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Judgment
Honourable Mrs. Justice Aruna Jagadeesan
This Civil Miscellaneous Appeal is filed by the Oriental Insurance Company Limited, Vellore against the Judgement and Decree dated 9.1.2009
made in MCOP. No. 6/2007 on the file of the Motor Accidents Claims Tribunal, Cheyyar, thereby awarding a sum of Rs. 2,20,000/- with interest
at 7.5 per cent p.a. from the date of the claim petition till the date of realization to the claimants, who are the daughter and son of the deceased
Muniyammal and directing both the Insured and the Insurance Company to pay the compensation. The admitted facts are that the accident took
place on 5.12.006 on 1.00 p.m. in Periakolappalur Village Koot Road in Vandavasi Taluk, when the deceased was standing opposite to Kasi
Shop, the Motor Vehicle bearing Reg. No. TN-25-C-7392 driven by its driver in Periakolappalur Koot Road from west to East Direction in a
rash and negligent manner dashed against the deceased causing, fatal injuries to her. The Tribunal found that the accident took place due to the
negligence driving of the driver of the Motorcycle, which was insured with the Appellant Insurance Company and accordingly, the owner as well as
the Appellant were held liable to pay compensation.
The primary argument of Mr. N. Vijaya Raghavan, the learned counsel for the Appellant is that the driver of the motorcycle, namely,
Kirubakaran, who was examined as RW.3 before the Tribunal, was not having a valid driving licence on the date of the accident and therefore, the
vehicle was being driven in breach of the conditions of the Insurance Policy. Accordingly, the Tribunal erred in fastening the liability upon the
Appellant Insurance Company to indemnify the owner.
The learned counsel for the Appellant further contended that the Tribunal fell in error in not appreciating the evidence of RW.3, who gave
contradictory versions with regard to the driving licence, in a right perspective manner. The Tribunal failed to consider that neither the driver nor the
owner produced any evidence to show that the vehicle was being driven by the driver holding a valid driving licence. There was nothing on record
to prove though the the driver had driving license and no particulars, as regards the licensing authority who had issued the driving licence, were
brought on record. RW.3, in his chief examination, has stated that he had no driving licence, but while he was examined in cross after few days, he
contradicted his own statement made in chief and stated before the Tribunal that he had driving licence. The said contradictory evidence of the
driver ought not to have been believed by the Tribunal. The learned counsel for the Appellant would further submit that once the factum of licence
was disputed, it was for the holder of the licence or the owner of the vehicle to adduce evidence in that connection and taking into account the
contradictory versions made by the driver, the Tribunal ought to have taken an adverse interference against the driver and the owner that the driver
was not having a valid driving licence at the time of the accident.
On the other hand, Mr. S. Mukunth, the learned counsel for the Respondents 1 and 2/claimants argued that merely because of the contradictory
statements made by the driver in his evidence, it cannot be concluded that the driver of the vehicle had no valid driving licence and the Insurer
cannot escape from its liability, unless they show that there was willful breach of the conditions of the Insurance Policy in allowing a person with no
licence to drive the vehicle. The learned counsel would submit that at the relevant point of time, the driver was having a valid licence and when
there is no evidence to show that the owner allowed the driver knowing fully well that he was not having a valid licence, there was no breach of the
conditions of the policy and therefore, the Insurance Company cannot be absolved from its liability. In other words, he would submit that in the
absence of any evidence to show that the owner has not taken diligent steps or he was negligent in verifying the driving licence, the owner must be
indemnified for vicarious liability incurred due to the accident. The learned counsel placed reliance on the decisions of the Honourable Supreme
Court reported in 2004-ACJ-1-SC ( M/s. National Insurance Company Limited Vs. Swaran Singh) and 2011-7-MLJ-833-SC (Jawahar Singh
Vs. Bala Jain and others) to substantiate his contention that it is the responsibility of the owner of the vehicle to ensure that his vehicle is not
misused by a person, who has no driving licence and hence, the liability to pay the compensation would fall on the owner of the vehicle and the
Insurance Company, after paying compensation amount, would be entitled to recover the same from the owner of the vehicle.
The learned counsel for the Respondents 1 and 2 also placed reliance on the decision of this court reported in 2011-3-LW-821
(K.Kanagammal and others Vs. Chandran and others), wherein, in similar circumstances, pay and recover order has been made against the
Insurance Company.
In accidental cases, the primary liability to pay compensation is upon the driver, who is guilty of negligence and the owner of the vehicle, who is
said to be vicariously liable. The Insurance Company is only responsible to indemnify the loss, provided that the vehicle is covered by a valid
Insurance Policy and is not being driven in breach of the same. Therefore, it was the bounden duty of the driver and the owner of the vehicle to
prove that the vehicle was being driven in accordance with the conditions of the policy and for that purpose, the driver was having a valid licence,
when the same was disputed by the Insurance Company. Thus, the burden to prove that the driver was having a valid licence at the time of the
accident was upon the driver and owner of the offending vehicle in this case.
The Appellant Insurance Company specifically contended in its counter filed before the Tribunal as well as in this Civil Miscellaneous Appeal
that though the offending vehicle was validly insured, as the driver of the vehicle had no valid driving licence, the Insurance Company is not liable to
pay compensation. In order to discharge its burden, the Insurance Company examined its Administrative Assistant as RW.1, who stated in his
evidence that the vehicle was driven by one Kirubakaran and he had no driving licence at the time of the accident. In his chief examination, RW.1
has filed a statement given by the said Kirubarakan to the Private Investigator appointed by the Insurance Company and marked it as Ex. R3. He
had further stated that the 3rd Respondent herein, being the owner of vehicle, was aware of the fact that the driver had no driving licence and in
spite of it, he permitted him to drive the vehicle, which is in violation of the conditions of the Insurance Policy Ex. R1 and he has marked the
investigation report as Ex. R2.
The investigator was examined as RW.2 and he has affirmed the facts stated by RW.1 that the driver had no licence and the driver had given a
statement to him which is marked as Ex.R3. On the side of the Appellant, the driver has been examined as RW.3 and he has admitted the accident
and also his driving the motorcycle owned by the 1st Respondent at the time of the accident. According to him, on the instructions given by the
owner, he had driven the vehicle and he had taken food for the labourers working in the land owned by the 1st Respondent. In categoric terms, he
has admitted in his chief examination that he had no driving licence. Further, he has admitted that he has not obtained any driving licence till date.
He was examined in chief on 26th August 2008 and at the request made by the claimants, his cross examination was deferred. Thereafter, on
9.9.2008, he had been summoned and examined in cross and he has given a go-by to his earliest statement and has stated that he had driving
licence, but the same was lost. He has further stated that he has signed Ex.R3 under compulsion and he cannot read and write. A perusal of his
evidence would clearly show that he has given a contradictory version taking advantage of his examination done by the claimants after few days. In
the chief examination, he has categorically stated that he has no driving licence to drive two wheeler. Except the contradictory version made by
RW.3, there is no evidence to show that he had driving licence at any point of time especially at the time of the accident.
Admittedly, the owner remained exparte. There was nothing on record to show that RW.3 had driving licence at the time of the accident. The
driver, namely, RW.3 has not moved any application for summoning the records of the licensing authority who had issued the driving licence. Once
the factum of licence was disputed, it was for the holder of the licence or the owner of the vehicle to adduce evidence that the driver had driving
licence to drive the offending vehicle at the time of the accident. No other person could furnish any positive evidence with regard to the licence in
the absence of details of issuing authority. Therefore, in the absence of such information, it was not possible for the court to hold that the driver had
valid driving licence, that too, in the wake of contradictory statements made by the driver. The Tribunal has held that the Insurance Company failed
to prove that the driver of the vehicle had no valid driving licence at the time of the accident. The approach of the owner in this regard appears to
be totally misplaced. Therefore, the said findings cannot be sustained and the same is liable to be set aside.
In view of the discussions made in the foregoing paragraphs, I am of the considered view that the driver of the vehicle owned by the 3rd
Respondent herein was not having a valid driving licence to drive the vehicle at the time of the accident.
Now, it is relevant to refer to the submissions made by the learned counsel for the Respondents 1 and 2 that unless the Insurer proved willful
breach of the specific conditions of the policy, there is no escape from liability. A reading of Section 149(2) of the Motor Vehicles Act would
show that the Insurer can avoid liability, if there is breach of the specified conditions of the policy. Liability can also be avoided on the ground that
the policy was obtained by non disclosure of material fact or by making false representation in some material particulars as per Section 149(2)(b)
of the Act.
Section 149(2)(a)(ii) of the Act deals with licence to drive a vehicle. If the insured vehicle is allowed to be driven by a person, who is not duly
licensed or by any person, who has been disqualified for holding/obtaining driving licence during the period of disqualification, the Insurer is entitled
to raise a defence and to seek exoneration. In simple terms, if a driver of the insured vehicle does not possess a valid licence or he is not qualified
for holding such licence, the Act does not contemplate insurer to discharge obligation of indemnifying the Insured. The term, ''driving licence'' is
defined in Section 2(10) of the Act as to mean licence issued by a competent authority under Chapter II of the Act authorizing the person specified
therein to drive a motor vehicle of specified class or description. Section 3 of the Act in absolute terms prohibits a person from driving a motor
vehicle in public place unless such person holds an ''effective'' driving licence issued authorising him to drive the vehicle. Section 3 of the Act also
prohibits any person from driving a transport vehicle unless driving licence specifically entitles him to do so.
In 2004-ACJ-1-SC ( M/s.National Insurance Company Limited Vs. Swaran Singh), the Honourable Supreme Court was concerned with
interpretation of Section 149 (2)(a)(ii) of the Act in respect of three distinct situations: (i) when admittedly no licence was obtained by person and
driving licence was found to be fake; (ii) when driver has only ""learner''s licence""; and (iii) when driver is granted licence for one type of vehicle and
at the time of accident, he was driving another type of vehicle. After making reference to the entire case law, the Honourable Supreme Court held
that (i) in case where driver of vehicle admittedly did not hold licence and the same was allowed consciously to be driven by owner of the vehicle,
the Insurer is entitled to exoneration from its liability; (ii) in case when the Insurer take plea that driver''s licence is fake, the defence can only
succeed when it is proved that Insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the
driver; (iii) in case of learner''s licence, it is also a licence and allowing holder of learner''s licence to drive the vehicle does not amount to breach of
condition u/s 149(2) of the Act and (iv) that the Tribunal has to take a decision as to whether effect of driver possessing licence for one type of
vehicle and found driving another type of vehicle was the main or contributory cause of accident and if it is found that accident occurred solely
because of some unforeseen or intervening causes like mechanical failure or some other cause having no nexus with driver not possessing requisite
type of licence, the Insurer will not be liable to be allowed to avoid its liability merely on technical breach of conditions concerning driving licence.
Therefore, it is clear that the Insurer can validly defend the proceedings initiated against it on the premise that the owner of the vehicle has
committed breach of the conditions by entrusting the vehicle to a person, who is not duly licensed. Therefore, this section extends immunity to the
Insurance Company, if a breach is committed of the condition embodied in the policy. It is no doubt true that the Insurance Company will have to
establish that the Insured was guilty of infringement or violation of a promise. If the Insured had taken all precautions by appointing a duly licensed
driver to drive the vehicle in question, the Insurance Company cannot escape its statutory liability. It is only when the Insured himself placed the
vehicle in charge of a person who does not hold a driving licence, it can be said that he is guilty of breach of the promise that the vehicle will be
driven by a licensed driver. Therefore, it is sufficient if it is shown by the Insurer that the Insured/owner failed to exercise reasonable care in the
matter of fulfilling the conditions of the policy. When such initial burden is discharged by the Insurance Company, it is for the owner who stands
indemnified under the policy of insurance, to come forward and give evidence that in his capacity he has taken reasonable care and caution.
In the present case, RW.3''s evidence indicated that he had no driving licence at the time of the accident. The owner, who is covered by the
policy conveniently remained exparte. It is pertinent to point that it is the Insurance Company, which has led evidence to show that the driver had
no driving licence at the time of the accident. From the evidence placed on record, there cannot be any doubt that the driver had no driving licence
at the time of the accident. Therefore, there is certainly a clear breach of the specified conditions of the policy as referred to in Section 149(2)(a)(ii)
of the Motor Vehicles Act. I am of the considered view that in this case, the Insurer has discharged its burden. Therefore, when the owner has
failed to come forward and rebut the evidence, an adverse interference has to be drawn against the owner, as the owner would be the best witness
to speak about the circumstances under which the driver RW.3 came to drive the vehicle at the time of the accident. Therefore, in view of the
forgoing discussions regarding the legal principles and the findings of facts, the owner of the vehicle alone is liable to pay the compensation as
awarded by the Tribunal.
In the recent decision of the Honourable Supreme Court reported in CDJ-2011-SC-507 (Jawahar Singh Vs. Bala Jain and others) the
Honourable Supreme Court, dealing with a case where the driver had no valid and effective driving licence, approved the findings of the Tribunal
and the High Court in applying the doctrine of pay and recover. It held as follows:
We cannot shut our eyes to the fact that it was Jatin, who came from behind on the motorcycle and hit the scooter of the deceased from
behind. The responsibility in causing the accident was, therefore, found to be solely that of Jatin. However, since Jatin was a minor and it was the
responsibility of the petitioner to ensure that his motorcycle was not misused and that too by a minor who had no licence to drive the same, the
Motor Accident Claims Tribunal quite rightly saddled the liability for payment of compensation on the Petitioner and accordingly, directed the
Insurance Company to pay the awarded amount to the awardees and thereafter, to recover the same from the Petitioner. The said question has
been duly considered by the Tribunal and was correctly decided. The High Court rightly chose not to interfere with the same.
In the decisions of this court reported in 2010-4-LW-742 (Bajaj Allianz Insurance Company Limited, Pune Vs. P. Manimozhi and others),
2009-5-MLJ-715 (United India Insurance Company Limited, Salem Vs. S. Saravanan and another) and 2001-3-LW-367 (M/s.National
Insurance Company Limited, Karaikudi Vs. Sakthi and others), similar directions were given to pay and recover against the Insurance Company
placing reliance on the decisions of the Honourable Supreme Court.
In the present case, the claimants are the daughter and son of the deceased and they are in a state of penury and compensation will not be
immediately recoverable from the owner. In a fact situation, like the present case, the Honourable Supreme Court, even after exonerating the
Insurance Company from the liability to pay compensation, has directed the Insurance Company to pay and recover.
In view of the decisions of the Honourable Supreme Court and this court cited supra, the claimants being the third party, to meet the ends of
justice, it is justified to pass an order directing the Insurance Company to pay the compensation awarded and recover it from the owner of the
vehicle. In the result, this Civil Miscellaneous Appeal is allowed to the extent indicated above. The Appellant Insurance Company is directed to
deposit the quantum of compensation awarded by the Tribunal to the Appellants/claimants, after giving credit to the amount already deposited by
them if any, with interest at the rate of 7.5 per cent per annum, from the date of the claim petition till the date of deposit within three months from
today. On such deposit being made, the claimants are permitted to withdraw the amount with interest in equal apportionment. For the purpose of
recovering the same from the insured, the insurer shall not be required to file a suit and it may initiate a proceedings before the concerned executing
court. The executing court shall take all necessary steps by even attaching the offending vehicle if necessity arises and take the assistance of the
concerned Regional Transport Authority in that regard. No costs. Consequently, the connected MP is closed.