National Insurance Co. Ltd. vs Khelwati

Prashant Kumar Agarwal, J.—Disputing its liability to make payment of the amount of compensation as awarded by the learned Tribunal on the ground that the driver of the offending vehicle was not having a valid and effective driving licence at the time of the accident, the appellant-Insurance Company has filed this Civil Misc. Appeal u/s 173 of the Motor Vehicle Act, 1988 (hereinafter to be referred as "the Act") against the judgment and award dated 19.04.2006 passed by the Motor Accident Claims Tribunal and Special Judge, Dacoity Affected Area, Dholpur in M.A.C. Case No. 156/2005. The learned Tribunal has awarded a sum of Rs. 2,25,000/- with interest @ 6% per annum as compensation in favour of the claimant-respondents No. 1 and 2, who are parents of the deceased-Shri Ravi aged 18 years at the time of the said accident. The deceased sustained several fatal injuries as a result of the accident when he was travelling in a passenger carrying Tempo bearing registration No. RJ-11-P-0435. The main defence taken by the appellant-Insurance Company before the Tribunal was that at the time of the accident the driver was having a licence only to drive a light motor vehicle whereas the said accident occurred when he was driving a Tempo carrying passengers which is admittedly a light transport vehicle. It was pleaded by the appellant that liability to pay the amount of compensation cannot be fastened on it as the terms and conditions of the insurance policy were breached by the owner of the vehicle. Negativing the plea taken by the appellant, it was found by the learned Tribunal that a tempo is also a light motor vehicle and as at the time of the accident, the driver was having a valid and effective driving licence to drive such a vehicle, it cannot be held that there was fundamental breach of any term and condition of the policy. With this finding, liability to pay the amount of compensation was also imposed on the appellant-Insurance Company alongwith the owner of the vehicle.

Mainly relying on the case of New Indian Assurance Co. Ltd. Vs. Roshanben Rahemansha Fakir and Another, learned counsel for the appellant submitted that light motor vehicle does not include a "light motor transport vehicle" and both are of different category of vehicles within the meaning of the Act and as in the present case admittedly driver of the offending vehicle was driving a passenger carrying light transport motor vehicle while possessing a licence valid and effective only to drive a light motor vehicle, the Tribunal has wrongly fastened the liability on the appellant. It was pointed out by the learned counsel for the appellant that in the aforesaid case, the driver was driving "auto-rickshaw delivery van" which is a commercial vehicle coming under the category of a transport vehicle, Hon''ble Supreme Court held that possession of an effective licence is necessary in terms of Section 10 of the Act. According to the learned counsel for the appellant Hon''ble Supreme Court while allowing the appeal filed by the Insurance Company set aside the finding of the High Court.

On the other hand, learned counsel for the claimant-respondents submitted that the appellant insurer cannot escape from its statutory liability to satisfy the award passed in favour of the victim of a motor accident by taking a technical objection to the effect that the driver of the offending vehicle was found to possess a valid and effective driving licence to drive a vehicle which is different from the category of the vehicle which he was actually driving at the time of the accident. It was further submitted that in the present case the driver of the vehicle involved in the accident was having a valid and effective driving licence to drive a light motor vehicle, the appellant cannot disown its liability on the ground that at the time of the accident he was driving a light motor passenger carrying transport vehicle more particularly in view of the fact that the appellant failed to discharge its burden to prove that the owner (insured) acting negligently and knowingly and willfully allowed a person who was not having a valid and effective licence to drive his vehicle. It was also contended that it has not been proved by the appellant-Insurance Company that not possessing a proper licence was the main or contributory cause of accident.

In support of his submissions, learned counsel for the respondents relied upon the case of S. Iyyapan Vs. United India Insurance Company Ltd. and Another,

On consideration of submissions made on behalf of the respective parties and the material available on record as well as the well settled legal position, the submissions made on behalf of the appellant being not legally tenable are liable to be rejected. The issue involved in the present case has been considered by a Bench of three Hon''ble Judges of the Hon''ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Swaran Singh and Others, and has been answered against the insurer. It has been held by the Hon''ble Supreme Court that mere possession of invalid driving licence at the relevant time is not a defence available to the insurer against either the insured or the third party. It was also held that to avoid its liability towards the 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. It has also been held that the breach on the condition of licence must be so fundamental as found to have contributed to the cause of accident.

In the present case, the appellant neither pleaded nor discharged its aforesaid burden by bringing evidence on record.

Consequently, while maintaining and affirming the judgment and award dated 19.04.2006 passed by the Motor Accident Claims Tribunal, Dholpur in MAC. Case No. 156/2005, the appeal preferred by the appellant being meritless is, hereby, dismissed, but without any order as to costs.