Bajaj Allianz General Insurance Co. Ltd. vs R. Logaraj and Others

Ram Mohan Reddy, J.—1. This appeal by the insurer of the offending scooter calling in question the judgment and award dated 18.10.2010 in MVC No. 7376/2008 of the VI Addl. Judge, Court of Small Causes and MACT, Bengaluru City, (for short ''MACT''), is directed against the finding fastening liability to pay compensation of Rs. 1,05,000/-.

It is not in dispute that the scooter in question was insured by the appellant, while its owner/2nd respondent was the insured. It is also not in dispute that rider of the scooter was attributed with actionable negligence the cause of the accident and injuries to 1st respondent. It is not in dispute that the appellant did not chose to examine the Regional Transport Authority or Officers of the Regional Transport Department to produce and speak to the driving licence of rider of the scooter, who was charge sheeted for cognizable offence under Indian Penal Code.

It is not in dispute that R.W. 1 officer of the appellant/insurer did not have personal knowledge of either the particulars of the rider of the scooter nor made enquiries into the existence or otherwise of a valid and effective driving licence by the rider of the scooter on the date and at the time of accident. It is a matter of fact that in the testimony of R.W. 1 it is stated that no efforts were made to ascertain from Regional Transport Officer over the driving licence of the accused/rider before the Criminal Court. The contention advanced before the MACT that the rider of the scooter did not possess a valid and effective driving licence was turned down, since there was not a title of evidence in support of the contention. Identical is the contention advanced in this appeal.

The submission of Sri A.N. Krishnaswamy, learned counsel for appellant that Exs. R.1 to R.5 being the insurance policy, the notice issued to the 2nd respondent/owner of the scooter, the postal cover and copy of the notice as well as the certificate of posting, calling upon the owner to furnish material particulars and data relating to the rider of the scooter in question, when not responded is breach of Section 134(c) of the Motor Vehicles Act, 1988, (for short ''Act'') hence MACT was not justified in fastening liability on the insurer, is noticed only to be rejected. If there is violation or breach of terms of the policy which is not fundamental to the accident is not a ground or a defence available to the appellant under Section 149(2) of the ''Act''.

In Rukmani and others v. New India Assurance Co. and others , (1998)9 SCC 160, the Apex Court though noticed that the Insurance Company had in support of its plea that the driver of the vehicle did not hold a valid driving licence, examined Inspector of Police who investigated the accident, nevertheless, observed that in the enquiry of the said Inspector, the driver of the vehicle did not produce the licence and even after demand, did not submit the licence since he was not have any, while, in cross-examination, admitted to the effect that he was required to check whether licence is issued and that he had not informed the Inspector of the motor vehicles that driver did not hold a valid licence since it was not necessary, the Apex Court held that failure to summon the driver of the vehicle and there being no record from Regional Transport Authority placed before Tribunal, the Insurance Company has not discharged its burden cast upon it under Section 96(2)(b)(ii) of the M.V. Act, 1989, which is para material with Section 149 of the ''Act''.

In National Insurance Co. Ltd. v. Swaran Singh and others , AIR 2004 SC 1531, the Apex Court observed thus:

"63. In Rukmani and Others v. New India Assurance Co. Ltd. and Others [, 1999 ACJ 171], this Court while upholding the defences available to the insurer to the effect that vehicle in question was not being driven by a person holding a licence, held that the burden of the insurer would not be discharged when the evidence which was brought on record was that the Inspector of Police in his examination in chief merely stated, "My enquiry revealed that the respondent No. 1 did not produce the licence to drive the above said scooter. The respondent No. 1 even after my demand did not submit the licence since he was not having it".

The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event, the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. (See Sohan Lal Passi (supra).

Apart from the above, we do not intend to lay down anything further i.e. degree of proof which would satisfy the aforementioned requirement inasmuch as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance. Each case may pose different problem which must be resolved having to a large number of factors governing the case including conduct of parties as regard duty to inform, correct disclosure, suppression, fraud on the insurer etc. It will also depend upon the fact as to who is the owner of the vehicle and the circumstances in which the vehicle was being driven by a person having no valid and effective licence. No hard and fast rule can therefore be laid down. If in a given case there exists sufficient material to draw an adverse inference against either the insurer or the insured, the Tribunal may do so. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of contract of insurance on the part of the insurer by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records."

If regard is had to the observations of the Apex Court supra, it is needless to state that the postal receipt, returned postal cover, copy of notice and UCP receipt, Exs. P.2 to P.5 by themselves and nothing more do not constitute relevant material to establish a fact of violation or breach of terms and conditions of police of Insurance Company, Ex. P.1. Merely because R.W. 1 Officer of the Appellant/insurer made a statement that notice was issued to respondent No. 2, owner/insured, without it being served and response elicited, it is not possible to accept the plea that the 2nd respondent deliberately did not furnish material particulars of the accident. Even otherwise, charge sheet filed by the State constabulary against the rider of the scooter was sufficient material for the appellant insurer to ensure service of notice on the rider of the scooter and to examine him as witness and if he turned hostile, to deal with him appropriately, in accordance with the Evidence Act. Such an effort when not made, submission of the learned counsel that Exs. R.2 to 5 constitutes substantial legal evidence of breach of conditions of policy of insurance is unacceptable. The standard of proof required is not just production of document, but it involves something more, in the sense, that notice must be served calling upon the owner to place on record relevant material particulars. Such an exercise when not made, Exs. R.2 to 5 are unacceptable as admissible evidence.

Appeal devoid of merit is dismissed. Amount in deposit is directed to be transmitted to the MACT concerned, forthwith.