Punjab-Haryana High Court
New India Assurance Company Limited vs Smt. Vidya Devi And Others on 6 July, 2010
Author: K. Kannan
Bench: K. Kannan
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
FAO No.2220 of 2001
Date of decision:06.07.2010
New India Assurance Company Limited ....Appellant
versus
Smt. Vidya Devi and others ...Respondents
II. FAO No.2221 of 2001
New India Assurance Company Limited ....Appellant
versus
Darshana Devi and others ...Respondents
III. FAO No.2222 of 2001
New India Assurance Company Limited ....Appellant
versus
Bakhshi Ram and others ...Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
----
Present: Mr.R.C.Gupta, Advocate, for the appellant.
Mr. Sandeep Bansal, Advocate, for the respondents in FAO
No.2220 of 2001
None for the respondents in FAO Nos.2221 and 2222 of
2001
----
FAO No.2220 of 2001 -2-
1. Whether reporters of local papers may be allowed to see the
judgment ?
2. To be referred to the reporters or not ?
3. Whether the judgment should be reported in the digest ?
----
K.Kannan, J. (Oral)
1. All the three appeals are on the issue of exclusion of liability on the ground of want of driving licence and the evidence was sought to be produced by the insurer that the driving licence was a fake. The owner however gave evidence to the effect that he had seen the driving licence and he was under the bona fide impression that the driver had a valid driving licence. The issue on whether the insured would be liable in such a case has been considered by the Hon'ble Supreme Court in National Insurance Company Versus Swaran Singh-(2004) 3 SCC 297 .
2. The judgment of the Supreme Court in Swaran Singh (supra) has an immediate relevance for us in this case for the effect of proof of fake licence in the context of the need for discharging the burden of proof on the Insurance company that the insured had committed a breach of terms of the policy. The fact that the driver had a fake licence will absolve the insurer of the liability of the insurer only, if it is established that the accident was on account of reasons where the possession of valid driving licence will have relevance for consideration of the aspect of negligence that has to be proved. If the accident was on account of say, mechanical defect in the vehicle, the issue of the validity of licence will have no relevance. The Hon'ble Court had said,
31. The right of the victim of a road accident to claim compensation is a statutory one. He is a victim of an FAO No.2220 of 2001 -3- unforeseen situation. He would not ordinarily have a hand in it. The negligence on the part of the victim may, however, be contributory. He has suffered owing to wrongdoing of others. An accident may ruin an entire family. It may take away the only earning member. An accident may result in the loss of her only son to a mother. An accident may take place for a variety of reasons. The driver of a vehicle may not have a hand in it. He may not be found to be negligent in a given case. Other factors such as unforeseen situation, negligence of the victim, bad road or the action or inaction of any other person may lead to an accident.
64. There may be a case where an accident takes place without there being fault on the part of the driver. In such an event, the question as to whether a driver was holding a valid licence or not would become redundant. (See Jitendra Kumar v. Oriental Insurance Co. Ltd.)
65. Skandia, on the other hand, has been approved by a three-Judge Bench, when the correctness thereof was referred to a larger Bench in Sohan Lal Passi case wherein a three-Judge Bench of this Court noticed the ratio propounded in Skandia case and observed:
"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 FAO No.2220 of 2001 -4- 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 the 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." (underlining supplied).
66. A bare perusal of the provisions of Section 149 of the Act leads to only one conclusion that the usual rule is that once the assured proves that the accident is covered by the compulsory insurance clause, it is for the insurer to prove that it comes within an exception.
3. These observations in Swaran Singh's case show that the proof of fake licence does not conclude the issue. The conscious act of the insured in the complicity with the driver in securing a fake licence may exclude liability. But if the insured had made bona fide enquiries and he was under the belief that the driving licence shown by the driver at the time of employment or immediately afterwards but before the FAO No.2220 of 2001 -5- accident was a genuine one, though it was fake, it could not be said that the insured had committed any breach of the terms of the policy. Swaran Singh's case (supra) states as follows:
75. As has been held in Sohan Lal Passi the insurance company cannot shake off its liability to pay the compensation only by saying that at the relevant point of time the vehicle was driven by a person having no licence. ....................
84. We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. 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. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence.
In a given case, the driver of the vehicle may not have any hand in it at all e.g. a case where an accident takes place owing to a mechanical fault or vis major. (See Jitendra Kumar.)
4. In this case, there is evidence of the owner about the enquiries regarding the possession of licence by the owner. It cannot therefore be said that the insured was guilty of any breach of terms of the FAO No.2220 of 2001 -6- policy.
5. The claim of exclusion of liability by the Insurance Company cannot be accepted.
6. All the appeals are dismissed.
7. There is a cross appeal for enhancement of the claim at the instance of the widow in FAO No.2220 of 2001. The deceased was said to be a driver and there was evidence to the effect that he had a monthly income of Rs.5,000/-. The Tribunal, however, took him to be an unskilled worker and provided for an income of Rs.1,800/- per month . It assessed the extent of dependence of Rs.1,200/- per month and applied a multiplier of 14. It had granted compensation of Rs.2,01,600/-. The Tribunal also added an amount of Rs.2,000/- for funeral expenses and Rs.5,000/- for loss of consortium. In my view, the assessment has been on the lower side when there was evidence that he was working as a driver which was a semi skilled employment and the annual income could have been assessed at Rs.2,500/-. Providing 1/3rd of the amount towards his own expenses, the contribution to the family could have been assessed at Rs.1,650/- per month. The annual dependence would be Rs.19,800/- and for a person, who was aged 30 years, the appropriate multiplier would have been 16. The compensation payable would have been Rs.3,26,800/-. I provide for additional Rs.2,000/- for funeral expenses. Further additional Rs.5,000/- for loss of consortium. I provide for an additional Rs.5,000/- towards loss of estate. In all, the amount that could have been payable would be Rs.3,36,800/-, I round it off Rs.3,37,000/-. This shall substitute the amount already assessed by FAO No.2220 of 2001 -7- the Tribunal. The additional amount over the amount already awarded by the Tribunal shall carry interest at 7.5% from the date of the award till the date of payment. The manner of apportionment between the parents and widow shall stand. The cross appeal is allowed to the above extent.
(K.KANNAN) JUDGE 06.07.2010 sanjeev