Sardar Singh and Others vs Balchand @ Raju and Others

Shambhoo Singh, J.—This appeal is directed by the claimants against the award dated 17.1.1997 passed by 1st M.A.C.T., Neemuch in Claim Case No. 7/1996 whereby the non-applicant/respondent Insurance Company was exonerated from paying compensation and non-applicants/respondent Nos. 1 and 2, were directed to pay compensation of Rs. 1,36,000/- with interest at the rate of 12% per annum.

The facts of the case, in brief, are that on 14.11.1995 Kishanlal Banjara, the father of appellant No. 1 and son of appellant Nos. 2 and 3 was travelling in jeep No. M.P. 14B-7188, belonging to respondent Nos. 2 and 4 and insured with respondent No. 3 and driven by respondent No. 1. This jeep met with an accident near village Digaon in Mandsaur District, as a result of rash and negligent driving by respondent No. 1 wherein the deceased Kishanlal sustained injuries and died. The appellants filed claim case seeking compensation of Rs. 15,27,000/-. The respondents resisted the claim. Respondent No. 3 Insurance Company inter alia averred that respondent No. 1 had no valid and effective driving licence and it was also pleaded that this jeep was insured as private vehicle while it was used as taxi and thereby respondent Nos. 2 and 4 committed violation of the terms and conditions of the insurance policy, therefore, the Insurance Company was not liable to pay compensation. The learned Tribunal on appreciation of evidence held that the accident occurred due to rash and negligent driving of the jeep by the respondent No. 1 in rash and negligent manner. The Tribunal further held that respondent No. 1 was having valid and effective driving licence, however, it held that this jeep was used as taxi for hire in violation of the terms and conditions of the insurance policy and exonerated it. Hence, this appeal by the claimants.

Mr. Jain, learned Counsel for the appellants, submitted that the learned Tribunal committed error in holding that the jeep was used in violation of the terms and conditions of the policy. He submitted that the Insurance Company did not produce any evidence to the effect that this jeep was used as taxi for hire in violation of the terms and conditions of the insurance policy. Mr. Samvatsar, learned Counsel for the respondent adopted the arguments advanced by Mr. Jain. Mr. Swami, learned Counsel for respondent No. 3 Insurance Company, submitted that there is ample evidence on record to establish that the jeep was being used as taxi for hire.

We considered the arguments advanced by learned Counsel for both sides and perused the record. It is settled that the burden of proving violation of terms and conditions of the policy is on the insurer. The respondent Insurance Company examined Omprakash, who deposed that the offending vehicle was insured for private use. He stated that if this vehicle was used for transporting passengers for hire, this will be violation of the terms and conditions of the policy and the Insurance Company would not be liable to pay compensation. The respondent Insurance Company did not lead any evidence to prove that this where this jeep was being used as taxi for hire. Jaisingh (C.W. 2) who was travelling in the jeep, when it met with accident. He deposed that he, Raisingh, the deceased Kishanlal and other passengers boarded the jeep at village Sanj Pat for coming to Mandsaur. He did not state that the passengers had paid fare to the driver, under such circumstances, without evidence of payment of fare, it cannot be presumed that this jeep was used as taxi. Even otherwise, if the driver got lifted some passengers and allowed them to travel in the jeep, without knowledge and consent of the owner, it cannot be said that the owner committed breach of the terms and conditions of the policy. There is nothing on record to prove that the driver carried the passengers in the jeep in the knowledge of the owner of the jeep, it is thus, clear that the respondent owner did not wilfully committed breach of the terms and conditions of the policy, therefore, Insurance Company was liable to pay compensation. Their Lordships of the Supreme Court in case of Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan and Ors. I (1987) ACC 413 (SC) : AIR 1987 SC 1184, wherein the driver handed over the control of the truck to the cleaner when the engine of the truck was running and the cleaner drove the truck and accident occurred. The Insurance Company contended that there was breach of the terms and conditions of the policy, therefore, it was not liable to pay compensation. The Apex Court rejected this argument and held that the breach was not committed by the owner and the Insurance Company cannot be claim exoneration. Their Lordships observed:

The very concept of infringement or violation of the promise that the expression, "breach" carries within itself induces an inference that the violation or infringement on the part of the promisor must be a wilful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is ''guilty'' of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promiss. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive himself it cannot be said that the insurer is guilty of any breach.

From above, it is clear that the learned Tribunal committed error in holding that the owner committed the violation of the terms and conditions of the policy and wrongly exonerated the Insurance Company. In our opinion, the Insurance Company is liable to pay compensation.

Mr. Jain, learned Counsel also submitted that the compensation awarded by the learned Tribunal is low. We perused the evidence on record. It has come in the evidence of Deva, father of the deceased Kishanlal (C.W 1) and Jaisingh (C.W. 2) that Kishanlal was employed by fish contractor Rajesh Seth and he used to give him Rs. 1,500/- per month in addition to food. He was also earning Rs. 2,000/- per month from agriculture land. The learned Tribunal guessed the monthly pay of the deceased at Rs. 1,000/- by fish contractor. It held that the deceased must not have been engaged for more than 8 months in a year and assessed his yearly income from service at Rs. 8,000/- and Rs. 3,000/- from agriculture, totalling Rs. 11,000/- per year. According to the schedule to Section 163A Motor Vehicles Act, notional income for a non-earning person, Rs. 15,000/ - have been provided. We taking into consideration, the evidence on record and other facts and circumstances of the case, assess the yearly earning of the deceased at Rs. 15,000/-. On deducting 1/3rd of it for the personal expenses of the deceased, the dependency of the appellants comes to Rs. 12,000/- yearly. The Tribunal selected multiplier of 16. On multiplying it with the multiplicand, the amount comes to (12,000 x 16) Rs. 1,92,000/-. The claimant No. 1, the son of the deceased is entitled to Rs. 5,000/- for loss of love and affection and Rs. 2,000/- for funeral expenses. On addition of this amount, the amount of compensation comes to Rs. 1,99,000/-.

From the insurance policy Ex. D1 it is established that this vehicle stood registered in the name of respondent No. 4 Pukhrajmal for the period from 3.2.1995 to 2.2.1996. Learned Counsel for the Insurance Company submitted that the vehicle has been sold by Pukhrajmal to respondent No. 1 though in this regard no cross-examination was directed by the non-applicant Insurance Company nor was any evidence led, but if we accept that this vehicle was handed over by respondent No. 4 to respondent No. 2, even then, it cannot be held that the Insurance Company was not liable to pay compensation. The vehicle was not transferred to respondent No. 2 passing of consideration has not been proved. The registration stood in the name of respondent No. 4. Therefore, he is the owner of the vehicle. See Satish Sanghi Vs. Mihir Kumar Joshi and Others, In New India Assurance Co. Ltd. Vs. Vimla and Others, it was held that on the basis of admission of transferee, without proving transfer, it cannot be held that transferee was the owner of the vehicle, under such circumstances, respondent No. 4 Pukhrajmal who is still the registered owner, is liable to pay compensation. See Har Charan Singh Vs. Smt. Turza Bai and Others, . The Madras High Court in case of Dharman and another Vs. N.C. Srinivasan and others, , held that the transfer of the vehicle is not one of the grounds u/s 96(2) of the Act on the basis of which the Insurance Company could advance the defence that it was not liable to pay compensation to the third party. If there was violation of Sections 156 and 157 of the Motor Vehicles Act, the Insurance Company can proceed against registered owner for the reimbursement of the compensation amount which was required to be paid under the policy. Section 149 imposes duty on insurer to satisfy judgments passed against insured in respect of third party risk. In view of above, in our opinion, the respondent Nos. 1, 3 and 4 are severally and jointly liable to pay compensation amount to the L.Rs. of the deceased.

In the result, the appeal is partly allowed. The impugned award is modified and it is directed that the respondent Nos. 1, 3 and 4 shall pay Rs. 1,99,000/- to the appellants with interest at the rate of 12% per annum from the date of filing of claim application till realisation (after adjusting the amount already deposited). Out of the award amount appellant Nos. 2 and 3 be paid Rs. 30,000/ - each with accrued interest and rest of the amount with accrued interest be deposited in the name of appellant No. 1, the minor son of the deceased in maximum interest paying scheme in nationalised bank for a period till he becomes major. No order as to costs.