Oriental Insurance Co. Ltd. vs Mohammed Hussain and Another

P.R. Shivakumar, J.—The civil miscellaneous appeal is directed against the award dated 17.1.2002 made by the Motor Accidents Claims Tribunal (Third Addl. District Judge), Dharmapuri at Krishnagiri in M.A.C.T.O.P. No. 287 of 2001 directing the appellant therein to pay a sum of Rs. 1,13,500 as compensation to the respondent No. 1/claimant together with an interest at the rate of 9 per cent per annum from the date of claim till payment and with proportionate costs.

The respondent No. 1 herein, alleging that he met with an accident on 5.10.1998 at about 6 p.m. near Chinnamattarapalli bus stop which resulted in injuries leading to permanent disability, made a claim against the appellant and the respondent No. 2 herein for compensation to the tune of Rs. 3,00,000. It was his contention before the Tribunal that the motor cycle belonging to the respondent No. 2 herein bearing registration No. TN 29-U 5604 was the vehicle involved in the accident and that the said motor cycle hit him and caused the accident as its rider rode it rashly and negligently without following the rules of the road. It was his further contention before the Tribunal that while he was walking along the edge of the road the said motor cycle came there driven by its rider rashly and negligently and hit him which resulted in the injuries noted in the claim petition which according to him led to the permanent disability.

The owner of the said vehicle namely, the respondent No. 2 herein did not evince interest in resisting the claim and he remained ex parte before the Tribunal. The appellant herein, namely, Oriental Insurance Co. Ltd., alone contested the claim by filing a counter statement. In the said counter statement, besides denying the petition allegations on the merits of the case, the appellant herein also contended that the rider of the motor cycle did not possess a valid driving licence and that hence the appellant insurer was not liable to pay any compensation in terms of the contract of insurance.

The Tribunal framed necessary issues and conducted trial in which two witnesses were examined as PW 1 and PW 2 and four documents were marked as Exh. A1 to Exh. A4 on the side of the petitioner (respondent No. 1 herein). RW 1 and RW 2 were examined and Exh. B1 and Exh. B2 were marked on the side of the appellant herein/respondent No. 2 before the Tribunal. The Tribunal considered the evidence after hearing the arguments advanced on either side and upon such a consideration, came to the conclusion that accident was the result of rash and negligent driving of the motor cycle belonging to the respondent No. 2 herein/respondent No. 1 in the O.P. The Tribunal assessed the damages to which the respondent No. 1 herein/petitioner was entitled at Rs. 1,13,500.

So far as the contention of the appellant herein/respondent No. 2 that the rider of the motor cycle did not possess a valid driving licence at the time of accident is concerned, the Tribunal held that the onus to prove the absence of driving licence and the consequential violation of the policy condition was on the appellant insurer and that such onus was not discharged. In line with the said finding, the Tribunal held that the appellant insurer was obliged to indemnify the insured, namely, the respondent No. 2 (owner of the offending vehicle) to the extent of his liability towards the respondent No. 1 herein/petitioner which was fixed at Rs. 1,13,500. Thus, the Tribunal has passed an award holding that respondent Nos. 1 and 2 are jointly and severally liable to pay the above said amount and directing them to pay the said amount with interest at the rate of 9 per cent per annum from the date of claim till realization along with proportionate costs.

The said award of the Tribunal dated 17.1.2002 is challenged by the appellant insurer in this civil miscellaneous appeal not on the question of negligence or the quantum of compensation, but on the question of the liability of the insured in the light of the insurer''s contention that there was violation of a condition of the policy.

This Court heard the submissions made by Mr. S. Arun Kumar, the learned Counsel representing the appellant, Mr. Kumaravelan, learned Counsel representing the respondent No. 1 and Mr. V. Nicholas, learned Counsel representing respondent No. 2. The materials available on record were also perused.

The insurer of the vehicle involved in the accident who has been held by the Tribunal jointly and severally liable along with the owner of the vehicle to pay compensation to injured-claimant has brought forth this appeal. In view of the limited challenge made to the award, the points that have arisen for consideration are:

(1) Whether the rider of the motor cycle involved in the accident did not possess a valid driving licence at the time of accident?

(2) Whether the appellant insurer is absolved from liability to pay compensation to respondent No. 1/claimant?

(3) Whether the appellant insurer should be directed to pay compensation to the respondent No. 1/claimant at the first instance and recover the same from the respondent No. 2?

It is not in dispute that motor cycle bearing registration No. TN 29-U 5604 belonging to the respondent No. 2 herein was the one involved in the road accident that took place on 5.10.1998 at about 6 p.m. near Chinnamattarapalli bus stop and that the petitioner sustained injuries for which he had made the claim before the Tribunal on the basis of his contention that the accident was the result of rash and negligent driving of the said motorcyclist. So far as the question of negligence is concerned, the Tribunal has held that the rider of the motor cycle, by name Gajendran, was at fault and it was due to his negligence that the said accident occurred. The said finding has not been challenged in this appeal and hence the same has got to be confirmed. There is also no challenge to the quantum of compensation awarded by the Tribunal and hence no interference can be made with the same.

It is the contention of the appellant that the rider of the motor cycle did not possess valid driving licence and hence the appellant insurer was not liable to pay compensation based on the insurance policy. The learned Counsel for the appellant argued that the Tribunal committed an error in coming to the conclusion that the appellant insurer had not discharged its onus by adducing sufficient evidence to prove absence of driving licence with the rider of the motor cycle at the time of the accident. It is the further contention of the learned Counsel for appellant that despite the fact that there was an admission on the part of the rider of the vehicle before the criminal court in the prosecution launched by the police regarding the accident in question, for offences including one for driving the vehicle without possessing a valid driving licence which admission was substantiated by examining RW 1 and RW 2 and producing Exh. B1, the Tribunal gave a perverse finding as if the appellant insurer failed to prove its case that the rider did not possess a valid driving licence.

On the other hand, learned Counsel for the respondent No. 2 (owner of the vehicle) would contend that the insurance company who has come forward with a plea that it is absolved of its liability to pay compensation to the victim, should prove the absence of driving licence by adducing sufficient and proper evidence; that the Tribunal, on a proper appreciation of evidence came to the conclusion that the onus was not discharged and that hence the said finding of the Tribunal cannot be interfered with in this appeal. The learned Counsel for the respondent No. 1 petitioner, of course quite naturally, would support the above said contention raised by the learned Counsel for respondent No. 2. Let us now see whether the appellant insurer has adduced evidence, sufficient enough to discharge the onus and shift the burden of proof on the other side.

The appellant insurer, besides examining an employee of the appellant, examined the investigating officer also to show that the rider of the motor cycle involved in the accident was prosecuted for driving the motor cycle without possessing a valid driving licence. Exh. B1 is the certified copy of the judgment in the criminal case S.T.C. No. 4798 of 1999 on the file of the Judicial Magistrate, Krishnagiri. The oral evidence of RW 1 and RW 2 and Exh. B1 will make it abundantly clear that the rider of the motor cycle made an admission before the criminal court that he rode the motor cycle without possessing a valid driving licence and caused the accident due to his negligence.

Generally, judgments of criminal courts are not relevant and admissible in the trial of civil cases or M.C.O.P. case except to the extent of showing that there was a criminal prosecution and the same resulted in conviction or acquittal. But it becomes relevant and admissible in case the judgment is based on the plea of guilty not as a judgment of the criminal court but as an admission made before the criminal court. Admissions are best evidence though not conclusive proof of the fact admitted therein. The party against whom such an admission is pleaded, shall have a right to adduce evidence to disprove the fact admitted therein to be false. In this case, the oral evidence of RW 1 and RW 2 and the admission incorporated in the judgment of the criminal court as evidence by Exh. B1 are enough to hold that the appellant insurer has adduced sufficient evidence at its disposal at last, to dislodge the burden of proof and recast such burden of proof on the opposite party. Curiously, in this case, neither the respondent No. 1/claimant nor the respondent No. 2/owner of the vehicle chose to adduce evidence to discharge the burden cast on them. Under such circumstances, this Court accepts the contention of learned Counsel for the appellant that the finding of the Tribunal in this regard is erroneous and liable to be interfered with by this court.

Learned Counsel for the appellant also drew the attention to the admitted fact that the rider of the motor cycle by name Gajendran was none other than the brother of the respondent No. 2 herein. Respondent No. 2 who is placed in a better position to prove that the rider of the motor cycle did possess a valid driving licence, had not chosen to lead such evidence. Under such circumstances, this Court comes to the conclusion that the rider of the motor cycle did not possess valid driving licence at the time of accident. Point No. 1 is answered accordingly.

The next question to be determined is whether the insurer is completely absolved of its liability under the insurance policy? In a series of cases, it has been held that the statutory scheme providing compulsory insurance to the motor vehicles is intended to benefit the victims of the accidents and that the provisions relating to the scheme should be liberally construed so that the statutory right conferred to such victims shall not be denied or diluted. That is why in all such cases, it has been held that the insurer''s liability towards the third party victims is absolute. In case of violation of any condition of the contract of insurance enabling the insurer to rescind the contract or that by virtue of such violation the insurer could have rescinded the contract, the courts have adopted the method of directing the insurer to satisfy the claim of the third party victims at the first instance and then recover the amount from the insured in the very same proceeding by levying execution without having the necessity to go for a separate proceeding.

Learned Counsel for the appellant, however, would contend relying upon the observations made by the Hon''ble Apex Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others, , that when there is a wilful violation of a condition of policy, there would not be any question of directing the insurer to satisfy the award at the first instance and then recover the amount from the insured. Learned Counsel submitted that the respondent No. 2 in allowing his brother to ride the motor cycle knowing fully well that he did not possess a valid driving licence, had committed a wilful violation of the policy condition and hence the insurer should be absolved of the liability even towards the third party victim. This Court is not in a position to accept such a far reaching proposition. In fact in the case relied on by the learned Counsel for the appellant also, ultimately the insurer was directed to satisfy the claim and then recover the amount from the insured.

At the cost of repetition, this Court wants to emphasise the point that the scheme of compulsory insurance is aimed at protecting the poor victims keeping in mind the fact that all those who own motor vehicles will not be in a position to satisfy the award of compensation that may be passed in the motor accident cases. Under such circumstances, the liability of the insurer towards the third party victim, whose interests are sought to be protected by the compulsory insurance scheme, should be held absolute. The said statutory protection given to the victims of the motor accidents cannot be taken away or diluted by the fact that there was an act on the part of the insured which amounted to violation of a condition of a policy. At best, such violation will govern the rights of the insured and insurer inter se without affecting the rights of the third party victims. The question of wilful violation of policy condition may be relevant insofar as the voluntary coverage of insurance over and above this statutory requirement which shall include own damages and personal accident claim. This is not such a case. Therefore, this Court is of the considered view that the appellant''s/insurer''s liability towards the respondent No. 1 (victim) is absolute. At the same time, the appellant having proved that the rider of the motor cycle did not possess a valid driving licence at the time of accident, is entitled to a direction incorporated in the award itself enabling it to recover the compensation amount from the respondent No. 2/owner of the offending vehicle after making payment to the respondent No. 1 victim.

For all the reasons stated above, this Court hereby holds that the appellant''s/insurer''s liability towards the respondent No. 1/claimant is not affected by the fact that the appellant was able to pursue that the rider of the motor cycle did not possess a valid driving licence and hence there was violation of a condition of the insurance policy. On the other hand, in view of the proof of violation of a policy condition, the appellant insurer shall be entitled to recover the amount paid as compensation to the respondent No. 1/claimant from the respondent No. 2/owner of the vehicle. Such a direction shall be incorporated in the award. Point Nos. 2 and 3 are answered accordingly. The award of the Tribunal is liable to be modified to the extent indicated above.

In the result, this appeal is allowed in part and the award of the Tribunal is confirmed subject to a modification that the appellant herein/respondent No. 2 (the insurer) shall pay the award amount to the respondent No. 1 herein/claimant at the first instance and then recover the same from the respondent No. 2 herein/respondent No. 1 (owner of the offending vehicle) by levying execution before the Tribunal without having a necessity to file separate suit/original proceeding. Across the Bar, it has been brought to the notice of the court that the entire amount had already been deposited and the respondent No. 1 (victim) was allowed to withdraw 50 per cent of the said amount. In view of the same, the respondent No. 1 victim shall be at liberty to seek payment out of the balance by filing necessary petition before the Claims Tribunal.

However, there shall be no order as to costs.