Oriental Insurance Company Ltd. vs K.A. KABEER

THIS appeal is directed against the order passed by the District Forum, Emakulam, in O.P. No. 280/1997. The opposite party is the appellant.

BRIEFLY stated, the case of the complainant is as follows : He is the owner of a vehicle No. KL-7A-5731 which was insured with the opposite party. The vehicle met with an accident and got damaged. The accident was immediately reported to the opposite party. The damage was assessed at Rs. 45,000/- by the Surveyor. The opposite party however repudiated the claim on the ground that the driver who drive the vehicle did not have badge as required under the Motor Vehicles Act. Tine complainant contended that the driver had valid driving licence at the time of the repudiation and repudiation is invalid. Opposite party filed version admitting the insurance policy and also the accident resulting damage to the vehicle. It was also admitted that the claim was made to the opposite party and they deputed an independent Surveyor to assess the damage. The vehicle was driven by Shri Kunjumon, who did not hold any effective driving license at the material time. The opposite party wrote a letter to the Licensing Authority, Aluva, enquiring about the particulars of the license and the Licensing Authority replied that K.A. Kunjumon had not applied and the Licensing Authority has not issued any badge authorizing him to drive transport vehicles. Hence there is violation of the policy condition and the repudiation is valid.

The District Forum considered the matter and came to the conclusion that the driver had licence to drive Auto-rickshaw and after one year of completion he is competent to apply and endorsement is a mere formality and in the circumstances the repudiation is not justified. In that view, the District Forum directed the opposite party to settle the claim within a period of one month.

AGGRIEVED by the said order this appeal has been preferred. Learned Counsel appearing for the appellant brought to our notice the decision of the National Commission in Oriental Insurance Company Ltd. v. Ashok, II (1995) CPJ 208 (NC). That was a case where the driver was holding a licence to drive light motor but there was no specific endorsement on his licence that he was authorised to drive transport vehicle. Reliance was placed on Section 3(1) of the Motor Vehicles Act which states that no person shall drive a motor vehicle unless he holds an effective driving licence issued to him authorising him to drive the vehicle, and no person shall so drive a transport vehicle (other than a motor cab or motor cycle) hired on his own use or rented under any scheme made under Sub-section (2) of Section 75 unless his driving licence specifically entitles him so to do. The National Commission took the view that there was no specific authorisation to drive a transport vehicle as required by Section 3 of the Act and no such authorisation was endorsed on his licence and therefore the opposite party is not liable to indemnify.

EXT. Al is the photo copy of the driving licence which was issued to the driver on 2.1.1993. Initially the licence was issued for driving light motor vehicle and subsequently by endorsement dated 22.9.1993 made by the Licensing Authority on EXT. A1, the driver was also authorised to drive three wheelers with effect from 18.9.1993. In EXT. A1 it is stated that a paper badge No. EA./ 1210/93 was issued to the driver for driving Auto-rickshaws. EXT. A2 is the copy of that badge. The opposite parries contended that the driver had no valid badge for driving the light motor goods vehicle at the time of accident "though he was having a badge for driving Auto-rickshaw. EXT. B2 is the copy of the letter received by the opposite party from the Additional Licensing Authority, Aluva, dated 18.11.1995 in reply to a letter sent by the opposite party. That letter reads as follows : "As per your letter, you are informed that the badge is essential for driving Transport Vehicles, Badge for 3 wheeler is issuing alongwith 3 wheeler licence if the applicant has completed 20 years old. The badge for all Transport Vehicles (LMV and HMV) are issuing only after completing one year from the date of issue of L.M.V. licence. Both badges are one and the same. Hence Auto-rickshaw badge is also valid for driving all Transport Vehicles, as and when the applicant become completed one year from the date of issue of L.M.V. licence and an application is to be made before the Licensing Authority for revoking the limitation of badge for A/R only, and for endorsing it in his licence to drive all Transport Vehicles. In the above-referred case as per our off ice records Sri Kunjumon holder of D.L. No. EA/85/93 had not applied and we have not issued him badge, authorising him to drive all Transport Vehicles."

It has been clarified in Ext. B2 that a badge for driving transport vehicles both L.M.V. and H.M.V. are issued only after completing one year from the date of issue of L.M.V. licence that both badges are one and the same and that Auto-rickshaw badge is also valid for driving Transport Vehicles as and when the applicant completed one year from the date of issue of L.M.V. Licence and an application is made by him to the Licensing Authority for endorsing it in his driving licence authorising him to drive all Transport Vehicles. It is not disputed that Shri Kunjumon had not made any application for endorsement though he completed one year period and he has not been issued any badge authorising him to drive all motor vehicles. Ext. B3 is a Circular issued by the Transport Commissioner, Trivandrum, on 29.11.1995 which reads as follows : "It is hereby clarified that in the endorsement of authorisation to drive transport vehicles, in the case of drivers of Auto-rickshaw, the class of vehicles will be specified so that a driver with authorisation to drive an Auto-rickshaw cannot drive any other class of vehicle without completing one year after obtaining the licence of driving light motor vehicles. Whenever he attains the experience of one year after obtaining the licence of driving L.M.V. he has to produce the M.D.L. with authorisation to drive Auto-rickshaw before the Licensing Authority/ Assistant/ Additional Licensing Authority for cancelling the endorsement specifying the clause of vehicle if so desired."

From this clarification it is clear that in order to enable a driver having a valid licence for driving L.M.V. with a valid badge for Auto-rickshaw only to drive all light motor vehicles the only thing that has to be done by such person is to produce the driving licence and badge for the Auto-rickshaw after completing one year from the date of issue of driving licence before the Licensing Authority to get endorsement limiting the authorisation to drive Auto-rickshaw only deleted from the badge. So if the driver Kunjumon had produced Exts. Al and A2 before the Licensing Authority and got the endorsement in Ext. A2 that it is valid only for driving Auto-rickshaw deleted, Kunjumon would have got a valid badge to drive all light motor vehicles in view of Exts. B2 and B3. At the time of accident, Kunjumon was entitled to get the endorsement in Ext. A2 badge limiting it to Auto-rickshaw deleted. In the circumstances we are unable to uphold the technical objection raised by the opposite party to repudiate the claim. In this connection we may refer to a recent decision of the Supreme Court in B.V. Nagaraju v. Oriental Insurance Company Ltd., II (1996) CPJ 18 (SC). In that case the claim was repudiated on the ground that the vehicle carried more than 6 permitted passengers. Dealing with the question, the Supreme Court observed as follows: "It is plain from the terms of the insurance policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could these added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. Here, it is nobody''s case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the oncoming vehicle had collided head on against the insured vehicle, which resulted in the damage. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of owner, cannot be said to be such a fundamental breach that the owner should in all events, be denied in identification. The misuse of the vehicle was some what irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident."

In the instant case, however, we find no such contributory factor. In Sikami''s case this Court paved the way towards reading down the contractual clause by observing as follows : "When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependents on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The Court cannot but opt for the former view. Even if some were to make a strictly doctrinaire approach, the very same conclusion would emerge on obeisance to the doctrine of Preading down'' the exclusion clause in the light of the main purpose'' of the provision so that the ''exclusion clause'' highlighted earlier. The effect must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose. The theory which needs no support is supported by Carter''s Breach of Contract" vide paragraph 251. To quote : ''Notwithstanding the general ability of contacting parties to agree to exclusion clauses which operate to define obligations there exists a rule, usually referred to as the "main purpose rule", which may limit the application of wide exclusion clauses defining a promisor''s contractual obligations. For example, in Glynn v. Margeson & Company, 1993 AC 351, 357, Lord Halsburry, L.C. stated: It seems to me that in constructing this document, which is a contract of carriage between the parties, one must in the 1st instance look at the whole instrument and not at one part of it only. Looking at the whole instrument, and seeing what one must regard, as its main purpose, one must reject words, indeed whole provisions, if they are inconsistent with what one assumes to be the main purpose of the contract''."

ALTHOUGH this rule played a role in the development of the doctrine of fundamental breach, the continued validity of the rule was acknowledged when the doctrine was rejected by the House of Lords in Suissee Atlantique Sedate d'' Armement Maritime S.A. v. N.V. Rotterdatnsche Kolen Central, 1967 (1) AC 361. Accordingly, wide exclusion clauses will be read down to the extent to which they are inconsistent with the main purpose, or object of the contract.

ULTIMATELY the Supreme Court held that the National Commission went for strict construction of the execution clause and that the reasoning that the extra passengers being carried could not have contributed in any manner, to the occurring of the accident was barely noticed and rejected seems any plausible account, even when the claim conferring the damage only was limited in nature. Adopting the same principle we have no hesitation to hold that the Insurance Company cannot escape from the liability in the instant case. As pointed out earlier, a mere application on the expiry of one year after the issue of the license would have enabled the driver to obtain endorsement to drive all transport vehicles and also to obtain a badge. The absence of badge or failure to get necessary endorsement has not in any way contributed to the accident in this case. In the circumstances we do not find any ground to interfere with the order passed by the District Forum. We accordingly dismiss the appeal. Appeal dismissed.