Andhra HC (Pre-Telangana)
The National Insurance Company Limited ... vs Parital Venkateswarlu And Anr. on 28 February, 2008
JUDGMENT T. Ch. Surya Rao, J.
1. The insurer is the appellant, which seeks to assail the award, dated 12- 12-2005, passed by the learned Motor Accidents Claims Tribunal-cum-V Additional District & Sessions Judge (Fast Track Court) Ongole in O.P. No. 204 of 2003 on the premise that it has no liability to pay the compensation and at any rate the direction of the Tribunal that the appellant should pay in the first instance and recover the same later from the owner is not tenable and valid.
2. The first respondent herein is the injured claimant. He preferred the claim for compensation of Rs. 2,00,000/- for the injuries suffered by him in the accident that allegedly occurred on 6/7-9-2002 at about midnight when he was sitting on the motorcycle bearing No. AP 27 F 6550 as a pillion rider, owned by the second respondent herein and insured with the appellant-insurer, being driven by his friend one Jangala Sudheer, at high speed and when the motorcycle reached Ramnagar 10th line, on account of a rikshaw cyclist coming across the road all of a sudden, which resulted in the accident by the motor cycle dashing against the rickshaw, due to which he fell down and sustained injuries. According to the claimant, he was shifted to Government Hospital, Ongole and from there he was shifted to Guntur for better treatment and was treated as an inpatient in People's Trauma and Emergency Hospital from 07-09-2002 to 24-09- 2002 and had to spend nearly Rs. 1,00,000/- towards medical treatment. His right eye was completely blurred and as such he lost his vision and thus he claimed a compensation of Rs. 2,00,000/-.
3. The claim was resisted by the insured and the insurer as well. The case of the first respondent-owner was that the pillion rider was sitting callously without having proper holding and therefore he suddenly fell down and the accident was not due to rash and negligent driving of the motorcyclist. The case of the second respondent-insurer was that the motorcyclist, at the time of the accident, was not having valid and subsisting licence to drive the vehicle and that the compensation claimed was excessive.
4. On the above pleadings, the Tribunal framed three issues as under:
1. Whether the petitioner sustained injuries in Motor Vehicle Accident as a pillion rider of motorcycle on account of rash and negligent driving of the Hero-Honda Splendor Motorcycle bearing No. AP 27 F 6550 by its driver?
2. Whether the petitioner is entitled to claim for compensation? If so, to what amount and from whom?
3. To what relief?
5. At the time of enquiry, three witnesses were examined on the side of the claimant, besides getting Exs.A1 to A11 marked. None was examined on the side of the first respondent-owner and no documentary evidence was adduced. On behalf of the appellant-insurer, R.W.1 was examined and Exs.B1 and B2 were got marked.
6. Appreciating the evidence of P.W.1 - the claimant and placing reliance upon Exs.A1 to A3, the certified copies of F.I.R.; wound certificate; and charge-sheet respectively, the learned Tribunal was of the view that the accident, in the instant case, was due to the rash and negligent driving of the driver of the vehicle of the first respondent. The Tribunal then proceeded to assess the compensation and quantified it at Rs. 1,20,000/-, consequently it passed the impugned award granting compensation of Rs. 1,20,000/- in favour of the claimant and directed the appellant-insurer to pay in the first instance the compensation and recover the same from the first respondent-owner by filing the necessary execution petition without there being any need to file any separate suit. As aforesaid, it is now being disputed by the appellant-insurer.
7. The learned standing counsel for the appellant represents that since it is clear from the matrix that the son of the second respondent - owner was driving the motorcycle and since he was having no licence and as the second respondent failed to produce the licence pursuant to the notice got issued by the appellant under the original of Ex.B2, the appellant-insurer discharged the burden cast upon it and was able to prove the breach of the condition of the policy by the insured. It is the further contention of the learned Counsel that at any rate the Tribunal did not give proper direction for recovery of the amount from the owner while directing the appellant to pay in the first instance in the alternative.
8. Per contra, the learned Counsel appearing for the first respondent- claimant would contend that the appellant failed to discharge the burden cast upon it and it was not a case of the motorcyclist not having any licence at all, in view of the plea taken by the appellant inter alia in the counter. The points, therefore, that arise for my determination in this appeal are:
(1) Whether the second respondent-owner, committed breach of the condition of the policy and thereby absolved the insurer from any liability?
(2) In the facts and circumstances of the instant case what shall be the appropriate direction to be given by the Tribunal in the alternative
9. It is appropriate to set-forth certain facts, which are not in dispute, before adverting to the other facts touching the contentious issues. The first respondent herein is the injured claimant. He was the pillion rider on the offending vehicle, which is a Hero Honda Splendor motorcycle bearing No. AP 27 F 6550, owned by the second respondent herein and insured with the appellant- insurer. The motorcycle was being driven by one person, by name, Sudheer, who was the friend of the claimant. There was an accident that occurred on 6/7-9- 2002 at about midnight near Ramnagar 10th line of Ongole in which the injured-claimant sustained injuries.
10. While it is the case of the claimant that the accident was occurred when the motorcycle was going at a high speed on account of a cycle rickshaw coming across the road all of a sudden, it was the case of the owner of the vehicle, the second respondent herein, that the claimant-pillion rider was sitting callously without having proper holding on the motorcycle and he suddenly fell down and sustained injuries, thereby denying the alleged rash and negligent driving. The appellant-insurer too reiterated and denied its liability on the premise that the driver of the motorcycle was not having valid and subsisting driving licence to drive the vehicle.
11. P.W.1 - the claimant deposed in his evidence that on 06-09-2002 he was a pillion rider on the motorcycle being driven by his friend, by name, Sudheer and that at about 10.30 or 11.00 PM when both of them reached near 10th cross road Ramnagar, Ongole, Sudheer was unable to control the vehicle and dashed the rickshaw, which was coming in the opposite direction, which resulted in the accident. He denied the suggestions put to him by the first respondent - owner that on account of his own negligence, he fell down on the ground and that he created all the documents and he only sustained minor injuries. In the cross- examination on behalf of the second respondent - the insurer, he stated that his friend Sudheer is the son of first respondent - the owner. He further stated in the cross-examination that he was informed by his friend Sudheer that he was having L.L.R. driving licence by the date of accident, but he has no personal knowledge. He denied the suggestion that Sudheer had no valid driving licence at the time of the accident. The Motor Vehicles Inspector's report in this case has not been filed. Having regard to Exs.A1 and A3, certified copies of the F.I.R. and the charge sheet respectively, coupled with the oral testimony of P.W.1, the learned Tribunal eventually reached the conclusion that the accident in this case was due to the rash and negligent driving of the motorcyclist. That aspect is not seriously disputed on either side. The contentious issues seem to be that whether it was a case of the motorcyclist having no licence at all to drive the vehicle and the liability of the insurance company.
12. From the evidence on record it is obvious that the motorcyclist by name Sudheer is the son of the first respondent - owner of the vehicle. The appellant-insurer issued a notice under the original of Ex.B2 to the first respondent - owner, calling her upon to cause the production of the driving licence, if any, of the motorcyclist. No evidence has been adduced on the side of the first respondent, owner of the offending vehicle. R.W.1 - the Assistant Administrative Officer, examined on the side of the appellant-insurer, deposed inter alia in his evidence that there was no valid driving licence to the driver of the offending vehicle, which involved in the accident at the time of the accident. In the cross-examination, he admitted that he had no personal knowledge as to whether the driver of the vehicle had a valid driving licence or not. However, he stated further that only on enquiries they came to know that the driver of the vehicle was not having driving licence at the time of the accident. This is the available evidence on record on either side.
13. It is appropriate at this stage to refer the judgment of the Apex Court in National Insurance Co. Ltd. v. Swaran Singh and Ors. 2004 (2) ALD 36 (SC). Both the learned Counsel referred the above judgment and relied upon certain relevant paras, which, in their perception, would support their respective cases.
14. In para 82 it was held by the Apex Court as under:
In a case, therefore, where the driver of the vehicle admittedly did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability.
This is sought to be relied upon by the learned standing counsel for the appellant.
15. Again in para 105 the Apex Court held as under:
Although, as noticed hereinbefore, there are certain special leave petitions wherein the persons having the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicles in the manner laid down therein. But this order may not be considered as a precedent.
Again this is sought to be relied upon by the learned standing counsel to buttress his contention that Swaran Singh's case cannot be an authority for the proposition that there shall be direction inter alia in the award for payment by the insurer in the first instance and recover the same from the owner later. In the alternative, if, for any reason, this Court comes to the conclusion that the appellant-insurer is liable, the learned Counsel seeks to place reliance upon the judgment of the Apex Court in Oriental Insurance Co. Ltd. v. Nanjappan and seeks to contend that the judgment shall contain a direction as laid down by the Apex Court in that judgment inter alia in para 8, which reads as follows:
Before release of the amount to the insured, owner of the vehicle shall be issued a notice and he shall be required to furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the executing court shall take assistance of the concerned Regional Transport Authority. The executing Court shall pass appropriate orders in accordance with law as to the manner in which the insured, owner of the vehicle shall make payment to the insurer.
It is in the evidence of P.W.1 that he was told by the said Sudheer that he had L.L.R. licence, but he had no personal knowledge. It is equally in the evidence of R.W.1 that the said Sudheer has no valid driving licence at the time of the accident and that he had no personal knowledge of the same, but only on enquiries they came to know that the driver of the vehicle was not having driving licence at the time of the accident. In Swaran Singh's case referred to above no doubt it was held in para 82 that where the driver of the vehicle had no licence at all, the insurer was entitled to succeed in its defence. On a careful perusal of a relevant observations of the Apex Court excerpted hereinabove, it is obvious that if it is an admitted case that the driver did not possess licence and it was fairly a case where the owner allowed consciously the vehicle to be driven by the person having no licence and in such event the insurer was entitled to succeed in its defence. Turning to the matrix of the case it is not an admitted case that the driver had no licence. Therefore, it becomes the plain obligation on the part of the insurer to prove its defence.
In para 107 in Swaran Singh's case the Apex Court given a summary of its findings. In finding No. 3 it was held thus:
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.
In condition No. 4 it was held again thus:
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.
16. Again in condition No. 6 it was held thus:
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 Apex Court in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan AIR 1987 SC 1184 held in an authoritative pronouncement that the insurer shall establish that the insured is guilty of an infringement or violation of a promise and it must be a willful infringement or violation. That was the first pronouncement of the Court on the subject.
Again in Sohan Lal Passi v. P. Sesh Reddy AIR 1996 SC 2627 placing reliance upon Kokilaben's case held that "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."
17. From the above excerpted passages it is obvious that the burden is cast upon the insurer not only to prove its defence which it is entitled to take under the provisions of Section 149(2) of the Motor Vehicles Act, but must also establish breach on the part of the owner of the vehicle the conditions of the policy. To avoid the liability, the insurer must further 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 the vehicle by duly licenced driver. Above all, it is further obvious that it must be a case even where the insurer is able to prove breach on the part of the insured of the policy condition, the insurer would not be allowed to avoid its liability towards insured unless the said breach of the condition of driving licence is so fundamental and is found to have contributed to the cause of the accident. Therefore, apart from the proof that it is a case of breach of the condition of the policy by the policy holder, the insurer cannot be permitted to avoid its liability on that ground alone, unless it is able to show that the said breach is so fundamental that it contributed to the accident, obviously, therefore, the insurer is obliged to prove these aspects.
18. The Motor Vehicles Act is a beneficent legislation meant to serve the social purpose. Although the existence or non-existence of a licence by the driver of the offending vehicle who committed the accident on account of rash and negligent driving cannot be proved by means of a negative evidence, still the obligation is cast upon the insurer to prove by such negative evidence so as to eventually absolve itself from the liability. Existence of licence by the driver of the offending vehicle obviously can be proved positively by the owner of the vehicle, as he is the proper person to produce the licence of the driver. The person who denies the existence of licence cannot positively prove the same, because it is well within the knowledge of the person having the licence, either the driver or his employer, who is the owner of the vehicle. Therefore, if the insurer is obliged to prove the non-existence of licence, it must be by means of a negative proof, which, in ordinary circumstances, is very difficult for the insurer to establish. Notwithstanding the same, the burden is cast upon the insurer to prove it. Such a burden is cast upon the insurer, obviously, in view of the fact that the innocent claimant may not be knowing about the existence or non-existence of the licence by the driver of the offending vehicle, which is within the knowledge of the driver himself or the owner of the offending vehicle, who is the employer of the driver. Inasmuch as the insurer is trying to avoid its liability under the policy, the burden is cast upon the insurer to prove the same. Even though it is by means of a negative evidence, so far, in view of the clear legal position and the background under which the law has come to be laid down by the Apex Court, it is for the appellant to show that the second respondent-owner breached the condition of the policy and that the said breach of the condition of driving licence is so fundamental and is found to have contributed to the cause of the accident. In laying down the said proposition by the Apex Court it is obvious that the Court was conscious of the fact that the persons, who are duly licenced, are inept in driving and who are not duly licenced are adept in driving and the distinction in between these two.
19. Coming to the matrix of the case, as discussed hereinabove, the evidence is not clear that the driver of the motor vehicle by name Sudheer was not having any licence at all. It is no doubt true that the second respondent - owner did not respond to the notice got issued by the appellant-insurer for causing production of the licence. That will not absolve the insurer from discharging its obligation to show before the Court that the owner has breached the condition of policy of possessing valid driving licence by the driver. It may be reiterated here that the insurer can absolve its liability only when it was an admitted case that the driver did not hold any licence at all and the owner allowed consciously the said driver to drive the vehicle, then only, as held by the Apex Court in para 82 in Swaran Singh's case, the insurer can avoid its liability. It is not relieved of its burden from proving that it was not only a case where the driver had no valid driving licence at the appropriate time, but also a case where the owner breached the condition of the policy in regard to the valid driving licence by the driver. The insurer must show 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 licenced driver. Such a proof is not coming forth in the instant case.
20. On the other hand, having admitted in the cross-examination by R.W.1 that the enquiries revealed that the driver had no licence at the relevant time, he failed to adduce any evidence as to the nature of the enquiry that was conducted and its consequential result. Therefore, it is fairly a case where the insurer failed to discharge its burden cast upon it. Above all, there is nothing on record from which it may be reasonably concluded that the said breach of the condition by the owner has nexus or the necessary cause, which resulted in the accident. For want of proof, the appellant-insurer, I am afraid, in the facts and circumstances of this case, cannot avoid the liability.
21. Although the Tribunal below at the end gave a direction to the appellant to deposit in the first instance the compensation awarded to the claimant and recover the same from the owner by filing E.P., the Tribunal was clearly of the view that it was a case of joint and several liability on the part of the respondents 1 and 2. When once respondents 1 and 2 are held to be jointly and severally liable, giving a direction to the second respondent for depositing the compensation in the first instance with liberty to recover the same from the owner of the offending vehicle at a later stage is quite inconsistent. In the event the insurer is absolved from any liability, the direction to deposit in the first instance and recover the same at a later point of time is not germane. Having regard to the discussion hereinabove made and since the appellant-insurer failed to prove that it was a case of breach of condition of the policy by the insured and therefore it cannot validly avoid the liability, it is obvious, therefore, that it is a case of joint and several liability of respondents 1 and 2. Therefore, any direction to pay in the first instance and recover the same at a later point of time is quite irrelevant to the eventual conclusion of joint and several liability. Although the claimant has not filed any cross-objections or cross-appeal so as to set the record straight and remove the inconsistency invoking the provisions of Rule 33 of Order 44 of the Code of Civil Procedure, this Court can set aside the said finding.
22. On the quantum of compensation, the learned standing counsel for the appellant represents that when P.Ws. 2 and 3 did not speak anything about the percentage of disability, but may be on account of want of the necessary competency or otherwise, the Tribunal committed an error in having granted an amount of Rs. 50,000/- under the head injuries and the disability and the Tribunal further committed an error in having granted compensation towards loss of future income in an amount of Rs. 18,200/-, when admittedly the claimant was a student. From the evidence it is obvious that the claimant sustained three injuries viz., one lacerated injury on the dorsum of right foot and one comminuted depressed fracture on the right temporo periatal bone on account of two penetrating wounds and a small abrasion over left patellar region. The second injury according to the medical evidence is grievous in nature. From the evidence it is further clear that on account of this injury there was internal hemorrhage. The claimant is now claiming loss of vision of the right eye and deafness of the right ear. However, there is no supporting medical evidence on that but there cannot be any gainsaying that injury No. 2 is a serious one, the receipt of it being right temporal region. Even in the absence of any percentage of disability for the injury suffered by him, suitable compensation should be granted undoubtedly. In that view of the matter, although there is no disability, the claimant is entitled to the compensation on conventional basis at least for the injuries suffered by him, but certainly the Tribunal below has committed an error in having granted compensation towards future loss, when obviously the claimant is a student. Therefore, the amount of Rs. 18,200/- sanctioned under the head of future loss shall have to be set aside.
23. For the above reasons, the appeal is allowed in part and the compensation granted by the Court below is hereby modified. The award passed by the Tribunal below is hereby modified by granting compensation of Rs. 1,01,800/-, instead of Rs. 1,20,000/- and the respondents 1 and 2 are jointly and severally liable to pay the same with interest at 7.5 % per annum from the date of claim till realization.