Case: National Insurance Company Limited Vs. Gonti Eiiza David & Others

V.V. VAZE, J.Truck No. ATY 2996 belonging to Karnataka Rural Water Development Company Private Limited (Company) of Bangalore, was proceeding from Jalgaon towards Chalisgaon on 3rd April, 1979 along the State Highway, carrying some drilling equipment and accessories as well as the company servants. One John Buryan David who was employed by the Company for its drilling operations was one of the passengers of the truck which was being driven by Sadanand Karbali Kamble, another employee of the Company. As a result of an accident, the truck turned tutile and John Buryan who received the impact of heavy drilling equipment died on the spot. The parents of the deceased John Buryan applied to the Motor Accidents Claims Tribunal for Jalgaon District at Jalgaon for compensation impleading the company and the National Insurance Company Ltd. of Hyderabad, (insurer) with whim the truck was insured, as the opponents. The Tribunal awarded damages to the tune of Rs. 27,500/- in favour of the petitioners against the opponents and they were made liable jointly and separately. The Company did not prefer an appeal but the Insurer challenges the award in this appeal on two legal grounds.2. In the first place, the Insurer places reliance on section 96(2)(b)(ii) of the Motor Vehicles Act, 1939, which makes it permissible to plead and prove that a condition excluding driving by a named persons or by any person who is not duly licensed or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification, can be a defence to an action against the Insurer. According to the Insurer the driver of the vehicle did not hold a valid driving licence at the relevant time and hence they are absolved of any liability to pay the insurance amount, in view of the clarification appearing in the Schedule to the Insurance Policy to the effect that the person driving must hold a valid driving licence at the time of the accident or must have held a permanent driving licence other than the learners licence and was not disqualified from holding or obtaining such a licence.3. This plea was canvassed before the Tribunal which held that the initial burden is on the insurer to prove that the driver did not hold a valid driving licence at the time of the accident.4. Shri Murthy, the learned Counsel for the Company, has placed reliance on the decision in (N. Palaniswami v. Raniswamy and others)1, 1981 A.C.J. 115, in which a similar plea regarding placing of the burden on the Insurance Company to prove that the driver did not have a valid licence at the relevant time, was negatived by the Division Bench of the Madras High Court. It appears to us that the facts of the N. Palaniswamys case can easily be distinguished from those of the present case. In N. Palaniswamys case the appellants had not even disclosed the name of the driver or the address of the driver, and hence, the Court found that the Insurance Company had no means of verification whether the driver has valid licence or not. In the present case, the Company had made no secret about the identity of the person who was driving the vehicle, and hence, it was obligatory on the part of the Insurer to do their best to ferret the truth from the Company (sic) by asking them to produce the relevant record regarding the qualifications of the driver appointed by them or to serve a set of interrogatories for eliciting the above information. We would not wish to be thought that we expect the Insurer to see through the entire records of the Motor Vehicles Department to prove that the driver of the vehicle did not hold a licence at the time of the accident or at any time before. But the least the Insurer could have done is to cross-examine Police sub-Inspector Bhagwan who deposed about the prosecution of the driver for rash driving and bring it on record that the driver is also being prosecuted for driving without a valid licence.5. Not that the Insurers travails would have ended with such an admission from the Police Sub-Inspector, because, as the expression had held a licence shows his liability persists to cover the case of a once licensed driver who forgot to renew his licence. A driver would none-the-less, remain a driver even though his licence had expired a few days before unless he had been disqualified from obtaining a fresh licence. The legislature in its wisdom has extended an umbrella protection to the victim or those claiming under him even in a case of an unlicensed driver, provided he had held a valid licence some time in his life in the remote past.6. In this view which we are taking, we are fortified by the observations of the Karnataka High Court in (S. Sanjiva Shetty v. Anantha and others)2, A.I.R. 1976 Karnataka 146, which places the onus on the Insurer to establish the allegation that the vehicle was driven by a person not duly licensed.7. The learned Counsel for the Insurer next argues that under the terms of the policy read with the first proviso to sub-section (1) of section 95 of Motor Vehicles Act, the liability of the Insurer will be limited to that arising under the Workmans Compensation Act, 1923. As the workman was drawing monthly wages of Rs. 300/- so, the argument proceeds, the maximum that the third party can recover from him, if recovery be at all ordered, will be the amount of Rs. 18,000/- in view of Schedule IV to the Workmens Compensation Act.8. The first proviso to sub-section (1) of section 95 of Motor Vehicles Act reads :Provided that a policy shall not be required :---(i) to cover liability in respect of the death arising out of and in the course of his employment, of the employee of a person insured by the policy or in respect of bodily injury sustained by such an employee arising out of and in the course of his employment other than a liability arising under the Workmens Compensation Act, 1923, in respect of the death of, or bodily injury to, any such employee---(a) engaged in driving the vehicle, or(b) if it is a public service vehicle, engaged as a conductor of the vehicle or in examining tickets in the vehicles, or(c) if it is a goods vehicle, being carried in the vehicle.9. Clause (b) of the proviso of Article 1 of section II of the Policy Document reads :Except so far as is necessary to meet the requirements of section 95 of the Motor Vehicles Act, 1939 the Insurer shall not be liable in respect of death of or bodily injury to the person in the employment of the insured arising out of and in the course of such employment.10. The learned Counsel for the Insurer relies on (Venkataramma and another v. Abdul Munaf Sahib and others)3, 1971 A.C.J. 77 which has been followed in the (Orissa Co-operative Insurance Society Ltd. v. Sarat Chandra Champati and another)4, 1975 A.C.J. 196, the (General Assurance Society Ltd. v. Jaya Lakshmi Ammal and others)5, 1975 A.C.J. 159 and (New India Assurance Co. Ltd., Anantapur v. Kamaparaju Sunkamma and others)6, 1981 A.C.J. 441, in support of his proposition. On the other hand, the learned Counsel for the opponents placed reliance on (Oriental Fire &General Insurance Company Ltd. and another v. Ram Sunder Dubey and others)7, A.I.R. 1982 Allahabad 198, which is a judgment of a Division Bench to traverse the argument.11. Sub-section (2) of section 95 of the Motor Vehicles Act reads : "(2) Subject to the proviso to sub-section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely :---a) Where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmens Compensation Act, 1923 in respect of the death of, or bodily injury to, employees (other than the driver), not exceeding six in number, being carried in the vehicle.12. The cleavage of judicial opinion in this regard can be attributed to the difficulty in co-relating the language of the proviso to sub-section (1) of section 95 with that in sub-section (2) of that section. The former seems to tell the insurer and the owner : "as regards third party risks, it will be enough compliance of the statute, if you take out a policy which will cover the liability under the Workmens Compensation Act." Sub-section (2) on the other hand gives a confusing mandate : "there is an outer limit of one lac of rupees (sic) as respects the liability incurred as a result of an accident but that liability will include a liability arising under the Workmens Compensation Act also. The use of an inclusive definition in drafting sub-section (2) seems to suggest that the liability incurred in respect of an accident would embrace not only the one arising under the Workmens Compensation Act but also something more. Needless to say, that other species of liability would be the one arising under common law of tort.13. The only way to resolve the ambiguity would be as pointed out by the Supreme Court in (Motor Owner Insurance Co. Ltd. v. Jadavji Keshavji Modi and others)8, 1981 A.C.J. 507 to apply the touch stone that the purpose of law is to alleviate, not augment the sufferings of the people. Undoubtedly, an aggrieved employee is entitled under section 110-AA of Motor Vehicles Act to exercise his option regarding the forums which he can approach to prefer his claim for compensation. The factors to be taken into consideration in deciding his claim under the two Acts would be different. A Tribunal would apply the principles of strict liability circumscribed by the Workmens Compensation Act while, if the aggrieved chooses to move the Motor Vehicles Tribunal, it would go by the principles of tort in determining his case. The quantum of compensation under the Workmens Compensation Act is gratified in the schedule itself. But the quantum of damages under common law of tort is subject to determination by the Tribunal on the basis of well-settled principles. The Workmens Compensation Act offers no leeway in the matter of quantification of damages the process becomes mechanical once the pay packet of the claimant is known. The proof of damages in a common law action before a Tribunal which is generally presided over by a Senior Judicial Officer may throw open a number of issue the burden of proving which would lie on the claimant. In this option of forum shopping-if the workman has chosen to undertake the responsibility of discharching the onerous burden imposed upon him by tort law, it follows that he should get the benefit of the expression including the liabilities, if any, arising under the Workmens Compensation Act, 1923 occurring in Clause (a) of sub-section (2) of section 95 of Motor Vehicles Act which implies that insurer is liable for common law damages also and not only liabilities arising under the Workmens Compensation Act.

Decision:
0[ds]It appears to us that the facts of the N. Palaniswamys case can easily be distinguished from those of the present case. In N. Palaniswamys case the appellants had not even disclosed the name of the driver or the address of the driver, and hence, the Court found that the Insurance Company had no means of verification whether the driver has valid licence or not. In the present case, the Company had made no secret about the identity of the person who was driving the vehicle, and hence, it was obligatory on the part of the Insurer to do their best to ferret the truth from the Company (sic) by asking them to produce the relevant record regarding the qualifications of the driver appointed by them or to serve a set of interrogatories for eliciting the above information. We would not wish to be thought that we expect the Insurer to see through the entire records of the Motor Vehicles Department to prove that the driver of the vehicle did not hold a licence at the time of the accident or at any time before. But the least the Insurer could have done is toor Bhagwan who deposed about the prosecution of the driver for rash driving and bring it on record that the driver is also being prosecuted for driving without a valid licence.5. Not that the Insurers travails would have ended with such an admission from the Policebecause, as the expression had held a licence shows his liability persists to cover the case of a once licensed driver who forgot to renew his licence. A driver wouldremain a driver even though his licence had expired a few days before unless he had been disqualified from obtaining a fresh licence. The legislature in its wisdom has extended an umbrella protection to the victim or those claiming under him even in a case of an unlicensed driver, provided he had held a valid licence some time in his life in the remote past.6. In this view which we are taking, we are fortified by the observations of the Karnataka High Court in (S. Sanjiva Shetty v. Anantha and others)2, A.I.R. 1976 Karnataka 146, which places the onus on the Insurer to establish the allegation that the vehicle was driven by a person not duly licensed.The cleavage of judicial opinion in this regard can be attributed to the difficulty inthe language of the proviso to(1) of section 95 with that in(2) of that section. The former seems to tell the insurer and the owner : "as regards third party risks, it will be enough compliance of the statute, if you take out a policy which will cover the liability under the Workmens Compensation Act."(2) on the other hand gives a confusing mandate : "there is an outer limit of one lac of rupees (sic) as respects the liability incurred as a result of an accident but that liability will include a liability arising under the Workmens Compensation Act also. The use of an inclusive definition in drafting(2) seems to suggest that the liability incurred in respect of an accident would embrace not only the one arising under the Workmens Compensation Act but also something more. Needless to say, that other species of liability would be the one arising under common law of tort.13. The only way to resolve the ambiguity would be as pointed out by the Supreme Court in (Motor Owner Insurance Co. Ltd. v. Jadavji Keshavji Modi and others)8, 1981 A.C.J. 507 to apply the touch stone that the purpose of law is to alleviate, not augment the sufferings of the people. Undoubtedly, an aggrieved employee is entitled under sectionof Motor Vehicles Act to exercise his option regarding the forums which he can approach to prefer his claim for compensation. The factors to be taken into consideration in deciding his claim under the two Acts would be different. A Tribunal would apply the principles of strict liability circumscribed by the Workmens Compensation Act while, if the aggrieved chooses to move the Motor Vehicles Tribunal, it would go by the principles of tort in determining his case. The quantum of compensation under the Workmens Compensation Act is gratified in the schedule itself. But the quantum of damages under common law of tort is subject to determination by the Tribunal on the basis ofprinciples. The Workmens Compensation Act offers no leeway in the matter of quantification of damages the process becomes mechanical once the pay packet of the claimant is known. The proof of damages in a common law action before a Tribunal which is generally presided over by a Senior Judicial Officer may throw open a number of issue the burden of proving which would lie on the claimant. In this option of forumthe workman has chosen to undertake the responsibility of discharching the onerous burden imposed upon him by tort law, it follows that he should get the benefit of the expression including the liabilities, if any, arising under the Workmens Compensation Act, 1923 occurring in Clause (a) of(2) of section 95 of Motor Vehicles Act which implies that insurer is liable for common law damages also and not only liabilities arising under the Workmens Compensation Act.