M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
1. : IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH R DATED THIS THE7H DAY OF SEPTEMBER, 2017 BEFORE THE HON’BLE DR.JUSTICE H.B.PRABHAKARA SASTRY MISCELLANEOUS FIRST APPEAL NO.20481/2009 (MV) C/w. MISCELLANEOUS FIRST APPEAL NO.21233/2009 (MV) IN MFA No.20481/2009 BETWEEN: SRI. SHIVANAND TIPPAYY NAIK THE R. C. OWNER OF KA-20/550 R/O. HARNEER, POST: DHARESHWAR TQ: KUMTA (U.K.) (ORIGINAL RESPONDENT NO.1) (BY SRI. DATTATRAYA T. HEBBAR, ADVOCATE) AND:
1. THE DIVISIONAL MANAGER NATIONAL INSURANCE COMPANY LTD., DIVISIONAL OFFICE, SHANKAR BUILDING MOSQUE ROAD, UDUPI (ORIGINAL RESPONDENT NO.2) 2. SRI. MANJUNATH, S/O KRISHNA HEGDE AGED ABOUT33YEARS OCC: AGRICULTURIST AND BUSINESS R/O. KULKOD, TQ. HONAVAR (U.K.) (ORIGINAL PETITIONER) (BY SRI. S. V. YAJI, ADVOCATE FOR R1; SRI. A. S. PATIL, ADVOCATE FOR R2)) ... APPELLANT ... RESPONDENTS M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
2. :
1988. AGAINST THE THIS MFA IS FILED U/S1731) OF THE MOTOR VEHICLES AWARD ACT, DATED:04/12/2008 PASSED IN MVC NO.238/2003 ON THE FILE OF THE ADDITIONAL MACT, HONAVAR, AWARDING A COMPENSATION OF `1,40,200/- WITH INTEREST @ 6% P.A. FROM THE DATE OF PETITION TILL THE DATE OF PAYMENT. JUDGMENT
AND IN MFA No.21233/2009 BETWEEN: THE DIVISIONAL MANAGER NATIONAL INSURANCE CO.LTD DIVISIONAL OFFICE, SHANKAR BUIDLING MOSQUE ROAD,UDUPI, NOW REP.BY REGIONAL MANAGER, NATIONAL INSURANCE CO.LTD., REGIONAL OFFICE,SUBHARAM COMPLEX144 M.G.ROAD, BANGALORE560001. (BY SRI. S V YAJI, ADVOCATE) AND:
1. MANJUNATH, S/O KRISHNA HEGDE2 NOW AGED ABOUT39YEARS OCC: AGRICULUTRE AND BUSINESS R/O. KULKOD, TQ: HONAVAR SHIVANAND TIPPAYYA NAIK MAJOR, R.C.OWNER OF VEHICLE NO.KA-20/550, R/O. HARNEER POST: DHARESHWAR, TQ: KUMTA ... APPELLANT ... RESPONDENTS (BY SRI. A S PATIL, ADVOCATE FOR R1; SRI. DATTATRAYA T. HEBBAR, ADVOCATE FOR R2) THIS MFA IS FILED U/S1731) OF MOTOR VEHICLES ACT1988 AGAINST THE JUDGMENT
AND AWARD DATED:04-12-2008 PASSED IN MVC NO.238/2003 ON THE FILE OF THE MEMBER, ADDL. MACT, HONAVAR, AWARDING THE COMPENSATION OF `1,40,200/- WITH INTEREST AT THE RATE OF6 P.A., FROM THE DATE OF PETITION TILL REALISATION. M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
3. : THESE APPEALS COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING: COMMON JUDGMENT
Both these appeals have arisen out of a common judgment and award dated 04.12.2008 passed by the Additional Motor Accidents Claims Tribunal, Honnavar (henceforth referred to as ‘The Tribunal’, for brevity) in MVC No.238/2003.
2. The appellant in MFA No.20481/2009, who was respondent No.1 in the Tribunal, was the owner of the alleged offending vehicle bearing registration No.KA- 20/550. The appellant in the MFA No.21233/2009, who was the 2nd respondent in the Tribunal, was the insurer of the said vehicle bearing registration No.KA-20/550.
3. The appellant/owner in MFA No.20481/2009 in his memorandum of appeal has taken a contention that the Tribunal has lost sight of the material fact on record that the appellant has been holding a valid driving licence since the year 1984, however, it expired on 12.02.2001, M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
4. : which was got renewed on 25.02.2001. It was only in the interregnum period of one year 13 days, during which period the driving licence was not got renewed, the alleged incident has occurred on 20.09.2001. Since the same being an act of non-renewal of driving licence, it cannot be considered as a disqualification of the driver from holding or obtaining driving licence. The appellant has further contended that the exclusion contained in the policy used the word ‘and’. The Tribunal had not properly interpreted the said word which resulted in the Tribunal passing an erroneous judgment. With this, it is prayed for fastening the liability upon the Insurance Company to pay the compensation. The appellant/Insurance Company in MFA No.21233/2009 in its memorandum of appeal has taken a contention that the direction of the Tribunal in asking the insurer to pay the compensation and thereafter to recover it is opposed to para 77 and 100 of the decision rendered by the Hon’ble Apex Court in the case of National M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
5. : Insurance Co. Ltd, V. Swaran Singh reported in 2004(1) T.A.C.
321. With this it is prayed for setting aside the judgment and award under appeal.
4. For the sake of convenience, the parties would be referred to with the ranks they were holding in the Tribunal as the owner and insurer of the vehicle respectively.
5. The learned counsel for the appellant/owner in his argument reiterated the contention taken up by him in his memorandum of appeal. He further submitted that, when there is no express disqualification of the driver of the vehicle, mere non-renewal of the driving licence, though may show that there was no effective and valid driving licence as on the date of accident, but it does not result in disqualification of the driver. He gave more emphasis on the terms used in the Insurance Policy and submitted that, mere non-possession of the driving licence is not sufficient, but at the same time he should have been M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
6. : disqualified, it is only then the insurer would be exonerated from its liability. The learned counsel for the insurer in reply to the said argument of the owner of the vehicle submitted that, when the admitted fact remains to be the driving licence not being in force, the contention of disqualification goes along with it and as such, no specific disqualification is required.
6. The learned counsel for the owner in his argument relied upon a judgment of the Coordinate Bench of this Court in The Oriental Insurance Co. Ltd., Vs. Mohammed Sab Ali Sab Kaladagi & Ors. reported in ILR1998KAR4014 In the said case, which pertains to a motor accident claim matter, this Court while analyzing Section 149 of the Motor Vehicles Act, 1988, was pleased to observe that the driving licence of the driver of the offending vehicle in that case has expired and had not been renewed as on the date of accident. The insurer M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
7. : contended that the Insurance Company was not liable to pay the compensation as the driver had no effective driving licence. The argument addressed before the Court was that, the policy issued in the said case had used the word ‘and’, when in fact under Section 149(2)(a)(ii), the word used was ‘or’. The said Section is reproduced here below: “Section 149: (1) xxxxxxxxxxxxxxxxxxxxx (2) xxxxxxxxxxxxxxxxxxxx (a) xxxxxxxxxxxxxxxxxxxxx (i) xxxxxxxxxxxxxxxxxxxxxx (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 license during the period of disqualification ; or xxxxxxxxxxxxxxxxxxxxxxxxxx” In the instant case, the relevant condition in the policy covering the vehicle reads as below: “Provided that the person driving holds an effective driving licence at the time of M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
8. : the accident and is not disqualified from holding or obtaining such license. Provided also that a person holding an effective learner’s licence may also drive the vehicle when not used for transport of passenger at the time of the accident and such a person satisfies the requirement of rule no.3 of the Central Motor Vehicle Rule, 1989.” (Emphasis supplied by me) It was further argued in the said case that the word ‘and’ and the word ‘or’ makes a lot of difference in fastening the liability upon the insurer. As such, mere non-renewal of the driving licence is not sufficient, but also it has to be demonstrated that the licensee was disqualified for holding the licence. However, in the said case, after taking on record the arguments addressed by both sides and also referring to several decisions relied upon in the case before it, this Court did not give a detail reasoned opinion as to whether the use of the word ‘and’ used in the policy does not exonerate the insurer from its liability, where it has not proved any express M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
9. : disqualification of the licensee to hold the licence. On the other hand, the reasoning given by the Court at para 9 of its judgment is as below: “9. After going through these decisions and the relevant provisions, I am of the opinion that the Tribunal is justified in fastening the liability on the Insurance Company. As such, this appeal is liable to be dismissed and accordingly, it is dismissed.” Nowhere in that judgment, it has mentioned or reproduced the reasoning given by the Tribunal for fastening the liability upon the Insurance Company. As such, in the absence of detailed reasons, merely because the head note says that the Insurance Company was held liable to pay compensation even if the driving licence had not been renewed, it cannot be taken that the existence of the word ‘and’ in the policy instead of the word ‘or’ would not exonerate the insurer from its liability.
7. On the other hand, as contended by the learned counsel for the Insurance Company, a similar question came up before the Full Bench comprising five Judges M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
10. : before the High Court of Kerala in the Oriental Insurance Company Ltd., Chalakkudy, Kochi Vs. Poulose and another reported in AIR2015Kerala 148. In the said case also, the facts revealed that the alleged offending vehicle, though was covered under the Insurance Policy, but the driver of the said vehicle did not possess a driving licence as on the date of accident, for the reason that the accident had occurred on 07.03.1996 and the driving licence of the 2nd respondent/driver had expired on 24.06.1995, the Tribunal after considering the evidence found that the driver was rash and negligent and passed away, but directed the Insurance Company to satisfy the award. It is in that situation, when the matter came up for consideration before the Division Bench, the Division Bench noticing the apparent conflict between the decision of Full Bench of the said Court in Oriental Insurance Company Ltd., Vs. Paulose [2004(1) KLT8(F.B)]. and the decisions of the Apex Court in Malla Prakasarao V. Malla Janaki and Others [(2004) 3 SCC343, as well as National M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
11. : Insurance Co. Ltd., V. Kusum Rai (AIR2006SC3440, referred the matter to the Full Bench. However, the Full Bench was of the opinion that the matter requires consideration by a Larger Bench. Accordingly, the Larger Bench consisting of five judges had taken up the matter. The question before the Larger Bench was “Whether the driving licence which stood expired on the date of road traffic accident and was not renewed within the statutory period would fulfill the requirement of ‘duly licensed’ under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988?.”. The Larger Bench after referring to several cases of the Hon’ble Supreme Court including the judgment in the case of National Insurance Co.Ltd., Vs. Swaran Singh, reported in AIR2004SC1531answered the said question as below: “a. We hold that the decision of the Full Bench in Oriental Insurance Company V. Paulose [2004 (1) KLT8(F.B.)]. that driving licence continues to exists in spite of expiry of its validity period unless it has been shown that the licensee had been disqualified M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
12. : to hold one does not lay down the correct law, Therefore it is overruled. b. We further hold that a driving licence which stood expired on the date of road traffic accident and not subsequently renewed within the statutory period of thirty days would not fulfill the requirement of “duly licensed” under Section 149(2)(a)(ii) of the Act.” The Full Bench also observed that, it cannot be said that validity of driving licence continues to exists unless it is shown that the licensee had been disqualified to hold one. The said answer of the Larger Bench in the case reported in AIR2015Kerala 148 (supra) would answer the question in the case on hand also.
8. In the instant case, it is not in dispute that the driving licence of the driver of the offending vehicle which expired on 12.02.2001 was got renewed only on 25.02.2002. Thus, for a period of one year thirteen days, there was no effective driving licence in force. It is in the said period of one year thirteen days, during which there M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
13. : was no driving licence in force, the accident has occurred on 20.09.2001. As such, by virtue of the above judgment of the Larger Bench of Kerala High Court, the driver cannot be called as ‘duly licensed’. It cannot be said that the validity of driving licence continues to exists unless it is shown that the licensee had been disqualified to hold one. As such, the mere express disqualification need not be necessary in the instant case to hold that there is non- compliance of condition of Insurance Policy from the side of the insured.
9. In the instant case, the Tribunal, even after noticing that as on the date of accident the driver did not possess an effective driving licence, still observing that the accident has occurred between the period of expiry and renewal of licence, fastened the liability upon the insurer. However, it states, since there was breach of condition of policy, the insurer was entitled to recover the compensation amount from the owner of the vehicle in M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
14. : accordance with law. It is the said finding of the Tribunal, directing the insurer to deposit the said compensation amount initially and then permitting him to recover the said compensation amount from the respondent No.1/owner, the insurer has challenged in its appeal.
10. The learned counsel for the insurer in his argument submitted that in Swaran Singh’s case, the facts were different. In that case the owner had entrusted the vehicle to a driver, who did not possess the driving licence as on the date of accident. However, noticing that the alleged negligent act on the part of the owner was not proved, the insurer was held liable to pay the awarded amount and then to recover it from the owner of the vehicle. It was his further argument that, it is only the Hon’ble Supreme Court by exercising its power under Article 142 of the Constitution of India, can order for pay and recover, but not any subordinate Courts. M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
15. : In this regard, the learned counsel referring to a judgment of the Hon’ble Supreme Court in the case of Manager, National Insurance Co. Ltd., Vs. Saju P. Paul and another reported in 2013 ACJ554 submitted that the question as to whether a direction to pay and recover can be given under Article 142 of the Constitution of India is pending before the Larger Bench. As such, the said direction cannot be given.
11. In Saju P. Paul’s case (supra), at paras 24 and 25, it was observed as below: “ 24. In National Insurance Co. Ltd. V. Parvathneni, S.L.P.(C)...CC No.10993 of 2009, the following two questions have been referred to the larger Bench for consideration: “(1) If an insurance company can prove that it does not have any liability to pay any amount in law to the claimants under the Motor Vehicles Act or any other enactment, can the court yet compel it to pay the amount in question giving it liberty to later on recover the same from the owner of the vehicle?. M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
16. : (2) Can such a direction be given under Article 142 of the Constitution, and what is the scope of Article 142?. Does Article 142 permit the court to create a liability where there is none?.” 25. The pendency of consideration of the above questions by a larger Bench does not mean that the course that was followed in Baljit Kaur, 2004 ACJ428SC) and Challa Bharathamma, 2004, ACJ2094(SC), should not be followed, more so in a peculiar fact situation of this case………………” However, despite the above observation made by it in the very same judgment at para 25, the Hon’ble Apex Court has further held that the claimant cannot be compelled to struggle further for recovery of the amount, since the Insurance Company has already deposited the entire awarded amount pursuant to the order of the that Court passed on 01.08.2011 and the claimant was allowed to withdraw the amount deposited by the Insurance Company; in turn, the Insurance Company was permitted thereafter to recover the amount so paid from the owner. M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
17. : Thus, the principle of pay and recover was also recognized in the said case.
12. The above said reference by the learned counsel for the insurer would not enure much to his benefit, rather it would come to the aid of the claimant to get the awarded amount from the insurer and in turn enables the insurer to recover the same from the owner of the vehicle, who is primarily liable to pay the awarded amount.
13. With respect to the second contention of the learned counsel for the insurer that such kind of direction can only be given by the Hon’ble Apex Court exercising its power under Article 142 of the Constitution of India is concerned, the learned counsel for the owner of the vehicle in his reply argument relied upon a judgment of the Hon’ble Supreme Court in Lal Singh Marabi Vs. National Insurance Co. Ltd., and Others reported in 2017 ACJ1362 In that case, three Judges Bench of M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
18. : Hon’ble Apex Court, noticing that the facts of the case before it revealed that the driver of the offending minibus had no valid driving licence at the time of accident, still directed the Insurance Company to pay the compensation to the claimant and recover the amount from the owner and driver of the minibus. It is noteworthy that such an order of pay and recovery was made in the said case by the High Court itself, which while agreeing with the Tribunal that the Insurance Company was not liable to bear the burden of the awarded sum had, relying upon the case of Swaran Singh (supra) directed the Insurance Company to pay the awarded sum to the appellant first and recover the same from the driver and owner of the minibus. Thus, in its latest judgment, the Hon’ble Apex Court has not found fault with the direction of the High Court in directing the Insurance Company to pay the awarded sum to the claimant and then to recover the same from the owner of the vehicle, who was primarily liable. As such, M.F.A.No.20481/2009 (MV) C/w. M.F.A.No.21233/2009 :
19. : the argument of the learned counsel for the Insurance Company that it is only the Hon’ble Apex Court under Article 142 can make such a direction but not a High Court, is also not acceptable.
14. For the above reasons, neither the contention of the appellant that the insurer alone is liable in view of the condition in the policy nor the contention of the insurer that pay and recover cannot be ordered by any Court other than the Hon’ble Apex Court, is acceptable. Accordingly, I proceed to pass the following order: ORDER
MFA No.20481/2009 and MFA No.21233/2009 are dismissed. There is no order as to costs. The deposits made, if any, by the appellants be transmitted to the Tribunal, without any delay. gab Sd/- JUDGE