National Insurance Co. Ltd vs Nirmala Devi & Anr

Valmiki J. Mehta, J

CM No.5612/2017(exemption)

Exemption allowed, subject to all just exceptions.

Application stands disposed of.

FAO No. 74/2017 & CM No.5613/2017(stay)

This First Appeal under Section 30 of the Employeeâ€s Compensation Act, 1923 is filed by the insurance company impugning the judgment of the

Employeeâ€s Compensation Commissioner dated 25.11.2016 by which the Employeeâ€s Compensation Commissioner has allowed the claim petition

filed by the claimant/respondent no.1 herein and has awarded compensation under the Employeeâ€s Compensation Act on account of death of the son

of the claimant, Sh. Arun Kumar Sharma.

The facts of the case are that the deceased, Sh. Arun Kumar Sharma is pleaded to have been working as a driver of a truck bearing No.RJ-14-

GA-8783 which was owned by the employer/owner Smt. Roopa Sharma, respondent no. 2 herein, and who was the respondent no.1 before the

Employeeâ€s Compensation Commissioner. It was pleaded in the claim petition that on 16.1.2009 at about 10:45 AM when the subject truck was on

its way from Bangalore to Delhi and it reached Raptadu village in Andhra Pradesh it was hit by a bus of Andhra Pradesh Road Transport Corporation

(in short „APRTCâ€​) bearing No.AP-28Z-0604 and because of the accident Sh. Arun Kumar Sharma died. It was pleaded that the bus operated by

APRTC was being driven in rash and negligent manner but their employees being government employees managed to get an FIR registered that it

was the deceased Sh. Arun Kumar Sharma who was rashly driving the vehicle. The vehicle in question was insured with the appellant/insurance

company, respondent no.2 before the before the Employeeâ€s Compensation Commissioner, under an insurance policy which was valid from

29.9.2008 to 28.9.2009 and consequently, the subject claim petition was filed. I may note that earlier a claim petition was filed under the Motor

Vehicles Act, 1988 and which was allowed to be withdrawn wherein the claimant/respondent no.1 sought and was granted liberty to file a petition

under the Employeeâ€​s Compensation Act.

The owner/employer/respondent no.2 herein did not appear before the Employeeâ€s Compensation Commissioner and was proceeded ex-parte.

The claim petition was contested by the appellant/insurance company, respondent no.2 before the Employeeâ€s Compensation Commissioner. Two

defences were pleaded on behalf of the appellant/insurance company for dismissal of the claim petition. The first issue which was urged was that the

driving license of Sh. Arun Kumar Sharma was fake and secondly it was urged that there was violation of the permit condition because the vehicle in

question had no permission for being driven in Andhra Pradesh where the accident occurred.

Two issues were framed on the aspects as stated above, and of which onus was on the appellant herein, evidence was led on behalf of the

appellant/insurance company as onus of both the issues with respect to the driving license being fake and the vehicle being driven in an area for which

there was no permit, were on the appellant/insurance company. Since the present appeal will have to be decided almost entirely on the basis of the

affidavit by way of evidence filed on behalf of the appellant/insurance company, and since the affidavit by way of evidence is a short affidavit of four

paras in two pages, the same is reproduced as under:-

“Evidence by way of affidavit on behalf of respondent No.2 National Insurance Co.Ltd.

I, Dharmender Arya, Administrative Officer of National Insurance Co. Ltd. having its office at, 2E/9, Jhandewalan Extension, New Delhi â€" 55, do

hereby solemnly affirm and declare as under:

I say that I am the official of the National Insurance Co. Ltd. and handling the present case and thus aware of the facts of the case. Thus I am

competent to swear this affidavit.

I say that that the liability of the insurance company arises out of the insurance contract in the present case which is already on record. The said

policy has been issued subject to the terms and conditions of the policy as specified in the policy scheduled is as under:

Persons or Class of Persons entitled to drive:

Any person including insured, Provided that a person driving holds an effective driving licence at the time of the accident and is not disqualified from

holding or obtaining such license…….

It is submitted that upon receipt of the MACT Claim the driving license provided by the driver of the vehicle was verified through investigator. As per

report of the investigator obtained from the Licensing Authority, Mathura license provided by the Claimant was issued in the name of Sh.Subhash

Chand and not in the name of Late Arun Kumar Sharma i.e. the deceased driver. Thus it was proved from the report of investigator that the deceased

was driving the vehicle with forged Driving License. As the insured allowed the vehicle to be driven by a person not holding a valid and effective

driving licence thus no liability can be put upon the insurance company. The Insurance policy is exhibited herewith and marked herewith as Exhibit

R2W1/1 and the report of investigator dated 22.11.2010 is exhibited herewith and marked herewith as Exhibit R2W1/2.

I say that from the above facts and circumstances explained it is very much clear that the vehicle was being driven and was allowed to be driven

without a valid and effective driving license. Thus there is violation of terms and conditions of the policy. It is, therefore, the insurance company is not

liable to indemnify the compensation if any passed against the Respondent No.1.

I say that this is my true and correct statement and nothing material have been concealed therefrom.â€​

A reading of the aforesaid affidavit by way of evidence shows that the appellant/insurance company has proved the report of the investigator,

Ex.R2W1/2 that the driving license is fake, however, the law is now well settled that when the issue is that whether the terms and conditions of a

policy have been violated on the ground that driving license of the driver is fake, then all that an owner of the vehicle is to do at the time of

employment of the driver is to see whether the driver has a valid license. There is no onus or duty cast upon the owner of the vehicle to conduct a

detailed enquiry including by going to the Road Transport Authority to confirm the validity of the license. It has now been consistently held by the

Supreme Court that there is a requirement therefore in law for evidence to be led that the owner at the time of employment of the driver did not at all

check the license and such a deposition has to be made by the insurance company, however this has not been so deposed by the witness of the

appellant/insurance company in the affidavit by way of evidence which was filed, and therefore it has to be held that the employer had examined the

driving license of the employee at the time of employment of the employee as a driver of the vehicle. I have reproduced the affidavit by way of

evidence filed on behalf of the appellant/insurance company before the Employeeâ€s Compensation Commissioner and it is seen that no averment by

the appellant/insurance company that the owner of the subject vehicle when he employed the deceased Sh. Arun Kumar Sharma had not checked the

driving license of Sh. Arun Kumar Sharma or that the employer never saw any original valid license of Sh. Arun Kumar Sharma at the time of his

employment. Once the appellant/insurance company has not deposed so as per its affidavit by way of evidence, in such a case it has to be held that

the fact that the driving license may in fact turn out to be fake will not exonerate the appellant/insurance company. The first issue is therefore decided

against the appellant/insurance company.

6.(i) I would like to, at this stage, refer to the arguments on behalf of the appellant/insurance company with respect to the first issue that the judgment

of the Supreme Court in the case of National Insurance Company vs. Mastan & Anr., I (2006) ACC 1 (SC) concludes the issue in favour of the

appellant/insurance company that once there are two separate Acts being the Employeeâ€s Compensation Act and the Motor Vehicles Act then the

provisions of the Motor Vehicles Act including Section 149 of the Motor Vehicles Act cannot be used for deciding compensation cases under the

Employeeâ€​s Compensation Act.

(ii) In my opinion this argument urged on behalf of the appellant/insurance company has no application to the facts of the present case because all that

is held in the judgment of Mastan’s case (supra) is that a case under the Employeeâ€s Compensation Act will have to be decided as per the

provisions of the Employeeâ€s Compensation Act and the cases under the Motor Vehicles Act will have to be decided as per the provisions of the

Motor Vehicles Act, however, this is not the issue in the present case as the issue is that the law with respect to a valid driving license being held by

the driver is that all that owner has to do at the time of employment of the employee as a driver is to examine the driving license and that the

employee/driver has a driving license. The duty of the employer being the owner of the vehicle ends there with no further enquiry required to be

conducted by the owner of the vehicle/employer. It is this principle which is being invoked in this case for holding that the plea of fake license urged

on behalf of the appellant/insurance company is to be rejected and this Court is not applying any provision of the Motor Vehicles Act for deciding the

present case under the Employeeâ€s Compensation Act. Argument urged on behalf of the appellant/insurance company relying on Mastan’s case

(supra) therefore is clearly misconceived and is rejected.

The second argument which is urged on behalf of the appellant/insurance company is that admittedly the vehicle in question had a valid permit only

for the States of Rajasthan, Delhi, Haryana, M.P., Maharashtra, Karnataka and Tamil Nadu but the vehicle in question when it met with an accident

was in Andhra Pradesh, and hence clearly the terms and conditions of the insurance policy are violated as the vehicle was being driven against the

terms of its permit. In my opinion even this argument urged on behalf of the appellant/insurance company has no substance, though the Employeeâ€s

Compensation Commissioner may not have been justified in referring to the provisions of Section 149 of the Motor Vehicles Act, inasmuch as, the

vehicle has been proved at the relevant time of the accident as having been driven from Karnataka to Delhi wherein a part of the State of Andhra

Pradesh would have to be crossed. It is seen that the States of Karnataka, Maharashtra and Tamil Nadu are contiguous and adjacent to each other

and therefore for driving from these States to Delhi it is possible that for a particular stretch the highway of a State in which the permit is not valid

would have to be crossed, however, since it is not proved by the appellant/insurance company that the vehicle when it met with an accident in Andhra

Pradesh was not being driven for the trip from Karnataka to Delhi and that the vehicle was involved in an independent commercial journey in Andhra

Pradesh where the accident happened, hence the principle of contiguity has been rightly relied upon by the Employeeâ€s Compensation Commissioner

and which principle will necessarily apply. Surely, I do not think the appellant/insurance company can argue that vehicles should have rotors and wings

for flying so that they would cross a stretch of a State where it has no permit and which is required to be crossed necessarily for its onward journey to

a destination. It is for this reason that on account of doctrine of necessity that the principle of contiguity will apply and unless and until the

appellant/insurance company pleads and proves that there was no need to cross the stretch in a State not having permit otherwise the principle of

contiguity on the doctrine of necessity which would have to be applied. In terms of the affidavit by way of evidence of the appellant/insurance

company, and which has been reproduced in its entirety above, it has to be held that it has not been proved (or even pleaded) by the

appellant/insurance company that the accident when it happened in Andhra Pradesh was on account of the vehicle being involved in an independent

work in Andhra Pradesh and that it is not that the vehicle was only crossing a stretch which was in contiguity for the purpose of movement of the

vehicle from Karnataka to Delhi. The second argument is also therefore without any substance and is rejected.

An appeal under Section 30 of the Employeeâ€s Compensation Act will only lie where substantial question of law arises. No substantial question of

law arises. Dismissed.