Oriental Insurance Company Ltd. vs Uttam Singh and Others

G. P. Mittal, J.—The Appellant Oriental Insurance Company Ltd. impugns a judgment dated 25.11.2009 passed by the Motor Accident Claims Tribunal(the Claims Tribunal) whereby while awarding a compensation of Rs. 68,000/- in favour of the Respondent No. 3, Appellant''s plea of breach of the terms of the policy as envisaged u/s 149(2) of the Motor Vehicles Act(the Act) was rejected. By an order of this Court, a notice was issued to the Respondents only on the question whether the Appellant would be entitled to recovery rights?

It is urged by the Learned Counsel for the Appellant Insurance Company that they proved on record that the endorsement for driving heavy motor vehicle, that is, the truck was found to be fake, in spite of this the Claims Tribunal declined recovery rights.

A perusal of the written statement filed by the Appellant Insurance Company reveals that only a vague and general plea was taken that the driver did not possess a valid and effective driving licence at the time of the accident. It was nowhere stated in the written statement that the endorsement made on the driving licence was fake. It would be apposite to refer to the statement of the First Respondent Uttam Singh who entered the witness box as R2W1. He deposed as under:

Driver Ravinder Kumar Mishra worked with me as driver for 8-9 months. I engaged his services in month of January 2000 approximately. I had seen the driving license of Ravinder Kumar Mishra while appointing him as my driver. It was driving license issued by licensing authority, Meerut, UP. I have tested his driving skills and Ravinder Kumar Mishra was a very good driver. I had accompanied him in the vehicle being driven by him several times and had found him a competent driver. Till he remained in my service, he was not challaned for any traffic violation and had not been involved in any accident.

XXXXX by Sh. V.K. Sharma counsel for R-3 insurance company.

So far I remember driving license of Ravinder Kumar Mishra had been prepared in Hindi language. I do not know the residential address of Ravinder Kumar Mishra. It is incorrect to suggest that I had not taken any driving license of Ravinder Kumar Mishra. It is incorrect to suggest that I am deposing falsely only to avoid the liability.

Thus, a specific case was put up by the owner that he saw the driving licence issued to the driver by the licensing authority, Meerut. He deposed that he tested the driving skill of the driver (Ravinder Kumar Mishra). He found him to be a competent driver as he accompanied him several times. The driver was not challaned for any traffic violation and was not involved in the accident. This part of the First Respondent''s testimony could not be challenged in cross-examination. It is well settled that Insurance Company would be entitled to recovery rights only when it proves a willful and conscious breach of the terms of the policy. In the instant case, the owner did whatever was in his power. Owner of a vehicle is not expected to visit a transport authority to verify the genuineness of the licence or for that matter genuineness of any endorsement for driving any particular category of vehicle. I am supported in this view by a report of the Supreme Court in United India Insurance Company Ltd. Vs. Lehru and Others, . Para 20 of the report is extracted hereunder:

20.....If it ultimately turns out that the licence was fake, the insurance company would continue to remain liable unless they prove that the owner/insured was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly, even in such a case the insurance company would remain liable to the innocent third party, but it may be able to recover from the insured. This is the law which has been laid down in Skandia, Sohan Lal Passi and Kamla cases. We are in full agreement with the views expressed therein and see no reason to take a different view.

Since the First Respondent(the owner) took all the precautions to ensure that he did not commit any breach of the terms of policy and did not act negligently, he cannot be held liable for breach of the terms of the policy.

The Appeal is devoid of any merit; the same is accordingly dismissed.

Statutory amount of Rs. 25,000/-, if any, deposited shall be refunded to the Appellant Insurance Company. Pending Applications stand disposed of.