New India Assurance Company Vs. Rani - Court Judgment

R.L. Anand, J.

1. This appeal filed by the National Insurance Co. has been directed against the award dated 27.5.1999, passed by the M.A.C.T. Patiala, who allowed the claim petition of Smt. Rani (widow) and Nasib Khan (Minor son) of Bhup Din, and awarded compensation to the tune of Rs. 2 lacs along with interest @ 12% from the date of filing of the claim petition against the present appellant and respondents 3 and 4,i.e. driver and owner of the offending vehicle, respectively, jointly and severally.

2. The brief facts of the case are that in this case Bhup Din expired. He was a Siri with Sukhdev Singh. The accident took place on 21.2.1996 when the deceased was bringing woods in a rickshaw rehri, which was being plied by him for his employer as there was a marriage in the family of the employer. Mohinder Khan, father of the deceased, was following him on foot. When the deceased along with the rickshaw rehri reached near the shop/workshop of Raju at 8/8.30 a.m., on the main road at Balbehra, a truck bearing registration No. PB 11 1189 being driven by Joginder Singh came a! a very high speed and struck against the rickshaw rehri being pulled by the deceased and as a result of the impact, the deceased fell down on the road and died at the spot. The driver of the truck fled away from the spot along with the truck. Mohinder Khan, father of the deceased, after leaving the deceased under the supervision of Rashid Khan, approached the police along with Amrik Singh, Panch. Port-rnortem on the body of the deceased was conducted by Dr. Harish Tuli, Assistant Professor, Medical College, Rajindra Hospital, Patiala and as per the report, the cause of death was shock and hemorrhage due to the injures and the injuries were found to be ante-mortem in nature and sufficient to cause death in the ordinary course of nature.The claimants claimed compensation to the tune of Rs. 6 lacs. As per the claimants, the accident took place on account of the negligence of Joginder Singh and the present appellant, owner and driver of the offending truck, are responsible jointly and severally to pay the compensation.

3. Notice of the claim petition was given to the respondents of the claim petition. The stand taken up by the Insurance Co. was that the driver of the offending truck was not having a valid driving licence, therefore, the Insurance Co. is not liable to pay the compensation to the claimants. The claimants can claim the compensation only from the owner or the driver as there is a breach committed by the owner of the truck.

4. Joint written statement was also filed on behalf of the driver and owner of the truck. The driver denied his liability. In the written statement, it was pleaded that the Insurance Co. is liable to pay the compensation.

5. From the pleadings of the parties, the Tribunalframed the following issues :-

'1. Whether the respondent No. 1 caused the death of Bhup Din son of Mohinder Khan by driving truck No. PB-11-1189, negligently OPP

2. Whether the petitioners are the L.Rs. of the deceased OPP

3. Whether respondent No. 1 was not holding a valid driving licence at the time of accident, if so to what effect OPR

4. Whether there was no valid route permit, registration certificate and fitness certificate of the truck at the time of accident, if so to what effect OPR

5. Whether there was a breach of the conditions of the insurance policy and, as such, the insurance company is not liable to pay the compensation OPR

6. How much amount the petitioners are entitled to recover as compensation and from which of the respondents

7. Relief.'

6. The parties led evidence in support of their case and on the conclusion of the proceedings, issue No. 1 was decided in favour of the claimants and against the respondents. Issue No. 2 was also decided in favour of the claimants and it was held that they are LRs of Bhup Din. Issue No. 3 was decided against the Insurance Co. and it was held that the insurance company has failed to prove that Joginder Singh was not holding a valid driving licence at the time of the accident. Issues No. 4 and 5 were also decided against the respondents. Issue No. 6 was partly decided in favour of the claimants and they were allowed compensation of the tune of Rs. 2 lacs. Finally, the claim petition was allowed as stated above.

7. Aggrieved by the award of the Tribunal, the present appeal by the Insurance Company.

8. I have heard the counsel for the parties and with their assistance have gone through the record of this case.

9. Counsel for the appellant has assailed the findings of the Tribunal on issue No. 3 and submitted that the Tribunal has committed an error in holding that the Insurance Co. is liable to pay the compensation and that the company failed to prove that the driver was not holding a valid driving licence at the time of the accident.

10. Before I deal with the submissions of the counsel for the appellant, it will be appropriate for me to reproduce paras 13 and 14 of the impugned award, which contain the reasons in dismissing this plea of the appellant. The same reads as under :-

'13. Burden to prove this issue was on the respondents. To prove this issue respondent Insurance Company has produced Y. Venkatesh Reddy as RW1. The witness has stated that he was deputed by the respondent Insurance Company for checking the correctness of driving licence of Joginder Singh and on checking he found that the alleged licence of Joginder Singh was not entered at Sr. No. 9721/79. According to the witness there is no serial number in the records of 1979. The witness has proved on record his report Ex. R1. However, in the cross-examination the witness has admitted that though he had stated in his report that he has gone through the application forms and the record, but in fact he had not seen the application forms. Though the witness has denied the suggestions of giving a false report, but a perusal of the statement of the witness and the report Ex. Rl does not inspire confidence, needless to state that Y. Venkatesh Reddy is an investigator and surveyor, appointed by the respondent insurance company and the report Ex. R1 has been prepared by him without associating the petitioners and respondents No. 1 and 2. Even otherwise the law is well settled that aparty should bring on record the best evidence. In the instant case the best evidence to prove the invalidity of the licence in my opinion was the records of the licensing authority concerned. But the respondent insurance company has failed to discharge its onus by not producing the said record.

14. It may be most appropriate to refer here to a decision of the Hon'ble High Court of Punjab and Haryana in the case of United India Insurance Company Limited v. Neena Tandon etc., 1992(2) RCR (Civil) 457, wherein the Hon'ble High Court observed as under :-

'(5) In this case, the claim petition was being contested not only by the insurance company but also by the owner and the driver. In case, driver of the vehicle was not holding a valid licence, nothing prevented the insurance company to call upon the owner and the driver to produce the licence. Admittedly the insurance company did not issue an notice either to the owner or driver to produce the driving licence. It also did not make an notice either to the owner or driver to produce the driving licence. It also did not make any application to the Motor Accident Claims Tribunal causingthe driver to produce the driving licence. The only evidence led by the insurance company in this regard is examination of one Sohan Lal Sharma, Junior Assistant in the office of District Transport Officer, Patiala, who deposed that the licence issued to the driver was only for driving scooter. He in his cross-examination stated that office 'maintains separate register for addition of medium or heavy vehicles on the driving licence which is to be made later on.' He, however, did not produce the said register. In absence of the register, it was not possible for the claimants to cross-examine the said witness on the point as to whether the driver got added any other class of vehicle in his licence, which he may have been permitted to drive. Possibility of driver possessing another driving licence from any other transport authority also cannot be ruled out. In any case, it was for the insurance company to bringon record compelling evidence that the driver was not holding driving licence to drive the combine. Insurance company in my view, has failed to prove that there was a breach of the terms of the policy of insurance on the ground that the driver who was driving at the relevant time did not have a licence to drive the combine.

It is also worthwhile to refer to the statement of Mo-han Lal RW2 (respondent No. 2) wherein he stated that at the time of the employment of respondent No. 1 as driver of his truck in 1995, he had seen his driving licence, which was issued by the licensing authority, Patiala. Thus, the possibility of the driver holding a driving licence issued by the other licensing authority cannot be ruled out. Thus, issue No. 3 is decided in favour of the petitioners and against the respondents.'

11. On the contrary, counsel for respondents submitted that the Insurance Co. had undertaken to cover the third party risk and irrespective of the fact whether the driver was holding a valid driving licence or not, the Insurance Co. cannot escape the liability. It was also argued on behalf of the owner of the vehicle onus of issue No. 3 was on the insurance company and it has failed to establish that Joginder Singh was not holding a valid driving licence. Counsel for the respondents have adopted all the reasons given in paras 13 and 14 of the impugned award.

12. After considering the rival submissions, I am of the considered opinion that this appeal is totally devoid of any merit. First of all, I would like to determine the liability of the Insurance company.

13. The principal arguemnt of the counsel for the appellant was that since there is a breach of contract by the owner of the vehicle when he had employed Joginder Singh, a person who was not holding a valid driving licence, therefore, the Insurance company is not liable to pay the compensation to the claimants. At the most the owner and driver are liable to pay the compensation to !he claimants.

14. The arguments of the counsel for the appellant cannot be accepted. It is the common case of the parties that the Insurance Co. had undertaken the liability to reimburse the third party. The deceased or his family members had no privity to the contract which was executed between the owner and the Insurance Co. So far as the liability of the Insurance Co. vis-a-vis third party is concerned, it cannot be defeated by virtue of the provisions of Section 149(4) of the Motor Vehicles Act. This point was also considered by the Madhya Pradesh High Court in National Insurance Co. v. Prem Narain Sahu, AIR 1998 Madhya Pradesh 66, and it was held that Insurance Co. cannot avoid its liability on the ground that the vehicle was being driven by the person having no valid driving licence.

15. In G. Sobha and others v. Sunil Kumar Sahu and others, 2000(1) Civil and Rent Judicial Reports,while discussing the liability of the Insurance Co. under Section 149(4), it was observed by the Orissa High Court that even if the driver was not having the necessary driving licence, still keeping in view the policy of the legislature as contained in Section 149(4) of the Act, it will be appropriate to direct that the compensation amount should be paid by the Insurance Co. to the claimants and if ultimately it is found that the driver did not have the necessary driving licence, necessary directions can be issued by the Tribunal for reimbursing the Insurance Co. Thus, from this judgment, it is unclear that the Insurance Co. has to reimburse the amount so far as the third party is concerned.

16. In Divisional Manager, New India Assurance Co. Ltd. v. Tumu Gurava Reddy and others, 1999 ACJ 1077, it was observed that the defences which are available to the Insurance Co. are contained in Section 149(2) and even if the owner entrusts the vehicle to a person who was holding a licence but the same was found to be fake during enquiry before the Tribunal, and it is further proved that the owner had not deliberately allowed the vehicle to be driven by a person not holding any licence, still the Insurance Co. is not exempt from its liability because it is beyond any body's comprehension that the owner should first verify the genuineness of the licence with the concerned authorities before entrusting the vehicle to the driver. Since, the owner had taken reasonable steps, acted bona fide and discharged his statutory obligation, therefore the Insurance Co. cannot escape from its liability.

17. Reverting to the facts in hand, it is established on the record that Joginder Singh had a driving licence and it is also the statement of the owner that he saw the driving licence before he engaged the services of the Joginder Singh in order to run the vehicle. What the owner can do in these circumstances? At the most he can see the driving licence or he can take the test of the driver to be engaged. Both these aspects have been covered by the owner of the vehicle. In such a situation, when the owner has taken reasonable care while engaging Joginder Singh as a driver of the vehicle, no further duty was cast upon the owner. The things can be stretched further and we can examine the conduct ofthe owner on the test of probability. We all know that a heavy vehicle like truck, costs lacs. No same per-son/owner will try to hand over the vehicle to an un-trained person or a person who is not holding a licence. Nobody will like to part the property worth lacs into the hands of a person who has no valid driving licence. Atleast minimum inquiry in all probability, will be made by the owner before entrusting the vehicle to a person and in the present case, it is the direct statement of the owner that he saw the driving licence of Joginder Singh. As 1 have stated above, the onus lies upon the Insurance Co. to show that Joginder Singh was not holding a valid driving licence. I have examined the record of this case. Admittedly, Joginder Singh had a driving licence. Prima facie, it was issued from the office ofthe District Transport Officer, Patiala. In these circumstances, it was obligatory on the part of the company to produce the record of the Licensing Authority to snow whether Joginder Singh ever made any application for the issuance of a driving licence or not. The Company is mainly relying upon the report to the Surveyor who was examined and who deposed that he went to the office of the Registering Authority and came to the conclusion that no driving licence was issued in favour of Joginder Singh. The point was also considered by our own High Court in a judgment reported in Surjan Ram v. Anchal Singh (died) and others, 1997-3(117) PLR 844 : 1997(3) RCR(Civil) 670 (P&H;)(DB), and it was held that the Surveyor's report by itself could not show that the driving licence was invalid.

18. Faced with this difficulty, counsel for the appellant submitted that the Insurance Co. took steps before the Tribunal to summon the record of the Registering Authority. The witness was served but did not appear. In spite of that, the Tribunal did not issue the compelling process for the presence of the witness and for the fault of the court, the Insurance Co; could not be penalised.

19. I do not subscribe to the argument of the counsel for the appellant. The order vide which the request of the company for summoning the record of the Registering Authority was declined was challenged in revision, which was dismissed as infructuous because of the passing of the award in the main case itself. Be that as it may, I have to go by evidence which is on the record, The Insurance Co. has not been able to discharge its obligation. It was banking upon the report of the Surveyor which is hot sufficient and, in these circumstances, I hold that issue No. 3 has been rightly decided by the Tribunal.

20. Even the compensation which has been awarded in this case cannot be held to be excessive.

21. Resultantly, I do not see any merit in this appeal and the same is hereby dismissed with no order as !o costs.

22. The judgment of this appeal will not have any effect on the appeal which has been filed by the LRs. of Bhup Din.