Karnataka High Court
The Divisional Controller vs N Chiranjivi S/O Nataraj on 31 July, 2017
Author: K.Somashekar
Bench: K.Somashekar
:1:
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
ON THE 31ST DAY OF JULY, 2017
BEFORE
THE HON'BLE MR.JUSTICE K.SOMASHEKAR
MFA NO.25312 OF 2011 (MV)
BETWEEN
The Divisional Controller
NEKRTC, Bellary Division
Bellary
....Appellant
(By Sri S.C.Bhuti, Adv.)
AND:
1. N.Chiranjivi S/o Nataraj
Age: 22 years, Occ: Mestri
R/o 5th Link road, 5th Cross
Devinagar, Bellary
2. T.P. Prabhakar, Major,
R/o: 49, Jagannath Temple Street,
Near Radio Park, Cowl Bazar, Bellary
Owner of the bus bearing no. KA 34/4388
3. The Divisional Manager
M/s Oriental Insurance Co. Ltd.,
Bellary
4. Seena @ Srinivas S/o Venkanna
Major, Driver of the bus bearing
No. KA 17/7174
:2:
R/o Devinagar, 3rd Cross, Bellary
5. Venkanna Rangappa S/o Venkanna
Major, Driver of the bus bearing
No. KA 34/4388 Bellary division
Bellary
6. N. Srinivas S/o Narayana
Age: 26 years, Owner of the auto bearing
No. KA 17/7174, R/o 2nd Cross,
Devinagar, Bellary
.....Respondents
(By Sri B.C.Jnanayya, Adv. for R-1;
Smt. Aruna R. Deshpande, Adv. for R3;
R2, R4, R5 & R6 dispensed with)
This appeal is filed under Section 173(1) of MV
Act, 1988, against the judgment and award dated
23.06.2010 passed in MVC No.866/2006 on the file of
the Member MACT-IX, Bellary awarding compensation
of Rs.46,420/- with future interest at the rate of 6%
p.a. from the date of petition till the date of deposit.
This appeal coming on for Admission this day,
the court delivered the following:
JUDGMENT
With the consent of both the learned counsel appearing for the parties, the matter is taken up for final disposal.
:3:2. Heard the learned counsel for the appellant and the learned counsel for the respondent Nos.1 and 3.
3. This appeal is filed under Section 173(1) of MV Act, 1988, against the judgment and award dated 23.06.2010 passed in MVC No.866/2006 on the file of the Member MACT-IX, Bellary awarding compensation of Rs.46,420/- with future interest at the rate of 6% p.a. from the date of petition till the date of deposit.
4. Learned counsel for the parties submit that the issue involved in the present case has been elaborately discussed by the Hon'ble Supreme Court in the case of Mukund Dewangan vs. Oriental Insurance Company Limited in Civil Appeal No.5826/2011 decided on 03.07.2017 and the same is squarely applicable to the facts and circumstances of the present case on hand, wherein it is held as follows:
:4:"1. In the reference, the main question involved is whether a driver who is having a licence to drive 'light motor vehicle' and is driving 'transport vehicle' of that class is required additionally to obtain an endorsement to drive a transport vehicle?
xxxxx
46. Section 10 of the Act requires a driver to hold a licence with respect to the class of vehicles and not with respect to the type of vehicles. In one class of vehicles, there may be different kinds of vehicles. If they fall in the same class of vehicles, no separate endorsement is required to drive such vehicles. As light motor vehicle includes transport vehicle also, a holder of light motor vehicle licence can drive all the vehicles of the class including transport vehicles. It was pre-amended position as well the post-amended position of Form 4 as amended on 28.03.2001. Any other interpretation would be repugnant to the definition of "light motor vehicle" in section 2(21) of the provisions of section 10(2)(d), Rule 8 of the Rules 1989, other provisions and also the forms which are in the tune with the provisions. Even otherwise the forms never intended to exclude transport vehicles from the category of 'light motor vehicles' and for light motor vehicle, the validity periodof such licence hold good and apply for the transport vehicle of such class also and the expression in section 10(2)(e) of the Act 'Transport Vehicle' would include medium goods vehicle, :5: medium passenger motor vehicle, heavy goods vehicle, heavy passenger motor vehicle which earlier found place in section 10(2)(e) to (h) and our conclusion is fortified by the syllabus and rules which we have discussed. Thus we answer the question which are referred to us thus:
(i) Light motor vehicle' as defined in Section 2(21) of the Act would include a transport vehicle as per the weight prescribed in section 2(21) read with section 2(15) and 2(48). Such transport vehicles are not excluded from the definition of the light motor vehicle by virtue of Amendment Act No.54/199.
(ii) A transport vehicle and omnibus, the gross vehicle weight of either of which does not exceed 7500 kg.
would be a light motor vehicle and also motor car or tractor or a road roller, 'unladen weight' of which does not exceed 7500 kg. and holder of a driving licence to drive class of "light motor vehicle" as provided in Section 10(2)(d) is competent to drive a transport vehicle or omnibus, the gross vehicle weight of which does not exceed 7500 kg. or a motor car or tractor or road- roller, the "unladen weight" of which does not exceed 7500 kg. That is to say, no separate endorsement on the licence is required to drive a transport vehicle of light motor vehicle class as enumerated above. A licence issued under section 10(2)(d) continues to be valid after Amendment Act 54/1994 and 28.03.2001 in the form.
:6:(iii) The effect of the amendment made by virtue of Act No.54/1994 w.ef. 14.11.1994 while substituting clauses (e) to (h) of section 10(2)which contained "medium goods vehicle" in section 10(2)(e), medium passenger motor vehicle in section 10(2)(f), heavy goods vehicle in section 10(2)(g) and "heavy passenger motor vehicle" in section 10(2)(hj) with expression 'transport vehicle' as substituted in section 10(2)(e) related only to the aforesaid substituted classes only. It does not exclude transport vehicle, from the purview of section 10(2)(d) and section 2(41) of the Act i.e. light motor vehicle.
(iv) The effect of amendment of Form 4 by insertion of "transport vehicle" is related only to the categories which were substituted in the year 1994 and the procedure to obtain driving licence for transport vehicle of class of "light motor vehicle" continues to be the same as it was and has not been changed and there is no requirement to obtain separate endorsement to drive transport vehicle, and if a driver is holding licence to drive light motor vehicle, he can drive transport vehicle of such class without any endorsement to that effect."
31. In Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan (1987) 2 SCC 654, this Court has laid down that the motive and philosophy of a provision should be :7: probed, keeping in mind the goals to be achieved by enacting the same, and the defense build upon an exclusion clause by insurer cannot succeed because on a true interpretation of the relevant clause which interpretation is at peace with section 96 of the Motor Vehicles Act, the condition excluding driving by a person not duly licensed is not absolute. The promisor is exculpated when he does everything in his power to keep promise. The Court has laid down thus:
"12. The defence built on the exclusion clause cannot succeed for three reasons, viz.:
(1) On a true interpretation of the relevant clause which interpretation is at peace with the conscience of Section 96, the condition excluding driving by a person not duly licensed is not absolute and the promisor is absolved once it is shown that he has done everything in his power to keep, honour and fulfil the promise and he himself is not guilty of a deliberate breach.
(2) Even if it is treated as an absolute promise, there is substantial compliance therewith upon an express or implied mandate being given to the licensed driver not to allow the vehicle to be left unattended so that it happens to be driven by an unlicensed driver.:8:
(3) The exclusion clause has to be "read down" in order that it is not at war with the "main purpose" of the provisions enacted for the protection of victims of accidents so that the promisor is exculpated when he does everything in his power to keep the promise.
13. In order to divine the intention of the legislature in the course of interpretation of the relevant provisions there can scarcely be a better test than that of probing into the motive and philosophy of the relevant provisions keeping in mind the goals to be achieved by enacting the same. Ordinarily it is not the concern of the legislature whether the owner of the vehicle insures his vehicle or not. If the vehicle is not insured any legal liability arising on account of third party risk will have to be borne by the owner of the vehicle. Why then has the legislature insisted on a person using a motor vehicle in a public place to insure against third party risk by enacting Section 94? Surely the obligation has not been imposed in order to promote the business of the insurers engaged in the business of automobile insurance. The provision has been inserted in order to protect the members of the community travelling in vehicles or using the roads from the risk attendant upon the user of motor vehicles on the roads. The law may provide for compensation to victims of the accidents who sustain injuries in the course of an automobile accident or compensation to the dependants of the :9: victims in the case of a fatal accident. However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the courts would be recoverable from the persons held liable for the consequences of the accident. A court can only pass an award or a decree. It cannot ensure that such an award or decree results in the amount awarded being actually recovered, from the person held liable who may not have the resources. The exercise undertaken by the law courts would then be an exercise in futility. And the outcome of the legal proceedings which by the very nature of things involve the time cost and money cost invested from the scarce resources of the community would make a mockery of the injured victims, or the dependants of the deceased victim of the accident, who themselves are obliged to incur not inconsiderable expenditure of time, money and energy in litigation. To overcome this ugly situation the legislature has made it obligatory that no motor vehicle shall be used unless a third party insurance is in force. To use the vehicle without the requisite third party insurance being in force is a penal offence (Section 94 of the Motor Vehicles Act). The legislature was also faced with another problem. The insurance policy might provide for liability walled in by conditions which may be specified in the contract of policy. In order to make the protection real, the legislature has also provided that the judgment obtained shall not be : 10 : defeated by the incorporation of exclusion clauses other than those authorised by Section 96 and by providing that except and save to the extent permitted by Section 96 it will be the obligation of the insurance company to satisfy the judgment obtained against the persons insured against third party risk (vide Section 96). In other words, the legislature has insisted and made it incumbent on the user of a motor vehicle to be armed with an insurance policy covering third party risks which is in conformity with the provisions enacted by the legislature. It is so provided in order to ensure that the injured victims of automobile accidents or the dependants of the victims of fatal accidents are really compensated in terms of money and not in terms of promise. Such a benign provision enacted by the legislature having regard to the fact that in the modern age the use of motor vehicles notwithstanding the attendant hazards, has become an inescapable fact of life, has to be interpreted in a meaningful manner which serves rather than defeats the purpose of the legislation. The provision has therefore to be interpreted in the twilight of the aforesaid perspective."
14. Section 96(2)(b)(ii) extends immunity to the insurance company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not fully licensed, or by any person who has been disqualified for holding or obtaining a driving licence during : 11 : the period of disqualification. The expression "breach" is of great significance. The dictionary meaning of "breach" is "infringement or violation of a promise or obligation" (See Collins English Dictionary). It is therefore abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression "breach" carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is "guilty" of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the : 12 : insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself it cannot be said that the insured is guilty of any breach. And it is only in case of a breach or a violation of the promise on the part of the insured that the insurer can hide under the umbrella of the exclusion clause. In a way the question is as to whether the promise made by the insured is an absolute promise or whether he is exculpated on the basis of some legal doctrine. The discussion made in para 239 of Breach of Contract by Carter (1984 Edn.) under the head Proof of Breach, gives an inkling of this dimension of the matter. In the present case even if the promise were to be treated as an absolute promise the grounds for exculpation can be found from Section 84 of the Act which reads thus:
"84. Stationary vehicles--No person driving or in charge of a motor vehicle shall cause or allow the vehicle to remain stationary in any public place, unless there is in the driver's seat a person duly licensed to drive the vehicle or unless the mechanism has been stopped and a brake or brakes applied or such other measure taken as to ensure that the vehicle cannot accidentally be put in motion in the absence of the driver.": 13 :
In view of this provision apart from the implied mandate to the licensed driver not to place an unlicensed person in charge of the vehicle, there is also a statutory obligation on the said person not to leave the vehicle unattended and not to place it in charge of an unlicensed driver. What is prohibited by law must be treated as a mandate to the employee and should be considered sufficient in the eye of law for excusing noncompliance with the conditions. It cannot therefore in any case be considered as a breach on the part of the insured. To construe the provision differently would be to rewrite the provision by engrafting a rider to the effect that in the event of the motor vehicle happening to be driven by an unlicensed person, regardless of the circumstances in which such a contingency occurs, the insured will not be liable under the contract of insurance. It needs to be emphasised that it is not the contract of insurance which is being interpreted. It is the statutory provision defining the conditions of exemption which is being interpreted. These must therefore be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfil its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not tuned to the purpose and philosophy of the legislation without being informed of the true goals sought to be achieved. What the : 14 : legislature has given, the Court cannot deprive of by way of an exercise in interpretation when the view which renders the provision potent is equally plausible as the one which renders the provision impotent. In fact it appears that the former view is more plausible apart from the fact that it is more desirable. When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependants on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of "reading down" the exclusion clause in the light of the "main purpose" of the provision so that the "exclusion clause" does not cross swords with the "main purpose" highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose. This theory which needs no support is supported by Carter's "Breach of Contract" vide paragraph 251. To quote:
"Notwithstanding the general ability of contracting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the "main purpose rule", which may : 15 : limit the application of wide exclusion clauses defining a promisor's contractual obligations. For example, in Glynn v. Margetson & Co (1893 AC 351, 357, Lord Halsbury, L.C. stated:
"It seems to me that in construing this document, which is a contract of carriage between the parties, one must in the first instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard ... as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract."
Although this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Suissee Atlantique Societe d' Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale (1967) 1 AC 361, 393, 412-413, 427-428, 430. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract. (emphasis supplied)"
: 16 :In view of the submission made by the learned counsel appearing for the parties and on considering the observations made in Mukund Dewangan's case, referred supra, the appeal is liable to be allowed.
Whereas, as regards the question regarding reduction of the compensation, the amount awarded by the Tribunal being just and reasonable, the same does not call for interference.
In the result, I proceed to pass the following:
ORDER
(i) The appeal is allowed in part.
(ii) The respondent No.3 Insurance
Company is liable to pay the
compensation awarded by the MACT -
IX, Bellary, in MVC No.866/2006
dated 23.06.2010 with accrued
interest within a period of six weeks
from the date of receipt of a copy of
this order.
: 17 :
(iii) The rest of the judgment and award
passed by the Tribunal shall remain in
tact.
The amount in deposit shall be refunded to the appellant forthwith.
Sd/-
JUDGE msr : 18 : KSJ: MFA NO.25312/2011 11.08.2017 ORDER ON "BEING SPOKEN TO"
Heard the learned counsel for the appellant.
On 31.07.2017, the appeal was allowed in part. The learned counsel for the appellant placed the judgment of the Hon'ble Supreme Court in the case of UPSRTC V/s KULSUM AND OTHERS reported in (2011) 8 SCC 142, at paragraph No.31, which is squarely applicable to the present case on hand, was not incorporated. Accordingly, the same has to be incorporated.
"31. The liability to pay compensation is based on a statutory provision. Compulsory insurance of the vehicle is meant for the benefit of the third parties. The liability of the owner to have compulsory insurance is only in regard to third party and not to the property. Once the vehicle is insured, the owner as well as any other person can use the vehicle with the consent of the owner. Section 146 of the Act does not provide that any person who uses the vehicle independently, a separate insurance policy should be taken. The purpose of compulsory insurance in the Act has been enacted with an object to advance social justice.": 19 :
Accordingly, this order shall be considered as the part and parcel of the judgment dated 31.07.2017.
Sd/-
JUDGE VNP*