RESERVED ON 17.12.2018 DELIVERED ON 25.2.2018
Court No. - 22
Case :- FIRST APPEAL FROM ORDER No. - 3306 of 2003
Appellant :- National Insurance Co. Ltd. Respondent :- Jagtamba Prasad Pathak & Others Counsel for Appellant :- A.K. Sinha
Counsel for Respondent :- C.P. Dwivedi
Hon'ble Salil Kumar Rai,J.
1. The present appeal has been filed by the Insurance Company under Section 173 of the Motor Vehicles Act, 1988 (hereinafter referred to as, 'Act, 1988') against the judgement and award dated 9.10.1996 passed by IInd Additional District Judge/Motor Accident Claims Tribunal, Jaunpur (hereinafter referred to as, 'Tribunal') in Motor Accident Claim Petition No.
41 of 1992, whereby the Tribunal has held the Insurance Company liable to pay compensation to the claimant/injured without the right to recover the same from the owner of the vehicle.
2. Motor Accident Claim Petition No. 41 of 1992 was filed by the claimant-opposite party No. 1 under Section 166 of the Act, 1988 alleging that he was injured on 3.10.1991 in an accident caused due to rash and negligent driving of Jeep No.
U.T.O. 6380 (hereinafter referred to as, 'offending vehicle') which was owned by respondent No. 2 and insured with the appellant. At the time of the accident, the opposite party No. 3 was driving the offending vehicle. The claimant-opposite party No. 1 claimed Rs. 6 lacs as compensation for the injuries caused to him in the accident.
3. The appellant as well as the opposite party No. 2, i.e., the owner of the offending vehicle filed their written statements denying the claim of claimant-opposite party No.
1. In his written statement, the opposite party No. 2, i.e., the owner of the offending vehicle further claimed that, at the time of the accident, the offending vehicle was insured with the appellant-Insurance Company and the driver of the offending vehicle had a valid driving license, therefore, under the Act, 1988, the Insurance Company was liable to pay compensation to the claimant-opposite party No. 1. In its written statement, the appellant-Insurance Company alleged that, at the time of the accident, the driver of the vehicle did not have a valid driving license, and therefore, the respondent No. 2 and not the appellant was liable to pay compensation to the claimant-opposite party No. 1. The Tribunal framed issues regarding the factum of accident, negligence of the driver of the offending vehicle in causing the accident resulting in injuries to the claimant, the inter-se liability of the defendants, i.e., the appellant and opposite party No. 2 to pay compensation to the claimant-opposite party No. 1 and the amount of compensation to which the claimant-opposite party No. 1 was entitled.
4. It is relevant to note that during the proceedings before the Tribunal, the owner did not appear as a witness to prove that, at the time of accident, the driver of the offending vehicle had a valid driving license. However, copies of the insurance policy and the driving license of the driver of the offending vehicle were filed in the Tribunal by the owner of the offending vehicle. Copy of the driving license filed in the Tribunal showed that the driving license of the driver of the offending vehicle was valid from 8.3.1982 to 7.3.1985 and subsequently, after renewal, from 24.10.1991 to 21.10.1994. Apparently, the license was not valid on 3.10.1991, i.e., on the date of accident.
5. In its impugned award, the Tribunal decided the issues regarding factum of accident resulting in injuries to the claimant in favour of the claimant. The Tribunal held that the claimant was injured on 3.10.1991 in an accident caused due to rash and negligent driving of the offending vehicle by its driver, i.e., opposite party No. 3. The Tribunal further held that as, at the time of the accident, the offending vehicle was insured with the appellant and the driver of the offending vehicle, i.e., opposite party No. 3 held a valid driving license before the accident which was subsequently renewed after the accident and on the date of accident, the driver was not disqualified to hold a driving license under the Act, 1988, then even though the license was renewed with effect from a date after the accident, the Insurance Company was liable to pay compensation to the claimant-opposite party No. 1. Consequently, the Tribunal awarded a compensation of Rs. 3,42,056.68 to the claimant-opposite party No. 1 and directed the appellant-Insurance Company to pay the same without the right to recover the amount from the owner.
6. The present appeal has been filed by the appellant- Insurance Company praying that the impugned award passed by the Tribunal is liable to be modified permitting the appellant-Insurance Company to recover from the owner of the offending vehicle, i.e., opposite party No. 2, the compensation amount paid by it to the claimant-opposite party No. 1 under the impugned award.
7. It has been argued by learned counsel for the appellant that the appellant-Insurance Company is entitled to recover from the owner of the offending vehicle the amount paid by it as compensation to the claimant-opposite party No. 1 because it was evident from the evidence on record that at the time of accident, the driver of the offending vehicle did not have a valid driving license. It was argued that the fact that the driver of the offending vehicle held a valid driving license before the accident which was subsequently renewed with effect from a date after the accident was not sufficient to hold the appellant-Insurance Company liable to pay compensation to the claimant-opposite party No. 1. In support of his argument, the counsel for the appellant has relied upon the judgements of the Supreme Court in Ram Babu Tiwari Vs. United India Insurance Company Limited and Others, (2008) 8 SCC 165 and National Insurance Co. Ltd Vs. Vidhyadhar Mahariwala & Ors, (2008) 12 SCC 701.
8. Rebutting the arguments of learned counsel for the appellant, the counsel for the opposite party Nos. 2 and 3 has argued that the driver of the vehicle, i.e., opposite party No. 3 held a valid driving license before the accident, which was subsequently renewed and as the driver of the offending vehicle was not disqualified to hold a valid driving license under the Act, 1988 and there was no fundamental breach of the insurance policy by the owner of the offending vehicle and the offending vehicle was insured with the appellant, therefore, the appellant-Insurance Company was liable to pay compensation to the claimant-opposite party No. 1. It was argued by learned counsel for the opposite party Nos. 2 and 3 that the Insurance Company cannot be absolved of its liability under the contract of insurance merely because during the interregnum period in which the accident occurred, the driver of the offending vehicle did not have a valid driving license if the same was renewed subsequently after the accident. In support of his argument, the counsel for the opposite party Nos. 2 and 3 has relied on the judgements of the Supreme Court delivered in Civil Appeal No. 8144 of 2018 (Shamanna and Another Vs. The Divisional Manager, The Oriental Insurance Co. Ltd. and Others) and Civil Appeal No. 490 of 2008 (Premkumari and Others Vs. Prahlad Dev and Others) as well as judgements of Division Benches of this Court in First Appeal From Order (Defective) No. 725 of 2014 (The Oriental Insurance Co. Ltd. Lucknow through the Manager Vs. Smt. Santosh Kumari and Others) and National Insurance Co. Ltd. Vs. Mahadev Rawat and Another, 2010 (2) ADJ 735.
9. I have considered the rival submissions of learned counsel for the parties and perused the record.
10. The only issue to be decided in the present appeal is regarding the inter-se liability of the appellant and opposite party No. 2, i.e., the owner of offending vehicle to pay compensation to the claimant-opposite party No. 1. It is admitted by the parties that, at the time of accident, the offending vehicle was insured with the appellant-Insurance Company. It is also admitted by the parties that the opposite party No. 3, i.e., the driver of the offending vehicle had a valid driving license, which was effective from 8.3.1982 to 7.3.1985 and subsequently from 24.10.1991 to 21.10.1994. It is also admitted that the accident injuring the claimant-opposite party No. 1 occurred on 3.10.1991. Thus, at the time of accident, the driver of the offending vehicle did not have a valid driving license. It is evident from a reading of the award as well as a perusal of the records of the case that the owner and the driver of the offending vehicle did not appear as a witness in the Tribunal. It is also evident from the records of the case that in their written statements, the opposite party Nos. 2 and 3, i.e., the owner and the driver of the offending vehicle had not raised any plea that before the accident, the driver of the offending vehicle had filed any application for renewal of his driving license under the Act, 1988.
11. In Ram Babu Tiwari (Supra), the driver of the vehicle held a valid driving license between 11.2.1990 and 10.2.1993 and 7.2.1996 to 7.2.1999. The accident in the said case occurred on 27.1.1996, on which date the driver of the vehicle admittedly did not have a valid driving license. The Supreme Court held that in such circumstances the insurer would not be liable to indemnify the insured. The observations of the Supreme Court contained in paragraph Nos. 15, 18 and 19 of the said judgement are relevant for the present case and are reproduced below :-
“15. The question as to whether the owner of a vehicle had taken care to inform himself as to whether the driver entrusted to drive the vehicle was having a licence or not is essentially a question of fact. However, in this case, it stands admitted that as on the date of accident, namely, on 27.1.1996, the driver did not hold any licence. Furthermore, it is beyond dispute that he had a licence only for one year and for about 3 years thereafter, he failed and neglected to renew his licence. His licence was renewed only on and from 7.2.1996. What would be the effect of not having a licence for such a long period is the question.
18. It is beyond any doubt or dispute that only in the event an application for renewal of licence is filed within a period 30 days from the date of expiry thereof, the same would be renewed automatically which means that even if an accident had taken place within the aforementioned period, the driver may be held to be possessing a valid licence. The proviso appended to sub-section (1) of Section 15, however, clearly states that the driving licence shall be renewed with effect from the date of its renewal in the event the application for renewal of a licence is made more than 30 days after the date of its expiry. It is, therefore, evident that as on renewal of the licence on such terms the driver of the vehicle cannot be said to be holding a valid licence, the insurer would not be liable to indemnify the insured.
19. The second proviso appended to sub-section (4) of Section 15 is of no assistance to the appellant. It merely enables the licensing authority to take a further test of competent driving and passing thereof to its satisfaction within the meaning of sub-section (3) of Section 9. It does not say that the renewal would be automatic. It is, therefore, a case where a breech of the contract of insurance is established. This aspect of the matter has been considered by this Court in National Insurance Co. Ltd. v. Kusum Rai holding : (SCC p. 254, para 11) :
"11. It has not been disputed before us that the vehicle was being used as a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle, thus, was required to hold an appropriate licence therefor. Ram Lal who allegedly was driving the said vehicle at the relevant time, as noticed hereinbefore, was holder of a licence to drive a light motor vehicle only. He did not possess any licence to drive a commercial vehicle. Evidently, therefore, there was a breach of condition of the contract of insurance. The appellant, therefore, could raise the said defence."
It was furthermore held : (SCC p. 255, para 14) "14. This Court in Swaran Singh clearly laid down that the liability of the Insurance Company vis-a-vis the owner would depend upon several factors. The owner would be liable for payment of compensation in a case where the driver was not having a licence at all. It was the obligation on the part of the owner to take adequate care to see that the driver had an appropriate licence to drive the vehicle."
It was opined : (SCC p. 256, para 16) "16. In a case of this nature, therefore, the owner of a vehicle cannot contend that he has no liability to verify the fact as to whether the driver of the vehicle possessed a valid licence or not."
(Emphasis added)
12. Recently, the Supreme Court in Singh Ram Vs. Nirmala and Others, (2018) 3 SCC 800 while dealing with the same situation held that in such circumstances, i.e., in cases where the driving license was not renewed within the prescribed period, the insurer was not liable to indemnify the owner of the vehicle. In Singh Ram (Supra), the accident took place on 22.3.2010 and the license of the driver of the offending vehicle was valid till 29.8.2009 and subsequently renewed w.e.f. 28.11.2011. In Singh Ram (Supra), also there was no evidence to indicate that the license was sought to be renewed as required in law within 30 days from its expiry. The Supreme Court rejected the plea of the owner of the vehicle that in such circumstances the insurer was not entitled to recover from the owner the amount paid by it as compensation to the claimant. The observations of the Supreme Court in paragraph Nos. 7 and 8 of the judgement are relevant for the present case and are reproduced below :-
“8. In the present case it is necessary to note, as observed by the Tribunal, that the owner did not depose in evidence and stayed away from the witness box. He produced a licence which was found to be fake. Another licence which he sought to produce had already expired before the accident and was not renewed within the prescribed period. It was renewed well after two years had expired. The appellant as owner had evidently failed to take reasonable care (Proposition (vii) of Swaran Singh) since he could not have been unmindful of facts which were within his knowledge.
9. In the circumstances, the direction by the Tribunal, confirmed by the High Court, to pay and recover cannot be faulted. The appeal is, accordingly, dismissed. There shall be no order as to costs.”
(Emphasis added)
13. In the present case, the accident took place on 3.10.1991. The driver of the offending vehicle held a driving license from 8.3.1982 to 7.3.1985 which was subsequently with effect from 24.10.1991 to 21.10.1994. Thus, on the date of accident, the driver of the offending vehicle did not have a valid driving license. There is no evidence on record to show that any steps were taken by the driver of the offending vehicle to renew his driving license within the prescribed period, i.e., within 30 days from the date his driving license expired. In the circumstances, following the judgements of the Supreme Court in Ram Babu Tiwari (Supra) and Singh Ram (Supra), the reasons recorded by the Tribunal in absolving the owner of the offending vehicle from paying any compensation to the claimant-opposite party No. 1 and holding the appellant-Insurance Company liable to pay the same is contrary to the law laid down by the Supreme Court. The Insurance Company is entitled to recover from the owner, i.e., opposite party No. 2, the amount paid by it as compensation to the claimant-opposite party No. 1.
14. At this stage, it would be appropriate to consider the judgements referred by the learned counsel for the respondents. The judgements of the Supreme Court in Shamanna (Supra) and Premkumari (Supra) do not help the opposite party No. 2 inasmuch as in the aforesaid cases, the Insurance Company had been given the right to recover from the owner the amount paid by them as compensation to the claimants. A reading of judgement of Division Bench of this Court in Mahadev Rawat (Supra) would show that in the aforesaid case, there was evidence that the application for renewal of license filed by the driver of the vehicle was pending before the appropriate authority. A reading of the judgement of Division Bench of this Court in Smt. Santosh Kumari (Supra) would also show that the accident occurred on 31.12.2006 and the driving license of the driver was valid from 26.12.2003 to 25.12.2006. Thus, the accident in case of Smt. Santosh Kumari (Supra) occurred within 30 days from the date of the accident, i.e., within the period prescribed under Section 15(1) of the Act, 1988 and in the aforesaid case, it was held that the license of the driver remained effective for a period of 30 days after its expiry. Paragraph 21 of the aforesaid judgement which is relevant for the present case is reproduced below :-
“21. The ground that the driver of the insured vehicle was not duly licenced under Sub Section 2(ii) of Section 149 of the Act would not be available to the insurer/appellant company to defend itself against the claim. The licence of the driver remained ''effective' for thirty days after its expiry, within which period the accident occurred. Proviso to Section 14, in such circumstances, would protect the claim of the claimant. The licence of the driver of the offending vehicle cannot be said to be ineffective for legal purposes, for that period of thirty days.”
(Emphasis added)
15. Thus, the judgements referred by learned counsel for opposite party Nos. 2 and 3 do not support the case of opposite party Nos. 2 and 3.
16. Accordingly it is held that the appellant-Insurance Company is entitled to recover from opposite party No. 2 the compensation paid by it to the claimant-opposite party No. 1. The award of the Tribunal is accordingly modified to the aforesaid extent.
17. The appeal is allowed. The parties shall bear their own costs.
Order Date :- 25.2.2019
Anurag/-