National Insurance Company Limited vs Bidyut Ankuray And Others

Though the application has been listed for disposal today, but we find that the appeal itself can be conveniently disposed of as the challenge is squeezed to a solitary point that the driver of the offending vehicle did not possess valid driving licence and, therefore, the Insurance Company is not liable to pay any compensation.

We, therefore, decided to dispose of the appeal solely on the point, so raised and invited the respective Advocates to argue on the aforesaid point.

It is not in dispute that the claimants/respondents filed an application under Section 166 of the Motor Vehicles Act, 1988 claiming compensation for accidental death of their predecessor on road on 16th January 2008. The victim was a pillion rider of a motorcycle and was heading from Durgapur side to Andal More along National Highway-II. The offending vehicle dashed the said motorcycle from behind and as a resultant effect the victim sustained severe injuries and succumbed to death. It is undisputed that the said victim was an employee of Durgapur Still Plant and was getting a salary of Rs. 24,000/- per month. At the time of his death, he was 52 years of age and compensation is claimed by his successors.

Though the plea of invalid driving licence was taken by the Insurance Company in the written statement filed before the Tribunal but no evidence was adduced in support thereof. The claimant no. 2 deposed as plaintiffs' first witness and an eyewitness was also cited as a witness, who deposed as plaintiffs' second witness. In order to proved the income of the deceased victim, the Deputy Manager, Durgapur Still Plant was summoned as witness, who prove the salary slip as well as the income, which the victim used to earn from his avocation.

It further transpires from the record that the owner of the offending vehicle nor the driver appeared and contested the claim petition and naturally no evidence was forthcoming from their end on the allegation that the driver of the said offending vehicle was driving recklessly, rashly and negligently.

The Tribunal assessed the income of the victim at Rs. 1,96,927.28 paise relying upon the Form-16 issued by the employer, which was marked as Exhibit-8 and further negatived the contention of the Insurance Company that the victim was 55 years of age at the time of accident and held that he was 51 years of age at that relevant point of time. After taking into account the amount, which the victim is statutorily bound to pay on account of income tax and provisional tax as compulsory deductions, the income was assessed at Rs. 1,84,344/-. The Tribunal further deducted 1/3rd from the said income towards the personal and living expenses and applied multiplier 11 to determine just compensation under Section 168 of the Motor Vehicles Act, 1988. The Tribunal further awarded a sum of Rs. 9,500/- on account of loss of estate, funeral expenses and loss of consortium and the aggregated sum was directed to be paid along with an interest at the rate of six percent per annum to be calculated from the date of application till its payment.

As indicated above, there is no challenge thrown either on multiplier having applied by the Tribunal nor on conventional heads viz. loss of estate, funeral expenses and loss of consortium. The entire challenge, as stated above, is on the plea that if the driver of the offending vehicle did not possess the valid driving licence, the Insurance Company is exonerated from its statutory responsibility/liability as it amounts to breach of conditions of the policy.

Indubitably, despite the plea having taken in the written statement, no supportive evidence was adduced by the Insurance Company in this regard. There is a clear distinction between pleading and proof. Mere statement in the pleading is not sacrosanct unless the adversary admits or did not controvert the same. In later case, the doctrine of non-traverse can be applied, whereas in case of clear admission, there is no necessity to prove such facts. The evidence adduced by the claimants does not reveal that they admitted that the driver of the offending vehicle was not possessing the valid licence. There is no question put to the said witness, which is an essential rule of evidence.

In case of National Insurance Co. Ltd. vs. Swaran Singh & Ors., reported in (2004) 3 Supreme Court Cases 297, the Apex Court held that the Insurance Company cannot shift its statutory responsibility under the insurance policy on simplicitor plea of non-possession of valid licence by the driver of the offending vehicle, unless there is a corroborative evidence produced to show that the owner of the offending vehicle even after knowing that the driver did not possess a valid licence yet permitted his/her vehicle to be plied and/or driven by such driver. However, such question becomes academic in the instant case as neither the owner nor the driver nor the Insurance Company adduced any evidence before the Tribunal touching upon such issue. In Swaran Singh & Ors. (supra), the Apex Court introduced the theory of pay and recover, meaning thereby, it is a primary responsibility and liability of the Insurance Company to pay the compensation to the claimants first and thereafter may recover such amount from the owner or the driver, as the case may be, subject to the exceptions laid down as under:

"Conclusion

It is, therefore, evident from the discussions made hereinbefore that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or driver thereof has been holding the field for a long time.

We may, however, hasten to add that the Tribunal and the court must, however, exercise their jurisdiction to issue such a direction upon consideration of the facts and circumstances of each case and in the event such a direction has been issued, despite arriving at a finding of fact to the effect that the insurer has been able to establish that the insured has committed a breach of contract of insurance as envisaged under sub-clause (ii) of clause (a) of sub-section (2) of Section 149 of the Act, the insurance company shall be entitled to realise the awarded amount from the owner or driver of the vehicle, as the case may be, in execution of the same award having regard to the provisions of Sections 165 and 168 of the Act. However, in the event, having regard to the limited scope of inquiry in the proceedings before the Tribunal it had not been able to do so, the insurance company may initiate a separate action therefor against the owner or the driver of the vehicle or both, as the case may be. Those exceptional cases may arise when the evidence becomes available to or comes to the notice of the insurer at a subsequent stage or for one reason or the other, the insurer was not given an opportunity to defend at all. Such a course of action may also be resorted to when a fraud or collusion between the victim and the owner of the vehicle is detected or comes to the knowledge of the insurer at a later stage.

The summary of our findings to the various issues as raised in these petitions is as follows:

(x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of lane revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal."

In absence of any convincing and cogent materials forthcoming from the Insurance Company, we cannot defeat and deny the just compensation to the claimants as the Insurance Company is still liable to discharge its obligation under the policy. It is also not in dispute that the offending vehicle is insured with the Insurance Company and, therefore, the initial onus lies on it to discharge its statutory obligation. But equally we cannot overlook the fact that in the event the Insurance Company succeeds in proving the fact that the owner is liable to reimburse such compensation, the Insurance Company may move before the Tribunal in this regard.

The Insurance Company is at liberty to proceed in accordance with law before the Tribunal in terms of the guidelines given in paragraph 110(x) of the decision in Swaran Singh & Ors. (supra) and if such approach is made, the Tribunal shall consider the said matter taking into account the amount paid by the Insurance Company to the claimants in terms of the impugned award.

It is informed to us that the Insurance Company has deposited the principal amount on two diverse dates i.e. Rs. 25,000/- on 30th September 2010 and Rs. 13,35,000/- on 13th June 2011 as determined by the Tribunal without payment of interest with the Registrar General of this Court.

Liberty is granted to the claimants/respondents to withdraw the said amount with accrued interest, if the same has been invested in an interest bearing fixed deposit, within two weeks from date.

It goes without saying that the claimants shall disclose the details of their individual bank account to the Registrar General, who shall disburse the said amount in equal proportion to each of the claimants and shall ensure that the cheque issued in this regard shall be indicative of the fact that the same can only be encashed in the said bank account. The Registrar General is also directed to see that the amount is released to the claimants without furnishing any security, if necessary, by encashing the fixed deposit prematurely.

It is pertinent to record that the widow of the deceased died in course of the instant appeal and an application for substitution was allowed, as the surviving heirs were already on record.

So far as the interest component is concerned, since the Insurance Company has not deposited the same in this Court, they are directed to pay the interest at the rate awarded by the Tribunal within a month from date. While calculating the interest component, the Insurance Company shall deduct the amount of interest accrued upon such deposit made before this Court and it is a responsibility of the learned Advocate for the claimants to intimate the same to the Advocate-on-Record of the Insurance company.

It goes without saying that the learned Advocate for the claimants shall also furnish the details of bank account held by each of the claimants so that the aforesaid amount is directly credited in their respective account electronically by the Insurance Company.

The appeal is, thus, disposed of.

In view of the disposal of the appeal itself, the connected application being CAN 8982 of 2010 has become infructuous and the same is also disposed of.

There shall, however, be no order as to costs.