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Delhi District Court

Shanti Devi vs Zakir Hussain on 18 December, 2012

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18.12.2012

SHANTI       DEVI       VS   ZAKIR HUSSAIN

Suit no. 634/04

Appearance:          Sh. L.C Sethi counsel for D.H.
                     Sh. A.K.Chhabra, counsel for J.D.
ORDER

1. The claimants namely Shanti Devi and others preferred a claim petition U/s 166 & 140 of the Motor Vehicles Act 1988 as amended upto date (herein called " the Act") on 22.11.2001 for claiming compensation on account of accidental injuries suffered by late Jagdish Yadav after arraying Zakir Hussain as driver and Ashwani Sahney as owner and New Indian Insurance Company as insured of offending vehicle. An award was passed on 02.03.2010 against respondents with the following observations:-

"Insurer has through the testimony of R3W1 proved the report Ex.RW1/1 with regard to driving licence of R1. It is the letter dated

23.01.2006 from RTO, Haldwani addressed to Sh.A.S.Yadav, Ld Predecessor wherein it has been informed that the licence No. 7289/TNK/89 issued on 13.10.1989 was not in fact issued from the authority as the office of Tanakpur ceased to exist at that time. R2 did not join the claim proceedings despite knowledge of the same.

As such recovery right is granted to R3 against R2 since it can be presumed at this stage that it was in the knowledge of R2. That the driving licence of R1 was not a valid one. Insurer is granted recovery right against insured"

2. Thereafter, an execution petition was preferred by insurance company against owner Ashwani Sahney for recovery of amount deposited for claimants. In response to notice issued owner/R2 marked his presence and moved an application U/o 9 rule 13 r/w Section 151 CPC for setting aside of judgment/award along with another application U/s 5 of Limitation Act. During the course of proceedings the application was allowed to a limited ground regarding proof of valid driving licence of driver of offending vehicle at the time of accident and following issues are framed:­ Issues:-

1 Whether the driver/Zakir Hussain was having a valid and effective driving licence at the time of accident?

2 Relief.

3. To prove that the driver had a valid driving licence at the time of accident the applicant/owner examined Sh. B.K.Arya, Licencing Clerk, ARTO, Mathura, U.P as a witness. This witness produced summoned record(licence register) from Licencing Authority, Mathura and stated that as per register, the licence no.623/MTR 94 was issued from licencing authority, Mathura on 11.04.1994 in the name of Zakir Hussain S/o Mehar Khan R/o Laxmi Nagar, Yamuna Par, Mathura. He also stated that driving Suit no. 634/04 Page no. 2/7 3 licence of driver Zakir Hussain was renewed from Licencing Authority for five times. The said licence renewed from 11.04.1994 to 10.04.1997 and after that the same was renewed from 3.7.1998 to 2.7.2001 and same was again renewed on 9.01.2001 to 8.08.2004 and again renewed from 15.01.2005 to 14.01.2008 and again renewed from 15.01.2008 to 14.01.2011. He also stated that driver was having valid and effective licence on 09.05.2001. The applicant/owner himself appeared into witness box and stated that driver employed by him was possessing valid driving licence on date of accident i.e 9.5.2001. The driver was having the said driving licence since 1994 and the same has been renewed five times from time to time from the Licensing Authority, Mathura and it is still valid today. He also stated that he has verified the driving licence, tested the driver about his capacity to drive and appointed him.

4. In rebuttal, insurance company examined Sh. Subhash Chand, Investigator, from New India Assurance Company Ltd and stated that during verification from RTO Mathura, U.P, it has come to light that driver namely Zakir Hussain was holding originally driving licence no.7281/Tanakpur/89 dated 3.10.1989, thereafter, it was renewed in the year 1994. He further clarified that no driving licence was issued originally from Mathura Office and it has only renewed from RTO Mathura, U.P.

5. I have heard the arguments advanced by ld.counsels for parties and gone through the material available on record.

6. Insurance company argued on two points:-

Issue No.1 As to whether the driver namely Zakir Hussain of the offending vehicle possessed a valid driving licence at the time of accident. According to Ld. counsel Sh. L.C.Sethi of Suit no. 634/04 Page no. 3/7 4 Insurance Company, the driving licence no.J-623/Mathura/94 possessed by R1/driver was renewed by the licencing authority Mathura is not genuine as the original driving licence no.DL-7289/DNK/89 dated 03.10.1989 was not in fact issued by Licencing Authority as the office of Tanakpur ceased to exist at that time and it was found to be fake. Th Ld.counsel placed reliance upon the judgment of Hon'ble Supreme Court in National Insurance Company Ltd Vs. Laxmi Narayan Dutt decided on 02.03.2007 holding that no renewal of licence in accordance with law can transform a fake licence as genuine. On the contrary, the case of the owner of vehicle is that driver possessed a valid driving licence at the time of accident. Besides this, the owner also pleaded that the driver Zakir Hussain was working as a driver with him, was holding the said driving licence since 1994 and it has been renewed five times from time to time from Licencing Authority, Mathura and is still valid today. He also stated that he has verified the driving licence tested the driver about his capacity to drive and appointed him.

7. In the case of National Insurance Company Vs. Swaran Singh 2004 ACJ 1 (SC), held as under:-

: (102) (iii) The bench of policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of section 149, has to be proved to have been committed by the insurer 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 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 licensed driver or one who was not Suit no. 634/04 Page no. 4/7 5 disqualified to drive at the relevant time.

(iv) The insurance companies are, however, ever 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 wherefor would be on them.

(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 the insured unless the said breach or breaches of 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 section 149 (2) of the Act."

Thus, the above said observation made by Hon'ble Apex Court makes it clear that in order to discharge the insurance company from its liability, it has also to prove that insured has committed breach of terms and conditions of the policy.

8. Here in this case the evidence of owner supported with documents shows that the owner examined, saw the driving licence and verified the renewed driving licence and after being satisfied himself that the driver had a licence and was driving very well, thus there is no breach of terms and conditions of the policy. Moreover, from the statement of Sh. B.R. Arya, Licencing Authority it manifests that the licence no. J-623/M/94 was issued in the name of Zakir Hussain and was renewed time to time. The insurance company cannot be absolved its liability. The insurance company has not brought on Suit no. 634/04 Page no. 5/7 6 record any material that insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of policy regarding driving of vehicle by duly licenced driver.

9. Now coming to the second point, the insurance company vociferously argued that in the confirmation report of renewal of driving licence issued by RTO Mathura Authority placed on record by owner, the fact about of old driving licence has been deliberately concealed. It has been alleged that because the owner of offending vehicle knew that old driving licence has turned out to be fake. Therefore, he in collusion with Transport Authority managed to procure the verification report of driving licence without mentioning of old driving licence.

10.I have considered these arguments but at the outset even if the argument is acceptable in favour of insurance company but then the factual position comes out that on the basis of an old fake driving licence from Tanakpur, the driver managed to procure a renewal from Mathura Authority. The owner of the vehicle in this case has fully discharged his onus of verification at the time of employment and subsequently in the proceedings showing that he had knowledge of only renewed driving licence which was genuinely renewed even if the earlier driving licence was fake. The owner/R2 is protected in this regard by the judgment of Apex Court (Swaran Singh's case).

11.In view of the reasons stated in the preceding paragraph in regard to the validity of driving licence, it is observed that there is no breach of policy conducted by the insured with regard to driving licence of driver of the offending vehicle. The insurance company is not entitled to be granted the recovery right of compensation amount from owner of offending vehicle.

Relief:-

As discussed above, the insurance company has no recovery rights against owner.

12.The insurance company without prejudice to the above also argued that the ld. Tribunal must also take cognizance of the conduct of owner/insured of the offending vehicle because he remained ex-parte during the claim proceedings and did not discharge his part of duties by adducing the aforesaid driving licence of driver namely Zakir Hussain. This non participation has resulted in financial loss to the insurance company because it engaged its machinery for verification of the licence and has also made to suffer due to interest obligation and posed upon the awarded compensation.

13.It is a matter of record that owner brought on record his aforesaid evidence only after the recovery proceedings have been initiated against him by insurance company. In these circumstance, it would be appropriate if the owner also shoulder responsibility towards the interest payment which insurance company has been ordered to bear. It would be appropriate that a sum of Rs. 80,000/- be paid by the owner of offending vehicle/applicant to the insurance company on this count and owner is directed to deposit a demand draft in the name of insurance company within one month. Put up for compliance for 18.01.2013.

Pronounced in the open court
on 18.12.2012                                              (VINEETA GOYAL)
                                                           PO : MACT (SOUTH-01)
                                                           18.12.2012


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