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Judgment
G.M. Akbar Ali, J.—These Civil Miscellaneous Appeals are filed by the Appellants, against the Judgment and Decree of the Tribunals by questioning the liability to pay the Compensation to the Claimants in cases of no valid driving licenses.
In all these Civil Miscellaneous Appeals, the common question arises for consideration is-
"Whether the Insurer has to be exonerated totally in a case where they have established that the driver of the insured vehicle did not possess any type of licence on the date of accident or whether the liability can be fastened on the Insurer by directing them to pay the Compensation to the Claimants with a liberty to recover the same from the insured."
This Court considered a similar question in a batch of Civil Miscellaneous Appeals and answered the question which is reported in Branch Manager, Oriental Insurance Co. Ltd. v. Mansoor Hussain, 2013 (1) TN MAC 216 : 2013 (2) CTC 57.
This has elaborately dealt with the matter and relied on National Insurance Co. Ltd. v. Swaran Singh, 2004 (1) TN MAC 104 (SC) wherein the Three-Judges of the Hon''ble Supreme Court has dealt in detail with the licence and had settled the principles in cases where,-
(i) when the person has been granted licence for one type of vehicle, but, at the relevant time he was driving another type of vehicle;
(ii) where the driver''s licence is found to be fake;
(iii) where the person is in possession of a learner''s licence;
This Court has also discussed the principles laid down in Branch Manager, United India Insurance Co. Ltd., Dharmapuri Town v. Nagammal, 2009 (1) TN MAC 1 (FB) : 2009 (1) CTC 1 (FB) : 2009 (1) LW 702.
A Full Bench of this Court in Branch Manager, United India Insurance Co. Ltd., Dharmapuri Town v. Nagammal, 2009 (1) TN MAC 1 (FB) : 2009 (1) CTC 1 (FB) : 2009 (1) LW 702, was considering a question of pay and recovery and the Full Bench has held as follows:
"31. Thus from an analysis of the statutory provisions as explained by the Supreme Court in various decisions rendered from time to time, the following picture emerges:
(i) The Insurance Policy is required to cover the liability envisaged under Section 147, but wider risk can always be undertaken.
(ii) Section 149 envisages the defences which are open to the Insurance Company. Where the Insurance Company is not successful in its defence, obviously it is required to satisfy the decree and the award. Where it is successful in its defence, it may yet be required to pay the amount to the Claimant and thereafter recover the same from the owner under such circumstance envisaged and enumerated in Section 149(4) and Section 149(5)."
The First Bench decision of this Court at Principal seat reported in Bajaj Allianz General Insurance Company Ltd. v. P. Manimozhi, 2010 (2) TN MAC 542 (SC), had considered the question of non-possession of a valid licence of the driver and after considering the decision of another Division Bench reported in United India Insurance Co. Ltd. v. S. Saravanan, 2009 (2) TN MAC 103 (DB), held that when there is a breach of condition under an Insurance Policy, then the Insurance Company must pay and recover. It is necessary to extract the relevant portion from the above decision, which is as follows:
"14. The next contention raised by the learned Counsel appearing for the Appellant is that the Third Respondent, the rider of the two wheeler did not have a valid driving licence on the date of the accident and therefore, the Insurer is not liable to pay. The Hon''ble Supreme Court as regards this point namely, possession of valid driving licence broadly classified the same under four different categories:
(i) Where, there was no licence
(ii) Where, the licence is forged/fake
(iii) Where, the licence is for a different class of vehicle from the offending vehicle and
(iv) Where, the licence is for a learner
and held that when there is a breach of condition under an Insurance Policy is proved then the Insurance Company must pay and may recover. A Division Bench of this very Court in which one of us (T.S. Sivagnanam, J.) was a party, considered this very issue and after taking note of the decisions of the Hon''ble Supreme Court in the case of New India Assurance Co. Ltd. v. Kamla, (2001) 4 SCC 342; United India Insurance Co. Ltd. v. Lahru, 2004 (1) TN MAC 340 (SC); Skandia Insurance Co. Ltd. v. Kokilaban Chandravadan, (1987) 2 SCC 654; Sohan Lal Passi v. P. Sesh Reddy, (1996) 5 SCC 21; Oriental Insurance Co. Ltd. v. Swaran Singh, 2004 (1) TN MAC 104 (SC); and National Insurance Co. Ltd. v. Laxmi Narain Dhut, 2001 (1) TN MAC 310 (SC) held that the Insurer must pay the amount and then may recover."
Another Division Bench judgment of this Court reported in United India Insurance Co. Ltd., Salem v. V. Vijayakumar, 2010 (2) TN MAC 388 (DB), (where I am one of the party) had also dealt with the similar question as to -
"Whether the Insurer has proved the defence as to breach of policy condition and whether pay and recover can be ordered".
My esteemed sister R. Banumathi, J. dealt in detail with Section 3 of the Motor Vehicles Act, which emphasis upon the necessity for driving licence and other provisions relating to licences. After referring to the dictum laid down in National Insurance Co. Ltd. v. Swaran Singh, 2004 (1) TN MAC 104 (SC) and various other judgments had ultimately held as follows:
"38. The 3rd Respondent had a licence, but not a valid one. As there was violation of conditions of Policy, Tribunal was not right in fastening the statutory liability upon the Insurance Company. Since there was violation of Policy conditions, the Tribunal ought not to have fastened the statutory liability upon the Insurance Company. Keeping in view the nature of injuries sustained by the Claimant and that the Claimant is now reduced to vegetable existence, the only just and reasonable course would be to direct the Insurance Company to pay Compensation to the 1st Respondent-Claimant and recover it from the owner for his breach of the Policy conditions."
A latest decision of the Hon''ble Supreme Court reported in Jawahar Singh v. Bala Jain, 2011 (1) TN MAC 641 (SC), wherein the Hon''ble Supreme Court dealt with a case where a Motorcycle belonging to the insured was driven by a minor without driving licence amounts to breach of Policy condition and held as follows:
"11. We cannot shut our eyes to the fact that it was Jatin, who came form behind on the Motorcycle and hit the Scooter of the deceased from behind. The responsibility in causing the accident was, therefore, found to be solely that of Jatin. However, since Jatin was a minor and it was the responsibility of the Petitioner to ensure that his Motorcycle was not misused and that too by a minor, who had no licence to drive the same, the Motor Accident Claims Tribunal quite rightly saddled the liability for payment of Compensation on the Petitioner and, accordingly, directed the Insurance Company to pay the awarded amount to the awardees and, thereafter, to recover the same from the Petitioner. The said question has been duly considered by the Tribunal and was correctly decided. The High Court rightly chose not to interfere with the same."
This Section is corresponding to Section 96 of the old Act. In Iffco Tokyo General Insurance Co. Ltd. v. A. Jafer Sadiq, 2012 (1) TN MAC 394 (DB), a Division Bench of this Court (where I was a party) had an occasion to deal with provisions under Section 96 of the old Act and the provision under Section 149(2)(a) of the New Act.
This Court ultimately held in Paragraph No. 27 of the judgment-
"27. I am of the considered view that the defence available under Section 149(2)(a)(ii) which relates to duly licenced includes no licence also. The contention that in the case of no licence at all, the insured was guilty of negligence and failed to exercise reasonable care in the matter fulfilling the Policy condition can not be acceptable as the victim can not suffer for the failure of the insured. The wisdom of the Three-Judges Bench of the Supreme Court in British India General Insurance Co. Ltd. v. Captain Itbar Singh, 1958 (65) ACJ 1, is very relevant. This Court is also bound by the decision of the Full Bench in Nagammal''s case (cited supra), wherein it is held that "where it (Insurance Company) is successful in its defence, it may yet be required to pay the amount to the Claimant and thereafter recover the same from the owner...."
It is also relevant to refer Jawahar Singh v. Bala Jain, 2011 (1) TN MAC 641 (SC), where the Supreme Court upheld the Order of the Tribunal directing the Insurer to pay and recover form the insured in case of a Minor, who did not posses and could not have possessed any licence at all, caused the accident. Therefore, even in case of no licence if the Insurance Company establishes that the driver of the insured vehicle was not in possession of any type of licence, the Insurance Company is to be exonerated but as per sub-clause (4) & (5) of Section 149 of the Act, they can be directed to pay and recover. Therefore, the questions are answered accordingly in all the Civil Miscellaneous Appeals. Since in all the above Appeals, the Insurance Company has established no licence to the drivers, the Appellants are exonerated but directed to pay the Compensation and recover the same from the owner of the vehicle in the same proceedings.
In the result, all the Appeals are disposed of holding that in all the cases of no licence, the Insurance Company, though exonerated but directed to pay and recover the same from the owner of the vehicle. The Insurance Company is entitled to recover the Compensation as per the mode incorporated in Paragraph 8 of Oriental Insurance Co. Ltd. v. Shri Nanjappan, 2004 (1) TN MAC 211 (SC), which is incorporated as follows:
"For the purpose of recovering the Compensation amount from the insured, the Insurer shall not be required to file a Suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the Insurer and the insured was the subject matter of determination before the Tribunal and as if the issue is decided against the owner and in favour of the Insurer. A notice shall be issued to the insured to furnish security for the entire amount. The offending vehicle shall be attached as a part of the security. If necessity arises, the Executing Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass appropriate Orders in accordance with law as to the manner in which the insured/owner of the vehicle shall make payment to the Insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property of the insured".
No costs. Consequently, connected Cross-Objection and M.Ps. are closed.