AI Structured Summary
Not yet generated for this judgment
Judgment
Anand Byrareddy, J.—The insurance company, which is fastened with the liability to pay compensation in respect of a deceased workman, is in appeal.
The facts are as follows:
The Respondents Nos. 1 to 4 represent the deceased workman. The workman had died in an accident involving a Tempo Trax which was being driven by him. He was employed by Respondent No. 5, who was the owner of the vehicle and the said vehicle was insured with the Appellant. The claim for compensation was resisted by the Appellant mainly on the ground that the workman did not possess a valid and effective driving licence at the time of accident and hence the Appellant was absolved of liability under the policy of insurance. The contention having been negatived by the Commissioner for Workmen''s Compensation, the present appeal.
Shri A.M. Venkatesh, Counsel for the Appellant submits that the admitted fact is that the workman was holding a licence to drive Light Motor Vehicles and the same was effective from 28.11.1995 to 28.11.2000. The licence was not renewed. The accident had occurred on 8.4.2001. The driver was hence not only not licenced to drive a Tempo, as he had held a licence to drive only light motor vehicles but he did not even hold a valid and effective driving licence as on the date of accident. The insured having knowingly engaged the workman who did not possess a valid and effective driving licence as on the date of accident, there was a breach of the policy conditions. He would submit that in terms of Section 3 of The Motor Vehicles Act, 1988, no person can drive a vehicle unless he holds an effective driving licence and the phrase "effective driving licence" in this context, has been explained by the Supreme Court as being a valid licence both as regards the period and type of vehicle. He would therefore contend that the licence should have effective force on the date of accident. The reasoning of the Court below that the deceased was not disqualified from holding a licence or in having obtained renewal thereof and therefore the issue was not material, is without basis and wholly unreasonable.
It is contended that the liability having been fastened on the insurance company in several decided cases, even when there was a breach of policy condition by the insured is in respect of cases involving third-party claims. In the instant case the driver is not a third party and the claim was hence at best to be satisfied by the insured and not the Appellant.
Shri Venkatesh would seek to place reliance on the following authorities:
National Insurance Co. Ltd. Vs. Ningamma and Others, : This was a case where a passenger in a bus gets off at an intermediary stop to make a purchase and is knocked down by the very bus he was travelling on. The question that arose was whether he should be treated as a passenger on the bus or as a third party to determine the liability of the insurer. It was held that he was a third party - since he was not in the vehicle. By the same token of reasoning, Shri Venkatesh would contend, conversely, that a driver of the vehicle could not be termed a "third party" just as a passenger cannot be termed a "third party".
New India Assurance Co., Bijapur v. Smt. Kusim and Ors. 2003 (3) T.A.C. 423 (Kant): In this case, the Court, while dealing with the liability of the insurer in terms of Section 147(1)(b) of the Motor Vehicles Act, 1988 and in answering the question whether gratuitous passengers travelling in a jeep would be "third parties", the Court held that a policy issued u/s 147 only covers a third party risk and a gratuitous passenger could not be considered as a third party.
New India Assurance Co. Limited v. Narayan Dhar Swain and Anr. 1999 (1) T.A.C. 613 (Ori): Dealing with the question whether a driver is a "third party" for purposes of Section 147 of the Act, held, that the expression "third party" has been used in a particular sense and it does not include a person connected or associated with the offending vehicle in the capacity of owner, passenger in the vehicle or employee of the vehicle. If the driver or conductor or employees of the vehicle was treated as ''third party'', then there was no necessity of having the proviso to Section 147(1) of the Act in respect of driver or conductor or examiner of tickets.
National Insurance Co. Limited v. Mastan and Anr. 2005 AIR SCW 6305: To contend that the defences available to the insurer is not limited to those u/s 149(2) of the Motor Vehicles Act.
Ashok Gangadhar Maratha Vs. Oriental Insurance Co. Ltd., : To support the contention "Effective driving licence" would mean a valid licence both as regards the period and type of vehicle.
Shri Venkatesh would submit that even if this Court were to be inclined to sustain the Award, the Appellant ought to be afforded the right to recover the compensation amount from the insured.
Per contra, the Counsel for the Respondents Nos. 1 to 4 Shri Ashok N. Patil, would submit, the fact that the driver''s licence of the deceased was not duly renewed as on the date of the accident, would not enable the Appellant to deny its liability to cover the risk. The breach of a policy condition in this regard, is not material. He would also contend that the line of cases cited by the Appellant to urge that there is a distinction in respect of the liability of the insurance company even in cases where there was a proven breach of condition, in that, the liability has been upheld only in the event of third party risk and not that of the employees of the insured, is concerned, he would submit that those cases are rendered contrary to the view taken by the Apex Court and this Court.
He seeks to rely on the following authorities in support of his contentions.
K.G. Srinivsamurthy and Ors. v. Smt. Habib Khathun and Ors. ILR 2002 Kar 1088: Where the driving licence of a driver had expired on 28.11.1996. The driver having met with an accident while driving the insured vehicle on 13.1.1997, whether the insurance company was liable to pay compensation. A Division Bench of this Court held that the breach was neither a factor which contributed to the cause of the accident nor was it so fundamental, a breach as to afford a ground to the insurer to avoid the liability altogether.
Dr. S. Jayaram Shetty Vs. The National Insurance Company Limited, : A Division Bench of this Court, while rejecting the contention of the car owner that he should also be treated as a "third party" because he is not statutorily or contractually excluded from being treated as a third party - held, that the term "third party" must necessarily refer to a party other than those, who are parties to the contract of insurance and for a contract of insurance, the insurer is one party while the insured is the other party. Any person other than the said two parties would answer the description of "third party" and he would also necessarily be referred to as "third party". The Counsel would therefore contend, that the employees of the insured would certainly be covered under the said expression.
Akkavva v. New India Assurance Co. Limited ILR 1998 Kar 939: This case involved the death of the son of the insured while travelling with the goods vehicle as a representative or agent of the insured. The question whether an insurer under an "Act policy" would be liable for compensation for the death of the insured owner of the vehicle, while travelling with his own goods in his own vehicle. The Division Bench held that if the insurer is not liable, then the agent or representative of the owner so travelling, would be in no better position - unless such a person is a workman travelling in the vehicle in the course of employment. It was held that the owner and his agent or representative travelling in the vehicle are not third parties as the owner, and through him, his agent or representative, are parties to the contract of insurance, as distinct from an employee who is not a party to the contract.
National Insurance Co. Limited v. Faqir Chand and Ors. AIR 1995 J&K 9: Wherein it was held that the expression "third party" includes every person other than the insurer and the insured as contemplated under Chapter XI of the Motor Vehicles Act, 1988.
National Insurance Co. Ltd. Vs. Swaran Singh and Others, : While dealing with the meaning of the phrase "duly licensed" as found in Section 149(a)(ii) of the Motor Vehicles Act, 1988, vis-a-vis the phrase "effective licence" used in Section 3 of the Act. Held that the phrase "effective licence" used in Section 3 cannot be imported into Section 149(2). And held, minor breaches of licence conditions, such as want of medical Fitness Certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation with regard to licensing conditions and would not constitute sufficient ground to deny the benefit of coverage of insurance to the third parties. The Apex Court has further held that on all pleas of breach of licensing conditions taken by the insurer, the Tribunal may itself adjudicate the claim and decide inter se the liability of the insurer and the insured, or in its discretion relegate the insurer to seek its remedy, of reimbursement from the insured, in the Civil Court.
The New India Assurance Co. Limited v. Rajendra Singh and Ors. 2000 (2) Kar. LJ 207: Wherein a Division Bench of this Court, while examining the changed position of law pursuant to the coming into force of the Motor Vehicles Act, 1988, has held that the statutory liability of the insurer under the new Act is expanded and the extent of coverage of risk by the insurance policy would extend to all victims of the motor accident who are third parties, except the owner, who is one party to the contract of insurance and the insurer who is the other party to the contract.
The question of law framed in the above appeal is as under:
Whether the deceased was holding a valid and effective driving licence to drive the vehicle on the date of the accident, in order to fix the liability on the Appellant.
This stands answered by the Apex Court in Swaran Singh''s case supra. The breach of a licensing condition not being the proximate cause for the accident, the insurer cannot escape the liability to pay the compensation. The liability interse as between the insurer and the insured may be independently adjudicated. In the present case, the insurer may avail of such a remedy before a Civil Court to seek reimbursement from the insured if a willful breach of the policy condition is established.
In the light of the case law cited herein-above, the deceased driver is held to be a third party as contemplated under Chapter XI of the Motor Vehicles Act, 1988, to negate the contention of the Appellant in seeking to distinguish the several decided cases affixing liability on the insurer.
The appeal is dismissed. The claimants-Respondents Nos. 1 to 4 permitted to withdraw the amount in deposit.