A.K. Parichha, J.
1. This letters patent appeal is directed against the judgment of Learned Single Judge in Miscellaneous Appeal Nos. 29 of 1995 and 121 of 1995 enhancing the compensation of Rs. 51,000/- awarded by Learned Second Motor Accident Claims Tribunal, (in short, 'MACT'), ' Cuttack in Misc. Case No. 134 of 1987 to Rs. 90.000/-.
2. The relevant facts involved in the case are follows :
The truck bearing Registration No. ORC 4451 belonging to respondent No. 2 Phani Bhusan Kanungo met with an accident on 20th February, 1987 near village-Bhagipur due to rash and negligent driving by the driver resulting in the death of one Hrudananda Samantaray, who was the husband of appellant No. 1 and father of appellant No. 2. The appellants filed claim case No. 134 of 1987 making a claim of Rs. 1,40,000/- as compensation. Learned MACT after conducting enquiry awarded a compensation of Rs. 51,000/-. Not being satisfied by the said award the appellants filed Misc. Appeal No. 29 of 1995 for enhancement of the award. The Insurance Company-respondent No. 1 also filed Misc. Appeal No. 121 of 1995 challenging the award passed by the MACT denying its liability on the ground that the offending vehicle was not being driven by a person having valid driving licence. Learned Single Judge who heard both the Misc. Appeal analogously, allowed the Misc. Appeal No. 121 of 1995 with observation that the Insurance Company is not held liable to pay compensation to the claimants as directed by the Tribunal. Learned Single Judge, however, allowed the Misc. Appeal No. 29 of 1995 in part and modified the award to the extent that the claimant-appellants will be entitled to compensation of Rs. 90,000/- with interest thereon at the rate of 8% per annum from the date of claim till payment and that the owner of the offending vehicle (present respondent No. 2) is liable to pay the compensation awarded in favour of the claimants. Aggrieved by the said order appellants have preferred the present AHO for striking down the observation of the Learned Single Judge that the Insurance Company-Respondent No. 1 is not liable to pay the compensation to the appellants.
3. Mr. P. B. Ray, Learned Counsel appearing for appellants submitted that Learned Single Judge took a legally incorrect view that the burden is on the claimants to prove that the driver had a valid licence. According to him, when the Insurance Company took the plea that the driver of the offending vehicle was driving the vehicle without any valid licence the burden was on the Insurance Company to prove that aspect. Mr. Ray also submitted that even if the driver of the offending vehicle did not possess a valid licence at the relevant time still then the Insurance Company has to pay the compensation to the claimants and subsequently recover such amount from the owner of the offending vehicle. In support of such contention Learned Counsel placed reliance on the cases of United India Insurance Company Limited v. Lehru and Ors. : [2003]2SCR495 and The National Insurance Company Limited v. Swaran Singh and Ors. AIR 2004 SCW 633.
4. Mr. A. K. Mohanty, Learned Counsel appearing for Insurance Company respondent No. 1 on the other hand submitted that Insurance policy is a contract between the owner of the vehicle and the Insurance Company and the Insurance Company is liable to pay compensation to the claimants only if the conditions laid down in the Insurance policy are rigidly fulfilled. He submitted that one of the conditions of the policy is that the vehicle must be driven by a driver holding a valid licence and if the offending vehicle was driven at the time of the accident by a driver not having a valid licence then the liability of the Insurance Company will cease and the company will not be liable to pay any compensation to the victims or the claimants. Mr. H. M. Dhal, Learned Counsel appearing for respondent No. 2 argued that the burden of proving that the driver had no valid licence at the time of the accident squarely lies on the Insurance Company and that the burden having not been discharged by production of any document, the Insurance Company, respondent No. 1 is liable to pay the compensation to the claimants.
5. From the submission of the Learned Counsel for the parties it appears that the controversy is basically confined to the following two legal points :
(i) whether the burden of proving that the driver of the offending vehicle was driving without a valid licence at the time of the accident is on the Insurance Company who resisted the claim or on the claimants;
(ii) whether the Insurance Company is liable to pay the awarded amount to the claimants even if it is found that the driver of the offending vehicle had no valid licence and then recover that amount from the owner of the vehicle.
6. In Lehru's case (supra) the Insurance Company resisted the claim on the ground that the driving licence of the driver was a fake one, but it failed to prove that the licence was fake. In that situation the Apex Court ruled that the Insurance Company is not exempted from liability and observed that in order to avoid its liability Insurance Company has to prove that the driver was not duly licensed and that the owner-insured was aware and had noticed that the licence was fake or invalid and still permitted that person to drive the vehicle. The Apex Court also observed that even in such a case the Insurance Company would remain liable to the 3rd party, but it may recover the amount from the insured. In Swaran Singh's case (supra) the Insurance Company took the defence to the claim saying that the driver of the offending vehicle had a defective licence and so the company is not liable to pay compensation to 3rd party. After analyzing the issues the Apex Court observed that burden of proof to establish breach of policy condition i.e., disqualification of driver/invalid driving licence is upon the Insurance Company and mere absence, fake or invalid driving licence, disqualification of the driver for driving at the relevant time are not in themselves defences available to the insurer against either the insured or the 3rd party. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicle by duly licensed driver or one who was not disqualified to drive at the relevant time. It was also candidly observed that the liability of the insurer is a statutory one and even where it is able to prove the breach on the part of the insured concerning the policy condition regarding holding a valid licence by the driver or his qualification to drive during the relevant period, the insurer could not be allowed to avoid its liability towards the insured unless the said breach or breaches of the condition licence is/are so fundamental as are found to have contributed to the cause of the accident. In the case of National Insurance Company Limited v. Kanti Devi and Ors. 2005 (II) OLR (SC) 348 the issues relating to the liability of the insurer under Section 149, of the M.V. Act was discussed in detail and the ratios of Lehru's case (supra) and Swaran Singh's case (supra) were critically analyzed.
7. The above noted judicial pronouncements make it clear that the insurer can take a defence that the driver of the offending vehicle had no valid licence at the time of the accident but in order to be absolved of its liability it has not only to prove that the driving licence was invalid but that the insured had knowledge about such invalid/defective licence of the driver and yet allowed the driver to drive the vehicle and that the want of valid licence was the cause of the accident. The decisions further suggest that even if it is established that the driving licence of the driver was not a valid one yet the insurer would be liable to pay the compensation to the 3rd party if the accident occurred not only due to the invalid/defective licence but also for other reasons.
8. No doubt Lehru's case, Swaran Singh's case or Kanti Devi's case were not in existence when the impugned judgment was passed, but fact remains that the legal position then was the same as of today. The views taken in the cases of Oriental Insurance Company Limited v. Folix Correa and Ors. 1989 ACJ 430; Narcinva v. Kamat and Anr. v. Alfredo Antonio Doe Martins and Ors. 1985 ACJ 397; New India Assurance Company Limited v. C.B. Shankar and Ors. 1986 ACJ 82 relied in the impugned judgment, were virtually similar to the view taken in Swaran Singh's case (supra).
9. It is not disputed that Hrudananda Samantaray died as a result of the accident of the truck belonging to respondent No. 2 and that the said truck had been insured with respondent No. 1. Though the respondent No. 1-insurer took the defence that the driver has no valid licence, it did not discharge its burden of proving that allegation or proving that the accident occurred due to the want of valid licence. So in view of the ratios laid down in the above noted cases the insurer-respondent No. 1 becomes liable to pay the compensation to the appellant-claimants. The observation of the learned Single Judge that the insurer respondent No. 1 is not liable to pay the awarded amount and that the owner of the vehicle is liable to pay the said amount is, therefore, untenable in the eye of law and the same has to be set aside.
10. Mr. Mohanty, Learned Counsel for respondent No. 1 submitted that the enhancement in the award made in the impugned judgment is disproportionate and that the same is not sustainable. On perusal of the impugned judgment, we find that the Learned Single Judge took every bit of evidence and circumstance into consideration in quantifying the award. We do not find any illegality or perversity in the approach and accordingly, find no good reason to interfere with the same. However, we feel that the direction for payment of interest from the date of the claim till the date of payment is unreasonable as the litigation prolonged due to the contributory act of both the parties. We, therefore, modify that direction to the extent that the interest at the rate of 8% per annum shall be paid from the date of the impugned order i.e., 12.12.2000 till the date of payment.
11. Accordingly, the A.H.O. is allowed in part. Both the parties are directed to bear their respective cost of litigation in this forum. Hearing fee is assessed at contested scale.
P.K. Tripathy, J.
12. I agree.