Oriental Insurance Co. Ltd. vs CHANNAVEERAPPA

THESE two appeals arise out of a single order and a common argument was advanced by the Advocates, and hence, we are disposing of these appeals by this single order. 1. Appeal No. 563/1998 is by the Oriental Insurance Company Ltd., which was respondent No. 1 before the District Forum, Dharwad in Complaint No. 456/94, which has been asked by an order dated 22.6.1998 to pay a sum of Rs. 69,000/- jointly and severally to the complainant within one month from the date of receipt of the order, failing which the said amount will carry interest at 18% p.a. till payment, whereas, Appeal No. 580/98 by the complainant against the same order for awarding interest at 21% p.a. on the amount awarded and for awarding compensation for the inconvenience caused to the complainant. The necessary facts, for the purpose of disposal of these appeals are these- The complainant was the owner of a vehicle bearing Regn. No. KA. 27/1425, a Goods Truck, which was insured with the respondents for the period from 7.12.1992 to 6.12.1993 paying a premium of Rs. 6,660/-. That was a comprehensive policy. The said vehicle in question met with an accident on 21.11.1993 at about 1.30 a.m. on P.B. Road within the jurisdiction of Kumarpattam Police Station, Dharwad District. The said accident was reported to the said police station which was registered in Crime No. 87/93. Due to the said accident, the said vehicle suffered heavy damage. Hence, the complainant submitted a claim form to respondent No. 1 on 21.12.1993 furnishing the details of the accident, driving licence particulars and R.C. particulars. The estimation of the repairs and the cost of the spare parts spent for the repair was also submitted to the respondent. On receiving the intimation of the accident, the Insurance Company had appointed a Surveyor for the spot survey of the vehicle and also appointed another Surveyor for the detailed report of the survey to ascertain the estimation of the damage. The complainant, however, with the permission of the Insurance Company got repaired the vehicle. After getting it repaired, he produced all the particulars including the bills for purchasing of the spare parts and labour charges were furnished to the Insurance Company. To his surprise, the complainant received a letter on 29.4.1994 from the respondent stating that his claim has been repudiated on the ground that the driver at the time of the accident was not authorised to drive a transport vehicle and the said vehicle was carrying the passengers which was opposed to the policy conditions. According to the complainant he had not violated any terms and conditions of the policy and the driver of the vehicle at the time of the accident was holding a valid and effective driving licence and without any reasons the Insurance Company had repudiated his claim. According to the complainant, he had spent a sum of Rs. 1,50,000/- towards repair of the vehicle. However, he was prepared to accept the damages mentioned by the Surveyor as per the assessment made by him. Since his claim was repudiated he has moved the District Forum with the said complaint.

ON receipt of the notice from the District Forum, the respondent submitted their written objections admitting the existence of the insurance policy, ownership of the vehicle, and the accident as such. However, it has justified the repudiation made by it. According to the Insurance Company during the course of investigation of the claim, it came to light that the driver of the vehicle, at the time of the accident was not having an effective and valid driving licence. It also came to know that the said vehicle was carrying passengers and on these grounds it had repudiated the claim and the said fact of repudiation had been intimated to the complainant. It also disputed the quantum of amount spent for the repair. In support of the case, the complainant filed his affidavit and produced documents P1 to P7, whereas the opponent filed the affidavit and placed reliance on Exs. D1 to D4. The District Forum after considering the materials placed by the parties and hearing the arguments of the learned Advocates appearing for the parties came to the conclusion that the complainant has proved that he was entitled for the relief claimed in his complaint.

In this appeal Mr. A.M. Venkatesh, Advocate appearing for the appellant in A. No. 563/98 contended before us that the District Forum was not justified in entertaining the complaint and granting the relief holding that the repudiation made by the Insurance Company was illegal. He pointed out that the order of the District Forum suffers from serious legal infirmity and it is against the provisions of the Motor Vehicles Act and is liable to be set aside. He has also urged that the driver of the vehicle did not have effective and valid driving licence to drive the transport vehicle and he possessed a licence only to drive light motor vehicle, and hence, the Insurance Company was justified in repudiating the claim. He has further pointed out that the District Forum ought to have considered that the driver had obtained a learning licence permitting to drive a goods vehicle after the accident which was valid from 3.12.1993 to 2.6.1994 which clearly goes to show that he had no valid driving licence to drive a goods vehicle at the time of the accident. He also submitted that the principle laid in the Supreme Court decision reported in 1999 CTJ 635 (SC) (CP), is not applicable to the present case. On these grounds, he submitted before us that the order of the District Forum deserves to be set aside and requested this Commission to allow his appeal.

WE heard the learned Advocate Mr. A.S. Bawoor on behalf of the respondent in the present case and for the appellant in A. No. 580/98. According to this Advocate, the facts of the present case are identical to the facts in the case decided by the Supreme Court which is reported in 1999 CTJ 635 (SC) (CP), and the District Forum was justified in allowing the claim. He contended that the driver had the driving licence to drive light motor vehicles and in fact he was driving the said vehicle and the presence of the passengers or the goods which it was carrying did not contribute to the accident as such, and hence, he submitted that the District Forum was right in allowing the complaint. He has also pointed out that the accident had taken place not because of the presence of the passengers or the goods but it was due to parking of a tractor-cum-trailer in the middle of the road and due to the dizzling light came out of the bus from the opposite direction, the vehicle dashed against the said tractor which was right in the middle of the road as could be seen from the claim form. He further contended that the District Forum committed serious error in not awarding compensation for the inconvenience caused to the complainant and also interest at 21% p.a. since the complainant had borrowed the said amount paying interest at 21%. He requested this Commission to allow the appeal filed by the complainant and to award compensation and higher rate of interest. We have been taken through the order of the District Forum. Mr. A.M. Venkatesh, Advocate invited our attention to the decision of the High Court of Himachal Pradesh, reported in AIR 2000 HP 91, New India Assurance Co. Ltd. v. Suraj Prakash & Ors., and submitted that in view of the said decision the appeal filed by the Insurance Company has to be allowed. The said decision has laid down in para Nos. 9 and 10 as follows : "Para 9 : The learned Counsel for the appellant Insurance Company contended that the Tribunal committed an error in holding that the Insurance Company failed to prove that the vehicle in question is covered within the definition of the words ''public service vehicle'' inspite of the fact that the Maruti Van in question was registered and got insured also only as a taxi in which case it would be beyond controversy that the Maruti Van would answer the definition of ''public service vehicle''. From the records and the reply filed by the Insurance Company, we find particularly in para 3 of the reply that an objection has been taken that the Insurance Company is not liable in view of the fact that the driver of the vehicle, Maruti Van HPY 251 did not possess any valid licence to drive the taxi, as a paid driver and as such no liability can be fastened on the insurer. Ex. R3 policy of insurance (the schedule) filed disclosed that the insurance was in respect of the vehicle in question which stood registered as a Taxi. If that be the factual position, it would answer the description of ''public service vehicle'' as defined in Section 2(35) to mean any motor vehicle used or adopted to be used for the carriage of passengers for hire or reward and includes a maxi cab, a motor cab, contract carriage and stage carriage. Para 10 : Section 3(1) of the Motor Vehicles Act, 1988 stipulated that no person should drive as motor vehicle in any public place unless he holds an effective driving licence issued to him to drive the vehicle and that no person shall so drive a transport vehicle (other than a motor cab or motor cycle) hired for his own use or rented under any scheme made under Section 75(2) of the Act, unless his driving licence specifically entitled him so to do. Section 2(47) defines transport vehicle, to mean a public service vehicle, a goods carriage, an educational institution''s bus or a private service vehicle. Therefore, the vehicle in question answer the description of public service vehicle even on the materials disclosed on record. The conclusion of the Tribunal below to the contra is indicative of non-application of mind to a valid and relevant piece of material on record. Inasmuch as Ex. R1 driving licence does not contain any specific endorsement to drive a transport vehicle, the driver who drove the vehicle at the time of the accident must be held to be not possessed of a valid and effective driving licence. The mandatory requirement of Section 3(1) having not been satisfied by the driver, in not holding a licence to drive with a specific endorsement to drive the transport vehicle (public service vehicle) such a conclusion has become inevitable on the facts of the case."

AGAIN he placed reliance on the decision of the Madras High Court reported in 2000 ACJ 1378, which has held that since vehicles are classified by statutory provisions into different categories, authorisation to drive one category of vehicle cannot enable the driver to drive another category of vehicle. In contra to the above decisions, Mr. A.S. Bawoor, Advocate has invited our attention to paragraph Nos. 9 and 13 of the decision reported in 1999 CTJ 635 (Supreme Court) (CP), reads as follows : "Para 9 : There is no evidence to record and no claim has either been made by the insurer that the vehicle in question was having a permit for goods carriage. If we accept the contention of the insurer, there can never be any light motor vehicle and there can never be any driving licence for driving a light motor vehicle. We cannot put such a construction on Clause (21) of Section 2 of the Act so as to exclude a light motor vehicle from the Act altogether. Light motor vehicle is a motor vehicle to drive for which Jadhav possessed effective driving licence. His driving licence was valid on the date of accident. In allowing the claim of the appellant, the State Commission held that ''the driver who drove the vehicle at the time of accident, had as a matter of fact, a valid driving licence for driving a light motor vehicle and there is no material on record to show that he was disqualified from holding or obtaining such a licence at the time of accident. In view of these facts and in the circumstances of the case, we are satisfied that the policy does not insist on the driver having a licence to drive, to obtain a specific endorsement to drive a transport vehicle''. We however, do not subscribe to such a view. Para No. 13 : In the present case, the insurer alleged that the appellant had committed breach of the terms of the insurance policy and had violated the provisions of the Act by entrusting a ''transport vehicle'' to a person who did not hold a valid licence and the insurer was, thus, not liable to indemnify appellant. Under the policy firstly light motor vehicle meant the gross weight of which did not exceed 6,000 kgs. and secondly against the column ''driver'' the policy stated : ''Drivers clause : Persons, or classes of persons entitled to drive, any person including the insured. Provided that a person is driving holding an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence. Provided also that if a person holding an effective learner''s licence may also drive the vehicle when not used for the transport of goods at the time of the accident and that such a person satisfies the requirements of Rule 3 of the Central Motor Vehicles Rules, 1989."

He also invited our attention to paragraph 5 of the decision of the Goa State Consumer Commission, reported in II (2000) CPJ 576, M/s. Panorama Constructions & Ors. v. Oriental Insurance Company Ltd., in which the said Commission has observed as follows : "Para 5 : We are, therefore, satisfy that it is only when the insured is guilty of a deliberate breach of the conditions of the policy and the nature of the breach is a fundamental one, rather than a technical and formal deficiency, which can be said that that has been contributory to the accident, that the exclusion clause is able to be successfully invoked in order to absolve or exonerate the insurer from its liability to indemnify. In the instant case, we find that the appellant''s driver''s licence though valid to ply light motor vehicles, was not having, at the relevant time, and endorsement of being professional in order to enable him, as per the respondent''s contention, to ply a transport goods vehicle, irrespective of the fact that the definition of a light motor vehicle includes also a transport vehicle when its laden weight is less than 7500 kgs., as it happens in the case of the insured vehicle. Further, the evidence of the Asst. Director of Transport, Dilip Nagvenkar shows that for such endorsement in the driver''s valid licence, so as to make it formally effective, no additional aptitude test was required and the endorsement could be stamped just on the driver''s simply asking. There is also nothing on record to suggest that the owner of the vehicle was aware of this technical deficiency in the licence of his driver which could disentitle him to legally ply his vehicle. There is also no evidence to indicate that the driver was disqualified or could be disqualified to drive transport goods vehicles during the relevant period or getting his licence endorsed as professional. On the contrary, the record shows or the respondent has not disputed that such endorsement was actually stamped on the driver''s licence on or about 14.6.1993, barely one month after the accident."

He has also invited our attention to a decision of the Division Bench of the Karnataka High Court reported in ILR 2000 Kar. 1608, paragraph (10), which reads as follows : "Para 10 : We do not find substance in the argument raised. Admittedly the driver of the offending vehicle possessed a licence to drive LMVs from 23rd April, 1992 to 20th of April, 1995. He was authorised to drive HGV with effect from January, 1993. As the incident took place on 15th June, 1992, the endorsement issued on January, 1993 to drive HGV has no much relevance, as on the date of the accident he had a licence to drive LMV. As per the definition clause in Section 2(21) of the Motor Vehicles Act, 1988 ''light motor vehicle'' means a transport vehicle or omni bus the gross vehicle weight of either of which or a motor car or tractor or road-roller the unladen weight of any of which does not exceed 7500 kgs. (7500 kgs. was substituted for 6000 by Section 2 of the Act 54 of 94 with effect from 14.11.1994). It is not in dispute that the unladen weight of the offending lorry in question as per ''B'' Register extract of the vehicle Ex. R3 is 4960. As the weight of the offending vehicle was 4960 kg. i.e., much less than 7500 kgs. it has to be treated as LMV, Light Motor Vehicle as per the definition would include a transport vehicle also."

After carefully considering the rival submissions in the light of the decisions cited by them, we are of the opinion that in view of the decision rendered by the Supreme Court in Ashok''s case, the decision of the District Forum is just and proper since it is in conformity with the ratio laid down in the said decision. The District Forum has observed that the driver had the driving licence to drive the light motor vehicle and the said vehicle which he was driving had unladen weight less than 6000 kgs., and therefore, the repudiation of claim done without valid grounds and accordingly passed the impugned order.

WE have carefully considered the rival contentions and we are of the opinion that we have to follow the decision rendered by the Supreme Court. If we follow the said decision, the net result will be that the order of the District Forum has to be confirmed.

COMING to the appeal filed by the complainant, we have to hold that the complainant has not placed any material for grant of compensation towards inconvenience caused to him. We are also of the opinion that in view of the decision of the Supreme Court, the interest awarded at 18% p.a. is excessive and we have to reduce the said rate of interest from 18% p.a. to 12% p.a. The net result is that both these appeals are dismissed with the modification in the rate of interest from 18% p.a. to 12% p.a. There will be no order as to costs in these appeals. Appeals dismissed.