Allowed

Rameswarapu Venugopalaswamy, W.G.Dist and 2 Othrs v. Guttikonda Ashok, Krishna Dist and 2 Othrs

Andhra Pradesh HC6 Sept 2019MACMA/1071/2013

Case brief

AI extract

What is this about?

The High Court allowed an appeal against an award that exempted an insurer from liability. It held that an insurer is statutorily liable to third-party victims regardless of the insured's breach of policy conditions, such as driving without a license. The court directed the insurer to pay compensation initially and recover the amount later from the insured.

What did the court decide?

Directed the 3rd respondent (insurer) to pay the awarded compensation to the claimants, reserving the right to recover the amount from the insured subsequent to payment.

Rameswarapu Venugopalaswamy, W.G.Dist and 2… — Motor Accident Claims | Andhra Pradesh HC (2019)

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THE HON'BLE Ms. JUSTICE J. UMA DEVI

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M.A.C.M.A. No.1071 OF 2013.

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JUDGMENT:

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The claimants in M.V.O.P.No.1059 of 2010, on the file of the Motor Vehicle Accidents Claims Tribunal-cum-IV Additional District Judge, (Fast Track Court), Tanuku, have filed this appeal being aggrieved by non fixation of joint liability as against the 3^rd respondent-insurance company which has agreed to indemnify the liability of the 2^nd respondent by virtue of Ex.B.6 policy on the ground of breach of terms and conditions of the policy by the 2^nd respondent by handing over his vehicle to the 1^st respondent who had no driving license at the relevant point of time.

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The facts which lead the appellants to file the present appeal in precise are that on 03.03.2010 at about 8.30 p.m while the deceased Rameswarapu Ganga Bhavani, who was working as Health Assistant (Female) was returning to her house after attending a delivery case on a motor cycle bearing No.A.P. 05 AC 3868 driven by her husband Rameswarapu Venu Gopala Swamy (the 1^st claimant) herein, the motor bike was being driven by her husband, on the left side of the road in normal speed; during that time, a lorry bearing No. AP 16 TU 4639 driven by the 1^st respondent in a rash and negligent manner came on wrong side and dashed the motor bike on which the deceased was travelling as a pillion rider and as a result of it, she received a fatal injury to head and died on the spot.

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On a complaint given by V.R.O, Penumantra, a case in Crime No.25 of 2010, was registered against the 1^st respondent herein under Section 304-A IPC and charge sheet was filed against him. Since the driver of the lorry bearing No.A.P.16 TU 4639 was responsible for causing of the accident, in which the deceased died, the appellants herein who

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were the husband and her children laid the claim for compensation of Rs.25,00,000/- as against the driver, owner and the insurer of the offending lorry bearing No.A.P.16 TU 4639.

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During the course of the trial, the claimants examined P.Ws.1 and 2. Among them, P.W.1 was the husband of the deceased who was with the deceased at the relevant point of time. Exs.A.1 to A.12 were relied by the claimants apart from the oral testimony of the P.Ws.1 and 2. On behalf of respondent No.3, R.Ws.1 to 4 were examined and Exs.B.1 to B.8 were marked and Exs.X.1 to X.7 were marked.

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On appreciation of the evidence of the claimants and also the evidence adduced by the 3^rd respondent, the Court below granted compensation of Rs.23,64,500/- as against the respondents 1 and 2 and exempted the 3^rd respondent from the liability of payment of compensation on the ground that the terms and conditions of the policy were violated by the 2^nd respondent by handing over his lorry to the 1^st respondent, who had no driving license.

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Being aggrieved by the award so passed by the Court below exonerating the 3^rd respondent from the liability of payment of compensation, the claimants are before this Court by preferring the present appeal.

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Heard both sides.

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Despite the service of notices, respondents 1 and 2 who were the driver and owner of the offending lorry did not chose to contest the case filed against them by the appellant-claimants before the Court below.

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The impugned award is passed by the Court below holding that the driver and the owner of the offending lorry are liable to pay compensation to the claimants.

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The relief which the claimants are legally entitled as against the respondents 1 and 2 is already granted to them. Since the joint liability

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to pay compensation has not been fixed as against the 3^rd respondent who is the insurer of the crime vehicle, the claimants have come before this Court by preferring this appeal.

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Claimants claim that as the relief which they are legally entitled as against the respondents 1 and 2 has already been granted, there is no need of claiming the relief against him afresh.

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The claimants’ contention is that the learned trial Judge ought to have held that the 3^rd respondent-insurance company is liable jointly and severally, and that they cannot be penalised for non possessing of valid driving license by the 1^st respondent; that any violation, or non fulfilment of contractual obligation by the insured (1^st respondent) does not deter them from getting compensation from the insurer.

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Learned counsel appearing for the 3^rd respondent while making his reply submissions has made this Court to go through the front page of the grounds of appeal whether the appellants have mentioned that no relief is claimed against respondents 1 and 2. His contention is that since relief is claimed against the respondents 1 and 2, they cannot claim any relief against respondent No.3, whose liability is coextensive is with that of the owner of the vehicle.

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Undisputedly claim for compensation is raised by the claimants as against the 3^rd respondent and also the driver and owner of the offending lorry and that the owner and the driver are also held liable to pay compensation to the claimants and that the relief claimed by the claimants against the respondents 1 and 2 has already been granted by the Court below.

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The simple question which is required to be answered in the light of the afore mentioned contentions of the said parties is, “whether or not the insurance company is to be held liable jointly along with the 2^nd respondent to pay compensation?”

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The answer of this Court on this question, is, as valid insurance policy has been issued by 3^rd respondent in respect of the vehicle involved in the accident as evidenced by a certificate of insurance Ex.A.6, it owes the responsibility of payment of compensation to third parties whether or not there is any breach or violation of the conditions of the policy by the vehicle owner.

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It may be true that it has been established by 3^rd respondent by summoning the S.I of Police, Penumantra Police Station that he filed the charge sheet against the 1^st respondent and the owner and the lorry under Section 180 of the Motor Vehicles Act. The evidence on record manifestly makes clear that the criminal case registered against the respondent No.1 is compounded by the Motor Vehicles Inspector and that the driver is imposed with fine for non possessing of driving license. The charge sheet copy is place on record by marking it as Ex.B.3. The 3^rd respondent has also summoned the Road Transport authorities of Bhimavaram for cause production of the challan under which the M.V.I collected penalty of Rs.5,000/-.

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As it is mentioned by the appellants in the first page of the appeal grounds that they are not claiming relief against the respondents 1 and 2 who are already held liable, they cannot be prevented from claiming the relief as against 3^rd respondent.

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Considering the aforementioned aspects which are established by the 3^rd respondent, the Court below seems to have held that the 3^rd respondent has no liability to pay compensation to the claimants forgetting the fact that the claimants who are the legal heirs of the deceased are third parties and they are no way concerned with the terms and conditions entered between the respondents 2 and 3 herein.

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The learned trial Judge has failed to see that the victims of the accident or their legal heirs do not have the knowledge about

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possessing/non possessing of valid driving license by the driver of the crime vehicle. Since the claimants are the third parties to the contract of insurance entered between the owner and the insurer, the terms and conditions mentioned therein will not have any binding effect on them, and they are entitled to get compensation from the insurer as they being the third parties to the contract of insurance said to be entered between the owner and the insurance company.

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In this regard, it is apt to refer the judgment of a Division Bench of the Apex court in Skandia Insurance Co. Ltd. V. Kokilaben Chandravadan¹ where their lordships have pointed out that the insistence of the legislature that a motor vehicle can be used in a public place only if that vehicle is covered by a policy of insurance is not for the purpose of promoting the business of the insurance company but to protect the members of the community who become sufferers on account of accidents arising from the use of motor vehicles.

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It has been further pointed out by their lordships in the above case that “such protection would have remained only a paper protection if the compensation awarded by the courts were not recoverable by the victims (or dependants of the victims) of the accident. The insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to the insured if there is violation of any policy condition. But the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence. If the insurance company succeeds in establishing that there was breach of the policy condition, the Claims Tribunal shall direct the insured to pay that amount to the insurer. In default the insurer shall be allowed to recover 1 (1987) 2 SCC 654

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that amount (which the insurer is directed to pay to the claimant third parties) from the insured person.

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The principle laid down in the afore mentioned judgment has been approved by three Judges bench of the Apex Court in Sohan Lal Passi v.

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P. Sesh Reddy² , and it is held that:

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“The insurer and the insured are bound by the conditions enumerated in the policy and the insurer is not liable to pay the insurer if there is violation of any policy condition. But in the insurer who is made statutorily liable to pay compensation to third parties on account of the certificate of insurance issued shall be entitled to recover from the insured the amount paid to the third parties, if there was any breach of policy conditions on account of the vehicle being driven without a valid driving licence.”

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In National Insurance Co. Limited v. Swaran Singh & others³ , it

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has been held that:

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“After a third party has obtained a judgment against any person insured by the policy in respect of a liability required to be covered by Section 145, the same must be satisfied by the insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy or may in fact have done so. The same obligation applied in respect of a judgment against a person not insured by the policy in respect of such a liability, but who would have been covered if the policy had covered the liability of all persons, except that in respect of liability for death or bodily injury.”

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Keeping in view of legal position declared in the above mentioned case laws, there cannot be any hesitation for this Court to direct the 3^rd respondent insurance company to pay the awarded compensation amount to the claimants reserving its right to recover the same from the insured by initiating necessary proceedings instead of making the claimants to suffer, who are wholly unconcerned with the terms and conditions said to be entered between the respondents 2 and 3.

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2 (1996) 5 SCC 21

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3 (2004) 3 SCC 297

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In the light of the afore mentioned discussion, the insurer of the crime vehicle (3^rd respondent herein) is statutory held liable along with the 2^nd respondent to pay compensation to the claimants and is directed to pay the compensation first to the claimant and later to recover the compensation, so paid from the insured by initiating necessary proceedings against them in this regard.

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In the result, the appeal is allowed fixing the initial liability to pay compensation as against the 3^rd respondent reserving its right to recover the same from the insured by initiating the proceedings necessary in this regard. No order as to costs.

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Consequently, miscellaneous petitions pending, if any, shall also stand disposed of.

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________________ J. UMA DEVI, J

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Date.06.09.2019. Gk

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THE HON'BLE Ms. JUSTICE J. UMA DEVI

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M.A.C.M.A. No.1071 OF 2013.

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