Himachal Pradesh High Court
National Insurance Company Limited vs Kamal Kishore & Others on 5 July, 2019
Author: Jyotsna Rewal Dua
Bench: Jyotsna Rewal Dua
IN THE HIGH COURT OF HIMACHAL PRADESH,
SHIMLA
FAO(MVA)No.564 of 2018
.
Reserved on : 24.06.2019
Decided on : 05.07.2019
National Insurance Company Limited ....appellant
Versus
Kamal Kishore & others ...respondents.
................................................................................................
Coram
The Hon'ble Ms. Justice Jyotsna Rewal Dua, Judge.
Whether approved for reporting?1 Yes
For the appellant. : Mr. Jagdish Thakur, Advocate.
For the respondents : Mr. G.S. Palsra, Advocate, for
respondents No. 1 to 5.
Ms. Anjali Soni Verma, Advocate,
for respondents No. 6 & 7.
Jyotsna Rewal Dua, J (Oral)
The points for adjudication raised by the insurer in the present appeal directed against the award dated 28.6.2018 passed by learned Motor Accident Claims Tribunal-(II), Mandi, in claim petition No. 44 of 2013 are:-
1. Liability of insurer towards third party risks in respect of vehicle, not registered in accordance with Chapter-IV of Motor Vehicles Act and whose temporary registration had also expired.1
Whether reporters of the local papers may be allowed to see the judgment?
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 22. Determination of income of deceased in absence of any documentary evidence or any other cogent and reliable evidence on record.
.
3. Ancillary questions in respect of application of multiplier and interest to be awarded.
2. Point No.1 The relevant facts for determination of this point are undisputed. These are:-
2(i). S/Shri Ram Krishan, Kishori Lal and Ramesh Kumar, were travelling on 5.2.2013 in Tata Nano car, owned by respondent No.6 and driven by respondent No.7, when it rolled down the road due to rash and negligent driving of respondent No.7. As a result of this accident, Shri Ram Krishan, died on the spot and the other two passengers also suffered injuries. First Information Report No. 21/2013 was lodged against the respondent No.7 on 6.02.2013. Police Challan was presented under Sections 279, 337, 338 & 304-A of the Indian Penal Code and Section 192 of the Motor Vehicles Act. The claimants are two daughters, one son, widow and mother of the deceased (Shri Ram Krishan). Claim petition was filed by them on 12.9.2013 seeking Rs.15,00,000/-, as compensation alongwith interest at the rate of 18% per annum. Learned Motor Accident Claims Tribunal-(II), Mandi, awarded an amount of Rs.26,40,400/-
(Rupees Twenty six lakhs forty thousand and four hundred only) ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 3 as compensation to the claimants, alongwith interest at the rate of 7.5% per annum from the date of filing of petition till its realization. The owner & driver did not defend the claim petition .
and were proceeded ex-parte. The driver/respondent No.7 was held to be in possession of a valid driving licence and the accident was held to have been caused due to rash and negligent driving of respondent No.7. Liability to satisfy the award was fastened upon the insurer.
2(ii) The Insurance Company/appellant in its reply filed to the claim petition inter-alia took following preliminary objection:-
"1. There is a breach of terms and conditions of the Insurance Policy i.e. the vehicle was driven without valid and effective R.C. and fitness Certificate against the violation of M.V. Act also, therefore the replying respondent is not liable to pay any compensation to the petitioners."
2(iii). Learned Motor Accident Claims Tribunal-(II), Mandi, framed an issue:-
"3. Whether the respondent No.2 was driving the vehicle in violation of terms and conditions of the insurance Policy and without driving licence?
OPR"
However, perhaps this issue was not argued before the learned Tribunal in the manner canvassed in the present appeal and therefore has not been appropriately dealt with by the learned Motor Accident Claims Tribunal-(II), Mandi, below. Be that as it may, since the issue is purely a ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 4 question of law (facts undisputed) and reading of entire evidence including statement of RW-1 Sh. Darshan Singh, to .
whom suggestions regarding reasons for non-registration of vehicle were put by claimants themselves, suggests that it arose for consideration even before learned Motor Accident Claims Tribunal-(II), Mandi, and that parties were aware about this issue being involved in the case, therefore, it is being taken up for adjudication.
3. Contentions.
3(i). Learned counsel for the appellant contended that in the instant case, the vehicle in question was admittedly not registered in accordance with Chapter-IV, of the Motor Vehicles Act. On the date of accident, it's temporary registration had also lapsed and no steps were taken for registration of the vehicle as such, therefore, the insurer is not liable to satisfy the awarded amount. The appellant has thus prayed that it is not liable at all to discharge the liability determined by the learned Tribunal and has prayed for quashing of the award on this ground.
3(ii) In support of his contentions, learned counsel for the appellant has relied upon the judgment in Narinder Singh Vs. New India Assusrance Company Limited and ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 5 others, (2014) 9 Supreme Court Cases 324, wherein it was held as under:-
.
"12. Indisputably, a temporary registration was granted in respect of the vehicle in question, which had expired on 11.1.2006 and the alleged accident took place on 2.2.2006 when the vehicle was without any registration. Nothing has been brought on record by the appellant to show that before or after 11.1.2006, when the period of temporary registration expired, the appellant, owner of the vehicle either applied for permanent registration as contemplated under Section 39 of the Act or made any application for extension of period as temporary registration on the ground of some special reasons. In our view, therefore, using a vehicle on the public road without any registration is not only an offence punishable under Section 192 of the Motor Vehicles Act but also a fundamental breach of the terms and conditions of policy contract."
Learned counsel thus contended that plying of vehicle without valid registration certificate amounts to fundamental breach of policy as held in Narinder Singh's, case (supra).
3(iii). Per contra, learned counsel for the respondent contended that the judgment relied upon by the appellant will not be applicable to cases of third party liability.
4. Observations.
4(a) The Tata Nano vehicle was purchased on 29.9.2012. The Insurance policy Ex.PX shows that this vehicle was insured from 29.09.2012 to 28.09.2013. The document also shows that the vehicle was comprehensively insured i.e. it covered 'own damage basic' as well as 'third ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 6 party basic'. The vehicle bore a temporary registration No.HP-33-T-9255.
.
4(b). Section 43 of the Motor Vehicles Act deals with temporary registration of the vehicles, which provides as under:-
"43. Temporary registration.Notwithstaning anything contained in section 40 the owner of a motor vehicle may apply to any registering authority or other prescribed authority to have the vehicle temporarily registered in the prescribed manner and for the issue in the prescribed manner of a temporary certificate of registration and a temporary registration mark. r 2. A registration made under this section shall be valid only for a period not exceeding one month, and shall not be renewable:' Thus, the temporary registration of the vehicle under the provisions of Section 43 of the Motor Vehicles Act remains valid only for a period of 30 days. It is admitted case of the parties that the temporary registration of the vehicle had expired on the date of accident. Vehicle was not registered on the date of accident.
4(c). Section 39 of the Act ibid is also relevant in respect of registration of the motor vehicles and the corresponding liabilities and duties of the owner of the vehicles:-
"39.Necessity for registration- No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 7 public place or in any other place unless the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner:
.
Provided that nothing in this section shall apply to a motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government."
4(d). A conjoint reading of both the above sections make it clear that temporary registration provided to a motor vehicle, remains valid only for a period of 30 days.
Whereafter, the vehicle cannot be plied until it is registered in accordance with Chapter-IV of the Motor Vehicles Act. In fact, Section 192 of the Motor Vehicles Act makes the use of a motor vehicle in contravention to the provision of Section 39, an offence.
4(e). Chapter-XI, of Motor Vehicle Act inter-alia provides for compulsory insurance of vehicles. The provisions for compulsory insurance have been made inter-
alia with a view to protect rights of third parties as well.
Section 147 of the Act provides for requirement of the policies and the limits of the liabilities. Section 149 provides for duty of insurer to satisfy the judgments/awards against insured, in respect of third party risks. Section 147 enjoins upon the insurer certain requirements in relation to the use of particular vehicle vis-a-vis:- (i) Policy must specify ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 8 the persons or class of persons who are insured with respect to their liabilities towards third parties.(ii) Policy must .
specify extent of liability which must extend to the extents specified in sub-sections (2) and (3) liability which may be incurred by persons or class of persons in respect of death or bodily injury to any person caused by or arising out of use of vehicle insured, in a public place.
4(f).
In the present case insurance cover Ex.PX., is admittedly comprehensive insurance covering third party risk. There is no such stipulation or condition therein that insurer will not be liable towards third party risk for want of valid registration certificate of the vehicle. The insurance policy is a contract executed between the owner and the appellant. Under Section 149 of Motor Vehicles Act, there is no such defence available to the insurer for repudiation of claim on the ground of invalid/absence of registration certificate. It is apt to reproduce under Section 149 hereunder:-
"149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.(1) If, after a certificate of insurance has been issued under sub- section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub- section (l) of section 147 (being a liability covered ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 9 by the terms of the policy) 1[or under the provisions of section 163A] is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or canceled .
the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.
(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:--
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:--
(i) a condition excluding the use of the vehicle--
(a) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organized racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non- disclosure of a material fact ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 10 or by a representation of fact which was false in some material particular.
(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign .
judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub- section (1), as if the judgment were given by a Court in India: Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the Court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).
(4) 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 condition other than those in clause (b) of sub-section (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 towards 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.
(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person. (6) In this section the expression "material fact"
and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 11 whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the .
fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy. (7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-
section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation.--For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168.
4(g). In Narinder Singh Vs. New India Assurance Company Limited and others, (supra) Hon'ble Apex Court was dealing with a case of 'own damage'. Question there was not in respect of third party risks. In the present case 'own damage' is not involved. Present is a case of total loss of the vehicle, in which the deceased Shri Ram Krishan suffered fatal injuries and two others were injured. Claimants are legal heirs of deceased Shri Ram Krishan, a third party.
4(h). Hon'ble Apex Court in National Insurance Co.Ltd. Vs. Swaran Singh and others (2004) 3 Supreme Court Cases 297, dealt with the issue of the liabilities of the insurance company, vis-a-vis, third party risks. It is profitable to reproduce some relevant paragraphs of this judgment:-
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 12"23. Concededly, different types of insurance covers are issued containing different nature of contracts of insurance. We are, however, in this batch of cases mainly concerned with third-party right under the policy. Any condition in the insurance policy, .
whereby the right of the third party is taken away, would be void.
25. In this context, it is necessary to consider as to what is a third-party right. A third-party claim arises when a victim of an accident suffers a bodily injury or death as a result thereof or his property is damaged. An accident is not susceptible to a very precise definition.
"31. The right of the victim of a road accident to claim compensation is a statutory one.
He is a victim of an unforeseen situation. He would not ordinarily have a hand in it. The negligence on the part of the victim may, however, be contributory. He has suffered owing to wrongdoing of others. An accident may ruin an entire family. It may take away the only earning member. An accident may result in the loss of her only son to a mother. An accident may take place for a variety of reasons. The driver of a vehicle may not have a hand in it. He may not be found to be negligent in a given case. Other factors such as unforeseen situation, negligence of the victim, bad road or the action or inaction of any other person may lead to an accident.
50. Under the Motor Vehicles Act, holding of a valid driving licence is one of the conditions of contract of insurance. Driving of a vehicle without a valid licence is an offence, However, the question herein is whether a third party involved in an accident is entitled to the amount of compensation granted by the Motor Accidents Claims Tribunal although the driver of the vehicle at the relevant time might not have a valid driving licence but would be entitled to recover the same from the owner or driver thereof.
51. It is trite that where the insurers, relying upon the provisions of violation of law by the assured, take an exception to pay the assured or a third party, they must prove a willful violation of the law by the assured. In some cases violation of criminal law, particularly, violation of the provisions of the Motor Vehicles Act may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done intentionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be".::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 13
110.The summary of our findings to the various issues as raised in these petitions are as follows:
(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third party risks is a social welfare legislation to .
extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.
(ii) An Insurer is entitled to raise a defence in a claim petition filed under Section 163 A or Section 166 of the Motor Vehicles Act, 1988 inter-alia in terms of Section 149(2)(a)(ii) of the said Act.
(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 licensed 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.
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 14(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 circumstance .
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 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 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.
(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.
(ix) The claims tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 15 to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between insurer and the insured. The decision rendered on the .
claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.
(x) Where on adjudication of the claim under the Act the tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of section 149(2) read with sub-
section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the tribunal.
(xi) The provisions contained in sub-section (4) with proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 16 insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before .
regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims".
4(i). Providing compulsory insurance of vehicles against third party risks has been held to be a social welfare legislation. In National Insurance Co.Ltd. Vs. Swaran Singh and others, case, Hon'ble Apex Court was dealing with the fake, invalid driving licence, disqualification of drivers etc., it was held that these defences available to the insurer are not per se available against the interest of third party. Even, if the breach on the part of the insured was proved, insurer would not be allowed to avoid liability towards the insured, unless the breach was so fundamental and was found to have contributed to the cause of accident.
The rule of main purpose & concept of fundamental breach is to be applied while interpreting policy conditions. On successfully proving its defence, the insurer is liable to be reimbursed by the insured for compensation paid by it to the third party.
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 174(j) The High Court of Kerala at Ernakulam in case Joby Thomas and another vs. Annamma Augustine .
and another 2012 ACJ 848, while dealing with a case where temporary registration of the vehicle had lapsed on the day of the accident, held as under:-
"4. So whether non-registration would amount to breach of the policy conditions would be the next question. The parties who are insurer and the insured are governed by the terms of the contract entered into between them. So, if there is breach of the policy conditions, then necessarily the insured has to reimburse the insurer.
5. The learned counsel appearing for the parties had made available before me a copy of the policy and had also taken me through the conditions of the policy which are six in number and the learned counsel for the insurance company in the trial court had raised a contention that breach of the policy condition will come within the ambit of 'reliability trial' which is condition No.6. Without any fear of contradiction, it can be said that the reliability trial has nothing to do with the non-registration of the vehicle. When there is no breach of the policy conditions, the question of the insurance company to get entitlement of reimbursement does not arise.
6. This matter can be viewed from another angle and it has been viewed so by Karnataka High Court in the decision reported in Virupaksha v. Sivakumar, 2001 KHC 948. It was also a case where there was temporary registration for the vehicle till 30.11.1991. The vehicle was registered only on 24.1.1992. The accident took place on 12.1.1992 or in other words there was no valid registration for the vehicle on the date of accident. Whether the insurance company can raise the contention that it is not liable to pay the amount because of non-registration of the vehicle on the relevant date of the accident was considered. The learned Judge referred to section 149 of the Motor Vehicles Act which deals with specific defences available to the insurance company under the Act. All the clauses had been extracted and the learned Judge came to the conclusion that non-registration of motor vehicle is ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 18 not one of the defences enumerated under Section 149 of the Act. Therefore, the insurance company is not entitled to take defence of non-registration of the vehicle on the date of the accident . So viewed from both the angles, viz., that as there is no breach of .
policy conditions and as there is no defence available to the insurance company on account of non- registration, it has to be held that insurance company is not liable to be exonerated from the liability. The finding to the contra by the Tribunal is incorrect and it is liable to be set aside and I do so.
7. In the result, the appeal is allowed and the award of the Tribunal directing respondent Nos.1 and 2 to pay the amount to the insurance company is set aside and it is made clear that under the terms and conditions of the contract of insurance, the insurance company is bound to pay the amount awarded without any right for recovery from the owner or the driver".
The question in the above judgment was whether non-registration would amount to breach of the policy conditions or not. It was held therein that insurance company is not entitled to take defence of non-registration of vehicle on the day of accident, as there is no breach of policy conditions and there is no defence available to the insurance company on account of non-registration.
Therefore, insurance company in the above case was not exonerated from its liability in case of third party risk. It was not even held entitled to recover the amount from the owner. The above judgment was however delivered before the pronouncement in Narinder Singh's case, (supra).::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 19
4(k) This issue also came up before Madras High Court in New India Insurance Company vs. Saraswati, .
C.M.A. No. 1432 of 2009, decided on 11.08.2016. In some what similar factual position involving third party liability, reliance was placed by the Insurance Company upon Narinder Singh Vs. New India Assusrance Company Limited and others for avoiding third party liability.It was held as under:-
"10. In Narinder Singh's case cited first supra, a Division Bench of the Apex Court has held that the temporary registration of vehicle for one month expired on 11.01.2006 and the accident took place on 02.02.2006, when the vehicle was not under registration and hence the claim made by the insured was rejected for non-registration of vehicle. It is also revealed that in the said case, a complaint was filed before the District Consumer Forum which was allowed directing the Insurer to indemnify 75% of the claim. The appeal filed by the Insurer before State Consumer Forum against the said order was allowed and the appeal filed by the insured before the National Commission was dismissed holding that the vehicle driven without registration was prohibited under Sections 39 and punishable under Section 192 of the Act. Further it was held that the insured is not entitled to claim damages caused to his own vehicle since the vehicle was not registered at the time of accident and one month temporary registration was also expired on 11.01.2016. On coming to the instant case on hand, the claim is not made by the deceased being the owner of the vehicle. The registration of the motorcycle is not questioned and hence, this case is not made applicable to the instant case on hand."
4(l) To my humble understanding, the law laid down by Hon'ble Apex Court in Narinder Singh Vs. New India Assurance Company Limited and others, is in respect ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 20 of claim made by the owner of the vehicle. In the present case the claim is by the legal heirs of the deceased-third .
party. It is also to be noticed that when the vehicle was insured towards third party liability, it was done so on the basis of engine number and chassis number. These numbers were duly mentioned in the insurance policy. The insurance is a contract between the insured and the insurer.
It was not insured on the basis of temporary registration number or the permanent registration number. No such condition was stipulated in the contract. Therefore, the insurance company cannot escape its liability, towards third party, merely on account of vehicle being not registered on the day of accident. The contract of insurance is based upon good faith applicable to both the parties. It can also be safely said that there was no connection between the cause of the accident and the registration/non-registration of the vehicle. It is not the case of appellant in the present appeal that driving licence was not valid. Therefore, merely because vehicle was not registered under the provisions of Chapter-IV of the Motor Vehicles Act, Insurance company cannot escape its liability towards third party. The Hon'ble Apex Court has held in Narinder Singh Vs. New India Assurance Company Limited and others, that non-
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 21registration of the vehicle is fundamental breach of the policy conditions, however, in order to protect the third .
party rights, condition can be construed to be fundamental only against insured and not w.r.t. third party risks. This is also spirit of law laid down in National Insurance Co.Ltd.
Vs. Swaran Singh and others (2004) 3 Supreme Court Cases 297, relevant para of same stand extracted earlier.
However, since plying of vehicle without valid registration has been held to be fundamental breach of conditions in Narinder Singh's case, (supra), therefore, Insurance Company would be entitled for application of principle of Pay & Recover from insured as has been held in catena of judgments including recent ones in Shamanna and another Vs. Divisional Manager, Oriental Insurance Company Limited and others, (2018) 9 Supreme Court Cases 650. It is apt to reproduce the germane paragraphs hereunder:
"5. In the case of third party risks, as per the decision in National Insurance Company Ltd. v. Swaran Singh and others, the insurer had to indemnify the compensation amount payable to the third party and the insurance company may recover the same from the insured. Doctrine of "pay and recover" was considered by the Supreme Court in Swaran Singh case wherein the Supreme Court examined the liability of the insurance company in cases of breach of policy condition due to disqualifications of the driver or invalid driving licence of the driver and held that in case of third party risks, the insurer has to ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 22 indemnify the compensation amount to the third party and the insurance company may recover the same from the insured. Elaborately considering the insurer's contractual liability as well as statutory liability vis-a-vis the claims of third parties, the .
Supreme Court issued detailed guidelines as to how and in what circumstances, "pay and recover" can be ordered. In para (110), the Supreme Court summarized its conclusions as under:-
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(x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-
section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal.
(xi) The provisions contained in sub-section (4) with the proviso there under and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims,"
10. In Oriental Insurance Co. Ltd. v. Brij Mohan and others (2007) 7 SCC 56, the claimant was travelling in the trolley attached to tractor carrying earth to brick kiln. It was found that the tractor and the trolley were not used for "agricultural works", the only purpose for which the tractor was insured, when the ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 23 claimant sustained the injuries. The Supreme Court though held that the insurance company is not liable to pay compensation, however, invoked the power vested in the Supreme Court under Article 142 of the Constitution of India in directing the insurance .
company to satisfy the award by paying compensation to the insured/claimant and realize the same from the owner of the tractor.
13. Since the reference to the larger bench in Parvathneni case has been disposed of by keeping the questions of law open to be decided in an appropriate case, presently the decision in Swaran Singh case followed in Laxmi Narain Dhut and other cases hold the field. The award passed by the Tribunal directing the insurance company to pay the compensation amount awarded to the claimants and thereafter, recover the same from the owner of the vehicle in question, is in accordance with the judgment passed by this Court in Swaran Singh and Laxmi Narain Dhut cases. While so, in our view, the High Court ought not to have interfered with the award passed by the Tribunal directing the first respondent to pay and recover from the owner of the vehicle. The impugned judgment of the High Court exonerating the insurance company from its liability and directing the claimants to recover the compensation from the owner of the vehicle is set aside and the award passed by the Tribunal is restored.
14. So far as the recovery of the amount from the owner of the vehicle, the insurance company shall recover as held in the decision in Oriental Insurance Co. Ltd. v. Nanjappan and others (2004) wherein this Court held that:-
"8....that for the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer."
In another judgment of the Hon'ble Supreme Court in Amrit Paul Singh and another Vs. TATA AIG General ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 24 Insurance Company (2018) 7 Supreme Court Cases 558, it was held as under:-
"13. The Learned counsel for the appellants would .
submit that in the obtaining factual matrix, the breach would not exonerate the insurer from satisfying the judgment and an award in terms of Section 149 of the Act. He has drawn inspiration from the decision of a three Judge Bench in National Insurance Co. Ltd v. Swaran Singh and others. In the said case, the Court was dealing with the interpretation of Section 149(2)(a)(ii) vis-a-vis the proviso appended to subsections (4) and (5) of Section 149 of the Act. The issue centrally pertained to the necessity of having a driving licence. After adverting to various provisions, the Court also delved into the fundamental concept of third party right. Regard being had to the nature of the beneficial legislation, the Court observed:"
"39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in subsection (2) of Section 149 of the Act corresponding to subsection (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject matter of decisions in a large number of cases."
16. The Court held that if, on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing the requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence. That apart, minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to third parties. The other category of cases that the Court addressed to included cases where the licence of the driver is found to be fake. In that context, the Court expressed its general agreement with United India Insurance Co. Limited v. Lehru and stated thus:"
"92. ... In Lehru case the matter has been considered in some detail. 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 the law ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 25 in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its dis-entitlement from raising any defence or for the owners to be absolved from any liability whatsoever."
.
24. In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle at the time of the accident did not have a permit. The appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit. The exceptions that have been carved out under Section 66 of the Act, needless to emphasis, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction. We are disposed to think so in view of the series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore, the principles laid down in Swaran Singh (supra) and Lakhmi Chand (supra) in that regard would not be applicable to the case at hand. That apart, the insurer had taken the plea that the vehicle in question had no permit. It does not require the wisdom of the "Tripitaka", that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the tribunal as well as the High Court had directed the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in Swaran Singh (supra) and other cases pertaining to pay and recover principle."
In view of the above observations, point No.1 is answered accordingly. The appellant is held liable to discharge the liability of payment of entire compensation ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 26 amount to the third party/claimants in the first instance, whereafter, it is liable to be reimbursed for the same from .
the insured.
5. Point No.2 5(i) Claim petition asserted that the deceased was earning Rs.3,000/- per month, from the agriculture and had two mules from which he was earning Rs.15,000/- per month. In all, claim was made for an amount of Rs.15,00,000/-. No documentary evidence has been placed on record in respect of land owned by the deceased or in respect of income of deceased.
5(ii). The widow of deceased, Smt. Lata Devi steped in the witness box as PW-5 and stated that her husband used to earn Rs.30,000/- per month from a pair of mules and Rs.6,000/- per month from agriculture. In her statement also, no detail of land owned by the deceased has been given. The oral evidence in respect of earning Rs.30,000/-
per month, cannot be relied upon without any other corroborative cogent & reliable evidence.
5(iii). Learned Tribunal below has presumed that income of deceased as Rs.12,000/- per month. This assessment has been made without any basis. Learned counsel for the appellant has placed reliance upon Govind ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 27 Yadav vs. New India Assurance Co. Ltd. 2012 ACJ 28 Supreme Court cases, as under:-
.
"17. A brief recapitulation of the facts shows that in the petition filed by him for award of compensation, the appellant had pleaded that at the time of accident he was working as helper and was getting salary of Rs.4,000 per month. The Tribunal discarded his claim on the premise that no evidence was produced by him to prove the factum of employment and payment of salary by the employer. Learned Tribunal then proceeded to determine the amount of compensation in lieu of loss of earnings by assuming the appellant's income to be Rs.15,000/- per annum. On his part, the learned Single Judge of the High Court assumed that while working as a cleaner, appellant may have been earning Rs.2,000 per month and accordingly assessed the compensation under the first head. Unfortunately, both the Tribunal and the High Court overlooked that the relevant time minimum wages payable to a worker were Rs.3,000 per month. Therefore, in the absence of other cogent evidence, Tribunal and the High Court should have determined the amount of compensation in lieu of loss of earnings by taking the appellant's notional annual income as Rs.36,000 and the loss of earnings on account of 70 per cent permanent disability as Rs.25,200 per annum."
Thus, in absence of any contemporary record & proof of earning, the reference should be made to the minimum wages payable at the relevant time. This has also been held so by Coordinate Benches of this Court in FAO No.43 of 2018 titled as Shriram General Insurance Company Limited Vs. Anita Kumari & others & FAO No. 9 of 2019, titled as Reliance General Insurance Company Limited Vs. Ishwar Singh & others.
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 285(iv). The accident in this case has occurred on 5.2.2013, the minimum wages payable in 2013 to unskilled .
worker were Rs.150/- per day, which comes out as Rs.4500/- per month.
Additionally, since it has not been denied by the respondent that the petitioner was also earning from mules, therefore Rs.2,000/- can be added towards his income on this count. Total income of the deceased, thus can be assessed as Rs.4500 + 2000 = 65,00/- per month.
6. Point No.3 Multiplier.
6(i). The accident occurred on 5.2.2013. The Pariwar Register Ex.P-13 shows 4.8.1983 as the date of birth of the deceased. The date of birth has not been disputed by the respondent. The deceased was 29 years 6 months 1 day, old on the date of the accident. In terms of principles postulated in Sarla Verma Vs. Delhi Transport Corporation, 2009 (4) Supreme Court Cases 689, the learned Tribunal was justified in applying 17 as a multiplier.
Since, the deceased fell in the category of 26/30 years, therefore, appropriate multiplier was 17. The award cannot be faulted on this ground.
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 296(ii). No fault can be found with the observations of learned Motor Accident Claims Tribunal-(II), Mandi, that for .
future prospects of the deceased the income has to be computed in terms of the law laid down in National Insurance Company Ltd. vs. Pranya Sethi and others AIR 2017 SC 5157. As he was in the age group of below 40, therefore, his future prospects can be computed at 40% of the dependency. Learned Tribunal was also justified in deducting 1/4th share from the income of deceased for his own use, (Rs.6500 x ¼ = 1625) there being 5 dependents.
Learned Tribunal was also justified in awarding specific amounts as Rs.15,000/-, Rs.40,000/-, Rs.15,000/-, respectively towards funeral expenses loss of love and affection and loss of consortium to the claimants.
7. Interest.
7(i) Learned counsel for the appellant has contended that the interest should not have been awarded more than 6%, whereas, learned Tribunal below has awarded interest at the rate of 7.5%. Since the endeavor is to ensure awarding just compensation to the claimants, therefore, the award of interest at 7.5% cannot be said to be unjustified in the facts and circumstances of the case.
::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 30No other point has been raised in the present appeal.
8. Consequently, in view of the aforesaid .
observations claimants shall be entitled to following amount:-
Dependency = Rs.6500 - 1625 = 4875/-.
Sr.No Heads Amount.
1 Loss of contribution of income 13,92,300/-
comes out Rs.4875/- + 40% as
Rs.1950/-. i.e. monthly income of
Rs.4875 + 1950 = 6825 x 12x 17
2 Funeral expenses Rs.15,000/-
3 Loss of love and affection Rs.40,000/-
4 Loss of consortium to the petitioner. Rs.15,000/-
5 Total Rs. 14,62,300/-
9. In view of the afore discussions, the present appeal is partly allowed and the impugned order passed by learned Motor Accident Claims Tribunal-(II), Mandi, is modified to the extent indicated above. The Insurance Company is directed to satisfy the award in the first instance & pay it to the claimants, whereafter it is liable to be reimbursed for the same from the owner/insured, in accordance with law. Present appeal is accordingly disposed of, so also, the pending application(s), if any.
(Jyotsna Rewal Dua) Judge 05.07.2019 (Rohit) ::: Downloaded on - 29/09/2019 00:24:52 :::HCHP 31 .
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