Kerala High Court
Oriental Insurance Co. Ltd. vs Sadanandan on 2 November, 1999
Equivalent citations: I(2000)ACC215, 2001ACJ1368
JUDGMENT K.K. Usha, J.
1. These appeals arise out of an award of the M.A.C.T., Mavelikkara in O.P. (MV) Nos. 620 and 760 of 1986. Both the petitions were in respect of a common accident which happened on 30.5.86, as a result of collision between a scooter bearing registration No. KLK 9508 and a bus bearing registration No. KLY 6951. O.P. (MV) No. 620 of 1986 was filed by the legal heirs of one Suresh kumar who was riding the scooter and who died in the accident. O.P. (MV) No. 760 of 1986 was filed by the pillion rider who was also injured in the accident. The driver, owner and insurer of the bus were impleaded as respondent Nos. 1 to 3 respectively. Later, the owner took up a contention that the bus was being driven by one Ramachandran Pillai and not by the respondent No. 1 and on that basis, addl. respondent No. 4 was impleaded in O.P. (MV) No. 620 of 1986. But, he was not impleaded in O.P. (MV) No. 760 of 1986. The Tribunal disposed of both the petitions under a common award.
2. Tribunal found that the driver of the bus, at the time of the accident, was the respondent No. 1 and that the respondent No. 2 owner had failed to prove his case that it was the respondent No. 4 who was the driver of the vehicle. Tribunal further came to the conclusion that the accident happened due to negligence on the part of the driver of the bus. In O.P. (MV) No. 620 of 1986, the claim put forward by the petitioners was for compensation of Rs. 3,13,600. Deceased was 23 years old boy and a student of B.A. degree. Tribunal granted a total amount of Rs. 93,000. In O.P. (MV) No. 760 of 1986, total claim was Rs. 24,580. Tribunal granted a compensation of Rs. 8,400. Respondent No. 3 insurance company was directed to satisfy the award.
3. Insurance company had contended before the Tribunal that the driver of the bus was not having proper driving licence at the time of the accident and, therefore, insurance company is absolved of its liability. It was also contended that as per the policy, its liability to third party is limited to Rs. 50,000. Tribunal entered a finding that the respondent No. 1 was not having the required driving licence to drive the bus at the time of the accident. But, it did not accept the contention of the insurance company that it is absolved of the liability and that its liability towards third party is limited to Rs. 50,000. A copy of the insurance policy was produced as Exh. R-1 and Branch Manager of the insurance company was examined as RW 1. Tribunal took the view that since the original or carbon copy of the insurance policy was not produced before the court, the contentions of the insurance company that there is violation of the terms of the policy and/or that its liability is limited to Rs. 50,000 under the terms of the policy towards third party cannot be examined at all. It was on the above basis that those contentions were rejected. Aggrieved by the above, insurance company has filed these appeals.
4. It is contended by learned counsel for the insurance company that the Tribunal has erred in taking the view that lack of proper licence for the driver is a matter between the insurer and the insured and it cannot in any manner affect the claim of a third party. If the driver is not having the required licence, insurance company is entitled to take up a contention of violation of the terms of the policy as a defence, in the light of the provisions contained under Section 96 (2) (b) (ii) of the Motor Vehicles Act, 1939, the provisions of which are applicable in the present case, since the accident had happened on 30.5.1986.
5. Reliance was placed by the learned counsel on a Full Bench decision of this court in New India Assurance Co. Ltd. v. Celine, 1993 ACJ 371 (Kerala), in support of the above contention. Reliance was also placed on a decision of the Supreme Court in United India Insurance Co. Ltd. v. Gian Chand, 1997 ACJ 1065 (SC). In the above mentioned decision, it was held that when the vehicle is driven by an unlicensed driver, insurance company gets exonerated of its liability to the third party. In cases where the owner has entrusted the vehicle with licensed drivers and who on their own and without permission express or implied of the insured, hand over the vehicles or act in such a way that the vehicles get available to unlicensed drivers for being driven by the latter and which get involved in vehicular accidents by the driving of such unlicensed drivers, insurance company cannot get the benefit of exclusionary clause. But, the burden is on the insured to prove that he had handed over the vehicle to a driver with valid licence and it came to the hands of unlicensed driver without his knowledge. If he fails to discharge his burden, then the insurance company would get exonerated from its liability.
6. In the present case, as mentioned earlier, after entering a finding that the respondent No. 1 driver was not having a proper licence to drive the bus, Tribunal still proceeded to hold the insurance company liable for the reason that policy containing an exclusionary clause was not proved in this case. We are afraid, we cannot agree with this finding of the Tribunal. Exh. R-1 is duplicate copy of the insurance policy which was proved through RW 1, Branch Manager of the company. We have gone through his evidence. It is seen that the insured, namely, the owner of the vehicle, had not challenged the guidelines of Exh. R-1. It has to be noted that the original of Exh. R-1 should, in the natural course, be with the insured. When the insured has not raised an objection either for marking copy of the policy as Exh. R-l or challenge in relation to its contents by way of cross-examining RW 1, there was no reason for the Tribunal to take the view that Exh. R-l is not a true copy of the insurance policy of the vehicle. We have gone through Exh. R-2 licence of the respondent No. 1. It is seen that he had a licence issued in his name authorising him to drive light motor vehicles from 3.10.62 to 2.10.1965.
But, there is no authorisation to drive transport vehicle which is necessary for a driver of a bus as per the relevant rules under the Kerala Motor Vehicles Rules, 1961.
7. In the present case, apart from contending that it was the respondent No. 4 who was the driver of the vehicle and not the respondent No. 1, owner of the vehicle did not take any step to substantiate the above contention. He did not enter the box to give evidence nor the respondent No. 4. Respondent No. 1 also did not contest the matter. Under these circumstances, as was observed by the Supreme Court in United India Insurance Co. Ltd. v. Gian Chand, 1997 ACJ 1065 (SC), when unlicensed driver was entrusted with the bus with the knowledge of the insured, the insurer is absolved of the liability to the third party.
8. Learned counsel for the owner of the vehicle sought to place reliance on a Bench decision of this court in Oriental Insurance Co. Ltd. v. Nani Janaki, 1999 ACJ 788 (Kerala). The facts in the above case were as follows. The vehicle which was insured on 14.7.1986 as a private car, was involved in an accident on 9.5.87. It was contended by the insurance company that the owner of the vehicle had altered the character of the vehicle on 31.7.86 and was using the same as a contract carriage. According to the insurance company, the owner of the vehicle had misrepresented the fact on 14.7.1986 at the time of obtaining the policy and, therefore, violation would come under Section 96 (2) (c) of the Motor Vehicles Act, 1939. On the basis of the evidence in the case, the Bench took the view that on 14.7.1986, the vehicle was a private car and, therefore, there was no misrepresentation. If that be so, Section 96 (2) (c) will not be applicable. It was also contended that there has been a breach of the condition under Clause (a) of Section 96 (2) (b) (i). This contention was also not accepted. It is the following observation of the Bench, that is strongly relied on by the learned counsel for the respondents, "the liability to pay compensation to a third party by the insurer is a statutory liability which cannot be taken away because of the violation of the policy conditions by the owner of the vehicle". The above observation of the Division Bench has to be understood in the facts of the case. It cannot be taken that the Bench has taken the view against the dictum laid down by the Supreme Court in United India Insurance Co. Ltd. v. Gian Chand, 1997 ACJ 1065 (SC). Reference made to an observation of the decision of the Supreme Court in New Asiatic Insurance Co. Ltd. v. Pessumal Dhanamal Aswani, 1958-65 ACJ 559 (SC), is also not relevant to the facts of the present case.
9. There is a cross-appeal filed by the respondent-claimant seeking enhancement of the quantum of compensation. Since the appeal filed by the insurance company is not on the quantum of the award, the cross-appeal is not maintainable. On the facts of the case also, we do not think that it is necessary for this court to interfere with the quantum of compensation.
10. In the light of the above, we find that there has been a violation of the terms of the policy which would come under Section 96 (2) (b) (ii) of Motor Vehicles Act, 1939, which would absolve liability of the insurance company. The appeals, therefore, stand allowed. Cross-appeal is dismissed. No costs.