Oriental Insurance Co. Ltd. vs Chandra Prakash

Krishna Murari and Pankaj Naqvi, JJ.—This first appeal from order field by the appellant-insurance company is directed against the judgment and award dated 10.10.2013 passed by the Motor Accident Claims Tribunal/Additional District Judge, Court No. 1, J.P. Nagar in M.A.C.P. No. 63 of 2009 (Chandra Prakash and another v. The Oriental Insurance Co. Ltd. and another) awarding a compensation of Rs. 6,59,000/- with interest @ 6% per annum from the date of filing of the claim petition till final payment to claimant-respondent No. 1. The appellant-insurance company has been directed to make payment of the awarded amount with a right to recover the same from the owner of the offending vehicle. Heard Sri Ashok Kumar Jaiswal, learned Counsel for the appellant.

The sold argument advanced by learned Counsel for the appellant is that since the offending vehicle was being drive in violation of the terms and conditions of the insurance policy inasmuch as the permit to ply the vehicle was only valid within the State of Gujrat, Rajasthan and Delhi whereas the accident took place in district J.P. Nagar within the State of Uttar Pradesh and the owner who was driving the vehicle had no valid driving license, as such, the Tribunal has erred in law in fastening liability on the insurance company to pay the amount awarded and the liability ought to have been fastened on the owner of the vehicle.

We have considered the argument advanced by learned Counsel for the appellant.

The Tribunal has recorded a categorical finding that the permit for plying the offending vehicle was only valid within the State of Gujarat, Rajasthan and Delhi and thus it was being plied in the State of U.P. without any valid permit and the owner who was driving the offending vehicle had no valid driving license and thus the vehicle was being driven in violation of the terms and conditions of the insurance policy.

Thus the defence set up by the appellant insurance company was accepted by the Motor Accident Claims Tribunal. The only ground of challenge is that in view of the findings by the tribunal that the vehicle was being driven in violation of the terms and conditions of the policy, the liability of compensation determined ought to have been fastened on the owner of the vehicle and the insurer was not liable to the insured in view of the violation of the terms and conditions. The law on this issue is no longer res integra and stands settled by a number of pronouncement by Hon''ble Apex Court wherein it has been held that even where the insurer is able to prove breach of terms and conditions of policy on the part of the insured, the insurer would not be allowed to avoid its liability towards the insured unless the breach or breaches are so fundamental as are found to have contributed to the cause of accident and in case of third party risk, the insurer has to indemnify the amount with a right to recover the same from the insured, reference may be made to the judgment of the Hon''ble Apex Court in the case of National Insurance Co. Ltd. Vs. Laxmi Narain Dhut, New India Assurance Co., Shimla Vs. Kamla and Others etc. etc., Sohan Lal Passi Vs. P. Sesh Reddy and others, National Insurance Co. Ltd. Vs. Kusum Rai and Others, . Again in the case of S. Iyyapan Vs. United India Insurance Company Ltd. and Another, the Hon''ble Court has held as under:

Hence, in our considered opinion, the insurer cannot disown its liability on the round that although the driver was holding a license to drive a light motor vehicle but before driving light motor vehicle used as commercial vehicle, no endorsement to drive commercial vehicle was obtained in the driving licence. In any case, it is the statutory right of a third party to recover the amount of compensation so awarded from the insurer. It is for the insurer to proceed against the insured for recovery of the amount in the event there has been violation of any condition of the insurance policy.

In the instance case, admittedly the offending vehicle was plying in the State of Uttar Pradesh for which it had no valid permit and the owner who was driving the vehicle also did not have any valid driving licence and thus apparently, the vehicle was being driven in violation of the terms and conditions of the insurance policy. The Tribunal after analyzing the evidence of the parties has recorded a categorical finding in this regard and accordingly determined the liability in respect of the third party and fastened the same on the insurer giving it a right to recover from the insured. In view of the settled proposition of law by various pronouncement of the Hon''ble Apex Court referred to above, we find no illegality in the impugned award requiring any interference.

The argument advanced by learned Counsel for the appellant that liability of payment of compensation determined ought to have been fastened on the owner of the vehicle and the insurer was not liable, has not force and is not liable to be accepted. No other point was raised or pressed before us.

In view of the above discussions, the appeal is devoid of any merit and stands dismissed. However/there shall be no order as to costs.