Jammu & Kashmir High Court
Bajaj Allianz General Insurance Co. ... vs Mohd. Iqbal Mirza And Ors. on 29 December, 2017
Author: Sanjay Kumar Gupta
Bench: Sanjay Kumar Gupta
HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
CIMA No. 393/2012
Date of decision:- 29.12.2017
Bajaj Allianz General Insurance Co. Ltd. Vs. Mohd. Iqbal Mirza & Ors.
Coram:
Hon'ble Mr. Justice Sanjay Kumar Gupta
Appearing counsel:
For Appellant(s) : Mr. Vishnu Gupta, Advocate.
For respondent (s) : Mr. C.S.Gupta, Advocate.
i/ Whether to be reported in : Yes/No
Press/Media
ii/ Whether to be reported in : Yes/No
Digest/Journal
1. The Appellant-Insurance Company has filed the present Civil 1st Misc.
Appeal under Section 173 of the Motor Vehicle Act, 1988 against the award of the MACT, Rajouri dated 11.07.2012, passed in file No. 96/Claim, titled Mohd. Iqbal Mirza Vs Kabir Ahmed Shah & anr.
2. Appellant has challenged the impugned award/judgment on the grounds that the respondent No.1, more than 43 years old, filed petition u/s 166 of the M.V. Act on account of injuries received by him in an accident on 05.05.2008 when an Auto Rikshaw No. JK-11/4050 in which he was travelling turned turtle near Nerojal Nursery due to rash and negligent driving of respondent No.2. In the said accident some more passengers were injured. It was claimed in the petition that respondent No.1 was mason besides being agriculturist and suffered injuries to left leg and arm. It was claimed that he was treated in GMC Hospital, Jammu. The appellant was also arrayed as respondent besides respondent No. 2 who is the owner of the vehicle and was driving the same at the time of accident.
CIMA No. 393/2012 Page 1 of 12It is further stated that the respondent No.2 did not appear and was proceeded ex-parte by the Tribunal. The appellant filed detailed objections pleading various defences and prayed for the dismissal of the petition against it. It was pleaded that the Auto Rikshaw No. JK-11/4050 at the time of accident was being plied by its owner in breach of policy conditions as respondent No. 2 was not holding valid and effective driving licence issued by competent authority authorizing him to do so on the date of accident and this illegal act of respondent No.2 in plying the vehicle without holding valid driving licence was resulted in the exoneration of the answering respondent from its contractual liability to indemnity the owner. It was further pleaded that the owner while obtaining the policy from the appellant suppressed the fact that the vehicle was passenger vehicle, did not pay premium for covering the risk of passengers to be carried in the vehicle and got insured the vehicle as goods carriage. Thus, the risk of passengers including respondent No.1 was not covered under the policy as no premium had been paid by the owner for covering the risk of passengers to be carried in the vehicle and in the absence of premium respondent No.1 was travelling in the vehicle as gratuitous passenger though his risk was not covered under the policy. During trial, application of the appellant u/s 170 Motor Vehicle Act, 1988 was permitted by the Tribunal. Respondent No.1 examined Basharat Hussain and Dr. Shailender Sharma besides himself appearing in the witness box. The appellant in order to prove issue No. 4 and its defences examined Sakhi Mohd., Investigating Officer, to prove that respondent No.2 was not holder of driving licence and had been charge-sheeted besides other offences u/s 3/181 of M.V. Act. From the statement of Sakhi Mohd., it stood proved that respondent No.2 was driving the vehicle without being licensed by competent authority to drive the vehicle. The Tribunal below discarded the defences of the appellant and accepted the petition and directed the appellant to pay respondent No. 1 CIMA No. 393/2012 Page 2 of 12 Rs.2,08,600/- with interest @ 6% P.A. from the date of filing of the petition till the date of payment. The appellant being aggrieved of the award challenges the same, inter alia, besides others on the following grounds:-
A) That the award impugned in the present appeal is against the law and facts of the present case. The same is factually incorrect and has been passed in utter disregard to the legal and factual position and is liable to be set aside. B) That the Tribunal below committed grave illegality in deciding issue No. 4 against the appellant. From the evidence of the Investigating Officer it stood proved that respondent No. 2 (owner and driver) was driving the vehicle at the time of alleged accident without holding valid driving license to drive the same. That the respondent No. 2 who was owner of the vehicle was aware of the fact that he was not licensed/competent/authorized by competent authority to drive the same and driving of vehicle by him without holding driving license was against the provisions of M.V.Act, criminal offence and breach of policy conditions binding upon the parties. The finding of issue No. 4 by the Tribunal below amounts to granting upon license to all persons to drive the vehicles without being licensed by competent authority to drive vehicle qua the driving license. The finding of issue No. 4 is absurd, perverse, bad in law and not sustainable in the eyes of law.
C) That the finding of the Tribunal regarding issue No. 4 is bad and illegal and contrary to the law and judgements of the Apex Court and this Hon'ble Court that driving the vehicle without being licensed by competent authority qua vehicle and the period is an offence under M.V.Act and amount to breach of policy conditions by the owner of the vehicle. The finding of the Tribunal below being contrary to the section 149(2) of the M.V.Act, law laid down by the Apex Court and this Hon'ble Court is bad and illegal and deserves to be set aside.
D) That the reliance placed by the Tribunal below to Apex Court judgement AIR 2004 SC 1742 is misplaced and without understanding the law laid down in the said judgement. The Apex Court was considering a case where the vehicle was being driven by a driver and the defence of the owner was that before employing the driver, he had satisfied himself about the validity and legality of the driving license held by the said driver. In the present case no driver was involved and the vehicle was being plied by the owner himself though having the knowledge that he was neither licensed by competent authority nor legally authorized to drive the vehicle and by doing so he was committing breach of policy conditions which were binding on the parties. The finding of issue No. 4 is thus required to be set aside and the said issue decided in favour of the appellant.
E) That the net result of the finding of issue No. 4 by the Tribunal is that any person can drive vehicle without being licensed by competent authority to drive the vehicle and as if there is no legal requirement of obtaining driving license from competent CIMA No. 393/2012 Page 3 of 12 authority. The said finding of the Tribunal below is contrary and against all settled norms of law and cannot be allowed to sustain and is required to be set aside.
F) That the Tribunal below failed in its duty to decide the petition according to settled norms. In view of the fact that the owner himself was driving the vehicle at the time of the accident being fully aware that he was not licensed / authorized by competent authority to drive the same, the Tribunal below was bound to dismiss the petition against the appellant and direct the owner Respondent No. 2 to satisfy the award.
G) That the Tribunal below while deciding the petition failed to consider that respondent No. 2 while obtaining the insurance cover for the said vehicle had suppressed the fact that the vehicle sought to be insured was a passenger vehicle and got the same insured as goods carriage. From the policy it was apparent that no premium has been paid by the owner for covering the risk of any passenger to be carried in the vehicle. Thus, the risk of respondent No. 1 was not covered under the policy obtained by respondent No. 2 from the appellant and no award pertaining to any passenger carried in the vehicle could be legally passed against the appellant.
H) That the Tribunal below while passing the award failed to consider that the alleged disability certificate had been issued by single Doctor and not by the District Medical Board as required under Government orders which lays down that all disability certificate can be issued by three members Medical Board constituted by Government at every district level. Moreover, the respondent No. 1 had suffered permanent disablement of particular limb and not of the body as is required as per law laid down by Apex Court in 2011 ACJ 1. There was no evidence that 36% disablement of the body had caused 36% loss of earning capacity rather no evidence was produced to prove that respondent No. 1 had suffered any loss of earning and in the absence of the same the award of Rs. 1,68,480/- on account of loss of future earning is not sustainable and deserves to be set aside. I) That the Tribunal below committed grave illegality in awarding interest upon the compensation awarded on account of loss of future earnings. That no interest is payable upon any amount / compensation awarded on account of loss of future earning or any expenses to be borne in future.
J) That the award impugned in the present appeal is perverse, arbitrary, illegal and bad in law having been passed without due application of judicial mind and without looking into pleadings, evidence on the record and being contrary to the principles of law laid down by Apex Court and this Hon'ble High Court.
3. I have heard the counsel for the appellant and respondent No. 1. The concluding para of the Award/Judgment dated 11.07.2012, passed by Presiding Officer, Motor Accidents Claims Tribunal, Jammu is as under:-
CIMA No. 393/2012 Page 4 of 12"(Issues 3 & 4) Respondent Company has taken various pleas to avoid the liability to pay the compensation. It has been contended by the Respondent company, that the driver of the offending vehicle was not having a driving license and so he had breached the terms and conditions of the insurance policy. In addition to that, the documents of the vehicle were not valid. Respondent company has examined one witness (RW Sakhi Mohd) . He has stated that the respondent No. 1 was not having any license at the time of accident. Even if we assume the version of the witness to be correct, still the Respondent Company cannot avoid the liability of paying the compensation to the Third party. It appears that the defence taken by the insurer, is not contemplated by Section 149 Clause (2) of Motor Vehicles Act. In this regard, I would like to refer to case titled Punam Devi & another v. Divisional Manager New India Insurance Co. Ltd. & others AIR 2004 SC 1742, wherein the Apex Court has observed in Para No. 2 of the Judgment as:-
"In National Insurance Co. Ltd. Chandigarh v. Nicolletta Rohtagi and others, 2002 (7) SCC 456 it was held that the insurance company cannot challenge the quantum of compensation awarded by the Tribunal. The only ground open to insurer is contained in Section 149(2) of the Motor Vehicles Act. In National Insurance Co. Ltd. v. Swaran Singh and others, 2004 (1) Scale 180, this Court has held that "mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defenses available to the insurer against either the insurer or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence or failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time". In the present case, the insurer has not led any evidence that the driver of the vehicle had no licence. The burden of proof that the driver had no licence was open to the insurer which it failed to discharge."
There is no evidence on record to show that the documents of the vehicle, which caused the accident, were not valid. So, all the pleas taken by Insurance Company fail.
CIMA No. 393/2012 Page 5 of 12Issues 3 & 4 are accordingly decided against Respondent No. 2 and in favour of petitioner.
In view of the findings recorded on Issues 1 to 4, this claim petition succeeds and is accordingly allowed. The petitioner is held entitled to a compensation of Rs. 2,08,600/- along with interest @ 6%, from the date of petition till realization of the entire amount. The insurer is held liable to pay the compensation amount to the petitioner. Interim compensation if any paid, shall be deducted. File after completion be consigned to records."
4. I have considered the contentions of learned counsel for parties. The only substantial ground taken in memo appeal is that driver of offending vehicle was not having licence at all. Counsel for appellant has also stated in order to prove this fact he got examined I/O HC Sakhi Mohd, who has conducted the investigation of FIR no.54/2008 of P/S Thana Mandi U/S 279/337/338 RPC and 3/181 of M.V Act; he has found offences under section 3/181 of M.V Act found proved as driver was not holding any licence. He has produced a citation 2013 ACJ 1234 in case titled New India Assurance company v. Anant Rama Sawant, where in it is held as under :
"Motor Vehicles - Award of compensation - Award passed under challenge in present appeal - Held, there was nothing on record to even remotely suggest that the witness was not a truthful witness - There was reason for the Investigation Officer to depose falsely against Respondent No. 2 - It was observed that Respondent No. 1 ought to have produced evidence on record to indicate that Respondent No. 2 was disqualified from holding a driving licence - It was not the case of the Appellant that Respondent No. 1 was disqualified for any reason from holding a driving licence - There was no question of the Appellant producing any evidence on that count - Appellant failed to prove the breach of the policy condition could not be sustained - It was held that Appellant was not liable to -6 indemnify Respondent No. 2 on account of breach of the terms and conditions of the CIMA No. 393/2012 Page 6 of 12 insurance policy - Impugned order set aside - Appeal allowed."
5. I have given my thoughtful consideration to whole aspects of the matter.
6. Section 168 of the Motor Vehicles Act, 1988 provides that the Claims Tribunal shall hold an inquiry into the claim. Section 168 of the Motor Vehicles Act is reproduced hereunder:-
"Section 168. Award of the Claims Tribunal-
On receipt of an application for compensation made under section 166, the Claims Tribunal shall, after giving notice of the application to the insurer and after giving the parties (including the insurer) an opportunity of being heard, hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 162 may make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid and in making the award the Claims Tribunal shall specify the amount which shall be paid by the insurer or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be:
Provided that where such application makes a claim for compensation under section 140 in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter X. (2) The Claims Tribunal shall arrange to deliver copies of the award to the parties concerned expeditiously and in any case within a period of fifteen days from the date of the award. (3) When an award is made under this section, the person who is required to pay any amount in terms of such award shall, within thirty days of the date of announcing the award by the Claims Tribunal, deposit the entire amount awarded in such manner as the Claims Tribunal may direct."
7. Section 169 of the Motor Vehicles Act, 1988 provides that in holding the inquiry under Section 168, the Claims Tribunal may follow such CIMA No. 393/2012 Page 7 of 12 summary procedure as it thinks fit. Section 169 of the Motor Vehicles Act is reproduced hereunder:-
"Section 169. Procedure and powers of Claims Tribunals-
(1) In holding any inquiry under section 168, the Claims Tribunal may, subject to any rules that may be made in this behalf, follow such summary procedure as it thinks fit. (2) The Claims Tribunal shall have all the powers of a Civil Court for the purpose of taking evidence on oath and of enforcing the attendance of witnesses and of compelling the discovery and production of documents and material objects and for such other purposes as may be prescribed; and the Claims Tribunal shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
(3) Subject to any rules that may be made in this behalf, the Claims Tribunal may, for the purpose of adjudicating upon any claim for compensation, choose one or more persons possessing special knowledge of and matter relevant to the inquiry to assist it in holding the inquiry."
8. Section 3 of M.V.Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle which he intends to drive.
9. Bare perusal of record of tribunal below, evidence produced by appellant the I/O of criminal challan, who has categorically stated that during investigation, diver of offending was not found possessing licence, it is held that insurance company has cogently proved that there was violation of insurance policy .
10. Law cited by counsel for appellant, is clearly applicable in present set and circumstances of case.
11. Court below while relying on Punam Devi and another v. Divisional Manager, New India Insurance Co. Ltd. & ors., AIR 2004 SC 1742 has held that mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not defences available to companies, so fastened the liability on appellant.
CIMA No. 393/2012 Page 8 of 1212. Appellant in present case cannot be absolved from paying the compensation at first instance and recover the same from owner and driver, in view of the following Judgment.
13. In 2004 (3) SCC 293 three judges bench in case tilted National Insurance Company v Swarn Singh has held as under :-
"SUMMARY OF FINDINGS:
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) 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 wherefor would be on them.CIMA No. 393/2012 Page 9 of 12
(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 fulfil 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 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.CIMA No. 393/2012 Page 10 of 12
(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 there under 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 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."
14. In view of what has been discussed above, the quantum of award passed by tribunal below is upheld. However the appellant shall reimburse the award at first instance and thereafter can recover the same from owner and driver. Award if deposited shall be released in favour of claimants. This appeal stands disposed of.
(Sanjay Kumar Gupta) Judge Jammu 29.12.2017 Narinder CIMA No. 393/2012 Page 11 of 12 This judgment is pronounced by me in terms of Rule 138(3) of the Jammu & Kashmir High Court Rules, 1999.
( Tashi Rabstan ) Judge Jammu 29.12.2017 Narinder CIMA No. 393/2012 Page 12 of 12