New India Assurance Co. Ltd. vs Mukhtyarbibi and Others

Honourable Mr. Justice G.R. Udhwani

New India Assurance Ltd., original opponent No. 2, in Motor Accident Claims Petition Nos. 1830 and 1835 of 1999 filed before the Motor Accident Claims Tribunal (Auxi), 12th Additional District Judge, Vadodara, being dissatisfied with the judgment and award dated 18/01/2012, is before this Court by way of preferring appeals u/s 173 of the Motor Vehicles Act, 1988 (for short ''the Act''). Before the tribunal, in all, three claim petitions were filed being MACP No. 1330, 1335 and 1336 of 1999, out of which MACP No. 1330 of 1999 was filed by the legal heirs of the deceased, whereas MACP No. 1335 of 1999 was filed by the injured, who was pillion rider, as aforesaid. Appeals are filed only against the award made in first two above-mentioned petitions.

Civil Applications No. 12577 and 12572 of 2012 are also filed by the claimants before this Court for withdrawal of the amount awarded by the tribunal, pending the appeals and this Court, on the joint request of the parties herein has directed to list those Civil Applications for final disposal with the main appeals.

The short facts of the case are that the accident occurred on 09/05/1999 wherein a truck bearing Registration No. GJ7-X-3616 and a scooter bearing Registration No. GJ6-KK-9717 were involved. One Sitabkha, who was driving a scooter, lost his life in the said accident and Aqil Imam, who was a pillion rider, sustained injuries. Since issue of negligence has not been raised in these appeals, we refrain from mentioning elaborate facts on that count.

3.1 The claimants filed their respective claim petitions before the tribunal for compensation and the tribunal, after appreciating the facts and evidence on record, by impugned judgment and award, has partly allowed the MACP No. 1330 and 1335 of 1999 and has awarded Rs. 10,00,000/- and Rs. 1,00,050/- respectively to the claimants against their respective claims of Rs. 25,00,000/- and Rs. 2,00,000/-. Since the judgment and award is sought to be challenged on limited grounds, it is not necessary to set out the detailed facts of the case.

Learned Counsel appearing for the appellant - insurance company submitted that the judgment and award in both these claim petitions suffers from two infirmities; (1) that though it was submitted to the tribunal that the truck driver-respondent No. 6 herein, was not holding driving licence, the tribunal awarded compensation without considering the said fact. It is submitted that since the said driver did not possess effective driving licence, the insurance company, under the terms and conditions of the contract, would be entitled to disown its liability. In support of his contentions, learned Advocate for the appellant - insurance company has relied upon a decision in the case reported in National Insurance Co. Ltd. Vs. Swaran Singh and Others, ; particularly paragraph No. 110 (iii) and (vii) thereof and; (2) it is contended that the tribunal has committed a serious error in relying upon Form -16A produced by the claimants, for various years, to assess/determine the income of the deceased. The submission is that such forms merely reflected the gross income of the deceased and in absence of Income Tax Returns, the net income of the deceased was not available on record of the case and, therefore, there was no evidence for income.

On the other hand, learned Advocate for the respondents - claimants submitted that the tribunal has not committed any serious error, which would warrant interference at the hands of this Court. He has further submitted that mere non-possession of the driving licence; in absence of any other factors contributing to the accident by the driver, was not sufficient to enable the insurance company to disown the liability. He has invited attention of the Court to paragraph No. 110(i) and (vi) of the decision in case of National Insurance Co. Ltd., (Supra) and submitted that it is not sufficient for the insurance company to prove that the driver did not possess the licence, but it is also required to be proved that such non-possession of the licence was so fundamental defect that it contributed to the negligence itself.

5.1 Learned Advocate for the claimants also submitted that the tribunal has, in fact, not relied upon the evidence in the form of Form No. 16A in toto, but has merely drawn inference on the basis of the income reflected in Form No. 16A for the limited purpose of inquiring as to what could be the probable income of the deceased in absence of any other proof of income. It is submitted that the tribunal came to the conclusion that 20% of the gross income, as reflected in Form No. 16A, shall be treated as net profit. It is submitted that such inference of the tribunal is based upon the evidence on record and are not so unreasonable as would require interference in these appeals.

We have heard the learned Counsel for the parties. In order to appreciate the arguments made by them, we may refer to the decision in case of National Insurance Co. Ltd., (Supra) on the question as to whether mere non-possession of driving licence by the driver of the insured vehicular would entitle the insurance company to disown its liability. After addressing this issue, the Hon''ble the Apex Court in paragraph No. 110 of the decision in National Insurance Co. Ltd., (Supra) gave summary of its findings. Paragraph No. 110 (iii) runs as under:

(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time.

6.1 In paragraph No. 110 (vii) it has been observed as under:

(vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfill the requirements of law or not will have to be determined in each case.

6.2 Relying upon the aforesaid observations of the Hon''ble Apex Court, it was sought to be argued that once the negligence of the owner/driver, who was driving the vehicle, is proved and once it is established that driver did not possess the driving licence, as contemplated in Sections 3 and 5 of the Motor Vehicles Act, 1988, the insurance company was entitled to disown the liability.

6.3 We are afraid; this submission cannot be accepted, as the Hon''ble Apex Court in case of National Insurance Co. Ltd., (Supra) has observed in paragraph No. 110 (vi) as under:

Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insurer u/s 149 (2) of the Act.

(emphasis supplied)

The aforesaid observations would go to show that mere proof of absence of driving licence of the offending vehicle or his disqualification to drive the vehicle during the relevant period, would not allow the insurer to disown its liability. Paragraph No. 110 (iii) and (vii) of the decision cannot be read in isolation but with other paragraphs, more particularly, paragraph No. 110 (vi), which have already been referred hereinabove. Having so read, in our opinion, what more was required to be established is that such breach or breaches were so fundamental, as have contributed to the cause of the accident. Learned Advocate for the appellant - insurance company is unable to contend that such proof was rendered before the tribunal, although it had stepped into the shoes of the insured.

Reliance is however placed upon Sections 3 and 5 of the Act. Section 3 of the Act necessitates driving licence before a person is allowed to drive a vehicle on public roads; whereas, Section 5 prohibits the owner of the vehicle to allow other persons to drive a vehicle in absence of the licence with such other person.

8.1 While it is true that possession of the licence will authorize a person to drive a vehicle, but when it comes to determining the compensation u/s 166 of the Act, as noticed in the case of National Insurance Co. Ltd., (Supra), a mere non-possession of the licence, by itself, would not allow the insurer to disown its liability arising out of negligent driving by the driver of the vehicle.

8.2 In above view of the matter, we are unable to accept the first submission made by appellant.

Insofar as the second contention is concerned, having gone through the award made by the tribunal, we notice that the tribunal, while giving its finding on issue No. 2 regarding quantum, has accepted the contentions raised by the appellant that in absence of IT Returns, Form No. 16A by itself could not be a good piece of evidence for assessing the income of a person. The tribunal, thereafter, proceeded to add that Form No. 16A produced on record indicates Rs. 10,31,440/- as income of the deceased for two years and thereafter the tribunal calculated average income being Rs. 5,15,720/- and has presumed 20% of gross income as profit from the business. Thus, for the purpose of awarding compensation, the tribunal deemed it fit to consider Rs. 1,00,000/- per annum as the income. The tribunal, also, in absence of evidence before it, did not agree to award any compensation on the basis of agricultural income of the deceased. It is pertinent to note that the veracity of Form No. 16A was not questioned nor its contents. Only argument before the tribunal was that income reflected in Form No. 16A was gross income and, therefore, in absence of Income Tax Returns, the same could not be relied upon. As stated above, this contention was accepted. In our opinion, by arriving at a datum figure in the aforesaid manner, the tribunal has not committed any error that would require interference by this Court. We also notice that unlike Civil Courts, the tribunal is required to make an inquiry u/s 166 of the Act and then to come to the conclusion as to what could be just and reasonable compensation. While making such inquiry, the tribunal may seek information from the documents available on record and draw a reasonable inference and that is exactly what has been done by the tribunal in the present case. We, therefore, do not find any substance in this submission of the learned Advocate for the appellant - insurance company as well.

In the result, we do not find any substance in these appeals and the appeals stand dismissed.

In view of dismissal of appeals, Civil Applications do not survive and are dismissed accordingly. The amount deposited before this Court, shall be transmitted to the tribunal and shall be disbursed as per the original award passed by the tribunal.