Oral Judgment

1. The present Appeal arises from the judgment and award passed in MACP No.527 of 2005. The judgment and award is dated 17.04.2005 and has been passed by the learned Motor Accident Claims Tribunal (Main), Bhavnagar.

2. By way of the impugned judgment and award, the Tribunal has been pleased to award a sum of Rs.5,55,000/- with 9% rate of interest from the date of filing of the claim petition till realization,. from the opponents, jointly and severally.

3. At this juncture, the accident in question may be examined. It appears that on 21.07.2005, at about 7:00 am, minor Shilpa, the victim herein, (hereinafter be referred as "the deceased") was going to attend a call of nature, when a truck belonging to opponent no.1, being driven by one Hanifbhai alias Jokham alias Tako, came from the opposite direction, driving it in wrong side and dashed with the minor. As a result of the accident, the minor deceased lost her life.

4. Whilst preferring the claim petition, it appears that the father of the deceased did not deem it appropriate to implead the driver. Apparently only the owner of the vehicle and the Insurance Company were impleaded as opponent nos.1 and 2, respectively.

5. In the present First Appeal, the appellant - Insurance Company is aggrieved by the fact that it has not been exonerated though the Tribunal concluded that the driver did not possess requisite valid and effective driving license, and therefore, the appellant has preferred the present First Appeal.

6. Heard learned advocates for the respective parties.

7. Learned advocate for the appellant Mr. H G Mazmudar has submitted before this Court that on perusal of the document at Exhibits-48,49 and 50, it is clear that the driver was holding license in the following manner:

          1. He had held Light Motor Vehicle (Non-Transport) License from the period of 07.05.1982 till 05.04.2010.

          2. Medium Goods Vehicle and Heavy Goods Vehicle License from the period of 2001 to 11.10.2004.

8. Thereafter, as per the document Exhibit-49, the driver had renewed the said license of Medium Goods Vehicle and Heavy Goods Vehicle for the period of 25.07.2005 till 24.07.2008 and thereafter, again, from 25.07.2008 to 24.07.2011. It was thus submitted that as on the date of the accident i.e., on 21.07.2005, the driver did not hold any license in respect of the Medium Goods Vehicle or Heavy Goods Vehicle. It was further submitted that yet, the driver was driving the concerned vehicle on the fateful day and had caused the accident, resulting in death of minor Shilpa. It was thus urged that this is a case where the Insurance Company should have been exonerated for the reason of breach of policy conditions. He has also submitted that the Tribunal has relied on the judgment in the case of National Insurance Company Limited Vs. Sajjan Singh reported at 2004 ACJ 1 SC. It was submitted that thereafter, the Tribunal has also noticed the judgment in the case of Oriental Insurance Company Limited Vs. Zaharulnisha and Ors. reported at AIR 2008 SC 2018, wherein the Hon'ble Supreme Court held that holding the valid and effective driving license is one of the conditions in the contract of the Insurance Policy and that driving of the vehicle without driving license is an offence.

9. It was submitted that the Tribunal has erred in holding the Insurance Company liable to indemnify the insured. It was thus submitted that looking to the peculiar facts and circumstances of the case, the appellant - Insurance Company may kindly be exonerated in the present First Appeal.

10. Learned advocate appearing for the respondent No.1 has submitted that in the present case, neither the owner nor the driver have been examined by the Insurance Company. It was submitted that, therefore, in terms of the judgment in the case of First Appeal No.2858 of 2014 dated 29.09.2014, it was not proved by Insurance Company that the owner had taken proper care to verify the licence of the driver and, therefore, the Insurance Company cannot be absolved from the liability to pay the compensation as contended by the appellant. It was also further submitted that even if it was assumed that the Insurance Company has succeeded in proving that the driver did not have requisite licence, in terms of judgement in the case of Pappu vs. Vinod Kumar Lamba, 2018(0) AIJEL-SC 61544, the claimant cannot be prejudiced and in such circumstances, this Court may order pay and recover ordering the Insurance Company to first pay the claim amount to the claimants and, thereafter, recover it from the owner. It was, thus, submitted that in any case in either of the eventualities, the claimants may not be prejudiced, as they have not contributed to cause the accident.

11. It may be noted that, though the Rule has been served upon respondent no.2, who is the owner of the vehicle, he has not caused any appearance in the present First Appeal.

12. In the rejoinder arguments of the learned advocate for the appellant has reiterated that the Insurance Company has conclusively proved that at the time of accident, the driver did not have requisite licence, therefore, in view of the complete breach by the Insurance Company, the Insurance Company may kindly be exonerated. He, therefore, urged that the Court may please interfere with the judgement of the Tribunal to the aforesaid extent and in the present case, only the owner may be held liable.

13. Having heard learned advocates for the parties, the Court proceedings to decide the present appeal in terms of hearing hereinafter.

14. The point of determination that arises for determination by this Court in the present case is as to whether the Insurance Company could be held liable in the present case, if the driver is proved to not have valid and effective license? If so, to what extent?

15. At the outset, it may be noted that undisputedly the original claimants have not preferred any appeal against the impugned judgement and award. It may also be noted that during the course of arguments, learned advocate for the claimant has not disputed the contents of Paragraph No.17 of the impugned judgement, which reads as follows: -

          "17. From the oral as well as documentary evidence produced by the Opponents at Exh.48, 49 &50, it appears that the driver of Opponent No.1 i.e. Hanifbhai U. Mira was holding a driving license for LMV NT from 07.05.82 to 24.7.2011, which was also subsequently renewed even for Transport Vehicle but on the date of accident i.e. on 27.7.2005, he was not holding driving license to drive Transport Vehicle. Therefore, it is established from the above facts and documents that driver of opponent No.1. was not holding a valid driving licence to drive transport vehicle and accordingly, the breach is established."

16. Furthermore, the respondent no.2 has not caused any appearance and hence, the question of him disputing the aforesaid finding does not arise.

17. There is slight discrepancy wherein Paragraph No.10 of the Claim Petition wherein, the claimants have pleaded that it was the opponent, who was driving the concerned vehicle. However, from the perusal of the Paragraph No. (10-A) and (10-B) of the claim petition, it is clear that the driver of the concerned vehicle was one Hanif alias Jokham alias Tako and as per Paragraph no.(10-B) of the said claim petition, the owner was Yasinbhai Musabhai Radhanpara, who was original Opponent No.1 in the said claim petition.

18. Indeed, the Insurance Company, by application Exhibit 44 had prayed before the Tribunal that as they need to establish if the concerned driver - Hanifbhai the original opponent No.1 had valid licence or not needs to be proved and, that therefore, the RTO Officer, Bhavnagar may kindly be permitted to be summoned as a witness. The witness was subsequently examined by the Tribunal at deposition Exhibit 47. On perusal of the said deposition along with record of the Tribunal, it is clear that the vehicle involved in the present case was a Heavy Goods Vehicle (HGV), whereas the driver had the following licences since 1982.

          (A) Licence to drive Light Motor Vehicle (LMV) from 07.05.1982 till April, 2010.

          (B) Licence to drive HGV from 12.10.2001 till 11.10.2004.

          (C) Licence to driver HGV from 25.07.2005 till 24.07.2008.

19. Naturally, the date of accident was 21.07.2005 and it is clear that on the said date of accident, the driver did not possess requisite licence to driver HGV. This is not a case where the owner has been misled to believe that the driver, who is having a requisite licence and for the lack of further verification of the owner, he could not realize that the driver was committing a breach of the policy condition of the Insurance Company.

20. Furthermore, the Hon'ble Supreme Court in Zaharulnisha and Ors. (supra) has held that where a third party, injured, in an accident, is entitled to amount of compensation granted by the MACT, although the driver of the vehicle, at the relevant point in time, might not have the valid and effective driving license, but the claimant would be entitled to the compensation from the owner and the driver. The Hon'ble Supreme Court observed that where the insurers, relying upon the provisions of violation of law by the assured, take an exception to pay the assured or a third party, they must prove a willful violation of the law by the assured. In some cases, violation of criminal law, particularly violation of the provisions of the MV Act, may result in absolving the insurers but, the same may not necessarily hold good in the case of a third party. In any event, the exception applies only to acts done intentionally or "so recklessly as to denote that the assured did not care what the consequences of his act might be".

21. However, on perusal of the judgment in Pappu (supra), it appears that in that case, the owner had filed a written statement stating that the vehicle at material time was driven by an authorized person having valid driving licence. However, in the said written statement, the owner did not name that person. Thus, the Hon'ble Apex Court was pleased to hold that without disclosing the name of the driver in written statement or producing any evidence to substantiate the fact that copy of driving licence produced in support of the person who in fact was authorised to driver the offending vehicle at that relevant time, the owner of the vehicle cannot be said to have extricated himself from his liability. However, to subserve the ends of justice, the Apex Court was pleased to order pay and recover order, i.e. the Insurance Company to first pay the claimants and thereafter to recover the said amount from the owner of the vehicle to meet the ends of justice. On the basis of the said judgement, subsequently, this Court in the case of United India Insurance Company Limited vs. Vijay Narayan Apsbaran Ray, 2019(0) AIJEL-HC 241719, was pleased to conclude that the driver of the vehicle involved in the accident was not having a valid licence to drive the Heavy Goods Vehicle. Rather, he was only holding a licence to drive a Light Motor Vehicle or Medium Motor Vehicle as per the driving licence produced at Exh.51 to 53 on record. In the said circumstances, the Court held that in view of the decision of the Apex Court in the case of Pappu (supra) the Insurance Company was directed to first pay the amount of the compensation to the claimants and, thereafter, recover the same from the driver and owner of the offending vehicle by filing mere execution proceedings of the award without filing any other suit against the driver or owner of the offending vehicle.

22. The Tribunal, it may be noted, has stated the following paragraph No.21 to hold the appellant Insurance Company liable. The said Paragraph No.21 of the impugned judgement is quoted hereinbelow for the ease of reference:-

          "21.From the above ratios, it becomes clear that the liability of the insurer to satisfy the decree passed in favour of a third party is statutory and 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. As discussed above driver Hanifbhai was holding driving license to drive LMV NT from 7.5.1982 to 5.4.2010 and to drive MGV & HGV Transport license from 12.10.2001 to 11.10.2004. Therefore, this is not a case of no driving license at all." Indeed, the Tribunal is right when it states that mere absence, vague or invalid driving licence or disqualification of a driver for driving at the relevant point in time are not in themselves defence available to the insurer against either the insured or the third parties. The said quote is borrowed verbatim from the judgement in the case of National Insurance Company Ltd. vs. Swaran Singh , 2004 ACJ 1. However, in Swaran Singh (supra) the very paragraph further states that to avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and had failed to exercise reasonable care in the matter of fulfilling the condition of policy regarding use of vehicle by duly licenced driver for one, who was not disqualified to drive at the relevant time. It is clear that the driver did not have licence at the relevant period, as discussed in foregoing portion of this judgement. However, it appears that the owner did not take sufficient care to examine the licence that the driver was holding at the relevant point in time. Moreover, it appears from the perusal of the R & P that the owner of the vehicle original opponent No.1 had not even filed the written statement, though he was served. This has been noted categorically under the impugned judgement at Paragraph No.3 of the impugned judgment, wherein it is stated that Opponent No.1 had appeared through his advocate, but had not filed a written statement. Thus, the basic assertion of fact that the owner had not committed any breach of the policy condition and had examined the licence of the driver at the relevant point in time before handing over the vehicle to such driver was not made. This makes the facts such that ratio of Pappu (supra) can be applied. In absence of the concerned Opponent No.1 filing a written statement, the appellant Insurance Company had examined RTO officer who had enlightened the Tribunal about the nature of licences that the driver of the vehicle involved was holding which is also apparent from Paragraph no.17 of the impugned judgement. In the circumstances, it cannot be stated that at the relevant point of time, the driver had valid and effective licence.

23. In view of the foregoing, this Court in compliance of the aforesaid decisions of the Hon'ble Apex Court, more particulary, Pappu (supra), holds that the Insurance Company shall first pay to the claimants and thereafter be at liberty to recover the amount of compensation from the owner, who has been impleaded in the original proceedings at Opponent No.1 and in the present appeal at Respondent No.2. Insofar as, the driver is concerned, the Insurance Company may take steps for recovery against him, however, after filing and succeeding in appropriate proceedings before the competent forum.

24. The impugned judgement and award stands modified to the aforesaid extent. Rest of the judgement shall remain unaltered.

25. Moreover, in view of the orders dated 10.08.2015 and 05.10.2015, indicating that the entire award amount has been deposited before the Tribunal by the appellant, it is ordered that the amount to the extent that has not been disbursed to the original claimants be forthwith disbursed in accordance with law.

26. The appeal stands disposed of in aforesaid terms.

27. The record and proceedings be sent back forthwith to the Tribunal.