Madhya Pradesh High Court
Oriental Insurance Co. Ltd. vs Prasanna Kumar Jha And Ors. on 8 July, 2005
Equivalent citations: 2006ACJ443
Author: Arun Mishra
Bench: Arun Mishra, Shantanu Kemkar
JUDGMENT Arun Mishra, J.
1. These appeals have been preferred by the insurer assailing liability and the claimant praying for the enhancement in M.A. No. 1066 of 2002 whereas in M.A. No. 637 of 2002 the insurance company prayed that it cannot be made liable to pay compensation. Feeling aggrieved by the award dated 17.1.2002 passed by the VIII Additional Motor Accidents Claims Tribunal, Jabalpur in Claim Case No. 327 of 2001.
2. On. 12.5.1991 at about 4.30 a.m. Prasanna Kumar Jha was coming from Mandla on his motor cycle. A car driven by Prateek Pathak, the respondent No. 2 owned by Dr. Bina Pathak, insured with New India Assurance Co. Ltd., dashed the motor cycle as a result of which claimant sustained grievous injury on his left thigh.
3. The owner in the separate written statement denied the allegations and contended that respondent No. 3 was never authorised by her to drive the vehicle, only son of the owner, namely, Piyush Pathak who possessed the valid licence was authorised to drive the vehicle. The vehicle was not driven by Prateek Pathak at the relevant time.
4. The insurer in the written statement contended that Prateek did not possess driving licence at the time of accident and the same amounts to violation of the terms and conditions of the insurance policy. Hence it is not liable to compensate.
5. The Claims Tribunal has found that the accident had occurred due to rash and negligent driving by the car driver and also held that the respondent No. 1 has suffered permanent disability to the extent of 30 per cent. Prateek Pathak did not possess a valid and effective driving licence. However, as the owner was not having the knowledge that vehicle was driven by Prateek Pathak, insurer was fastened with liability along with the driver and owner, jointly and severally to make payment of compensation.
6. Mr. Anil Lala, learned Counsel for claimant has submitted that the Tribunal has erred in awarding only Rs. 30,000 for permanent disability, continuous treatment for one and half years was obtained and it ignored the fact that in future the treatment was required, the compensation of Rs. 30,000 is inadequate. He has further submitted that on account of special diet, attendant and for conveyance the amount awarded by the Tribunal is Rs. 8,000. On account of pain and suffering the amount be suitably enhanced.
7. Mr. Sanjay Sarvate, learned Counsel for the respondents has submitted that at the relevant time the vehicle was driven by Prateek Pathak, only Piyush Pathak who had licence was authorised by owner to drive the vehicle. He has submitted in the first information report the name of the driver has not been mentioned. Thus, the insurer is liable to pay the compensation.
8. Mrs. Amrit Ruprah, learned Counsel with Mr. Sanjay Agrawal, learned Counsel appearing on behalf of Oriental Insurance Co. Ltd., submitted that the Tribunal has found that vehicle was driven by Prateek Pathak, hence insurer be exonerated.
9. Coming to the question of quantum of compensation, it is not in dispute that the permanent disability to the extent of 30 per cent has been incurred in the left leg of the claimant-appellant. He was treated at Jabalpur and Nagpur and thereafter was confined to house for one and a half years. It is clear that the surgery for removal of rod was yet to be performed. No document has been filed that the operation was required to be performed at Bombay by Dr. Dolakhia. Fact remains that 30 per cent permanent disability was incurred and rod was inserted and the removal of it was required.
10. It is clear that the claimant was treated for the injury for considerable period of more than one year. On account of special diet no amount has been awarded. Thus, we award the sum of Rs. 10,000 on account of special diet for one year. On account of pain and suffering as we find that the sum of Rs. 5,000 is inadequate, we enhance it to Rs. 25,000. For the permanent disability of 30 per cent the sum of Rs. 30,000 has been awarded which in our opinion is inadequate, we enhance the amount from Rs. 30,000 to Rs. 50,000. Thus, total enhanced compensation comes to [Rs. 20,000 + Rs. 10,000 + Rs. 20,000 = Rs. 50,000 (rupees fifty thousand)] remaining part of the award is upheld. The enhanced amount shall carry interest at the rate of 6 per cent per annum from the date of claim petition till the date of payment.
11. Coming to liability of the insurer to compensate we have gone through the statement of the owner Dr. Beena Pathak NAW 1. She has clearly stated that she had never authorised Prateek Pathak to drive the car, only Piyush Pathak, her son, was authorised to drive the car. Piyush Pathak possessed the valid and effective driving licence to drive the car. On reading the entire statement of Dr. Beena Pathak we are of the opinion that she had no knowledge that the vehicle was given to Prateek for being driven by her son at the time of accident.
In the similar circumstances the Apex Court in United India Insurance Co. Ltd. v. Lehru , has held:
15. Now let us consider Section 149(2). Reliance has been placed on Section 149(2)(a)(ii). As seen, in order to avoid liability under this provision it must be shown that there is a 'breach'. As held in Skandia's case, 1987 ACJ 411 (SC) and Sohan Lal Passi's case, , the breach must be on the part of the insured. We are in full agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen. Whilst it is being driven by the thief there is an accident. The thief is caught and it is ascertained that he had no licence. Can the insurance company disown liability? The answer has to be an emphatic 'No'. To hold otherwise would be to negate the very purpose of compulsory insurance. The injured or relatives of the person killed in the accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner himself would be an innocent sufferer. It is for this reason that the legislature, in its wisdom, has made insurance, at least third party insurance, compulsory. The aim and purpose being that an insurance company would be available to pay. The business of the company is of insurance. In all businesses there is an element of risk. All persons carrying on business must take risks associated with that business. Thus it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time innocent parties must not be made to suffer a loss. These provisions meet these requirements. We are thus in agreement with what has been laid down in the aforementioned cases, viz., that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The insurance company must establish that the breach was on the part of the insured.
As held by Apex Court in the absence of knowledge of owner if vehicle is driven by someone else, that does not constitute breach on part of owner and insurer is liable to make payment of compensation.
In National Insurance Co. Ltd. v. Swaran Singh , the Supreme Court has taken similar view, it was held:
"Summary of findings:
102. 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 163A 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 conditions, 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.
(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 circumstances 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 of the condition of driving licence is/are so fundamental and are found to have contributed to the cause of the accident. The Tribunals in interpreting policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences available to the insurer 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.
12. The finding recorded by the Tribunal that owner gave permission to drive is based on misreading of the evidence. While saddling the liability on insurer it was held by Tribunal that Dr. Beena Pathak, respondent No. 1, had no knowledge that the vehicle was driven by Prateek Pathak who had no valid driving licence to drive the car. It is clear that Prateek Pathak was not regular driver employed by the owner and it appears that it was only casually that Prateek Pathak drove Maruti without the knowledge of the owner. The insurance company cannot escape the liability to indemnify. Thus we find that the driver, owner and insurer are liable to pay the amount of compensation including the enhanced compensation.
13. Accordingly, the appeal preferred by insurer M.A. No. 637 of 2002 is hereby dismissed. The appeal M.A. No. 1066 of 2002 is partly allowed. Parties to bear their own costs.