State Consumer Disputes Redressal Commission
Shri Orland Kya vs M/S National Insurance Co. Ltd on 3 August, 2004
IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION MEGHALAYA, SHILLONG C.P. NO.1(M) OF 2000 Shri Orland Kya, Jowai ........ Complainant -Vs- 1. M/s National Insurance Co. Ltd. Shillong. 2. The Branch Manager, National Insurance Co. Ltd. Jowai. ........ Opposite Parties B E F O R E THE HON'BLE MR. JUSTICE N.S. SINGH, PRESIDENT THE LEARNED MEMBER SHRI RAMESH BAWRI HE LEARNED MEMBER SMT. A.S. RANGAD For the Complainant: :Shri K.S.Kynjing, :Sr.Advocate. :Shri K. Sunar, Advocate. :Shri L.W. Phira, Advocate. For the Opposite Parties : :Smt. T.Yangi, Advocate. Date of Order :3.8.2004 O R D E R
Ramesh Bawri, Member - Whether a Consumer can be allowed to suffer for no fault on his part if he employs a driver who produces a licence which is quite genuine on the face of it but which may later turn out to be fake ; whether the innumerable vehicle - owning consumers all over the country really have an option other than to accept at face value the drivers' licences which appear quite genuine to the common human eye; and, lastly, the plight of the consumers in these circumstances leading to their motor accident claims being turned down by insurance companies on the ground of breach of conditions of policy which require the driver to hold an effective driving licence at the time of accident; these are some of the relevant questions requiring our consideration in the present case.
2. The Complainant is the owner of Sumo Vehicle No.ML-04-5225 which was being operated as a Public Maxi-Cab and insured with the opposite party, National Insurance Co. Ltd. (hereafter"NIC" for the sake of brevity) vide comprehensive policy No.201002/31/97/63/00228 dated 3.4.98, for the period from 10.11.97 to 9.11.98. The vehicle met with a major accident on 19.8.98 in which the driver and four other occupants died and seven other passengers sustained serious injuries on their persons. The accident was reported to NIC by the Complainant on 20.8.98 upon which NIC deputed Sri M. Roy, Surveyor, to assess/survey the loss. Apparently the survey was never completed. The Motor Vehicle Inspector, Shillong also inspected the vehicle on 20.8.98 and vide his report dated 24.8.98 declared that - "The vehicle is totally damaged, economically unrepairable or constructive total loss."
3. The vehicle was removed to the authorised service centre of Telco, the manufacturers, who found the vehicle to be totally damaged and on 3.9.98 submitted an estimate for repair and spare parts amounting to Rs. 574721.
4. Vide Police report dated 18.10.98 the Superintendent of Police, East Khasi Hills, confirmed the factum of the accident which occurred when the insured vehicle dashed against one S/model truck and further stated that - " During enquiry it revealed that the accident was caused due to the fault of driver of S/model truck No.AS01-E-4795 who fled away immediately after the accident and still absconding. A case vide Mandanrting P.S. Case No.58/98 U/S 279/337/338/427/304(A) IPC has been registered against the said absconding driver and investigation taken up."
5. A formal claim for the loss sustained by the Complainant due to the damage caused to his vehicle was made by him on 11.9.98 and reminders sent to the NIC on 12.1.99 and 16.1.99 for settlement of the claim. However, one year after the occurrence, the claim was repudiated by NIC vide their letter dated 18.8.99. This letter which gives the reasons for repudiation of the claim reads as under:
"Reference to your Motor Claim form dated 11.09.98 and after enquiry/investigation reports, we have been equipped with the following reports contrary to the information furnished by you in your Motor Claim Form dated.....(Blank).
(a) The said Report reveals that the Driving Licence No.3520/Ch purportedly issued by the D.T.O. Churachandpur in the name of Shri Beriwel Syntem, who drove the vehicle No.ML-04-5225 that met with an accident on 19th August'98, is ineffective and fake.
(b) That the D.T.O., Churachandpur categorically stated that the driving Licence No.3520/Ch (D/L:F.1083/98/K) was not issued in the name of Beriwel Syntem as per the office record of the said D.T.O.
(c) It follows, therefore, that the vehicle No.ML-04-5225 was entrusted by you to a driver, namely, Shri Beriwel Syntem not having a valid/effective driving licence as on the date of accident. It thus amounts to breach of the conditions laid down in clause (i) of the Policy No.201000/31/97/63/00228 more specifically -
(i) `Person or classes of persons entitled to drive:Goods Carriage Vehicle: Any person includinginsured 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......' The above exclusion clause in the Insurance Policy makes it clear that the Company in the event of an accident, would be liable only if the vehicle was being driven by a person holding an effective and valid driving licence.
(d) Seizing above and after due consideration of the materials and reports of the enquiry, we regret to repudiate your claim dated 11th Sept'98 under the Policy ofInsurance referred to above."
6. Aggrieved by this repudiation of his claim the Complainant filed Complaint Case No. 2/2000 before the District Forum, Shillong on 17.2.2000 which was dismissed on 7.9.00 being beyond the Forum's pecuniary jurisdiction, with liberty to approach the proper Forum. Thereupon a complaint was filed before this Commission alleging deficiency in service on the part of NIC and claiming an amount of Rs.674721, besides interest and damages.
7. NIC filed its showcause. They vehemently denied that there was any deficiency in the service rendered by them and reiterated that the Complainant's claim had been repudiated after thorough investigation on just and valid grounds as the Complainant had committed breach of the terms and conditions of the Insurance Policy by entrusting a vehicle to the driver who did not have a valid and effective driving licence. NIC annexed with their reply a photostat copy of a letter dated 6.4.99 written by Shri B.K. Das, Investigator, to the District Transport Officer (hereafter`DTO'), Kamrup West Zone (hereafter `Kamrup') bearing some hand-written remarks, purportedly made by the DTO. Xerox copy of another similar letter dated 19.5.99 addressed to the DTO, Churachandpur, with purported endorsements made by that DTO, was also annexed with the showcause reply.
8. The letter dated 6.4.99 written by Shri B.K.Das (Investigator) to the DTO,Kamrup, W.Z. reads as follows:
"Ref: Verification of Driving Licence. D/L No. : F-1083/98/K Holder's Name: Beriwel Syntem.
Issuing Authority: D.T.O. Kamrup(W/Z).
I identify myself as an authorised investigator of the Oriental/National Insurance Co. Ltd. and I have been deputed by the NIC, R.O. to verify the genuinity of the above D/L. In this connection, I request you to furnish the following details.
Whether the above D/L is issued or not from your Office? If yes, the date of issue, the type of vehicles the holder is authorised to drive and the date of expiry of the D/L."
9. The remarks purportedly made by the DTO, Kamrup on 6.4.99 upon this letter itself read:
"Returned in original with the intimation that D.L. No.3520/CL was issued in the name of Beriwel Syntem by the D.T.O., Chura Chandpur, Manipur on 2.2.96. Holder was authorised to drive M/cycle and L.M.V. Ex PSV. D.L. expired on 1.2.99. This D.L. was recorded in this Office vide No.F1083/98/K."
10. The Investigator's similar letter to the DTO, Churachandpur written on 19.5.99 is as under:
"Ref: Verification of Driving Licence. D/L No. : 3520/Ch.Holder's Name: Beriwel Syntem. Issuing Authority: D.T.O.Churachandpur. Date of issue : 2.2.96.
I identify myself as an authorised investigator of the Oriental/National Insurance Co. Ltd. and I have been deputed by the NIC, R.O. to verify the genuinity of the above D/L. In this connection, I request you to furnish the following details.
Whether the above D/L is issued or not from your Office? If yes, the date of issue, the type of vehicles the holder is authorised to drive and the date of expiry of the D/L."
11. Upon this letter of query the Churachandpur DTO purportedly made the following remarks on 25.5.99:
"The above D/L No.3520/Ch was issued in the name of Bikash Kumar Saha S/o Makhandlal Saha of 5 No. Colony, Pandu, Guwahati for driving Auto rickshaw on 10.9.89 and not issued (to) Beriwel Syntem."
12. We have heard Shri K.S. Kynjing, learned Sr. Advocate representing the Complainant who, during the course of hearing has produced the Driving License of the driver concerned. We have also heard Smti. T.Yangi, Advocate, who has appeared on behalf of NIC, the Opposite Parties.
13. The flow and logic of Shri Kynjing's arguments are thus:
(a) The driver's licence was genuine and not fake or invalid, as claimed by NIC. (b) The endorsement said to have been made by the DTO, Churachandpur on the purported letter of the Investigator had no evidentiary value and was disputed by the Complainant. (c) In any event, NIC had failed to prove that the licence was fake and hence no heed could be paid to their defence. (d) Even assuming but not admitting that the licence was fake, prima facie it clearly appeared to be genuine to the Complainant when he employed the driver concerned.
(e) The driver had all along been found to be driving competently. (f) The alleged breach of the policy condition was thus, in any event, not wilful and no fault lay with the Complainant. (g) The Complainant's driver had not contributed to the accident in any way, as revealed by the Police Report. (h) Therefore, in view of all the above, the Complainant was entitled to his claim which NIC had illegally repudiated and this clearly constituted deficiency in service on their part which called for redressal by this Commission.
14. Smt.Yangi, on the other hand, has reiterated in her defence that the driver's licence was indeed fake and invalid as pronounced by the DTO, Churachandpur and that NIC had rightly repudiated the Complainant's claim on the ground of breach of the policy condition requiring the driver concerned to hold a valid and effective driving licence at the time of accident, after thorough investigation and deliberation and on just and valid grounds. The fault, if any, lay entirely with the Complainant himself and as such the Complainant's Petition was required to be dismissed with costs.
15. The battle-lines are thus clearly drawn. The questions which are required to be asked and answered in order to resolve the dispute are, in our opinion, as under:
(a) On whom did the burden of proof lie to prove the alleged breach of policy condition which required the driver to hold an effective driving licence at the time of the accident ?
(b) If the said burden lay on NIC, have they suitably discharged it in order to prove the driver's licence to be fake ?
(c) If not, is NIC's repudiation of the Complainant's claim, without proving a breach of policy condition, legally sustainable ?
(d) Even assuming that the licence was fake, was the breach of the Policy condition by the Complainant wilful ? Had he fulfilled his duty of satisfying himself about the apparent genuineness of the licence and the competence of the driver ?
(e) If indeed he had, could NIC yet repudiate the claim on the ground of the driving licence being ineffective?
(f) Did the driver himself contribute to the accident and, if not, could the Insurance claim be repudiated?
(g) To what reliefs, if any, is the Complainant entitled?
16. In order to be able to answer these questions faultlessly we feel that we need to study, in chronological order, how the Hon'ble Supreme Court and National Commission have viewed the matter in the past. The bright light shed by these decisions will illuminate our path and make our journey smoother. We will also look at the statutory provisions in this regard.
17. Section 13(2)(b) of the Consumer Protection Act, 1986(the `Act') provides as follows:
"Where the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute,-
i) on the basis of evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegations contained in the complaint,(italics ours) or
ii) on the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum".
18. Section 14(1) of the Act further states:
"If, after the proceeding conducted under section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about services are proved, it shall issue an order to the opposite party directing him to do one or more of the following things, namely:- ........" (Italics ours).
It is thus clear from a bare perusal of the statute itself that all cases under the Act are to be decided on the basis of evidence and proof and that wherever the opposite party denies or disputes the allegations contained in the Complaint, all disputes before the Forum are to be settled on the basis of evidence brought to its notice by the Complainant and the Opposite Party.
19. Further, reference may be made to Section 67 of the Evidence Act which reads as follows:
"67. Proof of signature and handwriting of person alleged to have signed or written document produced.- If a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting must be proved to be in his handwriting."
It is thus evident that mere filing of a document is not enough to make the document a part of the record. There is still a preliminary matter to be attended to before the contents of a document may be read as evidence i.e. the authentication of the writing or the proof of its genuineness. A writing or signature may be proved by calling a person who signed or wrote a document or by calling a person in whose presence the document was signed or written or by proof of an admission by the person who is alleged to have signed or written the document that he signed or wrote it or in any other way in accordance with law. Unless a document is proved it cannot be read in evidence. Sec. 67 of the Act requires the proof of the hand writing or a signature upon a document. If by mere production of a document (not to speak of a mere unauthenticated photostat copy thereof) the truth of its contents was proved prima facie, the requirement of proof of hand writing and signature upon it would be almost superfluous.
20. Sec.149 (2)(a)(ii) of the Motor Vehicles Act, 1988, entitles an Insurer to defend an action brought against it, on the ground of breach of a policy condition excluding, inter alia, the driving of a vehicle by a person who is not duly licenced. It may be noted here that Section 96 of the Motor Vehicles Act,1939, and Section 149 of the Motor Vehicles Act, 1988 are identical in all material particulars.
21. On the question of burden of proof, the law laid down by the Hon'ble Supreme Court in Narchinva V. Kamat & Anr. -Vs-
Alfredo Antonio Doe Martins & Ors (AIR 1985 SC 1281) needs to be extensively referred to. That too was a case of repudiation of a motor accident insurance claim on the ground of breach of policy conditions, more particularly of the driver not holding a valid driving licence. At paras 12, 14 & 15 of the judgement the Hon'ble Supreme Court held:-
Para 12: "The insurance company complains of breach of a term of contract which would permit it to disown its liability under the contract of insurance. If a breach of a term of contract permits a party to the contract to not to perform the contract, the burden is squarely on the party which complains of breach to prove that the breach has been committed by the other party to contract. The test in such a situation would be who would fail if no evidence is led."
Para 14: ".....The burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company. It could not be said to have been discharged by it by a mere question in cross-examination. The second appellant was under no obligation to furnish evidence so as to enable the insurance company to wriggle out its liability under the contract of insurance. Further the R.T.A. which issues the driving licence keeps a record of the licences issued and renewed by it. The insurance company could have got the evidence produced to substantiate his allegation. Applying the test who would fail if no evidence is led, the obvious answer is the insurance company."
Para 15: "To sum up the insurance company failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance."
22. One of the leading judgments on the issues with which we are concerned, rendered by the Hon'ble Supreme Court, is reported in AIR 1987 SC 1184 (Skandia Insurance Co. Ltd. -Vs- Kokilaben Chandravadan and Ors) and extracts from paras 12 and 14 thereof bear reproduction:
Para 12: "The defence built on the exclusion clause cannot succeed for three reasons, viz.:-
(1) On a true interpretation of the relevant clause which interpretation is at peace with the conscience of Section 96, the condition excluding driving by a person not duly licenced is not absolute and the promiser is absolved once it is shown that he has done everything in his power to keep, honour, and fulfill the promise and he himself is not guilty of a deliberate breach."(2)
.......
(3) ....."
Para 14: "The expression `breach' is of great significance. The dictionary meaning of `breach' is `infringement or violation of a promise or obligation'(see Collins English Dictionary). It is therefore abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is not (sic) duly licenced will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression `breach' carries within itself induces an inference that the violation or infringement on the part of the promiser must be a wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is `guilty' of the breach of the promise that the vehicle will be driven by a licenced driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promiser (the insured) committed a breach of his promise."
23. In 1995 (2) CPR 184 (NC) (M/s Essma Felts (P) Ltd. -Vs- United India Insurance Co. Ltd. and Anr.), however, the National Commission held that repudiation of claim by the Insurance Company on the ground of the driver not holding a valid driving licence was quite in order and that in the eye of law a fake licence was as good as non-est and even upon renewal a non-est licence remained non-est. The National Commission while noticing the Skandia judgement (supra) found no force in the argument of the Appellant's Counsel that they should not suffer because the driver on the fateful date held a fake licence.
24. In 1996 (1) CPR 81 (NC) (Raj Kumar & Anr. -Vs- New India Assurance Co. & other) the Insurance Co. had rejected the Complainant's claim on the ground that the licence of the driver who was driving the vehicle at the time of the accident was fake and therefore the case came within the exclusionary clause of the Insurance Policy. The State Commission found that the licence was originally a fake and bogus one and held that the renewal of an originally fake licence did not clothe it with any validity. It upheld the repudiation of the claim on this ground with the finding that it did not constitute deficiency in service but also did not preclude the insured from seeking remedy in the Civil Court.
The National Commission upheld the view taken by the State Commission and further held that it was contractually incumbent on the insured to satisfy himself of the genuineness of the Driving License as an owner's ignorance about the drivers' fake licence could not be a ground for allowing insurance claims. In its view the Skandia case (supra) was not on all fours with the case at hand.
25. The views expressed in the Skandia case (supra) were re-affirmed by a Bench of 3 Hon'ble Judges of the Apex Court in Sohan Lal Passi
-vs- P.Sesh Reddy (AIR 1996 SC 2627).
26. In the case of M/s Fair Air Engineers (P) Ltd. and Anr.
-Vs- N.K. Modi (AIR 1997 SC 533, para
10) the Apex Court held:-
"Thus, it would be seen that the District Forums, State Commission and National Commission have all the trappings of a Civil Court and judicial authority. The proceedings before them are legal proceedings."
From this judgement it seems further clear to us that as the Consumer Fora have the trappings of a Civil Court and judicial authority and the proceedings before them being legal proceedings, they too are bound by the rules of evidence.
27. In H.V.P.N.L. -vs- Mahavir [AIR 2000 SC 3586(1)] the Hon'ble Supreme Court said in respect of Appeals before the State Commissions - "The Appellate Forum is bound to refer to the pleadings of the case, the submissions of the Counsel, necessary points for consideration, discuss the evidence and dispose of the matter by giving valid reasons." (Italics by us). In our view, this decision further shows that all Consumer Fora are duty-bound to base their orders only on the evidence laid before them; what is mandatory for an Appellate Forum applies with no less vigour to original complaints.
28. In the case of New India Assurance Co., Shimla -Vs- Kamla & Ors. (AIR 2001 SC 1419, Para
25), the Hon'ble Supreme Court, amidst other observations, stated:
"Learned Counsel for the insured contended that it is enough if he establishes that he made all due enquiries and believed bona fide that the driver employed by him had a valid driving licence, in which case there was no breach of the policy condition. As we have not decided on that contention it is open to the insured to raise it before the Claim Tribunal".
29. In AIR 2003 SC 1292 (United India Insurance Co.Ltd. -vs- Lehru and Ors) the Apex Court held in Para 20:
"When an owner is hiring a driver he will therefore have to check whether the driver has a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that Insurance Companies expect owners to make enquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The Insurance Company would not then be absolved of liability. If it ultimately turns out that the licence was fake the Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had noticed that the licence was fake and still permitted that person to drive."
30. In Jitendra Kumar -vs-
Oriental Insurance Co.Ltd & Ors (AIR 2003 SC 4161, paras 9 and 10 ) the Hon'ble Supreme Court made the following observations which are relevant.
Para 9:
"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 noting 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 driver."
Para 10: "We notice that in the impugned order National Commission has placed reliance on the Judgement of this Court in the case of New India Assurance Company (supra) which, in our opinion, has no bearing on this aspect of the case in hand. This Court in the said case held that the fake driving licence when renewed genuinely, does not acquire the validity of a genuine licence. There can be no dispute on this proposition of law. But then the judgment of this court in the case of New India Assurance Company (supra) does not go to the extent of laying down a law which empowers the Insurance Company to repudiate any and every claim of the insured (appellant) merely because he had engaged a driver who did not have a valid licence. In the instant case it is the case of the parties that fire in question which caused damage to the vehicle occurred due to mechanical failure and not due to any fault or act, or omission of the driver. Therefore, in our considered opinion Insurance Company could not have repudiated the claim of the appellant."
31. The last word on this subject has now been spoken by a Bench of three Hon'ble Judges of the Hon'ble Supreme Court in AIR 2004 SC 1531 (National Insurance Co. Ltd. -vs- Swaran Singh) where, it will be noticed, NIC, who are the Opposite Parties before us, were themselves the Appellants. Relevant extracts from this extensive judgment are liberally quoted below :
Para 64: "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. 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. [See Sohan Lal Passi (supra)]."
Para 65: "Apart from the above, we do not intend to lay down anything further i.e. degree of proof which would satisfy the aforementioned requirement inasmuch as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance...... The parties alleging breach must be held to have succeeded in establishing the breach of conditions of contract of insurance on the part of the insurer by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records."
Para 70: "As has been held in Sohan Lal Passi (supra), the insurance company cannot shake off its liability to pay the compensation only by saying that at the relevant point of time the vehicle was driven by a person having no licence."
Para 87: "It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed herein before, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru's case (supra) the matter has been considered at some details. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or the owners be absolved from any liability whatsoever."
Para 94. "So far as the purported conflict in the judgments of Kamla (supra) and Lehru (supra) is concerned, we may wish to point out that the defence to the effect that the licence held by the person driving the vehicle was a fake one, would be available to the insurance companies, but whether despite the same, the plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case."
Para 95.
"The Court, however, in Lehru (supra) must not read that an owner of a vehicle can under no circumstances has any duty to make any enquiry in this respect. The same, however, would again be a question which would arise for consideration in each individual case."
Para 96.
"The submission of Mr. Salve that in Lehru's case (supra), this Court has, for all intent and purport, taken away the right of insurer to raise a defence that the licence is fake does not appear to be correct. Such defence can certainly be raised but it will be for the insurer to prove that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the driver."
Para 105:"(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, have 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 licenced driver or one who was not disqualified to drive at the relevant time.
(iv) The insurance companies are, 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 wherefore would be on them.
(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.
(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding 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.
(vii) The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfill the requirements of law or not will have to be determined in each case."
32. From the authoritative and binding decisions cited above and upon application of our own minds we reach the following findings and conclusions on the different legal aspects relevant to the case with which we are presently concerned:
a) Consumer disputes are to be settled on the basis of evidence brought to the notice of the Consumer Fora by the Complainant and the Opposite Party.
b) A document which is not proved in accordance with law, cannot, ordinarily, be read in evidence, unless admitted by the other party.
c) The burden to prove a breach of contract lies upon the party which alleges the breach; an Insurance Co. is no exception to this rule.
d) An alleged breach of policy condition is required to be established by cogent evidence.
e) No criteria can be laid down regarding the required degree of proof which is to be decided by the Tribunal concerned, case to case, but its findings are to be on the basis of materials available on record .
f) In order to constitute a breach of policy condition the violation or infringement by the insured must be wilful.
g) If the insured is not at all at fault and has done nothing that he should not have done, he cannot be held to have committed a breach.
h) Unless the insured is proved to be at fault and guilty of a breach, the insurer cannot escape his obligation to indemnify the insured.
i) If an Insurance Company fails to prove the alleged breach of contract or policy condition by the insured, its liability under the contract of Insurance remains intact.
j) To justify its repudiation of a claim, an Insurance Co. can take the defence that the licence held by the person driving a vehicle is fake or invalid but default on the part of the insured will have to be established by it.
k) When an owner hires a driver it is incumbent upon him to check whether the driver has a driving licence; if, on the face of it, the licence appears to be genuine, the owner is not required to make any further enquiries to verify its genuineness.
l) An owner is also required to satisfy himself that the driver is competent to drive the vehicle.
m) If an owner fulfills his duties stated at
(k) and (l) above, even if it does ultimately transpire that the licence is fake, he would be absolved of any breach and the Insurer would remain liable, unless it proved that the owner was aware that the licence was fake or that he was guilty of negligence towards fulfilling the policy condition.
n) Even if it is proved that the vehicle was driven by a person not holding a valid licence an Insurer cannot repudiate a claim for damages if such damages do not arise from any fault, act or omission of the driver in question i.e. damages incurred owing to acts which the driver had not contributed to in any manner.
33. It must also be made clear here that though the decisions in the cases of Narchinva, Skandia, Passi, Kamla, Lehru and Swaran Singh (supra) were rendered in the context of an Insurers liability to a third party the case before us relates to the Insurers liability to the owner of the Vehicle/Policy-holder himself. However, this difference in the factual matrix does not, in our opinion, affect our reliance on these cases in view of the clear enunciation of the Apex Court made in Swaran Singh (supra) in para 105 (iii) where it has stated -
"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." ( italics ours). Our aforementioned conclusions, therefore, apply as much to motor insurance claims made by an insured vehicle-owner as to a third party, although Mrs.Yangi would want us to think otherwise.
34. We shall now view the facts of the present case through the prism of the legal principles that we have summarised above, in order to arrive at our conclusions.
35. To start with, we will clear the facts by stating here that the License produced before us is a duplicate copy issued by the DTO, Kamrup, West Zone on 5.9.98 and bears the number F-1083/98/K. It is issued in Form 6 (Form of Driving Licence) and bears the seal and signature of the DTO, Kamrup W/Z as well as the photograph of the driver. According to this copy the original licence was issued in the name of Shri Beriwel Syntem by the Licensing Authority, Churachandpur on 2.2.96 and was valid up to 1.2.99, but the number of the original licence is not mentioned thereon. There is no dispute as regards the genuineness of this Duplicate Licence. The driver is dead and no one knows the circumstances under which this duplicate licence was obtained.
36. Now, it cannot be disputed that the clauses contained in the Policy of Insurance clearly go to show that the insured does not stand indemnified if a Motor vehicle is driven by a person who does not hold an effective driving licence at the time of the accident and, obviously, if the driving licence of late Beriwel Syntem, the ill-fated driver who was at the wheel and even lost his life in the accident, is proved to be a fake, it could not be called an effective licence. But the question is - has NIC discharged its burden of proving that the aforesaid licence is fake, as alleged.
37. NIC has challenged the genuineness of the driver's licence and repudiated the Complainant's claim on the ground that the licence was fake and not valid and thus the vehicle was driven in contravention of the policy conditions. NIC's justification of repudiation thus rested solely on the alleged breach of the contract of insurance and, having so asserted, the burden of proof lay upon NIC to prove breach of policy conditions, as per the principles we have already stated above.
38. The records of this Commission show that the Insurance Company did not examine any witness to prove the remark/report purportedly made by the DTO Churachandpur upon the Investigator's letter dated 19.5.99, which is heavily relied upon by them, despite the fact that their entire case rested on these remarks. Though Sec. 13(4)(iii) of the Consumer Protection Act, 1986 also provides for the reception of evidence on affidavits, yet, even an Affidavit from the Investigator who wrote to the DTOs to enquire about the validity of the licence was not filed before the Commission by NIC. Even the Original of the letter dated 19.5.99 written by the Investigator which was said to contain the remarks of the DTO Churachandpur was not produced before us and only an unauthenticated Xerox copy was filed by NIC along with their Show Cause reply. In fact, what were filed before us were Xerox copies of two conflicting reports/certificates allegedly procured by an Investigator appointed by the Insurance Co. from two different DTOs at Kamrup and at Churachandpur, one of which shows that the original licence is genuine and the other says it is not. Such photostat copies have, in our view, very little evidentiary value [See M/S Moosa S. Madha -vs- C.I.T., West Bengal(AIR 1973 SC 2356,para 13)].
39. Thus, although nothing prevented NIC from taking necessary steps in accordance with law to prove that the driving licence in question was fake, as alleged by them, they chose not to do so, even though they knew full well that their entire defence rested on proving that the driver's licence was fake and invalid. This is surprising to say the least.
Incidentally, we may state that the simplistic manner in which the opposite party went about its task of investigating into the facts relating to the driving licence left a lot to be desired, if the facts were indeed to be unraveled completely and flawlessly without leaving anything to chance. If, for a minute, we go by NIC's averments, it was only the DTO Kamrup who informed the Investigator that the original Licence issued to the driver in question was numbered 3520/Ch for, as stated above, there was no mention of the original licence number in the duplicate licence. It was merely on the basis of this number 3520/Ch that the Investigator took up the matter with the DTO Churachandpur who, in turn, according to NIC, said that the Licence with this number had not been issued to the named driver but to someone else. Suppose the DTO Kamrup had made a mistake in stating the original Licence number, a possibility which cannot be ruled out? The result of investigation might then have been very different. Copies of the records of neither DTO were produced before us to enable us to ascertain the real facts. Enquiries made on the basis of a mere number cannot instill much confidence and the fate of a Consumer's claim cannot hang on such a slender thread. Therefore, even the benefit of doubt would have to go in favour of the Complainant. The driver's licence which has been produced before us is, as already stated above, although no doubt a duplicate copy, admittedly genuine. Now, further, in the absence of proof to the contrary, it must also be held to be valid and effective.
40. Learned Counsel for the Complainant has also drawn our attention to the recent judgement of the Hon'ble Supreme Court reported in 2004 AIR SCW 1308 (Punam Devi and Anr -vs- Divisional Manager, New India Assurance Co.Ltd.)where the insurer had not led any evidence to prove that the driver of the vehicle had no licence. As the burden of proof that the driver had no licence was open to the insurer which it failed to discharge, the Court upheld the liability of the Insurance Co. to pay compensation awarded by the Tribunal.
41. Thus we have no hesitation in holding that in the instant case, the burden of proof lay upon NIC which they failed to discharge and failed to prove that there was any breach of the term of the contract of insurance, that the driving licence of the driver of the vehicle which met with the accident was a fake one. NIC having thus failed to prove this aspect, its liability under the contract of insurance remains intact and unhampered. As stated earlier, NIC had adequate opportunity of adducing evidence before us to substantiate its contention that the Driver License in question was a fake one but they failed/ neglected to do so and for their failure to discharge this burden of proof the Complainant ought not to be allowed to suffer.
42. Mr. Kynjing, learned Senior Counsel for the Complainant has also argued that, even assuming but not admitting that the driving licence was a fake one, the Complainant was totally unaware that it was fake as the driving licence, on the very face of it, showed that it was genuine being in proper form and bearing thereupon the signature and seal of the licensing authority i.e. the DTO Kamrup and being valid up to 1.2.99 while the accident occurred on 19.8.98. Therefore, according to Mr. Kynjing, the Complainant could not even have suspected the Driving License to be fake and bonafide believed it to be genuine, more so as the driver was also found to be a competent one. Even for the sake of argument, if there was a breach of the policy condition requiring a valid and effective driving licence by the driver, the breach was not wilful or within the knowledge of the Complainant who bonafidely believed the licence to be authentic when the driver was taken into employment.
43. Indeed, let us assume for a moment that the Driver's licence was fake and ineffective as alleged by NIC and see what would then be the position. Would the Complainant then succeed or fail to get relief in this situation ?
44. As stated above, the Licence before us clearly shows that it has in fact been issued by the DTO Kamrup as a Duplicate Driving Licence and to this extent there is no challenge or dispute by NIC. It is not their case that this Duplicate Licence is fake - NIC's position is that the original licence based upon which this Duplicate was issued was fake. Now, when the DTO Kamrup himself was satisfied about the genuineness of the Driver's original Licence whereupon only, obviously, could he have issued the Duplicate Licence, it would be too much to expect of the Complainant to have doubted its genuineness while employing the driver. What is even more important to remember is that it was only the Duplicate Licence issued by the DTO Kamrup which was before the Complainant when he hired the driver - not the original Licence
- and even NIC does not deny that this Duplicate Licence is genuine. Thus as far as the Complainant was concerned he was dealing with a truly genuine licence, whether it was effective and valid in law being another matter altogether.
45. Moreover, NIC has produced no material before us by which we can hold that there was any reason for the Complainant to suspect the genuineness of the original licence. In our own minds, too, the licence produced before us does not give rise to any suspicion that its original was forged. Furthermore, in Para 3 of his Petition the Complainant has asserted that the person driving the vehicle at the time of accident was a `competent driver' and this statement stands uncontroverted by NIC. In these circumstances no fault can be found with the Complainant and it cannot be held that he acted with negligence in accepting the driver's licence as genuine and effective and in permitting the driver to drive his vehicle.
46. We have already concluded above that in order to constitute a breach of policy condition the alleged violation on the part of the insured must be wilful and that if a vehicle - owner fulfills his duty of checking that the driver whom he is engaging holds a driving licence that is prima facie genuine and of ensuring that he is competent at his job, the insured is absolved of any likely breach of the policy condition which requires the driver to hold an effective driving licence. The breach, if any, is clearly not wilful. Further, in order to be able to validly base its defence on the effective licence clause it was incumbent upon NIC to prove that the Complainant had failed to make proper enquiries about the genuineness of the drivers licence, which too NIC failed to do.
47. Thus, all the facts of the case, when seen in the light of our aforementioned legal conclusions, clearly lead us to the conclusion that, even assuming that the driver's licence was indeed ineffective, NIC could not be relieved of its liability to indemnify the Complainant for the damages incurred under the Policy.
48. One last aspect of the matter remains to be discussed. Did the driver who drove driving the insured vehicle contribute to the accident in any manner and, if not, was the exclusion clause applicable and did NIC turn down the Complainant's claim validly? We have already referred to the Police Report dated 18.10.98 issued by the Superintendent of Police which unequivocally reveals that the accident was caused due to the fault of the driver of an S/Model Truck against which the Complainant's vehicle dashed and that a case had been registered under various sections of the IPC against the truck driver who was absconding. Significantly, no fault whatsoever was found with the driver of the insured vehicle.
49. There is no material before us that would dissuade us from accepting the Police Report in toto and coming to the conclusion that the driver late B. Syntem (may his soul and the souls of the four others who perished in this mishap, rest in peace) was not to blame in any way for the accident and the damage caused to the Complainant's vehicle. In this view of the matter, too, the alleged breach of the condition of driving licence is not such as would, in our opinion, allow NIC to avoid its liability towards the insured inasmuch as the rule of main purpose and concept of fundamental breach as spelled out by the Hon'ble Supreme Court and referred to in the earlier paragraphs would apply.
50. It may also not be out of place to mention here that while the accident occurred on 19.8.98 the Complainant's claim was repudiated by NIC on 18.8.99, fully one year later. Even the investigation into the validity of the driver's licence was initiated almost 8 months after the accident. It is well settled that such inordinate delay in repudiation of a claim, in itself, constitutes deficiency in service. (See 2003(1) CPR 214(NC) - United India Insurance Co. Ltd -vs- Smt. Shavinder Kaur.)
51. To sum up, in view of the law laid down by the Hon'ble Supreme Court in the judgments cited above, upon application of all the principles enunciated by us hereinabove to the facts and circumstances of the present case and in the light of the above discussion and observations, we are completely satisfied that, having failed to discharge the burden of proving that the drivers licence of the driver of the insured vehicle was ineffective and thereby having failed to prove that there was any breach of the conditions of the insurance policy by the Complainant, NIC's repudiation of the insurance claim is unsustainable. Further, as the alleged breach by the Complainant was, in any case, not wilful and the accident did not occur owing to any fault of the driver, the policy condition relating to effective driving licence is non-operative. This further leads us to conclude that there was negligence and deficiency in service on the part of the Insurance Co. by not settling the Complainant's claim. Repudiation of the Complainant's claim by NIC is bound to be set aside which we hereby do. NIC is to now settle the Complainant's claim under the comprehensive policy of insurance. As NIC was deficient in its services and as its negligence has caused loss and injury to the Complainant this is required to be compensated by NIC.
52. The final question for consideration is only the quantum of relief to which the Complainant is entitled. He has claimed a sum of Rs.674721 along with interest @ 18% and further damages to the tune of Rs.20000. However, there is nothing on record to show how the figure of Rs.674721 has been arrived at. Perhaps it reflects the estimate for repair and spare parts submitted by the Telco Dealer but then that estimate is for Rs.574721 and not for Rs.674721. In any event, the vehicle in question has been insured only for a sum of Rs.375000 as revealed by the Policy and it is on this sum that the premium has been paid. The Complainant is, therefore, not entitled to any claim beyond the Policy value of Rs.375000 and his claim of Rs.674721 is totally unjustified.
53. No assessment of the loss appears to have been made by the Surveyor appointed by NIC. Therefore all that we have to go by are the M.V.I's report certifying the vehicle to be totally damaged and economically unrepairable i.e. constructively a total loss and the estimate of Rs.574721 made by the Authorised Dealers of Telco, the manufacturers of the damaged Sumo vehicle, which is well above the insured sum of Rs.375000. Under these circumstances we assess the loss at Rs.375000 and we are of the considered view that the Complainant is entitled to this sum of Rs.375000 to be paid by NIC, the opposite party, as its liability under the Insurance Policy for the loss suffered by the Complainant in the accident of the insured vehicle.
54. The Complainant has also claimed compensatory interest @ 18% per annum on the claim amount from the date of claim i.e 11.9.98 till the date of payment. Keeping in mind all the above-stated facts and circumstances we are of the considered opinion that grant of compensation in the form of interest at the rate of 12% p.a. on the awarded sum of Rs.375000 to be calculated for the period from 12.3.99 (being 6 months after date of submission of claim by the Complainant) till the date of payment, would meet the ends of justice. The Complainant has further claimed a sum of Rs.20000 as damages for the financial loss caused to him by NIC but this is totally unsubstantiated and we are not inclined to award any compensation on this count; we however award to him a sum of Rs.5000 as costs of this complaint.
55. In the result, the Complaint Petition is allowed and disposed of with the direction that National Insurance Co. Ltd. shall pay to the Complainant the sum of Rs.375000 together with interest @ 12% p.a. for the period from 12.3.99 till the date of full payment and a further sum of Rs.5000 as costs within 30 (thirty) days of receipt of a certified copy of this order, failing which the entire amount determined on the above basis will bear interest @ 12% p.a. till the date of full payment by the opposite party.
56. We further direct that, immediately upon full satisfaction of this award, ownership of the remains of the damaged Sumo Vehicle No.ML-04-5225 will stand transferred to NIC and that the Complainant shall hand over possession of the vehicle in an as-is-where-is condition to a duly authorised officer of NIC within 48 hours of receipt of the payment. Consequently and naturally, whatever salvage value is recovered by NIC will accrue to them. Further, the Registry of the Commission is to return the Driving Licence
-the object of this exercise of ours - to the Complainant's Counsel.
57. Before parting with the case we do feel impelled to make one general observation. Disputes between Consumers and Insurance Companies arising from repudiation of motor-accident claims on the ground of drivers holding non-effective driving licences would, in our opinion, be curtailed to a great extent and the sufferings of the Consumers largely mitigated if the Licencing Authorities functioning under the Motor Vehicles Act, 1988 stringently adhered to the provisions of the Act as well as to the rules and established procedures relating to the issuance of driving licences, including their renewal as well as issuance of duplicates thereof, and acted only after proper scrutiny. We cannot but feel that in many such cases, legalities apart, the difficulties faced by both the Consumers as well as the Insurance Companies are indeed real and their points of view, although divergent, need equal consideration. Ironically, while the disputes rage between them, the Licencing Authorities remain oblivious to the events. A driver holding a fake or non-effective licence means an untested driver, one whose competence and driving ability is under a cloud. Such a person therefore constitutes a likely and serious threat to the lives of all pedestrians and all passengers of the driven and approaching vehicles, not to speak of the drivers themselves, as well as to the properties of the persons owning the vehicles and the laden goods - in other words, a likely hazard to society itself.
58. We therefore direct the Registry that a copy of this order be forwarded to the Secretary to the Government of Meghalaya in the Transport Dept, for his kind information with the sincere expectation that suitable steps will be taken to ensure that the licencing procedures for driving licences are strictly followed by all the licencing authorities, at least in the State of Meghalaya, to mark a new beginning towards making the licencing system reliable and faultless throughout our country .
MEMBER MEMBER PRESIDENT