Partly allowed

Smt Vanitha P v. Future Gen India Ins Co. Ltd.

Karnataka HC7 Nov 2024MFA/7925/2022

Case brief

AI extract

What is this about?

Motor accident death claim. The court upheld the Tribunal's compensation of Rs.33,10,700 and its finding saddling liability on the vehicle owner since the driver had no valid licence, but modified the award by directing the insurer to pay with liberty to recover from the owner under the pay-and-recover doctrine.

What did the court decide?

Award modified: insurer directed to deposit Rs.33,10,700 with 6% interest within four weeks, with liberty to recover from owner; Tribunal's apportionment maintained.

Smt Vanitha P Vs Future Gen India Ins Co. Ltd. — Insurance | Karnataka HC (2024)

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NC: 2024:KHC:45374-DB MFA No.7925/2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7^TH DAY OF NOVEMBER, 2024 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.7925/2022 (MV-D)

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BETWEEN:

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SMT. VANITHA .P W/O LATE ANAND K AGED 34 YEARS.

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DAKSHA .A D/O LATE ANAND K AGED 15 YEARS.

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Digitally signed by RUPA V Location: HIGH COURT OF KARNATAKA

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HETHESH GOWDA S/O LATE ANAND K AGED 7 YEARS.

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DEVARAJU S/O KRISHNAPPA AGED 42 YEARS.

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KRISHNAPPA S/O NARAYANAPPA AGED 62 YEARS.

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SINCE APPELLANTS 2 AND 3 ARE MINORS REP. BY THEIR MOTHER AND NATURAL GUARDIAN SMT. VANITHA P.

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ALL ARE R/AT. DAKSHA NILAYA PARAMESHAPPA BUILDING NEAR BUS STOP, LAKSHMIPURA BENGALURU-562123.

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…APPELLANTS

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(BY SRI. PRAKASH M.H. ADV.,)

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AND:

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FUTURE GEN. INDIA INS. CO. LTD., REGIONAL OFFICE, PRASADENA NO.18/1, (OLD NO.125/A) 3RD FLOOR, ASHOKA PILLAR ROAD JAYANAGAR IST BLOCK BENGALURU-560082 REP BY ITS MANAGER.

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SRI. HANUMEGOWDA S/O KARIGOWDA AGE MAJOR, R/AT NO.4 NEAR POOJA STORE MADANAYAKANAHALLI MADAVARA, BENGALURU-562123.

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…RESPONDENTS

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(BY SRI. B.C. SHIVANNE GOWDA, ADV., FOR R1 SRI. HARSHA KUMAR GOWDA, H.R. ADV., FOR R2)

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THIS MFA IS FILED U/S 173(1) OF MV ACT, PRAYING TO CALL FOR RECORDS ON THE FILE OF THE COURT OF SMALL CAUSES AND MOTOR ACCIDENT CLAIMS TRIBUNAL, AT BENGALURU (SCCH-16), IN MVC NO.1458/2019. DIRECT THE RESPONDENT NO.1 TO SATISFY THE AWARD PASSED BY THE TRIBUNAL. MODIFY THE JUDGMENT AND AWARD DATED 19.07.2022 BY ENHANCING THE COMPENSATION SUITABLY IN THE INTEREST OF JUSTICE AND EQUITY.

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

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CORAM: HON'BLE MRS. JUSTICE K.S.MUDAGAL and HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL

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ORAL JUDGMENT

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( PER: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL)

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Challenging the judgment and award in MVC

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No.1458/2019 passed by the Small Causes and MACT at Bengaluru (SCCH-16), claimants have filed this appeal.

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The appellants were the claimants, respondent No.1 in this appeal was respondent No.2 and respondent No.2 herein was respondent No.1 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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Brief facts leading to filing of this appeal are that Sri.Anand K., husband of claimant No.1, father of claimant Nos.2 and 3, brother of claimant No.4 and son of claimant No.5 was proceeding on TVS Jupiter vehicle bearing registration No.KA-52 Q-8547 on the left side of the NICE road near K.G.Srikantapura. At that time, car bearing registration No.KA52 M-9341 driven by its driver came from opposite direction in a rash and negligent manner, dashed the motorcycle ridden by Sri.Anand K. resultantly rider of the motorcycle fell down, sustained grievous injuries and succumbed to the injuries on the spot. It was contended that the deceased was running

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printing press in the name and style of 'Anand Printers', was also doing milk vending business, also working as General Manager at M/s. Royal MD Groups and in all, he was earning Rs.90,000/- p.m. It was further contended that due to his untimely death, the legal heirs have lost the love and affection as well as financial dependency. Hence, they filed claim petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act'), seeking compensation of Rs.1,00,00,000/-.

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Respondents filed written statement denying the negligence of the driver of the car bearing registration No.KA52 M-9341. It was contended that the said car was insured with respondent No.2, the policy was in force as on the date of accident and the driver was having valid and effective driving license. Respondent No.2 denied the averments of age, income and avocation of the deceased. It was contended that the insurance policy issued in favour of respondent No.1 was subject to fulfillment of terms and conditions of the policy. It was further contended that the driver of the offending car was not holding valid and effective driving licence at the time of accident and respondent No.1 knowing fully well that the driver of the car had no valid driving licence, handed over the vehicle

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to him. Hence, the insurer is not liable to indemnify respondent No.1. It was contended that the accident occurred due to the negligence of the rider of the motorcycle and sought for dismissal of the claim petition.

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The Tribunal recorded the evidence of the parties. Claimant No.1 examined herself as PW-1 and got marked Exs.P1 to P20. Respondents examined RW-1 and RW-2 and got marked Exs.R1 to R11. The Tribunal, on appreciation of the oral and documentary evidence, partly allowed the claim petition awarding compensation of Rs.33,10,700/- with interest @ 6% p.a. from the date of petition till realisation. The Tribunal held that the driver of the offending car was not having driving licence for LMV as on the date of accident but was having such driving licence on and from 30.04.2019 only. Hence, directed respondent No.1 to pay the compensation and dismissed the claim petition against respondent No.2. Being aggrieved by the saddling of liability on the owner of the vehicle as well as on the quantum of compensation, the claimants are in appeal.

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Sri.Prakash M.H., learned counsel for the appellants submits that the Tribunal committed grave error in appreciating

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the oral and documentary evidence on record with regard to the liability. It is submitted that Ex.R4 the driving licence of respondent No.2 shows that though the same was issued subsequent to the accident, since 02.01.2003 he had a licence to drive motor vehicle with gear. Hence, it cannot be said that the driver of the offending car was not competent to drive the offending car and saddling the liability on the owner of the car is contrary to the evidence on record. In alternate, he submits that the Tribunal ought to have invoked the doctrine of pay and recover by directing the Insurance Company to pay the compensation amount and recover the same from the owner of the offending car. It is further submitted that the Tribunal has erred in assessing the income of the deceased at Rs.16,300/p.m. and has failed to consider the actual salary of the deceased as he was working as General Manager at M/s. Royal MD Groups as per Ex.P12 at Rs.18,800/- and also failed to consider that in addition, he used to earn income from milk vending business and from Printing press. Hence, he seeks to allow the appeal filed by the claimants.

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Per contra, Sri.B.C.Shivanne Gowda, learned

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counsel for respondent No.1 - Insurance Company supports the impugned judgment and award of the Tribunal and submits

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that the driver of the offending car did not possess valid and effective driving licence as on the date of accident. Ex.R4 clearly indicates that the driver of the offending car obtained the driving licence only after the accident. Hence, the Tribunal has rightly saddled the liability on the owner of the car. It is submitted that the Tribunal, on appreciation of the evidence has rightly assessed the income of the deceased at Rs.16,300/p.m. and awarded just compensation which does not call for any enhancement. Hence, he seeks dismissal of the appeal.

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Considering the rival submissions of the parties and examining the materials on record, the point that arises for consideration is “ Whether the impugned judgment and award of the Tribunal calls for any interference”?

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ANALYSIS

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It is not in dispute that in the road accident that occurred on 30.11.2018, deceased Anand K. sustained grievous injuries and succumbed to those injuries. The wife, children, father and brother of the deceased filed claim petition seeking compensation. The pleadings and evidence (Ex.P11) indicate that the deceased was aged about 38 years at the time of accident. The claimants have pleaded that the deceased was

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working as General Manager at M/s. Royal MD Groups, doing milk vending business and running Anand Printers. In total, he was earning Rs.90,000/- p.m. In support of his income, PW-1 wife of the deceased has produced the income tax returns of the deceased from 2010 to 2012 and 2014 to 2016. However, those income tax returns are much prior to the date of accident and hence, it cannot be the basis to assess the income of the deceased.

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The claimants have produced the registration certificate issued under Karnataka Shops and Commercial Establishment Act, 1961 as Ex.P4, I.D. card of Bangalore Printers' Association, as Ex.P5, letter from Tumkur Co-operative Milk Producers' Societies Union Ltd. as Exs.P7 to P9, the ledger extracts as Ex.P10 and the salary certificate issued by M/s.Royal MD Groups as Ex.P12. On considering the aforesaid exhibits, it would be difficult to assess the income of the deceased based on Exs.P4 to P11 as the claimants did not produce any corroborative evidence like bank statements or the income tax returns of the year 2017-18 and 2018-19. Hence, Exs.P4 to P11 would not help the claimants to prove the income of the deceased.

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The Tribunal, considering Ex.P12 and after

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deducting the permissible deductions, has rightly assessed the income of the deceased at Rs.16,300/- p.m. which does not call for any modification. The Tribunal, considering the age and avocation of the deceased has added future prospects at 40%, rightly applied 15 multiplier, deducted 1/4^th towards the personal and living expenses of the deceased which also does not call for any interference. The Tribunal has awarded consortium to wife, children, mother and father, loss of estate and funeral expenses in consonance with the law laid down by the Hon'ble Supreme Court in the case of National Insurance Company Limited Vs. Pranay Sethi & Others¹ .

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Insofar as liability is concerned, the Tribunal has recorded detailed finding at paragraph 23 of the impugned judgment and has come to the conclusion that the driver of the offending car bearing registration No.KA-52 M-9341 was not having valid and effective driving licence as on the date of accident. Admittedly, the jurisdictional police, on investigation filed charge sheet against driver of the offending car for the offences punishable under Sections 279, 304A of the Indian

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1 2017 (16) SCC 680

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Penal Code, 1860 and Section 3(1), 181 of the Act. The pleadings and evidence clearly indicate that as on the date of accident, the driver of the offending car was not having valid and effective driving licence. Hence, the Tribunal has rightly saddled the liability on respondent No.1 - owner of the vehicle. However, the Tribunal has erred in not invoking the doctrine of pay and recover as held by the Hon'ble Supreme Court in the case of National Insurance Co. Ltd. Vs. Swaran Singh² . The Hon'ble Supreme Court has reiterated the enunciation of law in the case of Shamanna and another Vs. Divisional Manager, Oriental Insurance Co. Ltd. and others³ . It would be useful to extract relevant paragraphs of Shamanna judgment referred to supra for ready reference.

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"5. In the case of third-party risks, as per the decision in National Insurance Co. Ltd. v. Swaran Singh [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] , the insurer had to indemnify the compensation amount payable to the third-party and the insurance company may recover the same from the insured. Doctrine of “pay and recover” was considered by the Supreme Court in Swaran Singh case [National

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2 (2004) 3 SCC 297

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3 (2018) 9 SCC 650

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11 -

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Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] wherein the Supreme Court examined the liability of the insurance company in cases of breach of policy condition due to disqualifications of the driver or invalid driving licence of the driver and held that in case of thirdparty risks, the insurer has to indemnify the compensation amount to the third-party and the insurance company may recover the same from the insured. Elaborately considering the insurer's contractual liability as well as statutory liability vis-àvis the claims of third parties, the Supreme Court issued detailed guidelines as to how and in what circumstances, “pay and recover” can be ordered. In para 110, the Supreme Court summarised its conclusions as under : (SCC pp. 341-42)

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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 third-party 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

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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 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 third-party 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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As per the decision in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] , onus is always upon the insurance company to prove that the driver had no valid driving licence and that there was breach of policy conditions. Where the driver did not possess the valid driving licence and there are breach of policy conditions, “pay and recover” can be ordered in case of third-party risks. The Tribunal is required to consider

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“as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver … does not fulfil the requirements of law or not will have to be determined in each case”.

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Keeping in mind the enunciation of law laid down by the Hon'ble Supreme Court referred supra, we are of the considered view that the Tribunal is justified in saddling the primary liability on respondent No.1 - owner of the vehicle.

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However, it ought to have directed respondent No.2 - Insurance Company to pay the compensation and recover the same from the owner of the vehicle in question. Considering the settled position of law, we uphold the saddling of liability on the owner of the vehicle by directing respondent No.2 - insurer

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to pay the compensation amount and recover the same from the owner of the vehicle.

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For the aforementioned reasons, we pass the

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following:

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ORDER

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The appeal is partly allowed. The impugned award of the Tribunal is modified as follows:

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(i) The claimants are entitled to compensation of Rs.33,10,700/- with interest thereon at 6% p.a. from the date of petition till its realization.

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(ii) Respondent No.1 is primarily liable to pay the award amount. However, respondent No.2/insurer shall deposit the compensation before the Tribunal within four weeks from the date of receipt of copy of this order with liberty to recover the same from respondent No.1 by executing this order.

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