Dismissed

Bajaj Allianz General Insurance Ltd. v. Rifat Ara and Ors.

J&K HC5 Apr 2021CMAM/49/2017

Case brief

AI extract

What is this about?

This is an appeal by an insurance company against an award by the Motor Accident Claims Tribunal directing it to pay compensation of Rs. 8,14,936/- along with interest for a death caused by a motor accident. The company challenged the liability based on the driver's invalid license and unauthorized passenger status. The High Court upheld the award and dismissed the appeal.

What did the court decide?

The appeal by the Insurance Company was dismissed. The impugned Award of the Tribunal is upheld with liberty to recover the amount from the owner of the vehicle.

Bajaj Allianz General Insurance Ltd. Vs Rifat Ara and Ors. — Motor Accident Claims | J&K HC (2021)

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HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR

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…..

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CMAM No. 49/2017

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Reserved on: 28.12.2020

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Pronounced on: 05.04.2021

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Bajaj Allianz General Insurance Company Limited

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…..Appellant(s)

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Through: Mr. T. A. Malik, Advocate

V/s

Rifat Ara and others

…….. Respondent(s)

Through: Mr. Rayees Yousuf, Advocate

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Coram:

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HON’BLE MR. JUSTICE VINOD CHATTERJI KOUL, JUDGE JUDGEMENT

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Impugned in this Appeal is Award dated 7^th March 2017, passed by Motor Accident Claims Tribunal, Srinagar (for short “Tribunal” ) on a Claim Petition bearing File no. 212/2009 titled Rifat Ara and Others v. Bajaj Allianz General Insurance Company Limited and Others , directing appellant Insurance Company to pay compensation in the amount of Rs. 8,14,936/- (Rupees Eight lac Fourteen thousand Nine hundred and Thirty six only) along with 6% interest per annum from the date of institution of claim till realization, on the grounds made mention of therein.

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A claim petition, as is discernible from perusal of the file, was filed by respondent nos. 1 to 3, before the Tribunal on 7^th September 2009, averring therein that deceased, Mushtaq Ahmad Malik S/o Ghulam Ahmed Malik R/o Zalangam, Kokernag , aged 32 years, died in an accident, which took place on 3^rd November 2008 at Larnoo Kokerag, due to rash and negligent driving of driver of offending vehicle, bearing Engine no. P24128813 Chasis no. 40002117, which was insured with

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CMAM No.49/2017

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appellant Insurance Company. Claimants/Respondent nos.1 to 3 sought compensation in the amount of Rs. 25.57 lacs along with interest @ 12%.

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Appellant Insurance Company resisted the claim before the Tribunal on the ground that the driver of the offending vehicle (tractor) was not holding valid and effective driving licence to drive the offending vehicle at the time of alleged accident and that the deceased was travelling in the alleged vehicle as an unauthorized passenger. It was admitted that offending vehicle was insured with appellant Insurance Company. It was further stated that petitioners had shown monthly income of deceased on exaggerated basis in order to extract undue benefit out of the benevolent provision of the Motor Vehicles Act, 1988. The quantum of compensation claimed by claimants is exaggerated and based on fanciful grounds. The petitioners cannot be permitted to draw mileage out of the benevolent provisions of the Act. Petitioners claimed under pecuniary and non-pecuniary heads a sum of Rs. 25.57 lacs without any sufficient proof.

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The Tribunal, in view of pleadings of parties, framed issues for determination, which are:

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Whether on 3^rd November 2008, respondent no. 3 driving tractor bearing Engine no. P24128813 and Chasis no. 40002117, rashly and negligently while going from Larnoo towards Inshan lost control over the same and fell from the road down into deep Gorge, killing Mushtaq Ahmad Malik, who was on board of the said tractor? OPP.

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Whether the respondent insured had knowingly engaged the respondent driver with invalid and ineffective D/L on the date of accident, if yes, the insurer is absolved from its liability as the insured has committed breach of insurance contract? OPRcompany.

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In case the issue no.1 is proved in affirmative, to what amount of compensation the petitioners are entitled to, from whom and in what proportion? OPP.

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Relief. OP Parties

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Additional Issue : Whether the deceased was travelling in offending vehicle as an unauthorized passenger, if so, what will be its effect on the merits of the petition? OPR1

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Claimants produced and examined five witnesses before the Tribunal; besides claimant/respondent no. 1. Appellant Insurance Company produced one witness.

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CMAM No.49/2017

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By impugned Award, the Tribunal found claimants/respondents entitled to received compensation of Rs. 8,14,936/- along with 6% interest per annum.

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Heard and considered.

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Learned counsel for appellant Insurance Company has stated that there was breach of terms and conditions of insurance policy as driver had no valid driving licence to drive the tractor at the time of accident as on enquiry, the Assistant Regional Transport Officer, Doda, certified that the record pertaining to driving licence no.3051/2004/ARTO/D-U dated 17^th December 2004, was not available in the office, confirming thereby that licence was not genuine, but even then appellant has been held liable to pay the compensation. The Tribunal is said to have failed to appreciate that appellant had discharged initial proof of proving that licence was fake and driver was not holding a valid driving licence at the time of accident and onus thereafter shifted on owner of offending vehicle to prove that he has not committed any breach of policy conditions. The onus having not been discharged by the owner was sufficient to hold that he committed breach of terms and conditions of the policy. So, the appellant Insurance Company ought to have been exonerated from the liability and even right of recovery of the amount has not been given to the appellant.

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Next submission of learned counsel for appellant is that assuming but not admitting that appellant Insurance Company is liable to pay the compensation, even then compensation awarded by Tribunal of Rs.8,14,936/- is exorbitant, unjust and arbitrary. The claimants did not prove by any cogent evidence that income of the deceased. There is no independent or direct evidence on record so as to show the income of the deceased. No documentary evidence has been produced about the income of the deceased. Since there is no independent evidence on record with regard to income of the deceased except the statement of the witnesses, wherein they have stated that the income of the deceased was Rs.10,000/per month, however, the learned tribunal has considered the income of the deceased for the multifarious services rendered for the family at

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CMAM No.49/2017

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Rs.5000/- per month which is purely on guesswork. In such eventuality the learned tribunal ought not to have taken the income of the deceased as Rs.3000/- per month and therefore, the Tribunal on the basis of guesswork and presumptions has awarded compensation in lumpsum. It is submitted that even the interest ought not to have been awarded.

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Learned counsel for appellant also contends that deceased was travelling in the offending vehicle as an unauthorized person and the vehicle in question was meant only for load purposes and not for ferrying the passenger. The offending vehicle was permitted to board only one person, i.e., driver and, as such had zero seating capacity, hence in view of the terms and conditions of the policy, the insurance company is not liable to pay any compensation as the terms and conditions of the policy have been violated.

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As regards above submissions, two Issues were framed by the Tribunal [(Issue no.2 – whether respondent insured had knowingly engaged respondent driver with invalid and ineffective driving licence on the date of accident, if yes, insurer is absolved from its liability as the insured has committed breach of insurance contract) and (Additional Issue – whether deceased was travelling in offending vehicle as an unauthorized passenger, if so, what will be its effect on the merits of the petition?)]; onus to prove the same were upon appellant Insurance Company. It only produced one witness, namely, Jahangir Hussain, Law Officer of Insurance Company. The Tribunal has taken into account the report of the Assistant Regional Transport Officer, Doda (licencing authority Doda), in which it was mentioned that driving licence was not available in the office but dealing assistant, Shri Prayri Lal, had lodged missing report dated 28.02.2003 with police post Pull Doda.

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The additional Issue was decided by the Tribunal in favour of appellant Insurance Company. The Tribunal has given appellant Insurance Company the right of recovery. Appropriate portion of the impugned judgement is reproduced hereunder:

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“Since the vehicle in question was insured with the respondent company at the time of accident, as such the Respondent Insurance Company is directed to deposit the awarded amount in the first instance before this Tribunal within a period of one month from the date of

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award. The respondent company shall thereafter be at liberty to recover the same from the owner of the offending vehicle by filing an application before this Tribunal for the recovery.”

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The question, whether Insurance Company can be and ought to be directed to pay claim amount, with liberty to recover the same from the owner/driver of the vehicle, has been answered by the Supreme Court in National Insurance Company Ltd v. Swaran Singh and others (2004) 3 SCC 297 , and reiterated in Pappu and others v. Vinod Kumar Lamba and others, (2018) 3 SCC 208 . On the contention of Insurance Company that once the defence taken by insurer is accepted by Tribunal, it is bound to discharge insurer and fix liability only on owner and/or driver of vehicle, the Supreme Court held that even if insurer succeeded in establishing its defence, the Tribunal or the Court could direct insurance Company to pay the award amount to claimant(s) and, in turn, recover the same from owner of vehicle. The three-Judge Bench of the Supreme Court in Swaran Singh (supra), after analysing earlier decisions on the point, held that there was no reason to deviate from the said well-settled principle. Having said that, impugned Award does not warrant any interference and as a corollary thereof, Appeal on hand is liable to be dismissed.

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