Gujarat High Court
United India Insurance Co. Ltd. vs Chhatrasing Parbatsing Rathod And Ors. on 18 November, 1998
Equivalent citations: 2000ACJ905, (1999)2GLR150, 1999 A I H C 3717, (1999) 2 GUJ LR 1100, (1999) 3 TAC 514, (2000) 2 ACJ 905, (1999) 3 CIVLJ 431
Author: S.K. Keshote
Bench: S.K. Keshote
JUDGMENT S.K. Keshote, J.
1. As these two appeals have arisen out of one and common accident and from the common judgment and award of the Motor Accidents Claims Tribunal (Aux. I), Ahmedabad (Rural), decided on 15.9.1997 passed in M.A.C.P. Nos. 928 and 1126 of 1986, the same are being taken up for hearing together and are being disposed of by this common order.
2. The brief facts of the case are as under:
On 10.12.1985 the claimant-respondent No. 1 in these two appeals was travelling in a jeep No. GAD 6192 on payment of fare. When the jeep reached near Dhanap village Patia Chiloda, National Highway No. 8, one truck No. GTH 8891 driven by Ganeshbhai H. Parmar, the opponent No. 1 in the claim application as a driver collided with the said jeep and accident took place in which the respondent No. 1 sustained injuries. It was the case of claimants-respondents before the Tribunal that the accident has been caused because of rash and negligent driving of both the drivers of jeep and truck. The driver of the jeep died on the spot in this accident. The jeep was insured by United India Insurance Co. Ltd., the appellant herein and the truck was insured by the National Insurance Co. Ltd. The respondent No. 2, the owner of the truck, Hiranand Transport Company filed a written statement and it is contended therein that he sold the truck to Suresh-chandra Lakhiyani, the respondent No. 3 herein. He has further stated that this truck was insured with the National Insurance Co. Ltd., Ahmedabad. The appellant insurance company filed a written statement in which it is submitted that the jeep was insured with it. After considering the evidence produced by the claimants and other side in these claim applications, the learned Tribunal held that the accident has occurred due to equal negligence (50-50%) on the part of both the drivers of the jeep and the truck. On merits, the Tribunal has granted compensation of Rs. 71,300 in M.A.C.P. No. 928 of 1986 and Rs. 66,640 in M.A.C.P. No. 1126 of 1986. The Tribunal has further awarded interest to both the claimants at the rate of 12 per cent per annum from the date of petition till realisation along with proportionate costs. Before the Tribunal, the appellant insurance company has raised contention that the jeep was a private jeep and the use of the same was only for domestic purpose. The claimants-respondents were paid passengers therein. So the driver and the owner have made breach of terms and conditions of policy and the insurance company could not have been made liable for making payment of the amount of compensation together with the interest thereon to the claimants-respondents. That contention of the insurance company was not accepted. Hence, these appeals before this court.
3. Mr. P.V. Nanavati, learned counsel for the appellant contended that the learned Tribunal has committed serious illegality in holding the driver of the jeep to be negligent to the extent of 50 per cent in this accident. It has next been contended that the jeep bearing registration No. GAD 6192 is insured as a private car and the policy itself provides that it does not cover use for hire or reward or for organized racing, pace-making, trial-speeding, carry of goods other than samples in connection with any trade or business or use for any purpose in connection with the motor trade and as in this jeep claimants-respondents were paid passengers, insurance company was not liable to indemnify the insured for the amount of compensation awarded by the Tribunal in favour of the claimants-respondents. Carrying this contention further, the learned counsel for the appellant urged that the Tribunal though accepted the version of the appellant that the persons were travelling in a private car as paid passengers by paying Rs. 5 with the knowledge of the owner, however, erred in coming to the conclusion that the breach of the terms of the policy is not proved. In his submission, a private vehicle would not have been used for hire or reward, otherwise also it has no permit for using it as a commercial vehicle as required by Section 42 of Motor Vehicles Act, 1939. The learned counsel for the appellant, in support of his contention has made reference to the provisions of Section 2 (15), (16) and (18) of the Motor Vehicles Act, 1939, and has also made reference to the decision of the Apex Court in the case of Sheikhupura Transport Co. Ltd. v. Northern India Transporters' Insurance Co. Ltd. 1971 ACJ 206 (SC) and the case of Bhoi Vanaji Dhulaji v. Patel Shivabhai Kashibhai 1981 ACJ 107 (Gujarat).
4. On the other hand, learned counsel for the respondents supported the award of the Tribunal.
5. I have given my thoughtful consideration to the submissions made by learned counsel for the parties.
6. From the contention of the learned counsel for the appellant, the crux thereof is the fact that the Tribunal has accepted that the claimant-respondent No. 1 in both these appeals were travelling in a private car as paid passengers with the knowledge of the owner. However, this contention is wholly devoid of any substance and further in total misreading of the judgment and award of the Tribunal. I find from the impugned award that the Tribunal has recorded categorical finding that there is nothing on the record which proves that the driver of the jeep had allowed unauthorised persons to travel in the jeep in the knowledge of the owner. Much emphasis has been laid on the fact that the claimants-respondents have admitted that they travelled in the jeep as paid passengers. It is true that this admission is there but there is no admission of the claimants-respondents that the driver has permitted them to travel in the jeep as paid passengers under the instructions or knowledge of the owner of the jeep. The learned counsel for the appellant is unable to show from the award of the Tribunal as well as from the record of the case that there is any material evidence to show and establish that the claimants-respondents were travelling as paid passengers in the jeep with the knowledge of the owner. The insurance company has also failed to prove and establish that the owner of the jeep has authorised or permitted the driver to carry in the jeep the paid passengers. The Full Bench of this court in the case of New India Assurance Co. Ltd. v. Kamlaben 1993 ACJ 673 (Gujarat), affirming earlier decision of the Full Bench of this court in the case of National Insurance Co. Ltd. v. Nathibai Chaturabhuj 1982 ACJ 153 (Gujarat), held that the insurer in order to successfully disclaim its liability on the ground mentioned in Section 96 (2) (b) of the Motor Vehicles Act, 1939, has to establish:
(i) that on the date of the contract of insurance, the insured vehicle was expressly or implicitly not covered by a permit to carry any passenger for hire or reward;
(ii) that there was a specified condition in the policy which excluded the use of the insured vehicle for the carriage of any passenger for hire or reward;
(iii) that the vehicle was, in fact, used in breach of such specified condition on the occasion giving rise to the claim by reason of the carriage of the passenger therein for hire or reward; and
(iv) that the vehicle was used by the insured or at his instance in breach of specific conditions including a condition that in the goods vehicle passengers for hire or reward were not to be carried. If it is done without knowledge of the insured by the driver's acts or omissions, the insurer would be liable to indemnify the insured.
Reference may be had to another decision of the learned single Judge of this court in the case of National Insurance Co. Ltd. v. Premjibhai Manjibhai Vasava 1996 ACJ 468 (Gujarat), wherein it is held that in case where the insured has no knowledge about his driver having taken passengers for hire or reward then notwithstanding the Act's exclusionary clause contained in the policy, insurer would be liable to indemnify the insured.
7. In this case, the insurance company on which burden lies has failed to prove and establish that the insured had knowledge about the driver having taken passengers for hire and reward in the vehicle. So in the facts of the present case, notwithstanding exclusionary clause contained in the policy, the insurer was liable to indemnify the insured.
8. Section 96 (2) (b) of the Motor Vehicles Act, 1939 provides that the insurer shall be entitled to defend the action on the ground that there has been breach of specified condition to the policy, i.e., a condition excluding the use of vehicle for hire or reward where the vehicle is on the date of the contract of insurance of vehicle not covered by a permit to ply for hire or reward.
9. The Apex Court in the case of Sohan Lai Passi v. P. Sesh Reddy, 1996 ACJ 1044 (SC), while dealing with the question of liability of the insurance company in respect of third party risk with reference to Section 96 of the Motor Vehicles Act, 1939, in para 12 observed:
...To examine the correctness of the aforesaid view this appeal was referred to a three Judges' Bench, because on behalf of the insurance company, a stand was taken that when Section 96 (2) (b) (ii) has provided that the insurer shall be entitled to defend the action on the ground that there has been breach of a specified condition to the policy, i.e., the vehicle should not be driven by a person who is not duly licensed, then the insurance company cannot be held to be liable to indemnify the owner of the vehicle. In other words, once there has been a contravention of the condition prescribed in Sub-section (2) (b) (ii) of Section 96, the person insured shall not be entitled to the benefit of Sub-section (1) of Section 96. According to us, Section 96 (2) (b) (ii) should not be interpreted in a technical manner. Sub-section (2) of Section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in Sub-section (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on the face of it operates on the person insured. If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression 'breach' occurring in Section 96 (2) (b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under Sub-section (1) of Section 96. In the present case, far from establishing that it was the appellant who had allowed Rajinder Pal Singh to drive the vehicle when the accident took place, there is not even any allegation that it was the appellant who was guilty of violating the condition that the vehicle shall not be driven by a person not duly licensed. From the facts of the case, it appears that appellant had done everything within his power inasmuch as he has engaged a licensed driver Gurbachan Singh and had placed the ' vehicle in his charge. While interpreting the contract of insurance, the Tribunals and courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds. Unless it is established on the materials on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licensed to drive the vehicle when the accident took place, the insurer shall be deemed to be a judgment-debtor in respect of the liability in view of Sub-section (1) of Section 96 of the Act. It need not be pointed out that the whole concept of getting the vehicle insured by an insurance company is to provide an easy mode of getting compensation by the claimants, otherwise in normal course they had to pursue their claim against the owner from one forum to the other and ultimately to execute the order of the Accidents Claims Tribunal for realisation of such amount by sale of properties of the owner of the vehicle. The procedure and result of the execution of the decree is well-known.
10. Reference may be had to another decision of Apex Court in the case of B.V. Nagaraju v. Oriental Insurance Co. Ltd. 1996 ACJ 1178 (SC), where it is held that, "...misuse of vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident..."
11. In the case in hand, the learned Tribunal was perfectly legal and justified to hold the appellant liable to indemnify the insured for his liability for the payment of compensation to the claimants-respondents applying the principles as laid down by the Full Bench in Kamlaben's case, 1993 ACJ 673 (Gujarat). On facts, learned Tribunal has decided against the appellant that the vehicle was used for the breach of special conditions by the insured or at his instance or within his knowledge. The award of the learned Tribunal does not call for interference of this court.
12. In the result, these appeals fail and the same are dismissed with no order as to costs.