Karnataka High Court
Yashodhara B. Shetty S/O Balakrishna ... vs United India Insurance Co. Ltd. Rep. By ... on 20 September, 2007
Author: Ram Mohan Reddy
Bench: Ram Mohan Reddy
JUDGMENT Ram Mohan Reddy, J.
1. Common questions of fact and that of law arise for decision-making, hence, with the consent of the learned Counsel for the parties, the appeals, though listed for admission, axe clubbed together finally heard and are disposed of by this common order.
2. M.F.A. No. 5490/2005 and M.F.A. 5489/2005 are preferred by the insured-owner of the offending motor vehicle, calling in question the common judgment and award dated 22-03-2005 in M.V.C. Nos. 2213/2000 and M.V.C. No. 1508/1998 on the file of the Prl. District Judge and Member, Motor Accident Claims Tribunal, Dakshina Kannada, Mangakxre, (for short 'MACT').
3. M.F.A. 314/2006 is instituted by the claimant-injured dissatisfied with the award of Rs. 47,000/- and interest at 6% per annum as compensation for personal injuries, by judgment and award dated 22-03-2005 in M.V.C. No. 2213/2000 on the file of the MACT.
4. The motor vehicle being a bus bearing Certificate of Registration No. KA-19/3619 owned by the appellant in M.R.A. No. 5490 & 5489/2005 and insured by the 1st respondent United India Insurance Company Limited, driven in a rash and negligent manner, caused an accident on 25-04-1998 at about 10.15 p.m. near Yeyyadi Bus stop, due to which one Naveen Kulal succumbed to grievous injury and another Sunil Shetry, the appellant in M.F.A. No. 314/2006 sustained grievous injuries. The legal heirs of the deceased, instituted a Claim Petition in M.V.C. No. 1508/1998 and the injured-claimant instituted M.V.C. No. 2213/2000. The insurer and the insured on notice, entered appearance and filed their respective Statement of objections. The insured denied the allegation of rash and negligent driving of the vehicle and contended that the vehicle was entrusted to one Shankar Poojary holding a valid driving licence, while denying the claim as excessive and exorbitant In addition, it was contended that as the offending vehicle was insured, it is the insurer who is liable to reimburse the compensation. Thfe insurer, in its defence raised the plea that the offending motor vehicle was driven by one Shankar Kulal, a cleaner of the bus, without a valid driving licence to drive the bus or any other vehicle, and that therefore the insured violated the terms and conditions of the policy of insurance, disentitling the insured to an indemnity. In the premise of the pleadings of the parties, the MACT framed the following issues:
(1) Whether in each case the petitioners/petitioner prove/s that the alleged accident which occurred on 25-4-1998 at about. 10.15 p.m. near Yeyyadi bus stop was due to rash or negligent driving of the city bus bearing registration No. KA 19 3619 by its driver?
(2) Whether the petitioners in MVC No. 1508/1998 prove that they are the legal representatives of deceased Naveen Kulal and they are entitled to be compensated? If so, for what amount?
(3) Whether the petitioner in MVC No. 2213/2000 proves that he sustained injuries in the accident in question? If so, for what amount?
(4) Whether the respondent-insurance company proves that the cleaner of the bus bearing registration No. KA 19 3619 was driving the said bus at the time of accident without possessing valid driving licence, thereby the owner of the bus has violated the terms and conditions incorporated in the policy? And if so, whether the insurance company is absolved from its liability to reimburse the owner of the bus?
5) Which of the respondents is liable to pay the compensation awarded in the case?
6) What order?
5. Before the MACT, one of the claimants in M.V.C. No. 1508/1998 by name Suit Saroja examined herself as PW-1, produced 15 documents marked as Exhibits P-l to P-15 while the Power of Attorney Holder of the claimant in M.V.C. No. 2213/2000 was examined as PW-1 and 7 documents Exhibits P-1 to P-7 were marked. For the respondent - Insurance Company, the Insurer, no oral evidence was adduced but two documents Exhibits R-1 and R-2 were marked. The insured did neither tender evidence nor produce documentary evidence.
6. The MACT, considering the pleadings of the parties, appreciating the evidence both oral and documentary, and all relevant material on record, attributed negligence on the driver of the bus and accordingly answered the first issue in the affirmative. The MACT awarded Rs. 2,54,000/- as compensation to the claimants in M.V.C. No. 1508/1998 and Rs. 47,000/- to the claimant in M.V.C. No. 2213/2000. Issue No. 4 relating to liability of the Insurer was answered in the affirmative and absolved the insurer of its liability to reimburse the owner of the bus, while fastening the liability on the owner of the motor vehicle.
7. Sri. S.S. Sripathy, learned Counsel on being duly instructed by the learned Counsel for the appellant, on record, contends that the challenge to the judgment and award in both the appeals filed by the Insured, is restricted to the finding on Issue No. 4 with regard to liability. According to the learned Counsel, the MACT fell in error is not noticing that in the Statement of objections filed by the insured, it was specifically pleaded that on 25.04.1998 the bus in question was entrusted to a duly licenced driver by name Shankar Poojary and a copy of the Driving Licence was also produced. The learned Counsel, contends that having discharged the initial burden by pleading before the MACT, of a valid entrustment of the bus to Shankar Poojary the holder of valid driving licence, the burden shifted on to the Insurance Company to establish by cogent evidence the allegation of breach of terms and conditions of the insurance policy. Learned Counsel hastens to add that Exhibit R-2, the certified copy of the judgment in C.C. No. 10834/1998 recording a finding and convicting one Shankar Kulal for having driven the bus in question and caused the accident on 25.04.1998, had no bearing on the fact of a valid entrustment of the bus by the insured in favour of Shankar Poojary, and the MACT fell in error in placing reliance upon the said judgment, in the absence of the insurer proving by independent evidence of the insured having committed willful default or breach of terms and conditions of the policy of insurance.
8. Per contra, Sri, A. Ravishankar, teamed counsel for the 1st respondent - Insurance Company contends that the fact of entrustment of the vehicle in question, by the owner, to a duly licenced driver on the relevant date, especially within the knowledge of the owner and the said Shankar Poojary, not having been established by adducing evidence of the witnesses, cannot claim to have discharged the initial burden of valid entrustment by only filing the statement of objections. Learned Counsel further contends that in view of Section 101, 102 and 106 of the Indian Evidence Act, 1872, the insured and the driver having not adduced any oral evidence, over a valid entrustment of the bus, adverse inference needs to be drawn against the insured.
9. Learned Counsel for the parties seek to support their respective contentions by placing reliance on the following decisions of the Apex Court:
1) Sohan Lal Passi v. P. Sesh Reddy
2) United India Insurance Co. Ltd. v. Gian Chand and Ors.
3) United India Insurance Co. v. Lehru and Ors.
4) National Insurance Co. Limited v. Swaran Singh and Ors.
5) National Insurance Co. Limited v. Kusum Rai
6) Oriental Insurance Co. Limited v. Meena Variyal
10. Learned Counsel for the appellant in M.F.A. No. 314/2006 contends that the appeal is restricted to the quantum of compensation awarded and not over the finding an Issue No. 4. According to the learned Counsel, the award of compensation is on the lower side and requires enhancement. Per contra learned Counsel for the respondent-Insurer and Insured would seek to sustain the impugned judgment and award, in so far as it relates to quantum of compensation, as being well-merited, fully justified and not calling for interference.
11. Having heard the learned Counsel for the parties, examined the impugned judgment and award, the following two questions arise for decision-making:
(i) Whether, in the facts and circumstances of the case, the MACT was justified in fastening the liability on the Insured and absolving the Insurer from its liability to pay compensation?
(ii) Whether the award of Rs. 47,000/- with interest at 6% per annum as compensation for bodily injuries suffered by the claimant-injured is just and proper?
12. Before proceeding to consider the principles laid down in the aforesaid decisions of the Apex Court, it is necessary to notice the admitted facts. The appellant in M.F.A. No. 5490/2005 and M.F.A. 5489/2005 is the owner of the bus bearing Registration No. KA-19/3619 which was insured by the 1st respondent - Insurance Company under a policy of insurance valid as on 25.04.1998 the date of accident. That the accident took place on 25-04-1998 due to the rash and negligent driving of the busy, by its driver, due to which one person by name Naveen Kulal succumbed to grievous injuries white another, the appellant in M.F.A. No. 314/2006 sustained grievous injuries is not in dispute. Yet another fact not in dispute is that one Shankar Kulal was prosecuted for offences punishable under Sections 279, 338, 304-A IPC read with Section 3(1) and 181 of the Motor Vehicles Act for rash and negligent driving of the bus in question on 25.04.1998 and causing the accident, resulting in death of a person and bodily injuries to another, in C.C. No. 10834/1998 before the JMPC HI Court, Mangalore and was convicted by judgment dated 13-08-1999 Exhibit-"R2". That though the Insured filed Statement of objections enclosing a copy of the driving licence of one Shankar Poojary said to possess a valid licence to drive a bus, admittedly, foiled to enter the Witness Box nor examine the driver Shankar Poojary in support of the defence. That the Insurer filed statement of objections, advancing the plea of breach of terms and conditions of the policy, to avoid legal and contractual liability, supported by Exhibit-"R1", the Insurance Policy and Exhibit-"R2" the judgment in C.C. 10834/98 of the JMPC.
13. There is considerable force in the submission of the learned Counsel for the 1st respondent - Insurance Company that the filing of Statement of objections, raising a plea of valid entrustment of the vehicle, by the insured, to a duly licenced driver is not a substitute to adducing oral evidence to discharge the initial burden of valid entrustment. It is no doubt true, pleadings of the parties need to be proved by adducing cogent evidence and the degree of proof that is required in a proceeding for compensation claims under the Motor Vehicles Act, 1988 is not one of strict proof of evidence but preponderance of probability. In the instant case, the dispute brought before this Court is between the insurer and the insured over the terms and conditions of the policy. While the insurer contends breach of terms, the insured emphatically denies the breach.
14. Section 102 of the Evidence Act, 1872 states that the burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side. Section 105 provides for burden of proving the existence of circumstances by the person accused, within any of the General Exceptions in the Indian Penal Code or within any special exception or proviso contained in any other part of the same Code, or in any law defining the offence and the Court shall presume the absence of such circumstances. Section 106 states that when any fact, is especially within the knowledge of any person, the burden of proving that fact is upon him.
15. Thus the knowledge especially of entrustment of the vehicle in question to a driver possessing a valid licence to drive the vehicle on 25.04,1998, a plea raised by the insured, the burden of proof did lie on the insured to prove the said fact Undeniably the insured failed to enter the Witness Box, to discharge the burden of establishing the knowledge especially of the aforesaid facts. So also is apparent, the absence of the evidence of Shankar Poojary said to be a driver possessing a valid driving licence to have been entrusted with the vehicle in question on 25,04.1998. Having regard to Section 114 illustration (g) of The Evidence Act, 1872, that if a party abstains from entering the witness box and state his own case on month and does not offer himself for cross-examination by the other side, a presumption arises that the case set up by him is not correct. This is the principle enunciated in Vidyadhar v. Manik Rao . It cannot therefore lie in the mouth of the insured that he discharged the initial onus of a valid entrustment.
16. In Sohanlal Passi's case supra, a three Judge Bench of the Apex Court seized of the question as to "Whether the Insurance Company can be absolved of its liability to pay the compensation in a case where the owner of the vehicle had got the vehicle insured but the accident took place when it was being driven by a person not holding the driving licence"? in a case arising under Section 96 of the Motor Vehicles Act, 1939, observed thus:
This bar on face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression 'breach' occurring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the court that such violation or infringement on the part of the insured was willful. If the insured has taken all precautions by appointing a duly licenced driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to driven by a person not duly licenced, then the insurance company cannot repudiate its statutory liability under Sub-section (1) of Section 96.
(Emphasis supplied)
17. In Gian Chand's 1997 ACJ 1065 case, the Apex Court, while making reference to the decision in Sohan Lal Passi's 1996 ACJ 1044 case, held thus:
We fail to appreciate how the aforesaid decision can he of any avail to the learned Counsel for the respondents-claimants on the peculiar facts of the present case. It has been clearly held by the Tribunal as well as by the High Court that respondent No. l who was permitted to drive the vehicle by respondent No. 9, the insured, was admittedly not having any driving licence. It was not the case of respondent No. 9, the insured, that he did not know that respondent No. 1, whom the vehicle was being handed over, was not having a valid licence. In fact, once he did not step in the witness-box to prove his case, an adverse inference had necessarily to be drawn against him to the effect that the vehicle had been handed over by him for being driven by an unlicensed driver, respondent No. 1. That finding reached by the Tribunal as well as by the High Court must result in exonerating the insurance company of its obligation as the statutory defence became available to it. The High Court, even though agreeing with the finding of fact reached by the Tribunal, has in our view, by misconstruing the ratio of the decision of this Court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan 1987 ACJ 411 (SC), erroneously held that the said defence was not available to the insurance company on the facts of the present case. Even that apart, a Bench of three learned Judges of this Court in Sohan Lal Passi v. P. Sesh Reddy , while upholding the ratio of the decision of this Court in Skandia Insurance Co. Ltd. v. Kolilaben Chandravadan 1987 ACJ 411 (SC), has also taken the same view.
(Emphasis supplied)
18. In Lehru's case supra, a Bench of two judges of the Supreme Court, while extracting Paragraph 12 of the judgment of the three judge bench in Sohan Lal Passi's case, following the same, proceeded to consider Section 149(2) of the Motor Vehicles Act, 1988. The three Judge Bench of the Apex Court in Swaran Singh's case, referred to the observations of the decision in Gian Chand's case supra at Paragraph 58, more particularly over the fact that when the insured had handed over the vehicle for being driven by an unlicensed driver, the Insurance Company would get exonerated from its liability to meet the claim of the third party who might have suffered on account of vehicular accident caused by such unlicensed driver, "The bench" did not disagree with the findings of the three Judge Bench in Passi's case as noticed in Paragraph 60 of the judgment. In Paragraph 64, their lordships held that the Insurance Company was required to establish the breach by cogent evidence and on failure to prove that there was any breach of conditions of policy on the part of the insured, the Insurance Company cannot be absolved of its liability. The observations of the Bench of two judges of the Apex Court in Kusum Rai's 2006 ACJ 1336 case supra, following the ratio laid down in Swaran Singh's AIR 2004 SC 1531 case supra reads thus:
12. This Court in Swaran Singh 2004 ACJ 1 (SC), clearly laid down that the liability of the insurance company vis-a-vis the owner would depend upon several factors. The owner would be liable for payment of compensation in a case where the driver was not having a licence at all. It was the obligation on the part of the owner to take adequate care to see that the driver had an appropriate licence to drive the vehicle. The question as regards the liability of the owner vis-a-vis the driver being not possessed of a valid licence was considered in Swaran Singh (supra) stating:
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 the 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) motor cycle without gear, (b) motor cycle with gear, (c) invalid carriage; (d) light motor vehicle; (e) transport vehicle; (i) 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 (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', 'motor cycle', '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 assessing a driving licence for 'motor cycle without gear', (Sic. May be driving a vehicle) for which he has no licence. Cases may also arise where 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 Claims 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.
(Emphasis supplied)
19. In Meena Variyal's case, the Apex Court observed thus:
Therefore, in a case where a person is not a third party within the meaning of the Act, the Insurance Company cannot be made automatically liable merely by resorting to Swaran Singh's ratio.
This legal position was affirmed by the Apex Court in National insurance co. Ltd. v. Laxmi Narain Dhut .
20. In the light of the aforesaid principles laid down by the Apex Court and applying the same to the facts of this case, there can be no more dispute that the appellant did not discharge his initial burden of establishing that he had done everything within his power by engaging a licensed driver by name Shankar Poojary and placed the vehicle in question in his charge on 25.04.1998 and that he had no knowledge of one Shankar Kiillal the cleaner having taken over the driving of the bus. In the absence of evidence to discharge the burden of proof of the appellant-insured, it cannot but be said that the MACT was fully justified in fastening the liability on the appellant-owner and absolving the Insurance Company of its liability to pay the compensation.
21. Learned Counsel for the appellant in M.F.A. No. 314/2006 Sri. Vishwajith Shetty was not able to point out to relevant material constituting substantial legal evidence over the disability, since admittedly, neither the claimant nor the Doctor was examined, and the sole witness examined was PW-1 the Power of Attorney Holder, as the claimant was busily engaged outside the country. In the absence of the evidence of the claimant and medical evidence of the Doctor the award of Rs. 47,000/- with interest at 6% cannot be said to be on the lower side not calling for interference. In the result, the appeals are without merit and are accordingly rejected.
The amounts in deposit in M.F.A. No. 5490 & 5499/2005 are directed to be transmitted to the MACT, forthwith.