National Insurance Co. Ltd. vs Santha

K.A. Abdul Gafoor, J.—The appellant insurer raised mainly two contentions before the Tribunal below; (1) the liability to indemnify to the insured in terms of the policy was limited and (2) there was violation of condition of police including in so far as the driver, the 2nd respondent before the Tribunal below did not possess a valid driving licence.

The first contention was sought to be substantiated on the basis of police and it was accepted by the Tribunal below. The second contention was sought to be substantiated by filing a petition on 19.10.1989 before the Tribunal below calling upon both the owner and the driver to produce certain documents relating to the vehicles including the driving licence. Though the interlocutory application was posted on three or four occasions, no order is seen passed. Except, as is discernible from the judgment of the Tribunal below, filing a written statement no contention had been raised or evidence had been tendered by the driver. While passing the impugned judgment the Tribunal below did not deal with the second contention of the Insurance Company especially with regard to the absence of driving licence. So, it is submitted that even the liability in terms of the award is not to be satisfied by the insurer, the appellant submits.

Section 96(2)(b)(ii) of the Motor Vehicles Act, 1939 provides that if the vehicle was being driven by a person without driving licence, necessarily, the insurer can avoid the liability. Sub-section (3) thereof further provides that any condition imposed other than that providing in Sub-section (2)(b) of Section 96 shall be of no effect so far as the insurer is concerned. In other words, all the conditions made mention of in Section 96(2)(b) is of no effect so far as the insurer is concerned to avoid a liability and to plead avoidance of liability. it is in that respect that valid plea available to the insurer in terms of the statue had been raised before the Tribunal below. In such circumstances, the Tribunal was incumbent to arrive at a finding on that aspect, the counsel for the appellant submits.

In answer to these contentions, the claimants submit that a mere pleading of absence of driving licence at the material time alone is not sufficient. There shall be proof in respect of his contention. The counsel relied on the decision reported in United India Insurance ltd. v. Jameela Beevi (1991 (1) KLT 832). It was further contended that the liability has to be met by the insurer, of course with liberty to realise the same from the insured. The counsel for the claimant relied on the decision reported in Oriental Insurance Co. Ltd. v. Nafeesu''s (2001 (1) KLT 498 (SC)). It is further attempted to be substantiated that the insurer did not, apart from filing the interlocutory application as mentioned above, take any step to examine the driver to obtain any record from the authorities to show that the 2nd respondent before the Tribunal below did not posses a valid licence at the material time to drive the vehicle in question.

That the 2nd respondent before the Tribunal below did not have a driving licence is a negative fact. No positive evidence can be adduced to prove that negative fact. In this case the Insurer appellant made an attempt before the Tribunal below calling upon the parties to produce the valid licence by filing a petition on 19.10.89 which was posted for three of four occasions, but no order has been passed. Paragraph 7 of the written statement disclosed that a specific plea in that respect had been taken by the insurer before the Tribunal below that the driver did not have a driving licence. Therefore, all possible pleas and attempts to substantiate the plea have been taken by the appellant to avoid the liability. In such circumstances, it cannot be taken that the insurer did not attempt to prove the fact pleaded in the written statement with regard to violation of the policy condition in that regard. Therefore, the decision reported in Jameela Beevi''s case (1991 (1) KLT 832) does not have any application in this case.

Admittedly, the accident took place when the Motor Vehicles Act, 1939 was in force. Limitation of liability is there in terms of the statute itself. In such circumstances, the insurer will be liable, even if there was no violation of the conditions of policy, only to the extent of such limited liability. It was in the above circumstances, the Supreme Court held in Nafeesu''s case (2001 (1) KLT 498 (SC)) that the insurer notwithstanding such restriction of liability even in the case of 1939 Act, shall meet the liability with liberty to realise it from the insured. In this case, even the liability of the insurer to effect payment, even inspite of the limited liability, is disputed, because of the violation of the policy condition that the driver did not have a valid licence at the material time. In such circumstances, the dictum laid down in Nafeesu''s case has no application to the facts of this case.

The owner of the vehicle expired during the pendency of this appeal. Petitions were filed to implead the legal representatives. One among them was served but did not appear. The endorsement reveals that the other two did not claim notice from the post office. Therefore, there was a declaration that there was due service upon them. In such circumstances, there is effective service and impleadment of the legal representatives of the decreased owner, 8th respondent in the appeal i.e., the 1st respondent before the Tribunal below.

As the aspect regarding absence of driving licence which was pleaded and attempted to be proved by the appellant, insurance company, had not been gone into by the Tribunal below, we are of the view that it has to be considered by the Tribunal below. it is made clear, with regard to the limitation of the liability under the policy, that it remains confirmed. The compensation awarded by the Tribunal also remains confirmed. The remand is only for the purpose of considering whether the 2nd respondent before the Tribunal below, at the material time,d id possess a licence to drive the vehicle in question. The insurer and claimant shall appear before the Tribunal below on 10.12.2001 and the insurer shall take steps to serve the newly impleaded additional respondents, the legal representatives of the original 1st respondent before the Tribunal below and the driver.

The appeal is allowed to the above extent. There shall be no order as to costs.