*HONOURABLE
Dr. JUSTICE B. SIVA SANKARA RAO
+M.A.C.M.A.
No.1093 and 1101 of 2011
% Dated
19.12.2013
Between:
# Bajaj Allianz General Insurance
Company Limited
...Appellant
and
$ T. Latha and others ….Respondents
! Counsel for the
Appellant : Sri A.Ramakrishna
Reddy
(respondent in MACMA No.1101 of2011)
^ Counsel
for claimants : K.Harimohan
Reddy
(appellants
in MACMA No.1093 of 2011)
Counsel for the 6th
respondent-owner
Of crime
vehicle in both the appeals :
None appeared
< GIST:
>HEAD NOTE:
? Cases referred:
1.1965(1)
All.E.R-563
2.1963(2)
All.E.R.432
3.1969(1)
All.E.R.555
4.1995
ACJ 366(SC)
5.AIR
1936 page 264
6. 2006 ACJ 414
SC
7.(2001) 8
SCC 197=AIR 2001 (SC) 3218
8.
2013(4)ALT 35(SC)
9.2009
ACJ 1298
10. 2013(7) SCC 476
11. AIR 2009 SC 208
12. (2004) 3 SCC 297=2004-ACJ-1
13. (2006) 4 SCC 250
14. (2004) 13 SCC 224=2004-SAR(civil)-290
15. (2007) 10 SCC 650=2007(4) Scale 292
16. 2008
ACJ 2654
17. 2008(1) LS-SC-177
18. (1997) 7 SCC 558
19. (2007) 13 SCC 246
20. 2008(1) Scale 531
21. 2008 ACJ 654
22.
2007 ACJ 721
23.
2001 ACJ 843
24.
2008(1) Scale 727
25. JT-2003(2) SC 595 = 2003 ACJ 611
26.
2010 ACJ 165
27. 2012 ACJ 1284
28.
1987 ACJ 411 (SC)
29.
2008 ACJ 2885
30. 2000 ACJ 319
31. 1996 ACJ 1046 (SC)
32. 1987 ACJ 411 (SC)
33.
2008-ACJ-1498
34. AIR 2007 SC 1971
35.
(2004)2 SCC-1
36. Appeal (Civil) C.C.No. 10993 of 2009
37. 2010(5) ALT 105
38. 2005(4) ACJ 721
39.
AIR 2011 SC 1234 = 2011 (2) SCJ 639
40.
(2013)11 SCC-35
41.
(2013) 7 SCC 62
42.
(2005) 6 SCC 236
43.
(2004)2 SCC-297
HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO
M.A.C.M.A.No.1093 and 1101 OF 2011
COMMON
JUDGMENT:
These two appeals, i.e. MACMA No.1093 of
2011 filed by the Insurer and MACMA No.1101 of 2011 filed by the claimants i.e. wife, two minor children and
parents, are case and counter against the award of the Tribunal in O.P.No.1257
of 2007 dated 11.08.2009 on the file of
the learned Chairman of the Motor Accidents Claims Tribunal–cum-III Additional
Chief Judge, City Civil Court, Hyderabad (for short, ‘Tribunal’) under
Section 166 of the Motor Vehicle Act, 1988 (for short, ‘the Act’).
2.
Heard Sri A.Ramakrishna Reddy, learned standing counsel for the Insurer and Sri
K.Harimohan Reddy, learned counsel for the claimants in both the appeals. The owner
of crime vehicle to whom notice sent to same address before the Tribunal not
served is called absent with no representation. Perused the material on record.
The parties hereinafter are referred to as arrayed before the Tribunal for the
sake of convenience in the appeal.
3. The contentions of the appellant-Insurer in the grounds of
appeal MACMA No.1093 of 2011 who is 2nd respondent in MACMA No.1101
of 2011 as well as submissions (in both the appeals) during course of hearing in
nutshell are that the award of the Tribunal is contrary to law, weight of
evidence and probabilities of the case, that the quantum of compensation is
excessive and exorbitant so also in fastening the liability of pay and recover
despite the driver of the vehicle not having transport light motor vehicle (for
short, ‘LMV’) driving licence of the auto bearing No.AP28 X 0307, that the Tribunal
erred in holding that the insurance company cannot avoid its liability on
technical breach of conditions, that the owner and driver of the auto has
violated and used the vehicle contrary to the permit and terms of the policy
and contrary to Sec.149(2)(a)(i) and 149(4) read with Sec.66 of the M.V.Act and
as such the Insurer is not liable to pay compensation to the petitioners, that
the Tribunal failed to appreciate the evidence of R.Ws.1 and 2 officials of the
Insurer pleaded and proved that the driver of crime vehicle has no valid and
effective licence. Hence, to dismiss the
same.
4.
The contentions of the appellants-claimants in the grounds of appeal in MACMA
No.1101of 2011 who are respondents 1 to 5 in MACMA No.1093 of 2011 as well as
submissions (in both the appeals) during course of hearing in nutshell are that
the award of the Tribunal is contrary to law, weight of evidence and
probabilities of the case, that the Tribunal went wrong in awarding meager
compensation, that the Tribunal failed to see that the deceased was working as
a cook in a hotel and earning Rs.5,500/-p.m. which is evident from the evidence
of P.W.3-the employer of the deceased and also Ex.A.6 salary certificate and
Ex.X.3 salary receipts but the Tribunal without taking into consideration the
evidence of P.W.3 and Ex.A.6 and X.3, erroneously taken into account the salary
of the deceased at Rs.3,000/-p.m., that the Tribunal failed to take into
consideration all the other aspects like loss of estate, pain and sufferance,
funeral expenses, love and affection and transportation etc, hence to allow the
appeal by awarding compensation as claimed before the Tribunal.
5.
Now the points
that arise for consideration in the appeal are:
1.
Whether the award of the Tribunal fastening joint liability on
the insurer with insured to indemnify the insured for the claimant(s) is
unsustainable and requires interference by this Court while sitting in the
appeal?
2.
Whether the quantum of compensation awarded by the Tribunal is not just and requires interference
by this Court and if so with what extent and against whom with what rate of
interest with what observations?
3.
To what result?
POINT-2:
6.
The facts of the case are that, on 23.05.2007 due to the rash and negligent
driving of the driver of the crime auto bearing No.AP28 X 0307 belongs to the 1st
respondent insured with the 2nd respondent-Insurer, dashed the
deceased, a hotel worker, aged about 35 years who along with another was
proceeding on foot, as a result while undergoing treatment in Gandhi Hospital
he was succumbed to the injuries, which occurrence is covered by Ex.A.1 FIR and
Ex.A.2 charge sheet. The learned Tribunal basing on the oral and documentary
evidence on record, awarded in all compensation of Rs.3,70,000/-(Rupees three
lakh seventy thousand only) out of Rs.10,00,000/- with interest at 7.5% p.a. against the respondents in the claim petition jointly
and severally and directing the 2nd respondent-Insurer to pay and
recover.
7. Before coming to decide, what is
just compensation in the factual matrix of the case, It is apt to state that
perfect compensation is hardly possible and money cannot renew a physique or
frame that has been battered and shattered, nor relieve from a pain suffered as
stated by Lord Morris. In Ward v. James[1],
it was observed by Lord Denning that award of damages in personal injury cases
is basically a conventional figure derived from experience and from awards in
comparable cases. Thus, in a case involving loss of limb or its permanent
inability or impairment, it is difficult to say with precise certainty as to
what composition would be adequate to sufferer. The reason is that the loss of
a human limb or its permanent impairment cannot be measured or converted in
terms of money. The object is to
mitigate hardship that has been caused to the victim or his or her legal
representatives due to sudden demise. Compensation awarded should not be
inadequate and neither be unreasonable, excessive nor deficient. There can be
no exact uniform rule in measuring the value of human life or limb or
sufferance and the measure of damage cannot be arrived at, by precise mathematical
calculation, but amount recoverable depends on facts and circumstances of each
case. Upjohn LJ in Charle red House Credit v. Tolly[2]
remarked that the assessment of damages has never been an exact science and it
is essentially practical. Lord Morris in Parry v. Cleaver[3]
observed that to compensate in money for pain and for physical consequences is
invariably difficult without some guess work but no other process can be
devised than that of making a monitory assessment though it is impossible to equate the money
with the human sufferings or personal deprivations. The Apex Court in R.D.Hattangadi v. Pest
Control (India) Private Limited[4]
at paragraph No.12 held that in its very nature whatever a Tribunal or a
Court is to fix the amount of compensation in cases of accident, it involves
some guess work, some hypothetical consideration, some amount of sympathy
linked with the nature of the disability caused. But all the aforesaid elements have to be
viewed with objective standard. Thus, in most of the cases involving Motor
Accidents, by looking at the totality of the circumstances, an inference may
have to be drawn and a guess work has to be made even regarding compensation in
case of death, for loss of dependent and estate to all claimants; care,
guidance, love and affection especially of the minor children, consortium to
the spouse, expenditure incurred in transport and funerals etc., and in case of
injured from the nature of injuries, pain and sufferance, loss of earnings
particularly for any disability and also probable expenditure that has to be
incurred from nature of injuries sustained and nature of treatment required.
8.
From the above legal position and coming to the factual matrix, there is
evidence on record from the Ex.A.1-FIR and Ex.A.3-Inquest report and also from
Ex.A.6 so called salary certificate with reference to evidence of P.Ws. 1 and 3
the deceased was working in a road side hotel near high way claimed as
cook. The fact of the avocation of the
deceased as a hotel worker therefrom taken as established despite the P.W.1
cross-examined by the Insurer showing with reference to the civil supplies
Xerox copy of the deceased showing his income only of Rs.21,600/- p.a. that is
no doubt not filed and accepted, but to say the P.W.1 though earlier in the
cross-examination deposed no civil supplies card issued when confronted to it
denying income. It is the settled law at least from the expression of the Privy
Counsel in Alluri Venkatapati raju Vs.
Dantuluri Venkata narasimharju[5] that
whether a fact is to be considered on admission being relevant and conclusive or
not, on what context and for what purpose it is made has to be
appreciated. The civil supplies ration
card showing income directly to claim some benefits by showing low income
generally will not reflect the real income thereby that is not the criteria to
appreciate therefrom the contention of the Insurer. Likewise even coming to Ex.A.6 salary certificate
of so called payment of salary to the deceased by the proprietor of the so
called road side hotel, there is nothing to show the existence of the hotel and
avocation in the hotel by payment of any professional tax much less
Registration Certificate (RC), Food Products licence and registration under
Shops and Establishments Act by showing the deceased as one of the workers. In
the absence of which but for other evidence that to say he worked in some road
side hotel on so called salary cannot be taken into consideration. As also
observed by the Tribunal in its finding in 3rd line in para-13 of page
6, referring to a Ruling of the Apex Court in P.Yeshodamma Vs. T.Buchireddy[6]
that in the absence of any proof, earnings can be taken a minimum of Rs.100/-
even to a daily wage earner. In fact, The
Apex Court in Latha Wadhwa vs. State of
Bihar[7]
held that even there is no proof of income and earnings, it can be reasonably
estimated minimum at Rs.3,000/- p.m. for any non-earning member and even for
housewife as domestic contribution. Having regard to the same and from the
accident was dated 23.05.2007 the earnings of the deceased with prospective
earning capacity can be assessed at Rs.4,000/- p.m. as per the expression in Rajesh
v. Rajbir Singh[8] three
judge bench. The age of deceased as can be seen from Ex.A.4 postmortem report
and Ex.A.3 inquest report as 35 and for those 31 to 36, the multiple is 16 as
per Sarla Verma v. Delhi Transport Corporation[9],
and from the fact that the dependents are 5 in number, the deduction shall
be 1/4th, the net earnings i.e. dependency of the claimants from
death of deceased can be taken Rs.3,000/-p.m.x12x16=Rs.5,76,000/-. In addition
to that the claimants are entitled to Rs.1,00,000/- towards loss of consortium
to the 1st claimant, Rs.25,000/- towards funeral expenses and
Rs.20,000/-(even taken Rs.10,000/- each) for care guidance to the minor
children-claimants 2 and 3 and Rs.10,000/- towards loss of estate maximum as per
Sarla Verma and Rajesh (supra) and in all comes to Rs.7,31,000/- and from Vimal
Kanwar Vs. Kishore Dan[10]
even a further sum of Rs.19,000/-
added, it comes to Rs.7,50,000/-, which is the just compensation to award.
Accordingly, point-1 is answered.
Point
No.2:
9. Now coming to decide whether the insurer can be exonerated from
liability to indemnify the insured to the third party claimants concerned it is
opt to refer the following propositions:
i) No
doubt in National Insurance Company Limited Vs. Vidhyadhar Mahariwala &
Others[11], the two judge bench of the Apex Court in this
decision by referring to National Insurance Company Limited Vs.
Swaran Singh & Others[12] apart from other expressions in National
Insurance Company Limited Vs. Kusum Rai & Others[13] and Oriental Insurance Company Limited Vs.
Nanjappan & Others[14]
and Ishwar
Chandra & Others Vs. Oriental Insurance Company Limited & Others[15] held that the
insurer is not liable to indemnify the owner, when the driver has no license to
drive the crime vehicle.
ii) In
Ishwar Chandra (supra) it was held
by the two judge bench that
the driver’s licence when expired 30 days prior to the date of accident and no
renewal application filed even by date of accident to say a renewal dates back
to date of application, it is suffice to hold the driver has no valid licence
as on date of accident.
iii) In Kusumrai (supra) it was held by the two judge bench
that, the vehicle was used as taxi (commercial) and the driver is required to
hold appropriate licence but not having valid commercial vehicle licence and
from that breach, the insurer is held entitled to rise the defence.
iv) In Vidhyadhar Mahariwala (supra)—in para -8 of the judgment, it was
observed that in Swaran Singh (supra)whereupon
it was held as follows:-
“45. Thus, a person whose license is
ordinarily renewed in terms of the Motor Vehicles Act and the Rules framed
thereunder, despite the fact that during the interregnum period, namely, when
the accident took place and the date of expiry of the license, he did not have
a valid license, he could during the prescribed period apply for renewal
thereof and could obtain the same automatically without undergoing any further
test or without having been declared unqualified therefore. Proviso appended to
Section 14 in unequivocal terms states that the license remains valid for a
period of thirty days from the day of its expiry.
46. Section 15 of the Act does not
empower the authorities to reject an application for renewal only on the ground
that there is a break in validity or tenure of the driving license has lapsed,
as in the meantime the provisions for disqualification of the driver contained
in Sections 19,20,21,22,23 and 24 will not be attracted, would indisputably
confer a right upon the person to get his driving license renewed. In that view of the matter, he cannot be said
to be delicensed and the same shall remain valid for a period of thirty days
after its expiry.”
v) In Ram Babu Thiwari Vs. United Insurance Company Limited[16] by referring to Ishwar Chandra, Kusum Rai, Swaran Singh (supra) among other
expressions, held that when a driving license of the driver of the offending
vehicle was expired about three years prior to accident and it was got renewed
only subsequent to the accident it was held as violation of the terms of the
policy by referring to Kusum Rai (supra)
followed in Ishwar Chandra (Supra)
observed that in view of the Section 15(1) of the Act even the license
after period of expiry remains valid for thirty days to
renew meantime any renewal subsequently would be renewed from the date of
renewal only to say as on the date of accident even be subsequent renewal long
after thirty days expiry of the statutory period not a valid renewal to say no
valid license to exonerate the Insurer and thus exonerated the insurer.
vi) The above decisions other than Swaran singh (Supra) mostly speak of no
valid license as on the date of accident though earlier it was from its lapse and timely non-renewal
or holding one license not valid to
drive other type of vehicle.
vii) On perusal of Swaran Singh (Supra) referring earlier expressions speaks several
categories of cases as to such imperfect license or lapsed license with no
license in subsistence or a fake license or even driver with no license at
all. An extreme case of this type of
driver having no license at all driving the vehicle knowingly without even
application for lilcence and without experience to drive even admittedly and in
his saying it is to the willful and conscious knowledge of the owner as a
fundamental breach.
Coming to the cases no license is concerned:-
viii)
In Sardari vs. Sushilkumar[17]- the
facts show one Jageeru , Tonga
ix)
In UIIC Vs. Gianchand[18], it
was observed that when the insured handed over the vehicle to an un-licenced
driver, insurer would be exonerated from liability to meet III party claims.
x)
In Swaran Singh (three judges
bench-supra) it was laid down that the owner of the vehicle has a
responsibility to see that no vehicle is driven except by a person who doesn’t
satisfy Sections 3 & 4 of the MVAct.
In a case where the driver admittedly did not hold licence and the same
was allowed consciously to be driven by the owner of the vehicle by such person
insurer in its defence succeed to avoid liability. The matter, however, may be different
where a disputed question of fact arises as to driver had a licence or owner
committed a breach of the policy terms by consciously allowing a person to
drive without having a valid driving licence.
xi)
In NIAC Vs. Prabhulal[19] it
was a claim arisen out of Consumer District Forum holding no liability of the
insurer against the National Consumer Commission’s verdict fixing
responsibility.
xii)
In Prem Kumari Vs. Prahlad Dev[20] it
was also observed that owner of the vehicle cannot contend no liability to
verify the fact as to whether the driver possessed a valid licence or not.
xiii)
By referring all these expressions at Para 9 of the Judgment of the Apex Court
in Saradari (supra), the Apex Court
did not choose to interfere with the finding of the tribunal confirmed by the
High Court, in not chosen to make liable the insurer.
xiv)
In Surina Durvasulu Vs. Bhavanarayana
Murthy[21]
Para 14 it was held that when the driver had no valid driving licence to drive
tractor and the charge sheet also mentions a penal provision for violation of
the same in driving with no licence and nothing deposed by owner despite
contention of Insurance Company, that he has taken all necessary precautions to
entrust the vehicle to a person who had valid driving licence, insurance
company not made liable holds good.
10. The other type of cases are driver possessing
a fake license and not any real license to drive and driving the vehicle
entrusted by owner it all depends upon the facts as to the owner consciously by
knowing it is a fake license allowed or believing as genuine allowed and what
extent the liability to enquire lies on the owner concerned, the cases on that
principle are as follows: -
i) In National
Insurance Company Limited Vs. Laxmi Narain Dhut[22],
it was held by the Apex Court referring to Swaran
Singh (supra) and New India
Insurance Company Limited Vs. Kamala[23]
at page 41 that the defense available to the Insurer to indemnify the insured
or not (any) of a third party claim
under Section 149 of the Act includes the license claim as genuine is
fake. In that case on facts found the
license possessed was fake and it was even renewed by the Regional Transport
Officer concerned ignorant if the fact or otherwise held that mere renewal of a
fake license cannot cure the inherent defect as renewal cannot transform a fake license as genuine as
held in Kamala(supra) was the
conclusion arrived.
ii) The other decision on that is Oriental Insurance Company Limited Vs.
Prithvi Raj[24]
which is also a fake license and proved so and held that a renewal cannot take
away the effect of fake license to make the Insurer liable and the Insurer
cannot thereby be liable to that conclusion, they followed Kamala (Supra) besides United India Insurance Co. Ltd. V. Lehru[25]
(supra).
iii) The other decisions regarding fake license is
National Insurance Company Limited Vs.
Dupati Singaiah[26]
referring to Lehru, Swaran Singh, Gain
chand, Prithvi Raj, Prahlad dev(supra),
not to mention Oriental Insurance
Company Limited Vs. Meena Variyar[27]
earlier expression in Scandia Insurance
Company Limited Vs. Kokila Ben Chandravadan[28]
and United India Insurance Company
Limited Vs.Rakesh Kumar Arora[29]
held that in Swaran Singh (surpa) at
para-102 it was held that an insurer is entitled to raise a defense in a claim
filed under Section 163-A and 166 of the Act, in terms of Section 149
(2)(a)(ii) of the Act, as to breach of the policy conditions including
disqualification of the driver or invalid license of the driver etc., and to
avoid such a liability the defense has to be proved by the insurer with a plea
raised to establish such breach. However, it was not laid down in Swaran Singh (supra) any criteria as to
how said burden would be discharged. Thus same would depend upon facts and
circumstances of each case. The question as to whether owner has taken a
reasonable care to find out as to whether driving license produced by driver is
fake or otherwise does not fulfill the requirements of law or not will have to
be determined in each case. If available
at the time of the accident was driven by a person having learner’s license,
Insurance Company would be liable to satisfy the claim. Thus, unless the
Insurer proves willful breach of specific conditions of policy they cannot
escape from liability. In Swaran Singh
(supra), at para-85 and 94 as well as 102(3) observed that it may be true that
a fake or forged license is as good as no license, however, the question is
whether Insurer must prove that owner was guilty of willful breach of the
conditions of the policy in the contract of Insurance as considered with some
details in Lehru (Supra). To agree
said conclusion of Swaran singh and
Lehru (supra), it was observed in Dhupati
Singaiah (supra) at para-820 that in most of cases drivers and owners
remaining ex-parte by taking it for
granting that in the event of negligence being proved, the Insurance Company
would discharge its statutory liability.
It is the only Insurer that has to lead evidence both on the question of
negligence and on the question of liability, therefore, main defense available
to the Insurer is under Section 149(2) of the Act when if Insurer leads
evidence to show license found in the vehicle involved in the accident is fake
or the driver had no license or valid license,
it can be taken sufficient proof of breach of conditions as per Section
149 (2)(a) of Act therefrom Section 149(2)(a)(ii) of the Act enables the
Insurer to escape from liability if shown that there has been a breach of
specified condition of policy and on facts therefrom held Insurer to be
exonerated from liability.
iv) In Ashok Gangadhar Maratha V. Oriental Insurance Co. Ltd[30] and Roshanben (supra) also the above
principles of law are reiterated in exonerating the insurer.
v)
In fact, the three judges bench judgment of the Apex Court in Swaran Singh (supra) well laid down the
law in this regard referring to Lehru (supra) and Kamala (supra) that followed the earlier three-Judges bench
decision Sohan Lal Passi V. P.Sesha
Reddy[31]
wherein the reference was answered upholding the view taken Skandia Insurance Co. Ltd. V. Kokila Ben
Chandravadan[32]
and the principle laid down therefrom in Swaran Singh (supra) was approved and reiterated even in the
subsequent decisions including the above but for distinguishing for the facts
on hand in each of the cases as held by the Apex Court in NIC Vs. Geetabhat[33]
that the principle is the same but for any deviation from factual matrix of
each case if at all to say non-liability.
vi) The Apex court in Lehru (supra), Swaran Singh (supra), Nanjappan
(supra), Geetabhat (supra) and several
other expressions in the cases relating to no license at all or imperfect and no
valid license held that even it is one of breach of terms of policy and
violation of rules, since the policy otherwise covers risk, though denied
liability from no valid license, the insurer is to pay and recover. The insurance company cannot escape liability
unless the violation proved willful with conscious knowledge and fundamental,
every violation of policy conditions cannot be considered to escape the insurer
from liability to indemnify the owner (insured) to the 3rd party
claimants.
vii) Even in Geetabhat (supra) it was held reiterating the principle laid down
in the above decisions after referring the above among other several decisions
that when insurer seeks to avoid liability on ground of fake or no licence of
driver of the vehicle of the insurer, but for saying no licence issued by RTO
in name of the driver, even taken alleged licence as fake, insurer has to pay
to the third party claimants and recover from insured.
viii) In fact, in Swaran Singh's
case (supra), the Apex Court
ix) Furthermore, in Oriental
Insurance Company Limited Vs. Brij Mohan & Others[34] while holding that insurance company has no
liability, however, invoked Article 142 and 136 of the Constitution in
directing the insurer to pay first and recover from the vehicle owner, like in
several other cases within the power of the Apex Court.
x) The other decision of Apex
Court
xi) In National Insurance Company
Limited VS. Baljit Kaur[35] it was
held (even the case of unauthorized passenger of goods vehicle) as a general
observation that interest of justice would be sub-served in giving such a
direction to pay and recover having regard to the scope and purport of Sections
149 read with 168 of the MV Act,1988.
xii) In another judgment of two judges bench in National Insurance Company Limited Vs. Parvathneni & Another[36], the Apex Court doubted
the correctness of the directions issued in various judgments to the insurer to
pay even though not liable and therefrom formulated issues for consideration by
a larger bench
xiii) In fact, by referring to the above expression in Swaran Singh's case (supra), this Court
(High Court of Andhra Pradesh) in an appeal by insurance company, observed in New India Assurance Company Limited,
Tirupati, Vs. G.Sampoorna & Others[37] from paras-6
onwards that insurer raised the contention of driver was not having valid
license at the time of accident and examined employee of Regional Transport
Office, besides employee of the insurance company and the owner of the vehicle
did not speak anything. No evidence produced by claimants to show that there
was a license or it was even if lapsed renewed later. However, the Tribunal
held that even in the absence of driving license, insurance company has to pay
and recover rather than escaping from liability for the claimants are not
parties to the contract of insurance of the vehicle between insurer and
insured.
xiv) Therefrom further held that the conclusion is not acceptable from
reading of Section 149(2)(a) r/w Section 3 of the Act and by referring to Vidhyadhar Mahariwala case (supra) in
saying the statute itself excludes insurer's liability in such a case, thereby
the fact whether the claimant being a third party is not a privy to the policy
between insurer and insured has no relevance. It is however, by referring to
the Swaran Singh (supra) apart from
the earlier expressions referred therein, observed that the proposition laid
down in Swaran Singh (supra) is
referred to a larger bench and it is still pending.
xv) In Swaran Singh (supra)
it was held that the Tribunals and Courts in exercise of their jurisdiction to
issue any direction for pay and recovery considering, depending upon facts and
circumstances of each case. In the event
of such a direction has been issued despite arriving at a finding of fact to
the effect that the insurer has been able to establish that the insured has
committed a breach of contract of insurance under Section 149(2)(a)(ii) of the
Act, the insurance company shall be entitled to realise the award amount from
owner or driver, as the case may be, in execution of the same award in view of
Sections 165 and 168 of the Act.
xvi) It is from this, the Court in Sampoorna
(supra) from para-13 onwards observed that "In my opinion from the afore-extracted
passage of the judgment, it is evident that direction to the insurance company
to pay the compensation does not automatically follow in every case where the
insurance company is found not liable. The same depends upon the fats and
circumstances of each case. In all the aforementioned cases, which were
referred to by the Supreme Court, directions were given on the facts of each
case and considered the fact that the provisions of the Act dealing with
insurance and payment of compensation are beneficial in nature".
xvii) In paragraph 81 of Swaran Singh (supra), it was observed that
right to avoid liability in terms of Section 149(2) is restricted as has been
discussed herein before. It is one thing to say that the insurance companies
are entitled to raise a defence; but it is another thing to say that despite
the fact that its defence has been accepted, having regard to facts and
circumstances of the case, the Tribunal has power to direct them to satisfy the
decree at the first instance and then direct recovery of the same from the
owner. These two matters stand apart and require contextual reading.
xviii) The Supreme Court in subsequent judgments have not treated the
previous judgments including Swaran
Singh (supra) as laying down unexceptionable principle that in every claim
brought before the Tribunal, the insurance company should be directed to pay
compensation amount first even though its defence was found accepted, as
evident from some of the later expressions like in National Insurance Company Limited Vs. Bommithi Subbhayamma &
Others[38], (a case of passenger in a goods vehicle).
xix) By referring to the above, from paragraph 20, the High Court in Sampoorna (supra) observed that on the
strength of the discussion undertaken above, it is not possible for this Court
to treat the judgment in Swaran Singh
(supra) as containing mandatory directions to Tribunals and Courts to
invariably direct the insurer to pay at first instance and recover from owner
of the vehicle even though they are held not liable. Pending resolution of the issues by the larger
bench of the Supreme Court, it would be reasonable to understand the judgment
in Swaran Singh (supra) as leaving
discretion to the Tribunals and the Courts to give appropriate directions
depending upon facts and circumstances of each case.
xx) By applying the ratio in Swaran
Singh (supra) at para-21 of the judgment, the High Court held that some
amount that was already deposited by the insurance company, which holds good to
withdraw, and for the rest, insurance company is not liable.
11.
In fact besides Lehru (supra), Swaran Singh’s (supra) and Nanjappan
(supra) in holding that from lack of license or fake license or imperfect or
defective license, the insurer can be ordered firstly to satisfy the claimants
by indemnifying the owner and then recover from owner and driver;
i)
Even in the subsequent expressions of the Apex Court
ii)
Even in the recent expression of the High Court in Jaya Prakash Agarwal V. Mohd. Kalimulla[40]
having considered the law at length taken similar view, while saying at para-39
that each case has to be decided on its own facts and circumstances.
iii)
Even in the latest expression of the Apex Court in S.Iyyappan Vs. United India Insurance Company[41] a
two judge bench of the Apex Court held that even though the insurer has taken
the defence that there is a breach of conditions of the policy excluding from
liability, from the driver is not duly licenced in driving the crime vehicle
when met with accident, third party has a statutory right under Section 149
read with 168 of the Act to recover compensation from insurer and it was for
the insurer to proceed against the insured for recovery of amount paid to third
party in case there was any fundamental breach of condition of Insurance
policy.
12.
As per the above propositions of law coming to the factual matrix there is
nothing even from the facts to say there is willful and conscious knowledge of
the alleged breach to attribute to the owner and section 168 of the Act speaks
once there is insurance coverage the insurer is bound to indemnify the insured to
third party-claimants, there is nothing to interfere with said finding of the
Tribunal so far as the liability of pay and recover is concerned, but for to
safeguard the interest of the Insurer with further observations.
13. Coming to the rate of interest, from the settled
proposition of law in TN Transport Corporation v. Raja Priya[42],
and Rajesh (supra) that
while awarding reasonable rate of interest the steep fall in the bank interest
rate since past several years has to be kept in mind and awarded therefrom
interest at 7.5% p.a. as reasonable. The
appellate Court also got the discretionary power under Order LXI Rule 33 C.P.C
to award reasonable rate of interest from the drastic fall in bank rate of interest in bank rate as laid down by the Apex Court in DDA Vs. Joginder S. Monga[43].
Having regard
to the same and from the discretionary power of the appellate Court as the interest
at 7½% p.a. awarded by the Tribunal is quite reasonable and it requires no
interference. Accordingly, Point No.1 is answered.
14.In
the result, a) The appeal (MACMA No. 1093 of 2011) of the Insurance Company is
disposed with no costs. The award of the Tribunal with regard to fastening
liability on Insurer to pay and recover holds good but for with further
directions that the respondents shall deposit said amount within one month,
failing which the claimants can execute and recover. It is made clear from the settled expressions
of the Apex Court in Lehru (supra)
& Nanjappan (supra) that the
insurer is entitled, while depositing the amount payable, if not deposited or
paid any amount so far to deposit balance to approach the Tribunal to direct
the RTA concerned not to register any transfer of the crime vehicle and to seek
for attachment of the crime vehicle or other property of the insured as an
assurance for execution and recovery in the same proceedings or under revenue
recovery as per the MV Act, 1988 and also ask the Tribunal not to disburse the
deposited amount to claimants (but for to invest in a bank) till such
attachment order is made. However, after
the same, the Tribunal shall not withhold the amount of the claimants, if there
is any necessity to permit for any withdrawal but for to invest the balance in
fixed deposit in a nationalized bank. Rest of the terms of the award of the
Tribunal holds good.
b)The
appeal (MACMA No.1101 of 2011) filed by the claimant is partly allowed by
enhancing the compensation awarded by the Tribunal from Rs.3,70,000/- to Rs.7,50,000/-
with interest at 7.5%p.a. The rest of the award terms in all other aspects
holds good. There is no order as to costs.
15.
Consequently, miscellaneous petitions, if any, pending in these appeals shall
stand closed.
_______________________
Dr. B. SIVA SANKARA RAO, J
Date:
19-12-2013
VVR
Note: L.R. copy to be marked. Yes/No
