New India Assurance Co., Ltd vs Vanapalli Suribabu and others

The New India Assurance Company Limited, Divisional Office, Visakhapatnam is the appellant herein, which was directed against the judgment and decree dated 17-5-1993 in OP No.350 of 1990 on the file of the Chairman (III Addl.Dist. Judge), Motor Accident Claims Tribunal, Visakhapatnam, wherein the Tribunal has awarded an amount of Rs.1,03,960/- for the untimely death of the wife of the first claimant, who was aged about 39 years at the time of occurrance of the accident and she was a cootie by profession earning Rs.600/- per month. The grounds urged in this appeal are that the Tribunal below should have held that the vehicle involved in the accident was being driven by the first respondent Kakara Apparao, who was not having driving licence, and caused the accident in which the wife of the first claimant died and therefore, the second respondent-owner of the vehicle has violated the terms and conditions of the insurance policy covering the said crime vehicle and as such the company-appellant is not liable to pay the compensation. It is further contended that the Court should have held that the first respondent in the petition, Kakara Apparao, was working as cleaner on the vehicle, was not having driving licence at the time of occurrance of the accident and the second respondent entrusted the vehicle to the cleaner who was not having driving licence and as such violated the terms and conditions of the insurance policy and therefore, the appellant-company is not liable to pay the compensation. Therefore, he sought for the interference of this Court to set aside the award passed by the Tribunal in the above said OP.

To appreciate the contentions raised by the learned Counsel for the appellant, it" is necessary to state few facts of the case, which are as follows:

On 18-5-1990 at about 1.00 p.m. when the deceased Vanapalli Chinnathalli was standing alongwith Yellamma, the other deceased, and others by the side of the wall of burial ground in Bheemunipatnam waiting for the arrival of water tanker for drawing water with their vessels and the water tanker lorry No.ABV-2448 was arranged by the Bheemunipatnam Municipality to supply water to the residents of the locality, at that time the first respondent K. Apparao was driving the tanker in a rash and negligent manner at high speed and dashed against the deceased Yellamma in the first instance and others. When the deceased Vanapalli Chinnathalli was taken to hospital, she was declared dead. Therefore, the dependants of the deceased have filed claim petition claiming an amount of Rs.1,20,000/- for the untimely death of the deceased.

The above claim was resisted by the Insurance Company by filing counter and denying the age, income and avocation of the deceased and stated that the deceased was responsible for the cause of accident. Iliey further denied the relationship between the deceased and the claimants. An additional counter affidavit was filed alleging that the first respondent was only a cleaner on the lorry bearing No.ABV-2448 and he was not having valid driving licence at the time of accident and as such the terms and conditions of the policy and provisions of the Motor Vehicles Act have been violated and therefore, the insurance company is not liable to pay the compensation.

The Tribunal has examined PW1, husband of the deceased on behalf of the petitioners and RW1, Administrative Officer of the company, on behalf of the respondents, and Exs.A 1 to A4 were marked on behalf of the petitioners and Exs.B1 to B3 were marked on behalf of the respondents.

After" evaluating both oral and documentary evidence, the Tribunal held that the accident was occurred due to the rash and negligent driving of the lorry by its driver, on the fateful day and therefore, the respondents are liable to pay the compensation.

When the second respondent/ owner of the water tanker remained ex parte, the appellant-company has failed to examine Kakara Apparao, who allegedly drove the vehicle at the time of occurrance of the accident. RW1, is Administrative Officer of the appellant Company. As per Exs.A1, copy of the FIR and Ex.A4 copy of the charge-sheet, Kakara Apparao, the first respondent, is the driver of the water tanker, but he was only cleaner on the vehicle, Ex.A3 copy of the Motor Vehicle Inspector''s report, shows that G. Shanker was the driver of the said lorry. Evidently, at the time of accident, the said Shanker was not driving (he vehicle, but Kakara Apparao was driving the vehicle, who was only a cleaner on the said lorry. Therefore, the appellant-company contends that it is not liable to pay compensation, as the insured-owncr of the vehicle has allowed the cleaner to drive the vehicle at the time of occurrance of the accident.

The Tribunal has considered the evidence of RW1 and Ex.B1 copy of the policy, which contemplates that any person who is driving on the insured order, or with his permission can be taken as person who can drive the vehicle. The Tribunal observed that RW1 has not placed any material to show that Kakara Apparao does not have valid driving licence and they have not filed any letter from the second respondent to show that Kakara Apparao was not having valid driving licence; they also failed to file any paper to establish that the second respondent-owner of the vehicle has allowed the first respondent to drive the vehicle. The Tribunal, therefore, after going through the material placed before it and the authorities on the above aspect, held that it is not for the petitioners to prove that the first respondent docs not have valid driving licence and he was not engaged by the second respondent at the time of occurrance of accident, but it is for the insurance company to prove by examining those people and atleast contacting 2nd respondent or atleast sending for documents from the RTO''s office that Kakara Apparao, had no valid driving licence. Therefore, it concluded that there was nothing to say that the first respondent Kakara Apparao had no valid driving licence and therefore, the liability of the insurance company-appellant is not absolved.

In similar circumstances, the Supreme Court had an occasion to consider a question whether the insurer is entitled to claim immunity from a decree obtained by the dependents of the victim of a fatal accident on the ground that the insurance policy provided ''a condition excluding driving by a named person or persons or by any person who is not duly licensed or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualifications'', and that such exclusion was permissible in the context of Section 96(2)(b)(ii) for claiming immunity against the obligation to satisfy the judgments against the insured in respect of the third party risks.

The Supreme Court while considering the above question in Skandia Insurance Company Limited v. Kokilaben Chandravadan and others, AIR 1987 SC 1184, observed as under:

"Section 96(2)(b)(ii) extends immunity to the insurance company if a breach iscommitted of the condition excluding driving by a named person or persons or by any person who is not fully licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification. The expression ''breach'' is of great significance. The dictionary meaning of ''breach'' is infringement or violation of a promise or obligation. It is therefore abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is duly licensed will be incharge of the vehicle. The very concept of infringement or violation of the promise that the expression ''breach'' carries within itself induces as inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. It is only when the insured himself places the vehicle incharge of a person who does not hold a driving licence, that it can be said that he is ''guilty'' of the breach of the promise that the vehicle will be given by a licensed driver. Unless the insured is at fault and a guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle incharge of a licensed driver, with the express or implied mandate to drive himself it can not be said that the insurer is guilty of any breach. And it is only in case of a breach or a violation of the promise on the part of the insured that the insurer can hide under the umbrella of the exclusion clause. In a way the question is as to whether the promise made by the insured is an absolute promise or whether he is exculpated on the basis of some legal doctrine. In the present case, even if the promise were to be treated as an absolute promise the grounds for exculpation can be found from Section 554. In view of this provision apart from the implied mandate to the licensed driver not to place a non-licensed person incharge of the vehicle, there is also a statutory obligation on the said person not to leave the vehicle unattended and not to place it in charge of an unlicensed driver. What is prohibited by law must be treated as a mandate to the licensed driver employed by the insured and should be considered sufficient in the eye of law for excusing non-compliance with the condition. It cannot therefore, in any case be considered as a breach on the pa,t of the insured. To construe the provision differently would be to rewrite the provisions by engrafting a rider to the effect that in the event of the motor vehicle happening to be driven by an unlicensed person, regardless of the circumstances in which such a contingency occurs, the insurer will not be liable under the contract of insurance. It needs to be emphasised that it is not the contract of insurance which is being interpreted. It is the statutory provision defining the conditions of exemption which is being interpreted. These must therefore, be interpreted is the spirit in which the same have been enacted accompanied by an enxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provision rather than to fulfil its life-aim. To do otherwise would amount to nullifying the benevolent provision by reading it with a non-benevolent eye and with a mind not tuned to the purpose and philosophy of the Legislation without being informed of the true goals sought to be achieved. Even if one were to make a strictly doctrinaire approach, thevery same conclusion would emerge in obeisance to, the doctrine of ''reading down'' the exclusion clause in the light of the main purpose of the provision so that the ''exclusion clause'' does not cross swords with the ''main purpose'' high lighted "earlier. The effort must be to harmonise the two instead of allowing the exclusion clause to snipe successfully at the main purpose."

From the reading of the above judgment, it is clear that it postulates the following three principles under the exclusion clause as contemplated u/s 96(2)(b)(ii):

On a true interpretation of the relevant clause which interpretation is at peace with the conscience of Section 96, the condition excluding driving by a person not duly licensed is not absolute and the promisor is absolved once it is shown that he has done everything in his power to keep, honour and fulfil the promise and lie himself is not guilty of a deliberate breach.

Even if it is treated as an absolute promise, there is substantial compliance therewith upon an express or implied mandate being given to the licensed driver not to allow the vehicle to be left unattended so that it happens to be driven by an unlicensed driver.

The exclusion clause has to be ''read down'' in order that it is not at war with the ''main purpose'' of the provisions enacted for the protection of victims of accidents so that the promisor is exculpated when he does everything in his power to keep the promise.

Following the above principles laid down by the Supreme Court, a Three Judges Bench of the Apex Court has considered the issue in Sohan Lal Passi Vs. P. Sesh Reddy and others, , wherein the Insurance company has raised the same issue, that the insured-owner of the vehicle involved in the accident has breached the condition of insurance policy, "excluding driving by any person who is not duly licensed" was breached by the insured. In the abovesaid case, the insured has appointed one Gurbachan Singh as driver of the vehicle who was having driving licence, but at the time of occurrance of the accident, it was driven by Rajinder Pal Singh, who was cleaner-conductor of the bus; which met with an accident and one Dr. P. Ramchandera Reddy died on account of the rash and negligent driving of the driver. '' The insured has taken a defence that at the time of occurrauce of the accident, the said Rajinder Pal Singh did not drive the bus, but it was driven by Gurbachan Singh and further stated that he has not breached the conditions in the insurance policy by engaging the cleaner-cum-conductor who was not having driving licence. The Apex Court after considering a catena of decisions on the point, affirmed and reiterated the statement of law laid down'' in Kokilaben Chandravadan ''s case (supra), and held that without the knowledge of the insured, if by driver''s acts or omission others meddle with the vehicle and cause an accident, the insurer would be liable to indemnify the insured. The insurer in such a case cannot take the defence of breach of the condition in the certificate of insurance.

In view of the law laid down by the Supreme Court in the abovesaid judgment, applying the same to the facts and circumstances of the case on hand, I am of the considered view that the Insurance company cannot take the defence u/s 9(2)(b)(ii) that the insured has breached the condition in the insurance certificate by wilfully entrusting the vehicle to the cleaner who was not having driving licence at the time of occurrance of the accident, and therefore, the company is notliable to pay the compensation. Therefore, applying the dicta laid down by the Supreme Court in the above case, I am satisfied that the appellant herein has failed to establish that the owner of the vehicle, has wilfully entrusted the crime vehicle !o the first respondent, instead of the regular driver of the vehicle, G. Shanker, who is alleged to be the cleaner on the lorry and had no driving licence that the appellant-company has also failed to establish that the owner of the vehicle has wilfully committed breach of the terms and conditions of the insurance policy. Therefore, when the Insurance Company has failed to establish that the above slated two facts, it can not claim to extend the immunity or exclusion for payment of compensation as awarded by the Tribunal below or indemnify the insured-owner of the crime vehicle u/s 96(2)(b)(ii). In this case, the appellant has failed to establish that the insured-owner of the vehicle has committed breach of terms and conditions of the policy. Therefore, having regard to the facts and circumstances of the case, I hold that the insurance company-appellant herein is liable to pay the compensation as awarded by the Tribunal. If the appellant has a case, it can proceed against the insurer-owner of the vehicle for recovery of the same after payment of compensation to the claimants.

With regard to the award of compensation, for the untimely death of the bread-winner of the defendants, the Tribunal has awarded a total compensation of Rs.1,03,960 with interest at 12% p.a. from the date of petition till the date of payment; relying on the settled principles of law. Therefore, 1 see no reason to interfere with the quantum of compensation awarded by the Tribunal below. The legal representatives of the Fourth respondent are also entitled for apportionment of compensation in the compensation awarded by the Tribunal below, as per their entitlement, as the learned Counsel for the respondents informed the said fact to the appellant''s Counsel through a Memo dated 11-11-1998.

The appeal is, therefore, devoid of merits and i! is accordingly dismissed. But in the circumstances of the case without costs.