Allowed

Smt. Mani K v. Sri Murali v

Karnataka HC21 Nov 2024MFA/4299/2020

Case brief

AI extract

What is this about?

Fatal scooter-car collision claim where the tribunal had exonerated the insurer on grounds the driver lacked a valid licence, saddling liability on the owner. This court held a charge sheet alone does not discharge the insurer's burden of proving the breach, allowed the appeal, and directed the insurer to pay the compensation with interest.

What did the court decide?

Award modified: insurer to pay Rs.16,96,083 with 6% p.a. interest from date of petition; deposit refunded to appellant; rest of award maintained.

Smt. Mani K Vs Sri Murali v — Insurance | Karnataka HC (2024)

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NC: 2024:KHC:47436-DB MFA No.4299/2020

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21^ST DAY OF NOVEMBER, 2024

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PRESENT

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THE HON'BLE MRS. JUSTICE K.S.MUDAGAL

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AND

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THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL MISCELLANEOUS FIRST APPEAL NO.4299/2020 (MV-D)

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BETWEEN:

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Digitally signed by K S RENUKAMBA Location: High Court of Karnataka

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SMT. MANI .K W/O KANNAN AGED ABOUT 62 YEARS R/AT NO.247, 4TH CROSS KANAKADAS LAYOUT, LINGARAJAPURAM BANGALORE NORTH TALUK BANGALORE 560084 (RC OWNER OF THE TATA INDICA CAR BEARING REG NO HR 37-B-3792).

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(BY SRI. A.K. BHAT, ADV., FOR SRI. S. RAJU, ADV.,)

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…APPELLANT

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AND:

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SRI. MURALI .V S/O VIJAYARAGHAVAN AGED ABOUT 35 YEARS.

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M. SANDARA YESHIKA D/O MURALI V AGED ABOUT 07 YEARS (SINCE MINOR REP BY HER FATHER AND NATURAL GUARDIAN MURALI V).

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BOTH ARE RESIDING AT NO.31 1ST CROSS, SATHYANAGARA M S NAGAR POST, BENGALORE 560033.

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UNITED INDIA INSURANCE COMPANY LTD. 4TH CROSS, 1ST MAIN

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NC: 2024:KHC:47436-DB MFA No.4299/2020

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NEAR DIVYA PRINTS V.D. CHANDRU BUILDING BANGALORE 560036 (POLICY NO 0725813116P107849796 VALID FROM 15-09-2016 TO 14-09-2017)

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…RESPONDENTS

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(BY SRI. KRISHNA J.C. ADV., FOR R1 & R2 R2 MINOR REP. BY R1 SMT. MANJULA N. TEJASWI, ADV., FOR R3)

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THIS MFA IS FILED UNDER SECTION 173(1) OF MV ACT, PRAYING TO CALL FOR THE RECORDS IN FROM IX ADDITIONAL SMALL CAUSES JUDGE & ADDL. MACT, BANGALORE (SCH-07) IN MVC NO.4605 OF 2017 DATED 17^TH NOVEMBER 2018, BY AWARDING COMPENSATION IN PART AND FIXING THE LIABILITY SOLELY ON THE APPELLANT WITHOUT FASTENING THE LIABILITY ON THE INSURER BY AWARDING AND DIRECT THE INSURANCE COMPANY TO PAY THE COMPENSATION TO THE CLAIMANT AS CLAIMED IN THE PETITION BY ALLOWING THIS APPEAL & ETC.

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THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MRS JUSTICE K.S.MUDAGAL and

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HON'BLE MR JUSTICE VIJAYKUMAR A. PATIL

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ORAL JUDGMENT AND ORDER ON I.A.NO.1/2024

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(PER: HON'BLE MRS JUSTICE K.S.MUDAGAL)

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Challenging the saddling of liability of payment of compensation on her, respondent No.1 in MVC No.4605/2017 on the file of 9^th Addl. Small Causes Court and Addl. MACT, Bengaluru (SCCH-7) has preferred this appeal.

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Appellant was respondent No.1, respondent Nos.1

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and 2 were claimant Nos.1 and 2 and respondent No.3 was respondent No.2 in MVC No.4605/2017 before the Tribunal. For the purpose of convenience, the parties are referred to henceforth according to their ranks before the Tribunal.

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Claimant Nos.1 and 2 are the husband and minor daughter of deceased Shalini. On 01.04.2017 at 6 p.m., when Shalini was returning home from her office on her scooter No.KA-03 JE-5034 at R.K.Hegdenagar Main Road in front of Haj Bhavan within the limits of Chikkajala police station, TATA Indica car No.KA-03 D-6596 hit her vehicle. She suffered grievous injuries in the accident. When she was taking treatment in Baptist Hospital, Bengaluru, she succumbed to the injuries on 26.04.2017. At the time of accident, respondent Nos.1 and 2 were the registered owner and insurer of car No.KA-03 D-6596.

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Claimants filed MVC No.4605/2017 before the Tribunal claiming compensation of Rs.85,80,000/- contending that deceased was earning Rs.20,000/p.m. by her employment as Computer Operator and the claimants were

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dependant on her. By her untimely death, they have lost her support financially as well as emotionally.

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Respondent No.2 contested the petition denying the negligence on the part of the car driver and contended that the accident occurred due to the negligence of the deceased herself. Respondent No.2 further contended that the driver of the offending car was not holding the driving licence, thereby there is breach of policy condition and it is not liable to pay compensation.

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On behalf of the claimants, claimant No.1 was examined as PW-1 and got marked Exs.P1 to P19. On behalf of respondent No.2, it's official was examined as RW-1 and Exs.R1 to R3 were marked. The Tribunal, on hearing both the parties, by the impugned judgment and award held car driver was responsible for the accident and granted compensation of Rs.16,96,083/-. The Tribunal further held that the driver of the car was not holding driving licence as the charge sheet was filed against him for the offences punishable under Sections 279 and 304 (A) of IPC and Section 134 (A & B) read with Section 187 of MV Act and 3(1) read with Section 181 of the

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Motor Vehicles Act, 1988 (for short, 'the Act') and therefore, exonerated the insurer. The Tribunal held that respondent No.1-owner of the vehicle is liable to pay the compensation.

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The insurer and the claimants have not challenged the award. Therefore, award so far it relates to them has attained finality. Only owner of the vehicle has challenged the award on the sole ground that the insurer should be held liable as there was a policy in force for the vehicle.

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Before this Court, the appellant - owner of the vehicle has filed I.A.No.1/2024 seeking to produce the extract of driving licence of Umesha A, S/o Arjuna who was shown as accused in the charge sheet in the criminal case. Relying on the said document, it is contended that the driving licence was issued to the driver of the car on 16.03.2012 itself and that was in force.

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Sri.A.K.Bhat, learned counsel for the appellant submits that the initial burden to prove the breach of policy condition viz., driver was not possessing the driving licence was on the insurer. But the insurer failed to discharge the said burden by examining the concerned Road Transport Authority

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NC: 2024:KHC:47436-DB MFA No.4299/2020

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or calling upon the respondent No.1 - owner. Therefore, the

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Tribunal was in error in exonerating the insurer.

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In support of his submissions, he relied on the following judgments:

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i. National Insurance Company Ltd. v. Swaran Singh¹ ii. Rukmani and others v. New India Assurance Co. and others²

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Smt.Manjula Tejasvi, learned counsel for the insurer submits that the copy of the driving license is produced belatedly in 2024. Had respondent No.1-owner produced the same before the Tribunal or atleast at the time of filing of the appeal, insurer would have saved the liability of payment of interest on the award amount. She submits that therefore the appellant shall be saddled with the payment of interest from the date of judgment of the Tribunal till the date of deposit.

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In view of submissions on both side, the only question that remains for consideration is "who shall pay the interest on the compensation amount from the date of award?"

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1 (2004) 3 SCC 297

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2 (1998) 9 SCC 160

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ANALYSIS

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As noted above, the occurrence of the accident due to the actionable negligence on the part of the driver of car No.KA-03 D-6596 is not disputed. It is also not disputed that as on the date of accident, the said vehicle was covered with the policy issued by respondent No.2. Respondent No.1-owner of the vehicle did not contest the petition. Respondent No.2insurer, apart from disputing the other aspects, disputed its liability on the ground that the driver of the car was not holding a valid driving license. The question is who has the burden of proving the fact that the driver was not holding a valid driving license and how to discharge the said burden.

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14. The Hon'ble Supreme Court in Swaran Singh's

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case, referred to supra, while summarizing the law on the point in Clause 2 and 3 held as follows:

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“110. The summary of our findings to the various issues as raised in these petitions is as follows:

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(i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against thirdparty risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to effectuate the said object.

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(ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said Act.

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(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer . Mere absence , fake or invalid driving licence or 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 third parties. To avoid its liability towards the 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 vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time.

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(iv) Insurance companies , however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish “breach” on the part of the owner of the vehicle; the burden of proof wherefor would be on them .

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(v) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.

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(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident . The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insurer under Section 149(2) of the Act.

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(vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving

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licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.

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(viii) If a vehicle at the time of accident was driven by a person having a learner's licence, the insurance companies would be liable to satisfy the decree.

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(ix) The Claims Tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third-party arising in use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between the insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants.

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(x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the thirdparty under the award of the Tribunal . Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal.

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(xi) The provisions contained in sub-section (4) with the proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.”

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(Emphasis supplied)

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The reading of the above paragraph shows that the law is that whenever the insurer takes a defence under Section 149(2)(a)(ii), the burden is on it to prove the said defence to avoid liability. To discharge the said burden, the insurer relied only on the charge sheet Ex.P3, which was duplicatedly marked at Ex.R3 in the evidence of RW-1. It is settled law that the charge sheet is not the conclusive proof of existence of fact. If there is some other material to show which is inconsistent with the charge sheet, the burden of proving that the driver of the vehicle was not holding driving license still not gets discharged. To discharge its initial burden, the insurer did not produce any material to show that the driver of the vehicle was convicted for the offence under Sections 3(1) and 181 of the Act or the other offences stated therein. Secondly, the insurer did not choose to summon the RTO and examine him to show that the driver

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did not possess any driving license at the time of the incident. The insurer did not even call upon respondent No.1 to produce the particulars of the driving license or the driving license. Neither the driver of the vehicle nor the Investigating Officer was summoned to prove insurer's defence.

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In the judgment of the Hon'ble Supreme Court in Rukmani's case referred to supra, also similar charge sheet was filed and even the Investigating Officer was examined. Still the Hon'ble Supreme Court held that such evidence was not sufficient to discharge the burden cast on the Insurance Company. It was held that the insurer did not summon the driver of the vehicle and no record from the Road Transport Authority was produced. Therefore, the insurer's liability is not discharged. In the present case also, the evidence on record clearly shows that the insurer has not discharged its burden and has failed to prove its defence. Under such circumstances, the Tribunal was not justified in exonerating the insurer and fastening the liability on the owner of the vehicle.

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Smt.Manjula N. Tejaswi, learned counsel for the insurer vehemently contends that the appellant cannot be

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permitted to encash her indolence in producing the driving license and therefore, she shall be held liable to pay the interest.

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In a dispute between the owner and the insurer of the vehicle, third party cannot be made to suffer. The insurer has to pay the compensation with interest. If the insurer has any grievance that the owner of the vehicle was not fair in the contract, it is open to the insurer to pursue the legal remedy if any against the insured.

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With such observations, this Court passes the

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following:

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ORDER

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The appeal is allowed.

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The impugned award is modified as follows.

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i. The claimants are entitled to compensation of Rs.16,96,083/- with interest thereon at 6% p.a. from the date of petition till its realization payable by the insurer - respondent No.2 in the claim petition.

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ii. The said amount shall be deposited within four weeks from the date of receipt of copy of this order.

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