Allowed

Madhusmita Das v. Pratak Ku.Barik

Orissa HC1 Mar 2019MACA/665/2015

Case brief

AI extract

What is this about?

The High Court clarified that the absence of a driver's licence is not an automatic defence for an insurer. Applying National Insurance Co. Ltd. v. Swaran Singh, the court held the insurer must prove the insured's negligence contributed to the accident. Being unable to prove negligence, the insurer was directed to pay compensation.

What did the court decide?

Compensation to be paid by the insurer; impugned award modified to exonerate the owner.

Madhusmita Das Vs Pratak Ku.Barik — Motor Accident Claims | Orissa HC (2019)

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HIGH COURT OF ORISSA: CUTTACK

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MACA No.665 of 2015

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From the award dated 4.4.2015 passed by the 2^nd Additional District Judge-cum-MACT, Cuttack in MAC Case No.529 of 2009.

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Madhusmita Das and another

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…. Appellants

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Versus

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Pratap Kumar Barik and another …. Respondents For Appellants -- Mr.B.N.Samantaray, Mr.D.Patnaik, Advocates For Respondents -- Mr.A.A.Khan, Advocate (For R.2)

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J U D G M E N T

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PRESENT:

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THE HONOURABLE DR. JUSTICE A.K.RATH

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Date of Hearing & Judgment:01.03.2019

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Dr.A.K.Rath, J. This is a claimants’ appeal against the award dated 4.4.2015 passed by the 2^nd Additional District Judge-cum-MACT, Cuttack in MAC Case No.529 of 2009, whereby and whereunder, the Tribunal has awarded an amount of Rs.3,74,000/- with interest @6% per annum from the date of filing of the claim application and saddled the liability on the owner of the vehicle, since the driver of the offending vehicle did not have a valid and effective driving licence at the time of accident.

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Shorn of unnecessary details, the short facts of the case are that one Champabati Das was travelling in an auto-rickshaw bearing registration no.OR-22C-4915. On 29.7.2009 at about 4.30 P.M. on N.H.5 near Paikirapur Chhak, the auto-rickshaw upturned, as a result of which, she sustained multiple injuries. Thereafter, she was shifted to Chandbali C.H.C. and then to S.C.B. Medical College and Hospital, Cuttack for treatment. While undergoing treatment, she died on 31.7.2009. The matter was reported to Chandbali Police Station, whereafter Chandbali P.S.Case No.72 of 2009 was registered against the driver of the offending vehicle. With this factual scenario, the claimants, daughters of the deceased, filed an application under Section 166 of the M.V.Act before the 2^nd Additional District Judge-cum-MACT, Cuttack claiming compensation of Rs.5,00,000/-. It was stated that the deceased was a sweeper and getting Rs.6,000/- per month.

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The owner of the vehicle was set ex parte. Pursuant to issuance of summons, opposite party no.2, insurer of the vehicle entered appearance and filed written statement denying the assertions made in the claim petition.

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On the inter se pleadings of the parties, the Tribunal struck four issues. To prove the case, the claimants had examined one witness and on their behalf, seven documents had been exhibited. On an analysis of the evidence on record and pleadings, the Tribunal came to hold that due to rash and negligent driving of the driver of the auto rickshaw, the accident took place. The driver of the auto rickshaw did not have a driving licence at the time of

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accident. Held so, it awarded an amount of Rs.3,74,000/- with interest at the rate of 6% per annum and saddled the liability on the owner of the vehicle.

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Heard Mr.B.N.Samantaray and Mr.D.Pattnaik, learned counsel for the appellants and Mr.A.A.Khan, learned counsel for respondent no.2.

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Mr.Samantrary, learned counsel for the appellants submits that Champabati Das was a passenger in the auto rickshaw. Due to rash and negligent driving of the driver, she sustained multiple injuries. While undergoing treatment, she died in the hospital. Merely because the driver of the offending vehicle did not have licence, the insurer is not exonerated from its liability. He placed reliance on a decision of the apex Court in the case of National Insurance Co. Ltd. v. Swaran Singh and others, AIR 2004 SC 1531.

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Per contra, Mr.Khan, learned counsel for respondent no.2 submits that driver of the auto rickshaw did not have a driving licence. The insurer is exonerated from its liability. The Tribunal has rightly saddled the liability on the owner of the vehicle.

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The seminal question that hinges for consideration before this Court as to whether the insurer is exonerated from its liability, if a driver of the offending vehicle had no driving licence at the time of accident ?

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In Swaran Singh, the apex Court made an in-depth analysis and summarized the principles. The apex Court held:

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“105. (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) 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 driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, have 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 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 duly licensed driver or one who was not disqualified to drive at the relevant time.

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(iv) The insurance companies are, 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 wherefore would be on them.

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(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance 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 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 insured 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 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

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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 proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against 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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The irresistible conclusion is that mere absence, fake or invalid driving license 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

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liability towards 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 duly licensed driver or one who was not disqualified to drive at the relevant time.

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In the instant case, the insurer has not adduced any evidence. The insurer rose from the deep slumber and raised the contentions before this Court. The Tribunal fell into patent error of law in saddling liability on the owner of the vehicle.

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In view of the authoritative pronouncement of the apex Court in the case of Swaran Singh, the insurer shall pay the compensation to the claimants. It is open to the insurer to file appropriate application before the Tribunal for recovery of the amount from the owner of the vehicle. The impugned award is modified to the above extent. The appeal is allowed. There shall be no order as to costs.

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…………….……..……

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Dr.A.K.Rath, J.

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Orissa High Court, Cuttack The 1^st March, 2019/CRB

Madhusmita Das v. Pratak Ku.Barik

Case brief

What is this about?

What did the court decide?

Madhusmita Das v. Pratak Ku.Barik

Case brief

What is this about?

What did the court decide?

What the court decided

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