The Branch Manager, Oriental Insurance Co. Ltd. vs Noor Basha

K.N. Phaneendra, J.—The appellant-Oriental Insurance Company is before this Court, challenging the judgment and award passed by the M.A.C.T. III at Bellary, in MVC No. 1106/06 in awarding the compensation of Rs. 27,400/- along with interest at 6% p.a., specifically fastening the responsibility on respondent No. 2 (appellant herein) to deposit the entire amount, along with the interest within one month from the date of the order. The question raised before this Court by the Insurance Company is that the respondent No. 1-M.Chandrashekar before the trial Court had absolutely no driving licence to drive any vehicle as on the date of the alleged accident. Therefore, fastening the liability on the Insurance Company is illegal. Allowing a person to drive the vehicle, who has no driving licence, amounts to violation of the terms and conditions of the policy. Therefore, it is contended that the award is bad in law, so far it relates to the appellant is concerned. After issuance of notice, the respondent appeared before the Court and contested the proceedings.

I have heard the arguments of Sri. Ravindra R. Mane, learned Counsel for the appellant and counsel for respondents 1 and 2. I have carefully perused the order impugned under this appeal.

The claimant by name Noor Basha S/o. Khasim Sab @ Khasim filed a claim petition, claiming compensation on the allegations that on 23/4/2006 at about 8.00pm, when he was proceedings along with his mother, towards Masthan Dargah, Cowl Bazar in Bellary, on the left side of the road, he was hit by a Bajaj Motor Cycle bearing Registration No. KA 34/Q- 8878, which was being ridden by its rider, first respondent-Chandrashekar. Due to the said accident, claimant sustained fracture and other injuries. The respondent No. 1 before the trial Court, who is the owner-cum-rider of the Motor cycle and second respondent being the Oriental Insurance Company (appellant) have appeared before the trial Court. In fact, the second respondent before the trial Court has contested the proceedings very seriously. The trial Court though came to the conclusion at paragraph 11 of the judgment, that the respondent No. 1 had no licence of any sort as on the date of the accident. But, he obtained the learner''s driving licence from 5/12/2006 to 4/6/2007. But, the accident was occurred on 23/4/2006. Instead of fastening the liability as the owner of the offending vehicle, the trial Court relying upon a decision of the Bombay High Court has held that the Insurance Company is also liable and fastened the liability on respondent Nos. 1 and 2 and directed the Insurance Company to deposit the amount. In a case reported in United India Insurance Co. Ltd. Vs. Kamal Maruti Darekar and Others, , the Bombay High Court has held that:

"If the accident occurred and the vehicle being driven by its owner, who had no licence, the Insurance Company was not legally liable to pay the compensation but made insured and Insurance Company liable jointly. It is stated that where there was licence about which the owners satisfied himself, but, which was subsequently found that such licence was fake or defective, but, no such direction can be issued where there was no driving licence with the driver and negligence of the owner was established- vehicle is statutorily required to be insured against third party risk."

By misreading the said judgment, the trial Court has fastened the liability on the second respondent. Even on going through the said decision, the clarification has been made that where there was no licence at all, then no liability can be fastened on the Insurance Company. But, where defective or fake licence was in existence, if ultimately that fakeness of the licence or existence of the licence is confirmed, the question of liability may arise to the Insurance Company. Perhaps in that context, the Bombay High Court must have held that the Insurance Company has to pay the amount first and then it can challenge the judgment. But, that is not the case on hand here. In this particular case, admittedly, there was no licence at all, whatsoever whether it is a fake or defective licence, in order to draw such an inference to direct the Insurance Company to pay and recover the amount from the owner of the vehicle.

In this context, the learned Counsel Sri. Ravindra Mane also brought to my notice a recent decision of the Apex Court reported inIII (2013) ACC 918 (SC), wherein the Apex Court held that:

"Violation of conditions of Insurance policies, exoneration of insurance company from liability. Offending van was not being driven by a person holding a valid driving licence. Insurance company was not liable to indemnify the owner. Liability to pay compensation fixed on the owner and driver of offending van. Single Judge of High Court proceeded on wrong assumption. Impugned judgment of the High Court in sofaras it relates to fastening the liability upon the Insurance Company cannot be upheld. When it is found that offending vehicle was driven by a driver who was holding no licence or fake licence, then it amounts to violation of terms and conditions of policy and no liability can be fastened upon the Insurance Company and impugned award of the Tribunal was restored."

Applying the above said dictum of the Supreme Court, in this particular case, the vehicle was ridden by owner cum rider who has no licence at all. But, subsequently, he has secured the learner''s driving licence. It should also be taken note of that the learner''s Licence could be given to a person after examining him and after conducting several tests. The person who is competent to obtain permanent licence will be given a learner''s licence after due test. Therefore, as on the date of the accident, when there was no driving licence, at any stretch of imagination, it can be said that he was competent to receive the permanent driving licence. Subsequently, under the above said circumstances, I am of the considered opinion that the trial Court has committed a serious error in fastening the liability on the Insurance Company. Therefore, the appeal succeeds. The order of the trial Court deserves to be set aside sofaras it relates to respondent No. 2, before the trial Court, (appellant herein is concerned.) Hence, the following order:--

"The appeal is allowed. The order passed by the M.A.C.T. III Court, Bellary, in MVC No. 1106/2006, in fastening the liability on the respondent No. 2 (appellant herein) directing him to pay and recover the entire award amount is hereby set aside. However, the award passed against the respondent No. 1, the owner and driver of the Motor Vehicle involved in the accident is undisturbed and respondent No. 1, before the trial Court is exclusively liable to pay the awarded amount as ordered by the trial Court. The amount in deposit is ordered to be refunded to the Insurance Company. The owner of the vehicle i.e. respondent No. 1 before the trial Court is hereby directed to deposit the awarded amount within two months from the date of this order, along with the interest as awarded by the trial Court."