Telangana High Court
United India Insurance Co Ltd vs Jaidu Venkatamma And 4 Ors on 22 July, 2024
Author: G.Radha Rani
Bench: G.Radha Rani
THE HONOURABLE DR.JUSTICE G.RADHA RANI
CIVIL MISCELLANEOUS APPEAL No.776 of 2012
JUDGMENT:
This Civil Miscellaneous Appeal is filed by the appellant - Insurance Company - Opposite Party No.2 (for short O.P.2) aggrieved by the orders in W.C.No.27 of 2008 dated 16.04.2012 passed by the Commissioner for Employee's Compensation and Deputy Commissioner of Labor at Mahabubnagar.
2. The respondents 1 to 4 were the wife, son, mother and sister of late Jaidu Yellaiah @ Yellappa.
3. The case of the respondents 1 to 4 / claimants was that late Jaidu Yellaiah @ Yellappa was employed by opposite party No.1 (for short O.P.1) as driver on his tractor bearing registration No.AP-27-N-3370. On 16.06.2008 at 05:00 PM, while late Jaidu Yellaiah @ Yellappa was ploughing agricultural land of O.P.1 by driving the tractor and was proceeding from one channel to another channel, he lost control over the said vehicle, due to which the vehicle over turned and Yellaiah @ Yellappa fell down under the tractor, sustained grievous bodily injuries resulting in his instantaneous death on the spot. Police, Marikal registered a case in Crime No.40 of 2008 under Section 304-A of IPC. 2
Dr.GRR, J cma_776_2012 The respondents - claimants claimed compensation of Rs.4.00 lakhs with interest @ 18 % per annum contending that the age of the deceased at the time of death was 30 years and he was being paid a monthly wage of Rs.5,000/- plus Rs.100/- as batta per day.
4. The respondent No.5 - respondent No.1 in W.C. filed counter admitting the employment of late Yellaiah @ Yellappa as driver on his tractor bearing registration No.AP-22-N-3370. He contended that the monthly wages were Rs.4,000/-, but not Rs.5,000/- and he was paying batta of Rs.30/- per day, but not Rs.100/- per day. He contended that the driver possessed a valid driving license and that his tractor was insured with O.P.2 and the policy was valid from 09.11.2007 to 08.11.2008 covering the date of accident on 16.06.2008. As such, the O.P.2 was liable to indemnify him and liable to pay compensation to the applicants and prayed to dismiss the application against him.
5. The appellant - Insurance Company - O.P.2 filed his counter contending that late Yellaiah @ Yellappa was not possessing a valid driving license at the time of the accident and that he was travelling as an un-authorized passenger on the tractor at the time of the accident. The O.P.2 further contended that as per the final report one P.Sreenivasulu was said to be the new owner / purchase of the vehicle from O.P.1, but the same was not transferred in his name in Registration Certificate and Insurance Policy. Thus, there was no relationship 3 Dr.GRR, J cma_776_2012 of employer and employee between the deceased and the registered owner of the vehicle and prayed to dismiss the application.
6. The applicant No.1 - the wife of the deceased was examined as AW.1. She got examined a co-worker of the deceased as AW.2 and got marked Exs.A1 to A3 - the certified copies of the FIR, inquest and PME reports on her behalf. The Divisional Manager of the Insurance Company was examined as RW.1 and the copy of the insurance policy was marked as Ex.R1. An employee from the RTO Office, Mahabubnagar was examined as RW.2.
7. On considering the oral and documentary evidence on record, the learned Commissioner for Employee's Compensation and Deputy Commissioner of Labor, Mahabubnagar held that late Jaidu Yellaiah @ Yellappa was employed by O.P.1 as a driver on his tractor bearing registration No.AP-27-N-3370. As such, there was an employer and employee relationship between them and that late J.Yellaiah @ Yellappa died due to the fatal accident caused to him on 16.06.2008 in the course of his employment and both O.Ps.1 and 2 were jointly and severally liable to pay compensation of Rs.6,11,601/- and directed both O.Ps.1 and 2 to deposit the said compensation amount within a period of 30 days from the date of receipt of the order.
8. Aggrieved by the said order passed by the learned Commissioner, the Insurance Company - O.P.2 preferred this appeal. 4
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9. Heard Sri V.Sambasiva Rao, learned counsel for the appellant - Insurance Company and Sri Venkatesh Gupta, learned counsel for the respondents 1 to 4 - claimants and Ms. Sowmya, learned counsel for the respondent No.5 - owner of the vehicle.
10. Learned counsel for the appellant - Insurance Company contended that the Commissioner grossly erred in awarding the compensation and fixing the liability on the Insurance Company along with the owner of the tractor. The learned Commissioner failed to see that the deceased was driving the tractor without having any driving license at the time of the accident against the terms and conditions of the policy. The owner of the tractor having participated in the proceedings before the Commissioner did not file the driving license of the deceased. Accordingly, the Commissioner ought to have fixed the liability on the owner of the tractor alone as per the settled principles of law. The learned Commissioner failed to see that in the final report, it was mentioned that the owner of the vehicle was imposed a fine of Rs.1,000/- under Section 180 of the Motor Vehicles Act, 1988, since the owner had handed over the tractor to an un-licensed driver. Accordingly, the Commissioner ought to have fixed the liability on the owner of the tractor alone as per the conditions of the policy and 5 Dr.GRR, J cma_776_2012 relied upon the judgments of the Hon'ble Apex Court in Sardari v. Sushil Kumar 1 and Beli Ram V. Rajinder Kumar and Another 2.
11. Learned counsel for the respondents 1 to 4 - claimants contended that the owner of the vehicle filed written statement admitting the employer and employee relationship, wages paid by him and that he possessed a valid driving license at the time of the accident. The learned Commissioner on considering all the facts and evidence on record passed a reasonable order. No substantial question of law would arise to set aside the said order passed by the Commissioner. As the Workmen's Compensation Act, 1923 is a beneficial legislation, even if this Court considers that there was breach of any policy conditions, "pay and recovery" might be ordered and prayed to dismiss the appeal.
12. Learned counsel for the respondent No.5 - owner of the vehicle contended that the order of the Commissioner was reasonable and all the questions raised by the Insurance Company were answered by the learned Commissioner in his order, no substantial questions of law would be arising and prayed to dismiss the appeal.
13. The main point on which the Insurance Company is contending in this appeal is whether the learned Commissioner is justified in fixing the liability on 1 2008 Law Suit (SC) 206 2 AIR 2020 SC 4453 6 Dr.GRR, J cma_776_2012 the Insurance Company even after proving by way of pleadings and adducing evidence through RWs.1 and 2 to show that the deceased J.Yellaiah @ Yellappa was driving the tractor without any driving license at the time of the accident.
14. Admittedly, the appellant - Insurance Company had taken a plea in its counter that late Yellaiah @ Yellappa was not having any driving license to drive the vehicle at the time of the accident and got examined the Divisional Manager of the Insurance Company as RW.1 and an employee from the RTO Office, Mahabubnagar as RW.2.
15. RW.1 stated that late Yellaiah @ Yellappa was not having a valid license to drive the vehicle and that the police had imposed a fine of Rs.1,000/- on the owner of the vehicle - O.P.1 and the O.P.1 - owner of the vehicle violated the terms and conditions of the Insurance Policy issued to him. RW.2, the employee from the RTO Office, Mahabubnagar stated that as per the records of their office, no driving license was issued to Yellaiah @ Yellappa, R/o.Kistapur Village, Dhanwada Mandal, Mahabubngar District.
16. The O.P.1 - owner of the vehicle had not adduced any evidence to show that the driver possessed a valid driving license at the time of the accident, as contended by him in his counter.
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17. The Division Bench of the Hon'ble Apex Court in Sardari & Others v. Sushil Kumar & Others (cited supra) on considering the facts of the case, which are similar to this case, held that:
7. The concurrent finding of fact herein is that Sushil Kumar never held a license. The owner of the vehicle has a statutory obligation to see that the driver of the vehicle whom he authorized to drive the same holds a valid license. Here again, a visible distinction may be noticed, viz. where the license is fake and a case where the license has expired, although initially when the driver was appointed, he had a valid license.
The question came up for consideration before this Court in United India Insurance Co. Ltd. Vs. Gian Chand and Others [(1997) 7 SCC 558], wherein it was held;
"12. Under the circumstances, 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 claims of the third party who might have suffered on account of vehicular accident caused by such unlicensed driver...."
A three Judges' Bench of this Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others [(2004) 3 SCC 297], upon going through the provisions of the Act as also the precedents operating in the field, laid down the following dicta;
"84. We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms 8 Dr.GRR, J cma_776_2012 of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle, admittedly, did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand in it at all e.g. a case where an accident takes place owing to a mechanical fault or vis major. (See Jitendra Kumar 22 .)"
In National Insurance Co. Ltd. Vs. Kusum Rai and Others [(2006) 4 SCC 250], a Bench of this Court (wherein one of us was a member) held;
"11. It has not been disputed before us that the vehicle was being used as a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle, thus, was required to hold an appropriate licence therefor. Ram Lal who allegedly was driving the said vehicle at the relevant time, as noticed hereinbefore, was holder of a licence to drive a light motor vehicle 9 Dr.GRR, J cma_776_2012 only. He did not possess any licence to drive a commercial vehicle. Evidently, therefore, there was a breach of condition of the contract of insurance. The appellant, therefore, could raise the said defence."
14. This Court in Swaran Singh clearly laid down that the liability of the Insurance Company vis-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 in possession of valid license has also been considered in para 89 in Swaran Singh (supra).
8. Yet again in New India Assurance Co. Ltd. Vs. Prabhu Lal [2007 (13) JT 246], the Court stated the law in the following terms:-
"33. In the present case, all the facts were before the District Forum. It considered the assertion of the complainant and defence of the Insurance Company in the light of the relevant documentary evidence and held that it was established that the vehicle which met with an accident was a 'transport vehicle'. Ram Narain was having a licence to drive Light Motor Vehicle only and there was no endorsement as required by Section 3 of the Act read with Rule 16 of the Rules and Form No. 6. In view of necessary documents on record, the Insurance 10 Dr.GRR, J cma_776_2012 Company was right in submitting that Ashok Gangadhar does not apply to the case on hand and the Insurance Company was not liable."
However, Swaran Singh (supra) has been distinguished by this Court in some cases holding that where the owner of the vehicle himself is involved, insurance company will not be liable.
In Premkumari & Ors. Vs. Prahlad Dev & Ors. [(2008) 1 SCALE 531], a Bench of this Court following Kusum Rai (supra), opined;
"10. In the case of National Insurance Co. Ltd. v. Kusum Rai and Ors. (2006) 4 SCC 250, the vehicle was being used as a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle was required to hold an appropriate licence therefor. Ram Lal, who allegedly was driving the said vehicle at the relevant time, was holder of a licence to drive light motor vehicle only. He did not possess any licence to drive a commercial vehicle. Therefore, there was a breach of condition of the contract of insurance. In such circumstances, the Court observed that the appellant-National Insurance Co. Ltd., therefore, could raise the said defence while considering the stand of the Insurance Company. This Court, pointing out the law laid down in Swaran Singh (supra) concluded that the owner of the vehicle cannot contend that he has no liability to verify the fact as to whether the driver of the vehicle possessed a valid licence or not. However, taking note of 11 Dr.GRR, J cma_776_2012 the fact that the owner has not appeared, the victim was aged only 12 years, the claimants are from a poor background and to avoid another round of litigation applying the decision in Oriental Insurance Co. Ltd. v.
Nanjappan (2004) 13 SCC 224 and finding that though the appellant-Insurance Company was not liable to pay the claimed amount as the driver was not possessing a valid licence and the High Court committed an error in holding otherwise, in the peculiar facts and circumstances of the case and in exercise of jurisdiction under Article 136 of the Constitution declined to interfere with the impugned judgment therein and permitted the appellant- Insurance Company to recover the amount from the owner of the vehicle."
In Oriental Insurance Co. Limited Vs. Prithvi Raj [2008 (1) SCALE 727], however, noticing Swaran Singh (supra), it was opined;
"10. In the instant case, the State Commission has categorically found that the evidence on record clearly established that the licensing authority had not issued any license, as was claimed by the Driver and the respondent. The evidence of Shri A.V.V. Rajan, Junior Assistant of the Office of the Jt. Commissioner & Secretary, RTA, Hyderabad who produced the official records clearly established that no driving license was issued to Shri Ravinder Kumar or Ravinder Singh in order to enable and legally permit him to drive a motor vehicle.12
Dr.GRR, J cma_776_2012 There was no cross examination of the said witness. The National Commission also found that there was no defect in the finding recorded by the State Commission in this regard."
In Ishwar Chandra & Ors. Vs. The Oriental Insurance Co. Ltd. & Ors. [2007 (4) SCALE 292], this Court held;
"9. From a bare perusal of the said provision, it would appear that the licence is renewed in terms of the said Act and the rules framed thereunder. The proviso appended to Section 15(1) of the Act in no uncertain terms states that whereas the original licence granted despite expiry remains valid for a period of 30 days from the date of expiry, if any application for renewal thereof is filed thereafter, the same would be renewed from the date of its renewal.
The accident took place 28.04.1995. As on the said date, the renewal application had not been filed, the driver, did not have a valid licence on the date when the vehicle met with the accident."
and dismissed the appeal.
18. The 3-Judge Bench of the Hon'ble Apex Court in Beli Ram v. Rajinder Kumar and Another (cited supra), held that:
15. We are of the view that once the basic care of verifying the driving licence has to be taken by the employer, though a detailed enquiry may not be necessary, the owner of the vehicle would know the validity of the driving licence as is set 13 Dr.GRR, J cma_776_2012 out in the licence itself. It cannot be said that thereafter he can wash his hands off the responsibility of not checking up whether the driver has renewed the licence. It is not a case where a licence has not been renewed for a short period of time, say a month, as was considered in the case of National Insurance Company Limited v. Swaran Singh and Others [(2004) 3 SCC 297] where the benefit was given to a third party by burdening the insurance company.
The licence in the instant case, has not been renewed for a period of three years and that too in respect of commercial vehicle like a truck. The appellant showed gross negligence in verifying the same.
16. We are conscious of the fact that in the present case the beneficiary is the driver himself who was negligent but then we are not dealing with a claim under the Motor Vehicles Act but under the Compensation Act, which provides for immediate succor, not really based on a fault theory with a limited compensation as specified being paid. We are, thus, in the present proceedings not required to decide the share of the burden between the appellant as the owner and the first respondent as the driver as may happen in a proceeding under the Motor Vehicles Act.
The Hon'ble Apex Court further held that:
"18. When an employer employees a driver, it is his duty to check that the driver is duly licensed 14 Dr.GRR, J cma_776_2012 to drive the vehicle. Section - 5 of the Motor Vehicles Act provides that no owner or person incharge of a motor vehicle shall cause or permit any person to drive the vehicle if he does not fulfil the requirements of Sections 3 and 4 of the Motor Vehicles Act. The owner must show that he has verified the licence. He must also take reasonable care to see that his employee gets his licence renewed within time. In my opinion, it is no defence for the owner to plead that he forgot that the driving licence of his employee had to be renewed. A person when he hands his motor vehicle to a driver owes some responsibility to society at large. Lives of innocent people are put to risk in case the vehicle is handed over to a person not duly licensed. Therefore, there must be some evidence to show that the owner had either checked the driving licence or had given instructions to his driver to get his driving licence renewed on expiry thereof. In the present case, no such evidence has been led. In view of the above discussion, I am clearly of the view that there was a breach of the terms of the policy and the Insurance Company could not have been held liable to satisfy the claim."
19. The above judgment is pertaining to the case, where the driver had a license, but failed to renew his license for a period of three (03) years and the employer had not checked whether the driver had renewed his license or not and considered it as a gross negligence on the part of the employer. But the present case is that the owner of the tractor without even checking whether the 15 Dr.GRR, J cma_776_2012 driver had a license to drive the tractor, had handed over his tractor to the deceased driver. As such, the negligence on the part of the employer is gross in nature than the facts of the case of the Hon'ble Apex Court.
20. As such, this Court considers that the respondent No.5 - O.P.1 - owner of the vehicle had violated the terms and conditions of the insurance policy. As such, he is alone liable to pay compensation to the claimants.
21. However, considering that the Workmen's Compensation Act, 1923 is a beneficial legislation and as the compensation amount was already deposited by the Insurance Company while preferring this appeal, this Court finds it reasonable to direct the Insurance Company to recover the same from the respondent No.5 - O.P.1 - owner of the vehicle in Execution Proceedings. The O.P.2 - Insurance Company is at liberty to recover the amount of compensation already deposited by it from the owner of the vehicle in Execution Proceedings and the respondents 1 to 4 - claimants are permitted to withdraw the balance amount, if any deposited by the Insurance Company.
22. In the result, the Civil Miscellaneous Appeal is allowed exonerating the Insurance Company from its liability, as the respondent No.5 - O.P.1 had committed breach of the terms and conditions of the insurance policy. However, as the entire amount was deposited by the Insurance Company at the time of preferring the appeal, the respondents 1 to 4 - claimants are permitted to 16 Dr.GRR, J cma_776_2012 withdraw the balance amount, if any and the appellant - Insurance Company is permitted to recover the same from respondent No.5 - O.P.1 - owner of the vehicle in Execution Proceedings.
No order as to costs.
As a sequel, miscellaneous applications pending in this appeal, if any shall stand closed.
_____________________ Dr. G. RADHA RANI, J Date: 22nd July, 2024 Nsk.