National Insurance Co. Ltd. vs Amina and Others

Mansoor Ahmad Mir, J.—Respondent Nos. 1 to 4 filed a claim petition before the Motor Accidents Claims Tribunal at Anantnag, for grant

of compensation on the grounds that respondent No. 5, namely, Mohammad Yaqoob Ganai, driver has driven bus bearing registration No. JK 01-

C 2419 rashly and negligently on 5.6.1997 at about 9.45 a.m. and hit the deceased who sustained injuries and succumbed to injuries. The

deceased was 40 years of age and was employee of Jammu & Kashmir Forest Department drawing Rs. 5,314 as salary and was also earning Rs.

2,000 and Rs. 1,500 from agricultural vocation and floriculture per month. It was expected that he would have been shortly promoted as Range

Officer.

Owner and driver have failed to file reply before the Tribunal. The appellant insurer filed written statement and contested the petition and the

Tribunal after going through the pleadings framed the following issues:

(1) Whether the death of Mohd. Hussain Chatoo was caused on 5.6.1997 due to rash and negligent driving of the respondent No. 1 while driving

vehicle No. JK 01-C 2419? OPP

(2) Whether respondent No. 2 was the owner of vehicle JK 01-C 2419 and the same was insured with respondent No. 3 vide policy No.

487338? OPP

(3) Whether Mohd. Yaqoob Ganai, respondent No. 1, did not possess proper driving licence in his name, if so what is its effect on the claim?

OPD3

(4) Relief.

Petitioners-claimants examined witness. Insurer examined only two witnesses, namely, Peerzada Noor-ud-Din, Clerk, RTO, Srinagar and

Imtiyaz Ahmad Shah.

After hearing learned Counsel for the parties the impugned order came to be passed. The Tribunal vide impugned award has held that driver

was having fake licence and has given the right of recovery to the appellant insurer provided it proves before the Tribunal that owner-insured has

committed breach of the policy conditions and engaged a driver who was having fake licence.

The short grievance projected by the learned Counsel for the appellant is that the Tribunal has committed error while asking the insurer-

appellant to prove that owner has committed breach of the policy conditions. Insurer-appellant was to be given right of recovery without asking it

to initiate further proceedings in order to prove that owner has committed breach of the policy conditions. Virtually, the appellant has not

questioned the award on any other grounds.

Learned Counsel appearing for the respondent Nos. 5 and 6, i.e., owner and driver argued that the impugned award is well reasoned needs no

interference.

There is evidence on the file that the driver has driven the offending vehicle rashly and negligently and has caused the accident resulting into the

death of the deceased, namely, Mohd. Hussain Chatoo. In terms of mandate of Section 149 of the Motor Vehicles Act, insurer cannot question

the quantum of compensation. Even otherwise learned Counsel for the appellant has not questioned the same. However, I have gone through the

record and I am of the considered view that the Tribunal has awarded just and reasonable compensation.

Now, the question is as to whether the impugned award needs to be modified insofar it relates to asking the appellant to initiate recovery

proceedings before it and to prove that owner-insured has committed wilful breach?

It is not the case of the parties that driver has not produced any licence. Admittedly, the driver has produced licence which proved to be fake.

In order to claim right of recovery the insurer had to prove by leading evidence that owner has committed wilful breach by engaging a driver who

was not having a valid and effective driving licence.

Section 149 (2) (a) mandates that the insurer in terms of Section 149 of the Motor Vehicles Act has limited defence. In order to avoid liability,

the insurer has to prove that owner has committed wilful breach and not mere breach. Wilful breach means that if a licence is not valid or is

ineffective or is fake the duty of the insurer is to prove that owner was aware that licence was fake, invalid, ineffective.

The Supreme Court in case titled as National Insurance Co. Ltd. Vs. Swaran Singh and Others, , held as under:

(102) (iii) The breach of policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in Sub-section (2) (a)

(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid

driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either

the insured or the third parties. 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.

(iv) The insurance companies, 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 wherefor would be on them.

(vi) 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

Tribunals in interpreting the policy conditions would apply 'the rule of main purpose' and the concept of 'fundamental breach' to allow defences

available to the insurer u/s 149 (2) of the Act.

I have also laid my hands on a recent judgment titled Premkumari and Others Vs. Prahlad Dev and Others, , wherein their Lordships have laid

down that by proving that driver was having fake licence would not absolve the insurer. It was to be proved that owner was having the knowledge

that driver is holding a fake licence but still permitted him to drive the vehicle. It is apt to reproduce relevant portion of para 6 of the said judgment

herein:

(6) ...It is clear from the above decision when the owner after verification satisfied himself that the driver has a valid licence and driving the vehicle

in question competently at the time of the accident there would be no breach of Section 149 (2) (a) (ii), in that event, the insurance company would

not then be absolved of liability. It is also clear that even in the case that the licence was fake, the insurance company would continue to remain

liable unless they prove that the owner was aware or noticed that the licence was fake and still permitted him to drive.

Applying the test to the instant case, insurer-appellant has not lead an iota of evidence in order to prove that owner was aware or noticed that

the licence was fake and still permitted the driver to drive the vehicle.

In the given circumstances of the case, I do not find any error in the impugned award. Accordingly, the appeal is dismissed.

Registry to send down the record along with a copy of this judgment.