Punjab-Haryana High Court
National Insurance Co. vs Surjeet Kaur on 19 December, 2000
Equivalent citations: 2003ACJ1518
Author: R.L. Anand
Bench: R.L. Anand
JUDGMENT R.L. Anand, J.
1. This appeal filed by the National Insurance Company has been directed against the award dated 24.7.1999, passed by the M A.C.T., Patiala, who allowed the claim petition of Surjeet Kaur and others u/s 166 of the Motor Vehicles Act, vide which the Tribunal in para-11 of the award held that the compensation which was awarded to the claimants vide award dated 21.5.1992 was just and fair compensation and there is no necessity to interfere in the same. Meaning thereby that the award dated 21.5.1992 was affirmed. Vide the impugned order dated 24.7.1999, the finding is also to the effect that the Insurance Co. is liable to the full extent and as such, the Tribunal also directed it to pay to the claimants the awarded amount along with interest up to date and Rs. 5,000/- as costs.
2 The brief facts of the case are that Surjeet Kaur and others filed a claim petition under Section 166 of the Motor Vehicles Act against Sardara Singh (owner). Gurdev Singh (driver) and National Insurance Co., and claimed compensation by alleging that the deceased Gurpal Singh, aged 45 years, was a School Teacher and he was also a dairy owner. He died on 13.6.1990 at 2.00 p.m. when he was returning to his village on Hero Majestic moped No. CHP-4688 and was knocked down by truck No. PAT-8380. The claim petition was originally filed against Sardara Singh (owner) and Gurdev Singh (driver). At that time, the Insurance Co. was not impleaded. Notice was issued to the respondents bul they were proceeded ex parte on 1.4.1992 and 22.2.1992, respectively, Thereafter, ex parte evidence was recorded and the Tribunal was pleased to pass an award on 21.5.1992 awarding a sum of Rs. 1.80 lacs to the claimants along with interest @ 12% from the date of filing of the application till payment. Thereafter, the claimants filed an execution application on 25.11.1995. Shri B.B. Gupta, Advocate, gave the appearance on behalf of the National Insurance Company and filed the objection petition against the award.
3. On 26.5.1997, the Tribunal decided the objections and held that liability of the insurer arising under the award shall be adjudicated on merits, after hearing both the parties. Resultantly, the objection petition of the Company was accepted to the extent indicated above. Thereafter, written statement of the company was taken on record and vide order dated 4.8.1997, the following issues were framed :-
"1. Whether Gurpal Singh died due to motor vehicle accident on 13.6.1990 driving a truck No. PAT-8380 rashly and negligently by respondent No. 2 ? OPA
2. To what amount claimants were entitled to recover the compensation amount from respondent No. 3 ? OPA
3. Relief."
4. On 29.1.1999, the following additional issue was also framed :-
"2A Whether the respondent No. 2 was holding a legal and valid driving licence, if so its effect ? OPR-3"
5. The claimants examined Surjit Kaur as AW-1, who testified that her deceased-husband was a teacher in a Govt. school at Masol. He was drawing Rs. 2,700/-
per month as salary and was also running a dairy farm and was earning Rs. 1,000/- per month from that profession. She and her husband had seven children, who were also dependent on the income of the deceased. Had the deceased been alive, he would have been promoted to higher post in the education department and his salary would also have increased. The claimants further examined AW-2 Pritam Singh. Pritam Singh and Mohinder Singh were standing at the Bus Stand, Banur, when they saw the deceased driving his moped on the correct side of the road at normal speed and a truck came from behind at a very high speed. The driver of the truck did not blow any horn and was driving rashly and negligently. The truck hit against the deceased as a result of which he received fatal injuries and died at the spot. The matter was reported to the police by Pritam Singh (AW-2) and FIR, Ex.A-1 was recorded. Jaswinder Singh (AW-3) testified that he knew Gurdev Singh but had not seen him for two years and stated that Gurdev Singh might have died. He testified that Gurdev Singh was the driver of the offending truck. He also stated that the driver Gurdev Singh was a good driver and he possessed a valid driving licence.
6. The company examined Parveen Rajapurkar, RW-1, Assistant of the office of Regional Transfer Officer, Gwalior, who testified that on 19.11.1986, only two licences were issued by his office in favour of Ghan-shyam Dass Goyal and Gopal Singh Kushwa. In accordance with the record of his office, licence No. G-19404 dated 19.11.1986 had not been issued or renewed by his office. This witness proved relevant entries in the Register, Ex.R1 and R2 and the report dated 15.3.1996, Ex.R3. The company further examined Jagdeep Singh, Record Clerk, Judicial Record Room, Patiala as RW-2, who deposed from the record of criminal case State v. Gurdev Singh decided on 3.8.1996 that during the pendency of the criminal proceedings in FIR No. 44 of 1990 u/s 340-A, IPC, accused Gurdev Singh had expired as a result of which the proceedings stood abetted and the file was sent to the record room. He further testified that the police did not take into possession any driving licence of the accused nor the driving licence of Gurdev Singh was produced along with the report u/s, 173, Cr.P.C. However, a photo copy of the driving licence is on the record of the criminal case, which shows that the licence was valid from 19.11.1986 to 18.11.1989 and, thereafter, it was renewed up to 17.12.1992. The photo copy of the same is Mark 'A' on the record.
7. The parties advanced arguments before the trial Court and under issue No. 1, it was held by the Tribunal that the accident took place on account of rash and negligent driving of Gurpal Singh, who was negligent in driving truck No. PAT-8380. Under issue No. 2, it was observed that the amount of compensation awarded by the Tribunal vide award dated 21.5.1992 is just compensation and the claimants are entitled to the said compensation. Rather, the Tribunal was of the view that the compensation awarded earlier was on the lower side. Issue No. 2 A was decided against the company and it was held by the Tribunal vide decision dated 24.7.1999 that "the material on record is not sufficient to hold that Gurdev Singh did not possess a valid driving licence on the date of the accident." This issue was decided in favour of the claimants and against the company and directions were given to the company to pay the amount of compensation awarded by the Tribunal vide award dated 21.5.1992 with interest.
8. Aggrieved by the award of the Tribunal, the present appeal by the Insurance Company.
9. I have heard the counsel for the parties and with their assistance have gone through the record of this case.
10. It will be appropriate for me to reproduce paras 12 and 13 of the order dated 24.7.1999, at the first instance, which read as under :-
"12. In respect of this, respondent 3 has examined Parveen Rajapurkar (RW1) who testified that only two licences were issued on November 19, 1986 in favour of Ghanshyam Dass Goyal and Gopal Singh Kushwa by the Regional Transport Officer. Gwalior and he also produced the relevant pages of the register which are Exs. R1 and R2. The witness further stated that licence No. G-19404 dated November 19, 1986 had not been issued by their office. The respondent (No. 3) further relied upon the evidence of Jagdeep Singh (RW2) who produced the criminal case record in FIR No. 44/90 which had been recorded regarding the death of Gurpal Singh. The witness testified that the accused had died during the pendency of the trial and the case had been consigned. He also testified that nq original driving licence had been taken into possession by the police and as such no driving licence had been produced in the court along with the challan. However, copy of the driving licence in the name of Gurdev Singh issued by the Licensing Authority Gwalior on November 19, 1986 bearing No. 9404/86 was on the file and it had been renewed upto November 1992.
13. The question to be considered is whether the evidence of Parveen Rajapurkar (Rw1) can be accepted in the absence of the original driving licence which was not shown to the witness. It is not known when Gurdev Singh died, Gurdev Singh was ex parte before this Tribunal. Therefore, it cannot be said with any certainty whether the driving licence in respect of which the witness has made a report and regarding which report Ex. R3 was also obtained from the Regional Transport Authority. Gwalior relates to Gurdev Singh at all. It is quite likely that Gurdev Singh, a truck driver by profession may have given a fake driving licence to the police and may have retained a valid driving licence with himself to continue in the profession of driving trucks even after his ar-
rest. Until and unless it was established that the driving licence taken into possession of Gurdev Singh was a false and fake one, the evidence of Parveen Rajapurkar (RW1) and Report Ex. R3 cannot be accepted. Gurdev Singh has died. He did not appear to defend the case before this Tribunal and was proceeded ex parte therefore, the material on record is not sufficient to hold that Gurdev Singh did not possess a valid driving licence on the date of the accident. Issue 2-A is decided in favour of the claimants and against respondent No. 3."
11. The frontal argument of the counsel for the company is that it is proved on the record that the driving licence of Gurdev Singh is a faked one. The driver was not holding a valid driving licence. The owner of the vehicle committed a wilful breach when he employed Gurdev Singh, who was not holder of a valid driving licence. In these circumstances, the company is not liable to pay any compensation which can only be paid by the driver or by the owner to the claimants. He submitted that the company had undertaken to reimburse the insurer provided the insurer complies with the conditions of the policy. If he commits a breach with regard to the conditions of policy, then, the company is not liable.
12. On the contrary, counsel for the respondents submitted that onus of issue No. 2 A was on the company. The company has miserably failed to discharge its onus. The evidence which has been produced by the company is totally not reliable from which a reasonable inference cannot be drawn that Gurdev Singh was not holding a valid driving licence. In fact, Gurdev Singh had a valid driving licence. Mark A is photo copy of the driving licence, which was produced from the record of the criminal file. It shows that the driving licence was issued to Gurdev Singh by the licensing authority of Gwalior (Madhya Pradesh). The driving licence was renewed upto 17.11.1992. Unfortunately. the company has not undertaken any steps to examine the owner of the vehicle. The driver has already expired. In these circumstances, the company cannot escape from the liability. It was also pleaded by the counsel for the respondents that the company is bound to pay the compensation to the claimants. At the most, it can recover the amount from the owner or the driver. Even if it is assumed for the sake of arguments that the owner of the vehicle has committed any breach with regard to the policy, it was submitted that the company had undertaken to reimburse the insurer against the third party risk. The claimants are the third party and they are not bound by any privity of contract between the insurance company and the insurer.
13. I have considered the rival contentions of the parties and am of the considered opinion that so far as the Insurance company is concerned, it cannot escape from its liability to pay compensation to the third party, which was never a party to the contract between the company and the insurer. They were strangers.
14. Section 149(4) of the Act lays down as follows :-
"Where a certificate of insurance has been issued under sub-section (3) of Section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any conditions other than those in clause (b) of subsection (2) shall, as respects such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of Section 147, be of no effect :
Provided that any sum paid by the insurer in or to-wards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person."
15. A reading of the above would show that so far as the company is concerned, it is liable to pay the compensation and if ultimately it is found that the driver did not have the necessary driving licence, the Tribunal has the power to give necessary directions for reimbursing the insurance company. This point came up for consideration before the Orissa High Court in G. Sobha and others v. Sunil Kumar Sahu and others, 2000(1) Civil and Rent Judicial Reports, (sic), and in para 8 of the judgment, it was held as follows :-
"The next question is as to whether this amount should be paid by the Insurance Company, which is the insurer in respect of both the vehicles. It appears that no specific issue had been framed on this aspect- It may be necessary for the Insurance Company and the owners of both the vehicles to adduce further evidence on this aspect which is required to be determined afresh by the Claims Tribunal. The learned counsel for the claimant-appellants submitted that the question as to whether both the owners would be liable or the Insurance Company being their common insurer would be liable is ultimately a matter between the two owners and the Insurance Company. He has submitted that keeping in view the principles envisaged in Section 149(4) of the Act, the Insurance Company can be asked to pay the amount to the claimants and thereafter depending upon the finding of the Tribunal it can claim reimbursement from both the owners or either of the owners. In the present case, the counsel for the Insurance Company had submitted that the drivers of the vehicles did not have valid driving licence, ft is ultimately found that the Insurance Company is not liable for the entire amount, necessary direction for reimbursement can be issued by the Claims Tribunal. Keeping in view the policy of the legislature as contained in Section 149(4) of the Act, it would be appropriate to direct that the compensation amount of Rs. 1,80,900/- should be paid by the Insurance Company to the claimants and if ultimately it is found that the drivers did not have necessary driving licences, necessary directions can be issued by the Claims Tribunal for reimbursing the Insurance Company."
16. This matter was further examined by the Andhra Pradesh High Court in Divisional Manager, New India Assurance Co. Ltd. v. Tuma Gurava Reddy and others, 1999 ACJ 1077, and while interpreting the provisions of Section 149(2)(a)(ii), it was held that if there is no deliberate breach on the part of the owner of the vehicle when he allowed the vehicle to be driven by a person not holding any licence, in such a situation, the insurance company is not exempt from liability on the ground that the driver of the offending vehicle had no vatic! driving licence at the time of the accident. It was further held that it is beyond anybody's comprehension that the owner should first verify the genuineness of the licence with the concerned authority before entrusting the vehicle to the driver. If the owner has taken reasonable steps and he had acted bona fide and discharged his statutory obligations, the insurance company will be liable to pay the compensation. In this case, the judgments reported in Kashiram Yadav and another v. Oriental Fire and Genl. Ins. Co. Ltd., 1989 ACJ 1078, Sohan Lal Passi v. P. Sesh Reddy, 1996 ACJ 1044 (SC) and Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 ACJ 411 (SC), were also taken note of.
17. I am in agreement with the above ratio of the judgment of the Andhra Pradesh High Court, which has taken note of the case law which has been even relied upon by the counsel for the appellant.
18. When an owner of the vehicle engages a driver, what should be his natural conduct ? First of all, he has to see the driving licence whether it is valid on the date of engagement or not and whether, apparently, it has been issued by the Licensing Authority or not. Since the owner of the vehicle hands over a costly property to the driver he can take the driving test of such a driver. His sense of prompt attention, character, good conduct, etc. can be further seen. After being satisfied, a valuable vehicle is handed over to the driver. It is not expected that the owner of a vehicle should go to the office of the Licensing Authority in order to check whether the driving licence has been validly issued or not. Supposing a person has a valid driving licence issued from Calcutta or Assam and on account of family circumstances, he comes to Punjab. He is engaged by an owner of the vehicle which ultimately meets with an accident. Such owner is not expected to go to Calcutta or Assam for the verification of the driving licence. He places his trust on the driver who, prima facie, shows the driving licence. In these circumstances, the onus is very heavy on the Insurance Company to show that the driver had no valid driving licence or that the owner of the vehicle committed a wilful breach when he engaged a person with no proper driving licence that the act of the owner was so reckless that he did not adopt a reasonable care while engaging the driver. If the insurance company is in a position to show that it was to the knowledge of the owner that the driver had been disqualified from driving a vehicle by any competent authority, certainly, the company may have a case.
Breach is wilful act committed by a person fully knowing the consequences of his act.
19. Let us now see what is the evidence in this regard, which has been produced by the insurance company on the record of the lower court.
20. The insurance company has mainly relied upon the statement of RW-I Parveen Rajapurkar. He wanted to show that on 19.11.1986 only two driving licences were issued by the Licensing Authority at Gwalior in the names of Ghanshyam Dass Goyal and Gopal Singh Kushwa and that the driving licence No. G-19404 dated 19.11.1986 was not issued or renewed by his office, as per the register brought by him. In the cross-examination he admitted that he did not see any record regarding the licence No. G-19404 of 1986 so mentioned in the application dated 15.3.1996. In these circumstances, the information supplied by the witness vis-a-vis driving licence No. G-19404 is a faulty one. This witness admitted that the office maintains 26 registers simultaneously regarding the issuance of the driving licences and their renewal but he has only brought one register. There is no statement of the witness to the effect that all the 26 registers were consulted by him. He admits that even if a driving licence is not entered in the register regarding its issuance/renewal, still it will be a valid licence if it is signed by the licensing Authority. He did not know who was the licensing authority of Gwalior in November, 1986 or November 1989 nor did he knew who was the licensing clerk at the relevant time because he had joined the seal in April, 1998. He also admitted that there is a Naya Bazar in Gwalior. Finally, this witness has to say that he cannot say if any driving licence was issued by his office in the name of Gurdev Singh son of Jageer Singh, resident of Naya Bazar, Gwalior and similar was his reply with regard to renewal of any licence in favour of that person. He was not in a position to say nor he had verified as to how many driving licences were issued and renewed by his office in the name of Gurdev Singh. He also admitted that he had not verified all the records of driving licences issued in the name of Gurdev Singh before he made a report on the application dated 15.3.1996 as it was not possible for him to check all the record. In the light of this statement, it is very difficult for me to give a finding that the document Mark 'A' is a faked document. The Company has purposely not examined the owner of the vehicle in order to show whether the owner adopted a reasonable care before engaging Gurdev Singh. Document Mark 'A', prima facie, indicates that this driving licence was issued in the name of respondent No. 2. It was valid from 19.11.1986 to 18.11.1989 at the first instance and then it was renewed upto 17.11.1992. Somebody has signed and a seal has been put under his signatures. It might be possible that Gurdev Singh might have given the photo copy of his driving licence to the police at the time of his arrest by retaining the original with him so that he may be able to drive subsequently after the date of his release.
21. Be that as it may, assuming for the sake of arguments that the driving licence of Gurdev Singh is a faked one, how the insurance company can escape from the liability so far as the third party is concerned. The agreement is between the insurance company and the insurer. This agreement is not binding upon a stranger. The insurance company had taken the liability to reimburse to the insurer vis-a-vis the third party. Claimants are the third party and, therefore, they have an independent right to claim compensation from the insurance company which has the right to get reimbursement from the owner of the vehicle if it is established that the said owner had committed a wilful breach of the contract.
22. Faced with this difficulty, counsel for the appellant relies upon a judgment of Hon'ble Supreme Court reported in Kashiram Yadav's case (supra), regarding which I have already made a reference above. In this case, the owner of the vehicle with the knowledge entrusted the tractor to a person who did not have a licence and such person caused an accident. In this background, the Hon'ble Supreme Court was pleased to hold that there is a breach of condition of policy and, as such, the insurance company is exempt from its liability.
23. Counsel for the appellant also relies upon Beet Singh and others v. Satbir Singh and another, 1999(2) PLR 405 : 1999(4) RRR 164 (P&H). Again, this judgment talks of the breach of the contractual agreement. What is a breach, in my view, I have already tried to explain above. If there is no wilful act on the part of the owner in the engagement or entrustment of a vehicle to the third person, that will not be a breach within the meaning of section 149. Breach of the policy is a question of fact, which has to be proved by the Insurance Company by preponderance of evidence. The owner in this case has not been examined. Even if the owner was put in the witness box and he had not supported the case of the insurance company, the insurance company would have the right to cross-examine this witness.
24. In Skandia Insurance Co, Ltd, v. Kokilaben Cltandravadan and others, 1987(1) PLR 665, the Hon'ble Supreme Court held that if the insured is not at all at fault and has not down anything he should not have done, in such a situated, the insurer cannot escape from the allegation of indemnifying the insured.
25. Before I part with this judgment, I may also make a brief mention to a judgment of the Madhya Pradesh High Court in National Insurance Co. Ltd, v. Prem Narain Sahu, AIR 1998 Madhya Pradesh 66, wherein it was held that the Insurance Company cannot avoid its liability on the ground that the vehicle was being driven by the person having no valid driving licence, and to the judgment reported in Surjan Ram v. Anchal Singh (died) and others, 1997(3) PLR 844 : 1997(3) RRR 670 (P&H)(DB), wherein it was held that the Surveyor's report by itself could not show that the driving licence was invalid. This matter has to be proved as a matter of fact and the evidence is lacking in this regard.
26. Thus, a resume of my above discussion is that the insurance company is liable to pay the compensation to the third party if it has undertaken to indemnify to the insurer and the company can recover the amount from the owner if the Tribunal so orders. Further, I have tried to show that since there was no wilful breach on the part of the owner in this case and that the insurance company has not been able to discharge its onus under issue No. 2A, therefore, it cannot escape from its liability.
27. In this view of the matter, I do not see any merit in this appeal and the same is hereby dismissed with no order as to costs.
28. Appeal dismissed.