National Insurance Co. Ltd vs Mahalaxmi & Ors.

R.K.Gauba, J

Shanker Yadav died as a result of injuries suffered in motor vehicular accident that occurred on 16.03.1999 due to negligent driving of truck bearing

registration no. HR 38C 3240 (the truck), the fifth respondent herein being the driver, the truck being registered in the name of sixth respondent (the

owner) and insured for the period in question with appellant insurance company. The first to fourth respondents (collectively, the claimants) instituted

accident claim case (MACT No. 528/2008) on 06.11.2001 on the averments that the accident and death had occurred due to negligent driving of the

truck. The tribunal held inquiry and, by judgment dated 03.07.2010 accepted the said claim holding the truck driver responsible as the principal tort-

feasor and, the sixth respondent (the registered owner) being vicariously liable. The tribunal assessed compensation and awarded amount of Rs.

4,99,000/-, fastening the liability on the insurer to pay with interest @ 9% per annum.

The insurer, pertinent to add, had taken the plea that there was breach of terms and conditions of the insurance policy since, according to it, the

driver of the truck was not holding an effective or valid driving licence at the relevant point of time. Evidence was led by the insurer, it examining

Usha Sharma (R3W1), an official of the insurance company to prove by her affidavit (Ex.R3W1/A) that it had issued a notice under Order 12 Rule 8

of the Code of Civil Procedure, 1908 (CPC) to which there was no response by the registered owner, the driving licence not having been produced.

The insurance company also relied on copy of the charge-sheet (RW1/6) which had been submitted by the police upon conclusion of investigation of

the corresponding criminal case seeking prosecution of the truck driver on the charge, inter alia, of he having driven the vehicle without holding any

valid licence, it constituting offence punishable under Section 3 read with Section 181 of Motor Vehicles Act, 1988. The sixth respondent also entered

the witness box (as R2W1) on the strength of his affidavit (Ex.R2W1/A) taking the position that he had employed the driver after checking his driving

licence. The tribunal accepted the said defence of the registered owner and, thus, declined to grant any relief to the insurance company.

The appeal challenging the judgment dated 03.07.2010 is pressed by the insurer to seek only recovery rights, its submission being that since the

owner had not responded under Order 12 Rule 8 CPC, the plea taken by affidavit (Ex.R2W1/A) is an afterthought, particularly when no such licence

was produced even before the police during investigation, it leading to the prosecution of driver of the truck also for offence under Section 3 read with

Section 181, Motor Vehicles Act.

The appeal had been admitted and put in the list of ‘regulars’ by order dated 14.09.2017. On being called out, there is no appearance on

behalf of the sixth respondent.

Having heard the learned counsel for the insurer and having gone through the record, this Court finds substance in the contention urged by the

insurance company. The insurance company had called upon the registered owner the sixth respondent by notice dated 15.11.2002 (Ex.RW1/2) to

produce the driving licence of the fifth respondent. The said notice had been sent to the registered owner vide postal receipt (RW1/3) at his correct

address. It had been duly delivered at the said address as per acknowledgement card (Ex.RW1/5). No response was given to such notice. Rather, the

record reveals that the owner did not take any interest till it reached the stage of his evidence when, for the first time, by his affidavit (Ex.R2W1/A)

sworn on 06.02.2010, he came up with the theory of having seen the driving licence of fifth respondent at the time of he being engaged for the

purpose. During cross-examination, he claimed that he had retained a copy of the licence which had been seen, but was unable to produce any such

document.

It is clear that the position taken by the sixth respondent has no legs to stand on. The insurance company has, thus, proved by evidence that the fifth

respondent was not holding a valid or effective driving licence. In the given facts and circumstances, it has to be inferred that the sixth respondent had

not exercised due diligence while engaging fifth respondent as driver, this constituting breach of terms and conditions of the insurance policy. In the

consequence, recovery rights are hereby granted in favour of the appellant insurance company.

By order dated 27.10.2010, the insurance company had been directed to deposit the entire awarded amount with the Registrar General and out of

such deposit 50% was allowed to be released. The registry shall release the balance to the claimants.

The appeal is disposed of in above terms.

The statutory deposit shall be refunded to the insurance company.