United India Insurance Co. Ltd vs Rafiqa And Others

Sanjeev Kumar, J

1) United India Insurance Company Limited is in appeal against the award dated 23rd April, 2019, passed by Motor Accident Claims Tribunal, Srinagar (hereinafter Tribunal) in file No.274 of 2015 titled "Rafiqa and others Vs. Sajad Ahmad Bangroo and others", whereby the Tribunal has awarded compensation to the tune of Rs.38, 89,600/ along with simple interest @6.5% per annum from the date of presentation of the claim petition till its realization.

2) Before adverting to the grounds of challenge taken in this appeal, it would be advantageous to, briefly, refer to the contextual facts of the case:

(I) On 22nd August, 2015, driver of the offending vehicle (TATA LP 407 bearing registration No.JK01N-5927) while driving his vehicle lost control over it when it reached Khan-sahib Budgam. The vehicle turned turtle and as a result whereof, one Bashir Ahmad Mir, who was on board in the said vehicle, sustained fatal injuries. The accident allegedly took place due to rash and negligent driving by the driver of the offending vehicle i.e. respondent No.7 in this appeal. With regard to the accident, FIR No.81/2015 came to be registered in Police Station, Khan-sahib Budgam under Section 279, 304-A, 337 and 427 RPC.

(II) The respondent No.1 being the wife of deceased and respondent No.2 to 5 being his children filed a claim petition before the Tribunal. The claim petition was contested by the appellant insurance company as well as owner and driver of the offending vehicle i.e. respondent No.6 and 7 herein.

(III) On the basis of respective pleadings of the parties, the Tribunal framed the following issues for determination:

Whether on 22.08.2015, at Khan Sahib, Budgam, the driver of the vehicle bearing regd. No.JK01N/5927, which was being driven by respondent No.2 rashly & negligently with the result, lost control over his vehicle and vehicle turned down, resulted into serious injuries to various persons including deceased, who was on board in the said vehicle and was taken to hospital, where he was declared brought dead? (PP)

Whether the respondent No.2 was not holding a valid and effective D/L & other vehicular documents at the time of accident, if so, what will be its effect on the claim petition (OPR 1 & 2)

Whether in case issue No.1 & 2 are decided in affirmative, to what extent and from whom the petitioners are entitled to receive compensation? (OPP)

Relief.

(IV) With a view to discharge the onus, the parties led their evidence. Respondent 1 to 5 (hereinafter referred as the claimants) examined Abdul Rashid Chopan, Mohammad Yousuf Dar and Nazir Ahmad Dar. The claimant wife of the deceased also entered the witness box. Driver of offending vehicle, respondent No.7 herein, also appeared as his own witness. He also produced Fayaz Ahmad Wagay to support his version. The appellant insurance company examined Sajad Hussain Dar, Record Keeper, RTO, Kashmir and Rameez Ahmad Najar, Assistant Legal Officer, in support of the case set up by the appellant insurance company.

(V) The Tribunal after analyzing the evidence on record and hearing the rival contentions of the learned counsel appearing for the parties, decided issue No.1 in favour of the claimants and held that the accident, in which the deceased lost his life, has happened due to the rash and negligent driving of the offending vehicle by the driver. Apart from oral evidence on record, the Tribunal relied upon the report of Investigating Officer, who had proved the case against the driver of the offending vehicle. Issue No.2, the onus whereof was on the driver and owner of the offending vehicle, was held not proved.

(VI) After rendering findings on issue No.1 and 2, the Tribunal proceeded to hold owner and driver of the offending vehicle strictly and the appellant insurance company vicariously liable to compensate the claimants for the loss occasioned to them due to the death of the deceased in motor vehicle accident. Relying upon the judgments of the Supreme Court in the cases of Sarla Verma vs. Delhi Transport Corporation (ACJ 2009 1298) and NIC vs. Pranay Sethi (SLP (Civil) 25590 of 2014), the Tribunal awarded compensation to the tune of Rs.38, 89,600/ along with simple interest @6.5% per annum, as noted above. It is this award of the Tribunal which has been assailed by the appellant insurance company in this appeal.

3) Apart from disputing the computation of compensation awarded to the claimants, the appellant has emphasized on the ground that in view of the clear evidence on record that the driver of the offending vehicle was driving the vehicle in violation of the conditions of permit, the Tribunal ought to have absolved the appellant of its liability to indemnify the owner. With a view to buttress his submission, learned counsel for the appellant relies upon following judgments of the Supreme Court:

(1) National Insurance Co. Ltd. Vs. Challa Bharathamma and others, (2004) 8 SCC 517;

(2) Amrit Paul Singh and another Vs. TATA AIG General Insurance Company Limited and others, (2018) 7 SCC 558;

(3) Raina and others Vs. National Insurance Company and others, (2018) 8 SCC 492

(4) Pappu and Ors. Vs. Vinod Kuamr Lamba and anr, (2018) 3 SCC 208

4) Per contra, learned counsel appearing for the claimants would submit that in the objections filed by the appellant insurance company, the plea that it was absolved of its liability to indemnify the insured on the ground that the offending vehicle was being driven in violation of the permit, has not been specifically taken. It is urged that after proper evaluation of the evidence on record, oral as well as documentary, the Tribunal came to the conclusion that the appellant insurance company had miserably failed to prove the violation of any of the terms and conditions of the contract of insurance, both with regard to driving license of the driver of the offending vehicle and route permit of the offending vehicle. It is, thus, submitted by the learned counsel for the claimants that the judgments relied upon by the appellant insurance company have no application to the facts of the instant case.

5) There is no representation on behalf of respondent No.6 and 7, who despite service have not chosen to contest this appeal.

6) Having heard learned counsel for the parties and perused the record, in my view, following two questions call for determination in this appeal:

(1) Whether the appellant insurance company has validly discharged the onus to prove the violation of the terms and conditions of the insurance policy, particularly with regard to route permit of the offending vehicle and if it has, whether it can be fully absolved of its liability to indemnify the owner and pay compensation to the claimants?

(2) Whether the amount awarded by the Tribunal represents just and fair compensation?

7) Although the Tribunal has come to the conclusion that the appellant insurance company as also the owner and driver of the offending vehicle have miserably failed to prove that the offending vehicle at the time of accident was being driven in violation of the route permit, yet from close scrutiny of the evidence on record, particularly statement of RW Sajad Hussain Dar and RW Rameez Ahmad Najar, it clearly comes to fore that the offending vehicle at the relevant point of time was possessing a valid permit though the same was valid from Batamaloo to Eastern area of Srinagar City. Admittedly, the accident took place while the vehicle was coming back from Dodpathri and had reached Khan-sahib Budgam. From the evidence it is not forthcoming as to whether the place where the accident occurred was falling within Eastern area of Srinagar City as the same has not been defined anywhere. However, taking judicial note of the fact that Dodpathri as also Khan-sahib are the places within the district of Budgam and, therefore, cannot, by any stretch of reasoning or imagination, be said to be part of Eastern area of Srinagar City. The Eastern area of Srinagar City, for all purposes, would mean the Eastern area of municipal limits of Srinagar City. That being the position, it is amply proved, on the basis of evidence on record, that the offending vehicle at the time of accident was plying on the route for which it did not have a valid permit.

8) Having held thus, the next question, that begs determination, is with regard to liability of the appellant insurance company to indemnify the owner. The judgments relied upon by the appellant insurance company, which have been noted hereinabove, do categorically lay down law that driving of a vehicle without valid permit is an infraction of fundamental condition of the insurance policy and absolves the insurer of its liability to indemnify the owner. From a careful perusal of the judgments of the Supreme Court, relief upon by the appellant, one thing becomes further clear that the Apex Court in the aforesaid matter has also drawn a distinction between a permit as defined under Section 2(31) of the Motor Vehicle Act (hereinafter the Act) and the route permit. The driving of the vehicle without permit may be an infraction of the fundamental condition of the policy and may provide justification to the insurance company in seeking absolution from its liability to indemnify the owner but merely that the offending vehicle at the time of accident was plying on a route other than the one specified in the permit, would not be an infraction of any fundamental condition of the insurance policy absolving the insurer of its liability to indemnify the insured.

9) Section 149 of the Act provides certain defences to the insurance company. For facility of reference, Section 149 may be reproduced hereunder:

Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.-(1) If, after a certificate of insurance has been issued under sub-section (3) of section 147 in favour of the person by whom a policy has been effected, judgment or award in respect of any such liability as is required to be covered by a policy under clause (b) of sub-section (1) of section 147 (being a liability covered by the terms of the policy) or under the provisions of section 163A is obtained against any person insured by the policy, then, notwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy, the insurer shall, subject to the provisions of this section, pay to the person entitled to the benefit of the decree any sum not exceeding the sum assured payable thereunder, as if he were the judgment debtor, in respect of the liability, together with any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments.

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or reward unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely:--

(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely: --

(i) a condition excluding the use of the vehicle-

(a) for hire or reward, where the vehicle is on the date of the contract insurance a vehicle not covered by a permit to ply for hire or reward, or

(b) for organized racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or

(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.

(3) Where any such judgment as is referred to in sub-section (1) is obtained from a Court in a reciprocating country and in the case of a foreign judgment is, by virtue of the provisions of section 13 of the Code of Civil Procedure, 1908 (5 of 1908) conclusive as to any matter adjudicated upon by it, the insurer (being an insurer registered under the Insurance Act, 1938 (4 of 1938) and whether or not he is registered under the corresponding law of the reciprocating country) shall be liable to the person entitled to the benefit of the decree in the manner and to the extent specified in sub-section (1), as if the judgment were given by a Court in India:

Provided that no sum shall be payable by the insurer in respect of any such judgment unless, before the commencement of the proceedings in which the judgment is given, the insurer had notice through the court concerned of the bringing of the proceedings and the insurer to whom notice is so given is entitled under the corresponding law of the reciprocating country, to be made a party to the proceedings and to defend the action on grounds similar to those specified in sub-section (2).

(4) Where a certificate of insurance has been issued under sub-section (3) of section 147 to the person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any condition other than those in clause (b) of sub-section (2) shall, as respect such liabilities as are required to be covered by a policy under clause (b) of sub-section (1) of section 147, be of no effect:

Provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is covered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person.

(5) If the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability, the insurer shall be entitled to recover the excess from that person.

(6) In this section the expression "material fact" and "material particular" means, respectively a fact or particular of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk and, if so, at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

(7) No insurer to who the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be. Explanation. -For the purposes of this section, "Claims Tribunal" means a Claims Tribunal constituted under section 165 and "award" means an award made by that Tribunal under section 168.

10) From plain reading of Section 149 (supra), it clearly transpires that its clause 2(a)(i)(a) relates to the vehicle not covered by a permit to ply for hire or reward and it is being used as such. A careful reading of Section as a whole would make it abundantly clear that violation of route permit is not envisaged as one of the defences available to the insurance company. Clause 2(a)(i)(c) provides that the insurance company may raise defence that the vehicle at the time of accident was being used for a purpose not allowed by the permit under which a transport vehicle is permitted to be used. This clause cannot be stretched to mean that the use of a vehicle on a route other than the one for which it has been granted permit would amount to using the vehicle for a purpose not allowed by the permit. The offending vehicle, admittedly a transport vehicle, at the time of accident was being used as such. That being the admitted position, it cannot be said that the appellant insurance company is absolved of its liability to indemnify the owner on the ground that the offending vehicle, at the time of accident, was plying on the route not permitted by its permit. Bearing this distinction in mind and without disputing the proposition of law cited by the learned counsel for the appellant, I am of the view that the first ground of challenge taken by the appellant is devoid of merit and deserves to be rejected.

11) Coming to the quantum of compensation awarded by the Tribunal to the claimants, it may be noted that the monthly income of the deceased, a government employee, is not in dispute. Going by his age, there ought to have been addition in the income of deceased @ 30% as future prospectus. The deductions on account of income and personal expenses have also not been disputed by the appellant. What is, however, disputed by the appellant insurance company is that the Tribunal has not taken note of the fact that the deceased was a government employee and under Service Regulations applicable to the deceased, the claimants were entitled to 50% of the salary of the deceased for a period of 10 years. However, nothing has been brought on record by the appellant to substantiate the aforesaid plea. In view of above, I do not find any legal infirmity in regard to the computation of compensation awarded in favour of the claimants.

12) For the foregoing reasons, I find no merit in this appeal and the same is, accordingly, dismissed. The awarded amount, if deposited in this Court, shall be released by the Registry to the rightful claimants after proper verification and identification, strictly in accordance with the terms and conditions of the award.