damages incurred due to reasons other than the act of the driver."
17. Other relevant para's of Swaran Singh's case (Supra) are quoted below:-
"Right to and scope of defences available to insurer in terms of Section 149 (2) r/w Section 149 (7) There cannot be any doubt or dispute that defences enumerated in Section 149(2) would be available to the insurance companies, but that does not and cannot mean that despite such defences having not been established, they would not be liable to fulfil their statutory obligation under Section 149(1) of the Act. Moreover, it has been held by the Supreme Court in no uncertain terms that the defence available to an insurance company would be a limited one and that an appeal by the insurer on the ground dehors those contained in Section 149 (2) would not be maintainable.
Section 149(2) - Making out the defence under
(i) Onus of proof The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is thus, required to establish the said breach by cogent evidence. Moreover, a bare perusal of the provisions of Section 149 of the Act leads to only one conclusion, that the usual rule is that once the assured proves that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within an exception. In the event the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability.
(ii) Breach of condition to be shown Section 149(2)(a) opens with the words "that there has been a breach of a specified condition of the policy", implying that the insurer's defence of the action would depend upon the terms of the policy. The insurance company with a view to avoid its liabilities is not only required to show that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured, that is they must prove a wilful violation of the law by the assured. In some cases violation of criminal law, particularly, violation of the provisions of the Act may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done intentionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be.
(iii) Causality: that damage suffered by victim flowed from breach, to be shown Such a breach (as discussed above) on the part of the insured must be established by the insurer to show that not only that the insured used or caused or permitted to be used the vehicle in breach of the Act but also that the damage the victim suffered flowed from the breach. That is, even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability toward the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insurer under Sections 149 (2) of the Act.
(iv) Degree of Proof The degree of proof which would satisfy the aforementioned requirement, in addition to the facts and circumstances of each case, will depend upon the terms of contract of insurance. A contract of insurance also falls within the realm of contract. Thus, like any other contract, the intention of the parties must be gathered from the expressions used therein. In the event the terms and conditions of policy are obscure, it is permissible for the purpose of construction of the deed to look to the surrounding circumstances as also the conduct of the parties. The courts also readily apply the doctrine of waiver in favour of the insured and against the insurer. Whether a change of risk was so great as to avoid an insurance must always be a question of degree and a question of the opinion of the court in the circumstances of the case.
49. Such a breach on the part of the insurer must be established by the insurer to show that not only the insured used or caused or permitted to be used the vehicle in breach of the Act but also that the damage he suffered flowed from the breach.
110 (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under section 149(2) of the Act."
18. Hon'ble Supreme Court in the case of Swaran Singh (supra) has discussed when the person has been granted licence for one type of vehicle but at the relevant time he was driving another type of vehicle. Relevant portion of the judgment are reads as under:
"88. Section 10 of the Act provides for forms and contents of licences to drive. The licence has to be granted in the prescribed form. Thus, a licence to drive a light motor vehicle would entitle the holder there to drive the vehicle falling within that class or description.
89. Section 3 of the Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle which he intends to drive. Section 10 of the Act enables Central Government to prescribe forms of driving licences for various categories of vehicles mentioned in sub-section (2) of said section. The various types of vehicles described for which a driver may obtain a licence for one or more of them are (a) Motorcycle without gear, (b) motorcycle with gear, (c) invalid carriage, (d) light motor vehicle, (e) transport vehicle, (f) road roller and (g) motor vehicle of other specified description. The definition clause in Section 2 of the Act defines various categories of vehicles which are covered in broad types mentioned in sub- section h (2) of Section 10. They are `goods carriage', `heavy-goods vehicle', `heavy passenger motor-vehicle', `invalid carriage', `light motor-vehicle', `maxi-cab',`medium goods vehicle', `medium passenger motor-vehicle', `motor-cab', `motorcycle', `omnibus', `private service vehicle', `semi-trailer', `tourist vehicle', `tractor', `trailer', and `transport vehicle'. In claims for compensation for accidents, various kinds of breaches with regard to the conditions of driving licences arise for consideration before the Tribunal. A person possessing a driving licence for `motorcycle without gear', for which he has no licence. Cases may also arise where a holder of driving licence for `light motor vehicle' is found to be driving a `maxi-cab', `motor-cab' or `omnibus' for which he has no licence. In each case on evidence led before the tribunal, a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or contributory cause of accident. If on facts, it is found that accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence."
19. In the present case this is established fact on evidence led by the claim petitioners which stood un-rebutted by the appellant that accident took place by a sudden accident in bursting of tyre resulting into the flipping over of the tempo wherein, the driver-Ajay Kumar Verma fell beneath the over turned tempo filled with the passengers, sustained injuries and died of. Here in this case no breach of any terms and conditions of any insurance policy is specifically pleaded and proved by the insurance company, whereupon it could be held that such fault was the main cause which contributed the accident. Such plea cannot be taken first time in appeal beyond the pleading and evidence on record.
20. In the present case the insurance company has not pleaded and established before the court below any fundamental breach of policy, terms and conditions or violation of any law in plying of motor vehicle on road. Moreover, on evidence the case is not found of negligent driving but is of unfortunate incident of sudden burst of tyre while insured Tempo in question was in use on the road. As such there was no fault on the part of driver, it was a simple unexpected accident due to bursting of tyre which was unforeseen at that moment by anyone. An argument is made by learned counsel for the appellant that driver who died in accident was driving himself, therefore his legal heirs cannot be given compensation. Without going into the merit or the arguments, it would be relevant to state that the insurance certificate issued by the appellant-Insurance Company itself covers the risk to the third party including passengers and drivers for which the appellant-insurance company have received premium of insurance. The insurance certificate dated 20.11.1997 which was effective from 20.11.1997 to 19.11.1998, is on record, therefore, this argument is quite baseless.
21. Further, Hon'ble Apex Court by a two judges Bench (Hon'ble Dipak Misra, C.J.I. and Hon'ble A.M. Khanwilkar, J.) in Civil Appeal Nos.2499-2500 of 2018 (arising out of SLP (Civil) Nos.28141-42 of 2017 (Mangla Ram Vs. The Oriental Insurance Co. Ltd. & Ors.) vide judgment dated 06.04.2018 has discussed the responsibility of owner and insurance company when the negligence is not established on the part of the driver. Relevant portion para-22 of the above-mentioned judgment reads as under:-
"22. In Kaushnuma Begum (supra), whilst dealing with an application under Section 163A of the Motor Vehicles Act, 1988, this Court expounded that negligence is only one of the species for compensation in respect of the accident arising out of the use of motor vehicles. There are other premises for such cause of action. After observing this, the Court adverted to the principle expounded in Rylands Vs. Fletcher18. It may be useful to reproduce paragraphs 12-14 which read thus:
"12. Even if there is no negligence on the part of the driver or owner of the motor vehicle, but accident happens while the vehicle was in use, should not the owner be made liable for damages to the person who suffered on account of such accident? This question depends upon how far the rule in Rylands v. Fletcher can apply in motor accident cases. The said rule is summarised by Blackburn, J., thus:
''[T]he true rule of law is that the person who, for his own purposes, brings on his land, and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff's default, or, perhaps, that the escape was the consequence of vis major, or the act of God; but, as nothing of this sort exists here, it is unnecessary to inquire what excuse would be sufficient.'
13. The House of Lords considered it and upheld the ratio with the following dictum:
''We think that the true rule of law is that the person who, for his own purposes, brings on his land, and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff's default, or, perhaps, that the escape was the consequence of vis major, or the act of God; but, as nothing of this sort exists here, it is unnecessary to inquire what excuse would be sufficient.'
14. The above rule eventually gained approval in a large number of decisions rendered by courts in England and (186173) All ER Rep 1 abroad. Winfield on Tort has brought out even a chapter on the "Rule in Rylands v. Fletcher". At p. 543 of the 15th Edn. of the celebrated work the learned author has pointed out that ''over the years Rylands v. Fletcher has been applied to a remarkable variety of things: fire, gas, explosions, electricity, oil, noxious fumes, colliery spoil, rusty wire from a decayed fence, vibrations, poisonous vegetation'.
He has elaborated seven defences recognised in common law against action brought on the strength of the rule in Rylands v. Fletcher. They are:
(1) Consent of the plaintiff i.e. volenti non fit injuria.
(2) Common benefit i.e. where the source of the danger is maintained for the common benefit of the plaintiff and the defendant, the defendant is not liable for its escape.
(3) Act of stranger i.e. if the escape was caused by the unforeseeable act of a stranger, the rule does not apply.
(4) Exercise of statutory authority i.e. the rule will stand excluded either when the act was done under a statutory duty or when a statute provides otherwise.
(5) Act of God or vis major i.e. circumstances which no human foresight can provide against and of which human prudence is not bound to recognise the possibility.
(6) Default of the plaintiff i.e. if the damage is caused solely by the act or default of the plaintiff himself, the rule will not apply.
(7) Remoteness of consequences i.e. the rule cannot be applied ad infinitum, because even according to the formulation of the rule made by Blackburn, J., the defendant is answerable only for all the damage ''which is the natural consequence of its escape'. "
And again, the Court, after adverting to the decisions in Charan Lal Sahu Vs. Union of India19, Union Carbide (1990) 1 SCC 613 Corpn. Vs. Union of India20 and Gujarat SRTC Vs. Ramanbhai Prabhatbhai 21, in paragraphs 19 & 20, observed thus:
"19. Like any other common law principle, which is acceptable to our jurisprudence, the rule in Rylands v. Fletcher can be followed at least until any other new principle which excels the former can be evolved, or until legislation provides differently. Hence, we are disposed to adopt the rule in claims for compensation made in respect of motor accidents.
20. ''No fault liability' envisaged in Section 140 of the MV Act is distinguishable from the rule of strict liability. In the former, the compensation amount is fixed and is payable even if any one of the exceptions to the rule can be applied. It is a statutory liability created without which the claimant should not get any amount under that count. Compensation on account of accident arising from the use of motor vehicles can be claimed under the common law even without the aid of a statute. The provisions of the MV Act permit that compensation paid under "no fault liability" can be deducted from the final amount awarded by the Tribunal. Therefore, these two are resting on two different premises. We are, therefore, of the opinion that even apart from Section 140 of the MV Act, a victim in an accident which occurred while using a motor vehicle, is entitled to get compensation from a Tribunal unless any one of the exceptions would apply. The Tribunal and the High Court have, therefore, gone into error in divesting the claimants of the compensation payable to them."
22. Dealing with all these issues Hon'ble Supreme Court in the case of Swaran Singh (supra) with respect to the defenses taken by the insurance companies with a view to avoid liability in its paragraph 39 to 42 has held as under:-
"39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject matter of decisions in a large number of cases.
40. It is beyond any doubt or dispute that under Section 149 (2) of the Act an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action on any of the grounds mentioned therein.
41. However, Clause (a) opens with the words "that there has been a breach of a specified condition of the policy", implying that the insurer's defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence.
42. We may also take note of the fact that whereas in Section 3 the words used are 'effective licence', it has been differently worded in Section 149 (2) i.e. ' duly licensed'. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 149 of the Act but Section 149 pertains to insurance as regard third party risks."
23. Since, it is proved that the insurance coverage issued by the appellant was valid and effective at the relevant time when the accident took place, therefore, it is undoubtedly established that the owner of the motor vehicle and the insurance company were under a contract regarding the third party risk. This is not only the contractual liability but also under statute whereby the insurer's liability arises. The appellant have not established any defence as envisaged under Section 149 (2) of the Motor Vehicles Act so as to escape out from the liability on insurer, therefore, learned court below has rightly held liable the appellant-Insurance Company to damnify the claim petitioners for the unfortunate death occurred in the accident with the motor vehicle insured by the appellant when the same was in use.
24. In view of the discussion made here-in-above, I find no reasons to interfere in the judgment and award passed by learned M.A.C.T. in M.A.C.P. No.19 of 1999 (Ram Pher and Anr. Vs. National Insurance Co. Ltd.), therefore, the judgment and award deserves to be upheld, appeal is liable to be dismissed.
The appeal is dismissed, interim stay order, if any, shall stand vacated. The judgment and award dated 28.02.2002 passed by Ist Additional District Judge/Motor Accident Claim Tribunal, Sultanpur in Motor Accident Claim Petition No.19 of 1999 is confirmed.
The appellant-Insurance Company is directed to pay the entire compensation as awarded by the M.A.C.T vide its judgment and award dated 28.02.2002, with interest @ 6% p.a. chargeable from the date of petition till the date of actual payment to the claim petitioner no.2/ mother of the deceased- Ajay Kumar Verma within one month, failing which the learned Motor Accident Claims Tribunal concerned is directed to proceed with the execution for recovery of compensation awarded against the appellant-National Insurance Company to recover the awarded amount as directed above with penal rate of interest i.e. 7% per annum chargeable from the date of petition till the actual payment.
It is further directed that the statutory deposit made by the appellant for moving the appeal and any other deposit made during the pendency of appeal under the order of court shall be adjusted towards the awarded amount to be recovered from the appellant for payment to the claimant.
Registry is further directed to send back the lower court record to the concerned Court.
Order Date :- 12.02.2019 Gaurav/-
(Vikas Kunvar Srivatav, J.)