Civil Miscellaneous Appeal dismissing insurer's challenge to Motor Accident Claims Tribunal order. Court held insurer must pay compensation first and recover from owner despite driver lacking license.
Civil Miscellaneous Appeal dismissed; no order as to costs.
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THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR
M.A.C.M.A.No. 236 of 2007
JUDGMENT:-
This Civil Miscellaneous Appeal is preferred by the New India Assurance Company Limited under Section 173 of the Motor Vehicles Act, 1988 (for short “the Act”) questioning the order dated 07.11.2005 passed by the Chairman, Motor Accident Claims Tribunal-cum-XXIII Additional Chief Judge at Nampally, Hyderabad (for short “the Tribunal”) in O.P.No.333 of 2002.
For the sake of convenience, the parties will hereinafter be referred to as arrayed in the main O.P.
The claimants, who are the wife and minor children of one P. Chandrasekhar, filed a petition under Sections 166 and 163-A of the Act claiming compensation of Rs.30,00,000/- for the death of said P. Chandrasekhar in a road accident that took place on 25.06.2001. It is stated that on the fateful day at about 6.30 p.m. while the deceased was proceeding on a LML scooter bearing registration No.AP 11C 2764 and when he reached near SBI Park, a Hero Honda bearing registration No.AP 28E 1958 driven by its driver in a rash and negligent manner came from behind and dashed against the scooter of the deceased. As a result of which, the deceased fell down, sustained severe head injury, fracture of right hand wrist and other injuries all over the body. Immediately thereafter, he was shifted to Osmania General Hospital where he succumbed to the injuries. In respect of the above incident, a case in crime No.168 of 2001 was registered for an offence punishable under Section 304-A IPC. It was stated that the deceased was working as a veena instrumentalist and Grade-II artist in All India Radio and earning Rs.15,218/- per month at the time of the accident. Apart from that, he was also giving tuitions and programmes and earning Rs.5,000/- per month. Since the accident took place due
to rash and negligent driving by the driver of the crime vehicle owned by the 1st respondent and insured with the 2nd respondent, a claim petition was filed making both the respondents jointly and severally liable to pay the compensation.
The 1st respondent remained ex parte, while the insurer of the crime vehicle filed their counter denying the manner in which the accident took place and also their liability to pay the compensation. According to them, the driver of the crime vehicle was not having a valid licence to drive the vehicle at the time of the accident.
On the basis of the above pleadings, the Tribunal framed the following issues for consideration:
3) To what relief?
In support of their claim, the claimants examined P.Ws.1 to 4 and got marked Exs.A.1 to A.31. On behalf of the respondents, R.W.1 was examined and Ex.B.1, a copy of insurance policy, was marked.
After analyzing the evidence on record, the Tribunal awarded a sum of Rs.13,90,256/- as compensation and directed the 2nd respondent to first pay the amount to the claimants and then recover the same from the 1st respondent. Challenging the same, the 2nd respondent preferred this civil miscellaneous appeal.
The learned counsel for the 2nd respondent/Insurance
Company mainly submits that the Insurance Company is not liable to indemnify the owner of the vehicle, since the vehicle was driven by a boy, who was aged about 15 years at the time of the accident and was not qualified either to obtain any licence or drive the vehicle.
Per contra, the learned counsel for the claimants submits that as the act of the owner of the vehicle was in violation of the conditions of policy, there is nothing wrong in directing the Insurance Company to pay the money and recover the same from the owner.
Though the present appeal is filed questioning the order of the Tribunal, the learned counsel for the Insurance Company did not dispute the manner in which the accident took place. His main argument is with regard to the liability of the Insurance Company to pay the compensation and also the quantum of compensation to be paid.
The material available on record i.e., Ex.A.7 reveal that the date of birth of the deceased was 12.05.1958. The driving licence of the deceased, which is placed on record as Ex.A.10, also corroborates the same. The accident occurred on 25.06.2001. Therefore, the age of the deceased at the time of the accident was 42 years. The evidence of P.W.1 coupled with Ex.A.6 clearly establish that the deceased was working as Grade II Veena Instrumentalist in All India Radio and earning Rs.15,218/- per month. Though the issuance of Ex.A.6 salary certificate of the deceased was not established by examining the person who issued the said certificate, the Tribunal, however, took the same into consideration and fixed the income of the deceased at Rs.9,100/- per month. P.Ws.3 and 4, who were the students of the deceased, were examined to speak that the deceased was giving tuitions to them. In their evidence P.Ws.3 and 4 stated that they were paying about Rs.1,500/- per month each to the deceased as tuition fee. The claimants also contended that the deceased was giving
programmes in national and international level, as he was a renowned veena artist. In support of the same, they filed photographs taken by the deceased with renowned persons vide Ex.A.9 and Exs.A.11 to A.28. Exs.A.9 and A.11 to A.28 also reveal that the father of the deceased was also a veena vidhwan and under his able guidance, the deceased started giving programmes from the age of 16 years as a child prodigy. As per Exs.A.18 to A.21, the deceased attended a cultural programme in USA from 01.07.1996 to 31.08.1996. Exs.A.22 to A.29 show payment of honorarium. Therefore, taking into consideration all these aspects, the Tribunal took the monthly additional income of the deceased at Rs.3,000/-. The same, in my view, warrants no interference. Since the age of the deceased was 42 years at the time of the accident, the multiplier that was adopted for calculation of loss of dependency was “14”. The said fact is not seriously disputed by the learned counsel for the Insurance Company. Taking the income of the deceased at Rs.12,100/- per month, after deducting 1/3rd towards living and personal expenses and applying the multiplier “14”, the Tribunal awarded a sum of Rs.13,55,256/towards loss of dependency, apart from Rs.15,000/- towards loss of consortium, Rs.15,000/- towards loss of estate and Rs.5,000/- towards transportation and funeral expenses, making the total compensation to Rs.13,90,256/-.
As stated earlier, the main ground urged by the learned counsel for the Insurance Company is that the driver of the vehicle was not having a valid licence to drive the vehicle at the time of the accident. According to him, the driver of the vehicle was a minor at the time of the accident and as such, the Insurance Company is not liable to indemnify the owner. The respondents pressed into service the evidence of R.W.1 to substantiate their plea. During crossexamination, R.W.1 admitted that the policy issued by them was a third party insurance policy and was in existence at the time of the
accident. He also admitted that the driver of the vehicle was the son of the policy holder and he was driving the vehicle with the permission of his father. Therefore, the question that arises for consideration is whether the Insurance Company is liable to pay compensation.
In the instant case, the driver of the vehicle was aged about 15 years as per Ex.A.2 and was not having any licence to drive the vehicle. It is also established that he was driving the vehicle with the knowledge of the owner. The Insurance Company was able to establish that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling conditions of the policy. Therefore, it is clear that the owner of the vehicle has violated the conditions of the policy.
In NATIONAL INSURANCE COMPANY LIMITED V.
SWARAN SINGH AND OTHERS[1] , the Apex Court clearly laid down that the liability of the Insurance Company vis-à-vis the owner would depend upon several factors. The owner would be liable for payment of compensation in a case where the driver was not having a licence at all. It was the obligation on the part of the owner to take adequate care to see that the driver had an appropriate licence to drive the vehicle.
In paragraph 10 of its judgment, the Apex Court also held as follows :
“Coming to the contention of the learned counsel for respondent Nos.1 to 5 that even in the absence of any liability on the insurance company, the responsibility is still on the latter to pay the amount to the claimants and recover the same from respondent No.6, in Swaran Singh (supra) a three Judge Bench of the Apex Court has dealt with this aspect with reference to the case law holding the field on this issue. The Supreme court made reference to its various earlier judgments including those in British India General Insurance Co., Ltd., v. Captain Itbar Singh and others (1960) 1 SCR 168), BIG Insurance Co., Ltd., v. Captain Itbar Singh and others (AIR 1959 SC 1331), Skandia Insurance Company Ltd., v. Kokilaben Chandevadan and others (1987) 2 SCC 654), Sohan Lal Passi v. P.Sesh Reddy
and others (1996) 5 SCC 21), Kashiram Yadav and another v. Oriental Fire and General Insurance Co., Ltd., and others (1989) 4 SCC 128) and held that the liability of the insurance company to satisfy the decree at the first instance and to recover the awarded amount from the owner or the driver thereof as has been holding the field for a long time.”
The Apex Court in Kusum Lata v. Satbi r[2] also observed as under:
“In respect of the dispute about licence, the Tribunal has held and, in our view rightly, that the insurance company has to pay and then may recover it from the owner of the vehicle. This Court is affirming that direction in view of the principles laid down by a three-Judge Bench of this Court in the case of National Insurance Company Limited v. Swaran Singh and others.”
In view of the judgments referred to above, it is clear that where there is a violation of conditions of the policy, the Insurance Company cannot escape from the liability of paying compensation. Even in the instant case, the owner of the crime vehicle has violated the conditions of policy by allowing his son to drive the vehicle though he was not having a licence to drive any vehicle. Therefore, the finding of the Tribunal in directing the Insurance Company to pay the compensation at the first instance and recover the same from the owner needs no interference.
Accordingly, the Civil Miscellaneous Appeal is dismissed. There shall be no order as to costs.
Consequently, miscellaneous petitions, if any, pending in the appeal shall stand closed.
_________________ C. PRAVEEN KUMAR, J 15th September, 2014 cbs
THE HON’BLE SRI JUSTICE C. PRAVEEN KUMAR
M.A.C.M.A.No. 236 of 2007
15th September, 2014
cbs
[1] (2004) 3 SCC 297
[2] (2011)3 SCC 646
2 issues framed by the court
Whether the insurance company is liable to pay compensation when the vehicle was driven by an unlicensed minor with the owner's permission.
Whether the insurer can be directed to pay compensation first and recover the same from the owner in case of policy violation.
Colour shows how this judgement treated each authority
National Insurance Company Limited v. Swaran Singh and othersExplained¶24
(2004) 3 SCC 297 · Who else cites this
British India General Insurance Co., Ltd., v. Captain Itbar Singh and othersReferred¶26
(1960) 1 SCR 168 · Who else cites this
BIG Insurance Co., Ltd., v. Captain Itbar Singh and othersReferred¶26
(AIR 1959 SC 1331) · Who else cites this
Skandia Insurance Company Ltd., v. Kokilaben Chandevadan and othersReferred¶26
(1987) 2 SCC 654 · Who else cites this
Sohan Lal Passi v. P.Sesh Reddy and othersReferred¶26
(1996) 5 SCC 21 · Who else cites this
Kashiram Yadav and another v. Oriental Fire and General Insurance Co., Ltd.,Referred¶26
(1989) 4 SCC 128 · Who else cites this
Kusum Lata v. SatbirApplied¶24
(2011)3 SCC 646 · Who else cites this
2 provisions across 1 enactments
New India Assurance Company Limited
State of Telangana (Respondent 1)
Orient Insurance Company (Respondent 2)
C. Praveen Kumar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
