New India Assurance Co. Ltd. vs Gurbachan Kaur and Others

Jawahar Lal Gupta, J.—Varinder Kumar who was travelling on a scooter on the Patiala Malekotla road had an accident with tractor No. PUC 4947 on January 3, 1979. He sustained injuries and died. His widow, two minor children and parents claimed compensation. The Tribunal found that the accident had occurred due to the negligence of the driver of the tractor and awarded a sum of Rs. 55,000/- to the claimants. It was held that the compensation was payable to Smt. Gurbachan Kaur who was held to be the owner of the tractor.

The award of the Tribunal was challenged in two separate appeals by Smt. Gurbachan Kaur the owner and the claimants. In the appeal by the owner of the tractor (Smt. Gurbachan Kaur) two grounds were raised. Firstly, it claimed that the finding recorded by the Tribunal that the driver was negligent was untenable, Secondly, as an alternative, it was pleaded that the liability was that of the Insurance Company and not of the owner. In the other appeal filed by the claimants a claim for enhancement of compensation was made.

The learned Single Judge who heard these two appeals held that "the accident took place while the scooter was trying to go past the tractor and the tractor suddenly turned to its right without giving any werning or indication to the deceased. It is also significant that the tractor driver did not stop after the accident, but drove off. There can thus, be no manner of doubt that the blame of the accident must lie entirely with the driver of the tractor and consequently the finding of negligence recorded by the Tribunal against the tractor driver must be upheld." It was further held that "under Section 96(2)(ii) of the Motor Vehicles Act, the insurer can defend a claim for compensation on the ground that the vehicle was being driven by the person, who was not duly licenced. --It follows, therefore, that as the Insurance Company has failed to show that the tractor was being driven by a person who did not hold a valid driving licence it cannot be absolved from liability for payment of compensation in this case." On these premises, the appeal of the owner of the vehicle was accepted. The learned Single Judge further found that the claimants were entitled to the enhancement of compensation which was fixed at Rs. 96,000/- with interest at the rate of 12 per cent per annum from the date of the application to the date of the payment of the amount awarded. Accordingly, both the appeals were accepted.

Aggrieved by this Judgment, the insurance company and the owner of the vehicle have come up in these two appeals viz. L.P.A. Nos. 622 and 623 of 1984.

Mr. R.L. Batta, learned counsel for the onwer of the vehicle stated at the outset that he did not press the appeal. Accordingly, L.P.A. No. 623 of 1984 is dismissed.

In L.P.A. No. 622 of 1984, the solitary contention raised by the learned counsel is that the Insurance Company was not liable to pay compensation as the vehicle was being driven by an unlicenced and unauthorised driver. Learned counsel pointed out that even in the written statement filed by the appellant, a specific plea had been raised to the effect that "the replying respondent is not liable to pay any compensation as the vehicle (tractor) was being driven by an unlicenced and unauthorised driver at the time of the alleged accident-- --"

Mr. Suri is undoubtedly correct in contending that the above-mentioned plea had been raised in the written statement. This, however, cannot be the end of the matter. The Insurance Company cannot be absolved of its liability merely by raising a plea. It did not press for the framing of an issue on the basis of this plea. It led no evidence to prove as to who was the driver and as to whether or not he had a valid driving licence. Can the appellant be still absolved of its liability ? This is the short question that calls for an answer.

The tractor was admittedly insured with the appellant. There was thus a contract between the Insurance Company and the owner of the tractor to indemnify the Insured in case of an accident. If it was the case of the appellant that the Insured had violated any term of the contract, it had to raise an issue and prove it by leading evidence. Normally, the contract of insurance provides a protection to the Insured and imposes a liability on the Insurer. The Insurer can escape the liability only by proving that the terms of the contract have been violated. The onus for proving the violation of contract lies on the Insurer. In the present case, the Insurance Company has failed to prove that the driver who was driving the tractor at the relevant time did not have a valid driving licence. The appellant having failed to prove this fact, it cannot be permitted to say that the contract of insurance would afford no protection to the Insured or the claimant. It cannot wriggle out of its liability without positively proving the violation of the terms of the contract. The premium is paid by the Insured for its own protection. Having accepted the premium the Insurer undertakes a liability and it can escape the liability only by proving that the Insured had violated the terms of the contract. We entertain no doubt that it is the Insurance Company which is liable to pay compensation under the terms of insurance policy and it can escape that liability only by proving the violation of the terms of the contract. This rule has been clearly enunciated by the Apex Court in Narcinva V. Kamat and Another Vs. Alfredo Antonio Doe Martins and Others, . It was held as under:-

"To sum up the insurance company failed to prove that there was a breach of the term of the contract of insurance was evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance."

In view of the above dictum of law, we find that the contention raised on behalf of the appellant cannot be sustained. We consequently reject it.

Mr. Suri placed strong reliance on the decision of a Division Bench of the Andhra Pradesh High Court in V. Rajeswara Rao and Ors. v. Karne Audemma and Ors.,2 1977 A.C.J. 462. On a perusal of the Judgment we find that even in this case their Lordships had clearly observed in paragraph 11 that" the burden is upon the Insurance Company who seeks to avoid liability to prove that there has been a breach of the conditions of the policy and the tractor was driven by a person without a licence. This decision is, thus, of no help to the appellant.

Mr. Suri then referred to the decision of a Single Bench of this Court in Raj Chopra and Ors. v. Sangara Singh and Ors.,3 (1984)86 P.L.R. 441 in support of his contention. In this case it was clearly found as a fact that the insurance policy was in favour of Ghanshyam Dass "whereas its owner at the time of accident was Padma Rani, respondent No. 7." It was thus clear that there was no contract between the Insurance Company and the real owner of the vehicle. Such is not the situation in the present case.

On an examination of the facts and the various decisions, we hold that in case of an accident the Insurance Company is liable to compensate the claimants and indemnify the Insured. It can escape that liability only when it proves that the Insured had violated the terms of contract. It cannot escape liability merely by alleging that the driver did not have a valid driving licence. It has to prove as to who was actually driving the vehicle and that he did not have a valid driving licence. Unless it does so, it must honour its liability and pay the compensation.

Even otherwise, it was stated by the learned counsel for the parties that the claimants had been paid the compensation by the appellant soon after the decision of the learned Single Judge, A period of almost 9 years has elapsed since then. There is no ground for interference at this belated stage.

Accordingly, both the appeals are dismissed. There would be no order as to costs.