JUDGMENT [ENTITY], J.
1. Heard Sri [ENTITY], counsel for the Insurance Company, Sri [ENTITY], counsel for the claimants and Sri [ENTITY], counsel for the driver and the owner.
2. By the [CASE NUMBER] filed under [SECTION] of the [ACT], Insurance Company has prayed for setting aside the award dated 16.4.2003 passed by the Motor Accident Claims Tribunal/Additional District Judge, Haridwar in [PRECEDENT] Sri [ENTITY] and Ors. v. Sri Sukhhir Singh and Ors. whereby the claims tribunal has awarded a sum of Rs. 1,74,500/- to the claimants along with interest @ 9% per annum.
3. By the [CASE NUMBER], the driver-owner have prayed for setting aside the award dated 16.4.2003 passed by the Motor Accident Claims Tribunal/Additional District Judge, Haridwar in [PRECEDENT] Sri [ENTITY] and Ors. v. Sri [ENTITY] and Ors. whereby the claims tribunal has awarded a sum of Rs. 1,74,500/- to the claimants along with interest @ 9% per annum.
Since both the cases arise out of the same accident and against the same claim petition, therefore, both are decided together.
4. Briefly stated, a claim petition was filed by the claimants - Sri [ENTITY] and Smt. [ENTITY] wife of Sri [ENTITY] being [PRECEDENT] Sri [ENTITY] and others v. Sri [ENTITY] and Ors. under [SECTION] of the [ACT] claiming a sum of Rs. 8,03,000/-.
5. According to the claimants, on 16.8.1997 at about 4 p.m, when [ENTITY] (hereinafter referred to as the deceased) was crossing the road, a tractor No. U.P. 10B-8559, which was being driven rashly and negligently dashed the deceased. In this accident, the deceased died on the spot. Report of the incident was lodged at P.S. Kankhal, which was registered as [CASE NUMBER]. At the time of accident, the claimant was 18 years of age and was earning a sum of Rs. 3,000/- as he was a confectioner. Post mortem of the deceased was conducted at H.M.G. District Hospital.
6. Opposite parties no. 1 and 2 have filed a written statement stating therein that at the time of the accident, the tractor in question was insured with the National Insurance Company, Branch, Haridwar. It has further been stated that the amount claimed by the claimants is excessive. It has also been stated that at the time of accident, the driver of the tractor in question was holding valid driving licence and was driving the vehicle by his side, but due to negligence of the deceased, he came under the wheels of the tractor, therefore, they are not liable to pay any compensation
7. Insurance Company has filed a written statement, wherein it has been admitted that the truck in question was insured with it. He has denied that [ENTITY] died in this accident. Further it has been stated that the age is not acceptable and the amount claimed towards compensation is excessive. It has also been stated that at the time of accident, the tractor in question was not having valid registration, fitness certificate and the driver was not holding valid driving licence.
8. Opposite Parties No. 3 and 4 have filed a joint written statement, wherein it has been stated that the tractor in question was insured with National Insurance Company, but has denied the occurrence with this tractor. It has been stated that the accident did not occur due to negligence of the driver of the tractor in question, therefore, the claimants are not entitled to get any compensation.
9. On the pleadings of the parties, the claims tribunal has framed following issues:
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10. On behalf of the claimants, [ENTITY] an [ENTITY] have been examined as P.W. 1 and P.W. 2 respectively. Claimants have filed the documentary evidence viz. the copy of the F.I.R. paper No. 6Ga1, copy of the Driving Licence of Sukhbir Paper No. 7Ga1, copy of the registration certificate of the tractor Paper 8Ga1, copy of the Cover Note of the Insurance Policy Paper 9GA 1 and copy of the Post Mortem Report paper No. 10Ga1. Claimants have also filed True Copies of the F.I.R. Paper No. 37Ga2, Charge Sheet 39Ga2/1, Naksha Najri 39Ga2 and Post Mortem Report Paper No. 4oGa2.
11. On behalf of the opposite parties, [ENTITY] has been examined as D.W. 1. Opposite Party No. 1 has filed original of the Driving Licence Paper No. 52Ga. Insurance Company has filed report of the Licencing Authority Paper No. 53Ga 2. Opposite parties No. 1 and 2 have filed Insurance Cover Note Paper No. 26Ga1, Driving Licence 29877/HDR/97 and Driving Licence 1702/HDR/88 Paper No. 27 Ga and 28Ga.
12. While deciding the Issue No. 1 as to whether near Singhdwar P.S. Kankhal, District Haridwar on 16.8.1997 at about 4.00 p.m., when [ENTITY] (deceased) was crossing the road, tractor No. U.P. 10B-8559, which was being driven rashly and negligently by its driver dashed [ENTITY], in which [ENTITY] received fatal injuries and ultimately died. The claims tribunal has relied upon the statement of [ENTITY] P.W. 1, who has stated that at the time of accident, the driver of the tractor was driving the tractor rashly and negligently. Further reliance has been placed on the statement of P.W. 2-[ENTITY], who has stated that he was present at the place of occurrence. He has stated that the deceased was coming from Jwalapur side and the tractor which was being driven rashly and negligently crushed the deceased. The deceased died on the spot and the driver of the tractor flew away. Relying upon the aforesaid statements, the claims tribunal has recorded a finding that the accident took place due to rash and negligent driving of the driver, in which [ENTITY] died on the spot.
13. While deciding the Issue No. 5, claims tribunal has relied upon the photocopy of the Registration Certificate Paper No. 8Ga1 and has recorded a finding that at the time of accident, the tractor in question was validly registered and the same was insured with National Insurance Company as the document referred by the owners of the tractor has not been rebutted by the Insurance Company.
14. While deciding the Issue No. 6 as to whether at the time of accident, the driver of the tractor was holding a valid driving licence, the claims tribunal has taken into consideration the report of the Licencing Authority, Firozabad Paper No., 28Ga1 and the report of the Licencing Authority, Firozabad Paper No. 53Ga2. Report of the Licencing Authority, Firozabad Paper No. 28Ga1 shows that the licence was renewed in the name of [ENTITY] and the licence had not been issued in the name of [ENTITY]. Further in the report of the Licencing Authority, Firozabad Paper No. 53 Ga2 shows that no licence had been issued in the name of [ENTITY]. The claims tribunal has further recorded a finding that Sri [ENTITY] had only Learning Licence and the tractor was going to take sand in which the trolley was also attached and since [ENTITY] was having a learning licence to drive, there was no occasion to carry sand by the tractor by attaching trolley. Further relying upon the aforesaid statements and documents available on the record, the claims tribunal has recorded a finding that there was violation of the Insurance Policy.
15. While deciding the Issue No. 3 as to whether the opposite party No. 1 was driving his tractor cautiously and by his side and without any negligence on the instructions of [ENTITY] S/o [ENTITY] R/o Harchandpur, District Haridwar, claims tribunal has relied upon the findings of the Issue No. 1 and has stated that at the time of accident, [ENTITY] was driving his tractor rashly and negligently due to which accident caused and [ENTITY] died on the spot.
16. While deciding the Issues No. 2 and 4 with regard to quantum of compensation, the claims tribunal has assessed the age of the deceased as 18 after relying upon the Post Mortem Report. According to the age of the deceased multiplier of 16 has been selected. Further the claims tribunal has taken Rs. 15,000/- per annum as notional income of the deceased as there was no documentary evidence showing the income of the deceased. 1/3rd of the personal expenses has been deducted from the income. Thus, the total dependency comes to Rs. 10,000/- per annum. Multiplying the annual dependency with 16, the amount comes to Rs. 1,60,000/-. Apart from that the claims tribunal has awarded a sum of Rs. 2,000/- towards funeral expenses, a sum of Rs. 10,000/- towards loss of love and affection and a sum of Rs. 2,500/- for loss of estate. Thus, the claims tribunal has awarded a total sum of Rs. 1,74,500/-towards compensation along with simple interest @ 9% per annum. The liability to pay compensation was given to the insurance Company, though it was stated that the Insurance Company may recover the amount from the owner of the tractor.
17. The recoverable rights have been given to the insurance Company to recover the amount of compensation from the Owner of the Tractor.
18. Both the parties have contested the case on the basis of the judgment of [PRECEDENT], where it has been observed that the Insurer cannot avoid the liability of third party. The relevant portion of the judgment is quoted below:
(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in [SECTION], has 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 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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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] of the Act.
19. I In [PRECEDENT] (supra), reliance has been placed on the judgment of [PRECEDENT] and the breach of the specified condition of the policy enabling the insurer to avoid liability is available only if there is a breach of policy as contained under [SECTION]. Relevant observation is quoted below:
77. In [PRECEDENT] it is stated: (ACJ pp. 1324-25, paras 19-22) [SECTION] relates to the liability of the insurer and speaks of a situation in regard to which no sum shall be payable by an insurer in respect of any judgment or award. In the context it is provided that an insurer to whom notice of bringing of any such proceeding is given could defend the action stated in the said statutory provision. The contention in the context would be found in [SECTION] in the even of a breach of a specified condition of the policy enabling the insurer to avoid liability in regard thereto. In the process in regard to the right of the insurer to recover the amount from the insurer, it would have to be seen by referred to [SECTION] as to under what circumstances this can be successfully recovered from the insured.
[SECTION] says that where a certificate of insurance is issued, so much of the said policy as purport to restrict the insurance of the persons insured thereby by referring to any of the conditions mentioned and it is precisely enacted in regard thereto that the liability covered by [SECTION] as is required to be covered by the policy would not be available. The position is made further clear by the proviso enacting that any sum paid by the insurer in or toward the discharge of any liability of any person who is covered by the policy by virtue of this sub section shall be recoverable by the insurer from that person.
In other words, [SECTION] considered the right of the insurance company in regard to reimbursement of the amount paid by them only in the context of a situation other than the one contemplated under [SECTION]. It would mean that except under the situation provided by [SECTION], the insurer would not be in a position to avoid the liability because he has got rights against the owner under the above provision.
The learned counsel strenuously submitted that this would not be the correct understanding and interpretation of the statutory provision of [SECTION] of the 1988 Act. The learned counsel submitted that to read the statutory provision to understand that the insurance company could only claim from the owner in situations governed by [SECTION] and to have no right under the said provision with regard to other situations under [SECTION] would not be the proper reading of the statutory provision. The learned counsel submitted that in fact the provision would have to be meaningfully understood. It is not possible to consider the submission of the learned caused in the light of the plain language of the statutory provision. It is necessary to emphasis that under the new Act the burden of the insurance company has been made heavier in the context of controlling the need of taking up contentions to legally avoid the liabilities of the insurance company.
78. The social need of the victim being compensated as enacted by Parliament was the subject-matter of consideration before a three-Judge Bench of this Court as early as in 1959 in [PRECEDENT] wherein [ENTITY], J. speaking for the Bench observed: AIR p. 1335, para 16.
16. Again, we find the contention wholly unacceptable. The statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore, to the statute for reason of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that the claims to be entitled to urge. He can thus avoid all hardship, if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to Sub-section (3) and under Sub-section (4) recover it from the assured. It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer's bad luck. In such circumstances the injured person also would not have been able to recover the damages suffered by him from the assured, the person causing the injuries.
20. So far as benefit confers on the third party by the [ACT], the same has been interpreted in the aforesaid judgment as under:
37. In Halsbury's Laws of England, 4th Edn. Reissue, Vol. 25, it is stated:
743. Benefits conferred on third parties by the [ACT]. It was against the background of the [ACT] that the [ACT] (now replaced by the [ACT]), was passed. It was realised that, unless some alterations were made in the rights to which the third party was by the first-named Act subrogated, those rights would frequently be of little, if any, value. Accordingly, it was provided that certain conditions in the assured's policy were to be of no effect in relation to a claim by a person to whom an assured was under a compulsorily insurable liability. The conditions to that extent avoided are any conditions providing (1) that no liability is to arise, or (2) that any liability which has arisen is to cease, in the event of some specified thing being done, or omitted to be done, after the occurrence of the event giving rise to the claim. If. therefore, any admission of liability is made after an accident contrary to a condition in the policy, or if, contrary to a condition in the policy, proper notice of the accident is not given to the insurers, the injured third party is not affected so far as his claim is concerned.
38. This Court in [ENTITY] 1 which has since been followed in [PRECEDENT] in no uncertain terms held that the defence available to an insurance company would be a limited one.
39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in [SECTION] of the Act corresponding to [SECTION] of the [ACT] had been the subject-matter of decisions in a large number of cases.
40. It is beyond any doubt or dispute that under [SECTION] of the Act, an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action on any of the grounds mentioned therein.
41. However, Clause (a) opens with the words "that there has been a breach of a specified condition of the policy", implying that the insurer's defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence.
21. In view of the above, recoverable rights shall be available only to the Insurer subject to non availability of the licence. Claims Tribunal shall adjudicate the same in accordance with law.
22. Subject to the aforesaid observations regarding availability of the driving licence on the Issue No. 6, both the Appeals are dismissed on other issues. Amount if any deposited in this Court shall be transmitted to the claims tribunal concerned.