CR No.6119 of 2007 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CR No.6119 of 2007 Date of Decision: 11.11.2008 The Punia Co-operative Transport Society and Anr. ....Petitioners Vs. Smt.Rajbala & Ors. ..Respondents Coram: Hon'ble Mr. Justice Vinod K.Sharma Present: Mr.Rajinder Goyal, Advocate, for the petitioner-appellants. Mr.N.K.Khosla, Advocate, for respondent No.7. Vinod K.Sharma,J. (Oral) This order shall dispose of C.R. No.6119 of 2007 titled The Punia Co-operative Transport Society and Anr. Vs. Smt.Rajbala and others; FAO No.4793 of 2007 titled The Punia Co-operative Transport Society and Anr. Vs. Smt.Rajbala and others and FAO No.4794 of 2007 titled The Punia Co-operative Transport Society and Anr. Vs. Smt.Maya Devi and others, as common questions of law and fact are involved in these cases and the FAOs have been ordered to be heard along with this revision. For brevity, the facts are being taken from CR No.6119 of CR No.6119 of 2007 2 2007. The petitioners by way of this revision petition have challenged the impugned part of award dated 31.8.2007 passed by the learned Motor Accident Claims Tribunal, Kaithal (for short the Tribunal), vide which liability to pay the compensation has been fixed on the petitioners i.e. owner and driver of the offending vehicle. The Petitioners claim that Insurance Company should be directed to indemnify the petitioners regarding the payment of compensation amount without the right to recover from the petitioners. The petitioners are the registered owner and driver of bus No.HR-45-0537, involved in the accident. Respondents No.1 to 6 i.e. the claimants filed a claim petition qua damages caused to their vehicle as a result of accident. The bus was insured with United India Insurance Company, Kaithal. It is the case of the petitioner No.1 that Petitioner No.2 was appointed after fully verifying the validity of licence from Regional Transport Officer, Jind and a driving test was also taken before appointing him as a driver in the year 2001. The petitioners led evidence in support of this assertion. However, the Insurance Company failed to lead any evidence regarding negligence on the part of the owner regarding the breach of conditions of the insurance Policy. In spite of evidence led by petitioner owner learned Tribunal has given right of recovery of the amount of compensation from the petitioners after payment to the claimants. CR No.6119 of 2007 3 The petitioners claim that impugned part of award which otherwise the insurance company to recover the amount of compensation from the petitioners was liable to be set aside. Learned counsel for the petitioners referred to the statement of RW.1 i.e. the clerk from the office of RTA, Jind wherein he has stated that licence of Charan Singh driver was renewed by their office for the period from 12.9.2002 to 11.9.2003 and from 12.9.2003 to 11.9.2004. Before renewal of the licence the office got it verified. The licence was renewed after it was found to be correct. However, he admitted that fake licence could also be renewed after depositing the necessary renewal fee as per rules. Learned Counsel for the petitioners placed reliance on the judgment of this Court in the case of Narinder Singh Vs. The Oriental Insurance Company Limited and others (2006-3) PLR 258 to contend that even if licence originally was fake, but if the same was renewed number of times, the insurance company would be liable to pay the amount of compensation without having any right to recover the same. The contention of the learned counsel, therefore, is that the impugned part of the order can not be sustained. This plea of the petitioners cannot be accepted as fake licence cannot be treated to be a valid, merely because, it is got renewed subsequently. Learned counsel for the petitioners thereafter contented that in the present case evidence was led by the petitioners to show that before appointing the driver necessary steps were taken to verify the driving licence as well as he was put to driving test,therefore, necessary precautions CR No.6119 of 2007 4 were taken by the employer, thus, no right could be given to the insurance company to recover the amount from the petitioners as there was no negligence on the part of petitioner No.1. In support of this contention reliance has been placed on the judgment of Hon'ble Supreme Court in the case of National Insurance Company Ltd. Vs. Swaran Singh and others (2004-1) PLR 510, wherein Hon'ble Supreme Court has been pleased to lay down as under:- “(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 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. (iv) The insurance companies are however, with a view to avoid their liability must not only establish 'breach' the available defence(s) raised in the said proceedings but must also establish' on the part of the owner of the vehicle; the burden of proof where for would be on them. CR No.6119 of 2007 5 (v) The court cannot lay down any criteria as to how said burden would be discharged in as much as the same would depend upon the facts and circumstances of each case. (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.” Reliance has also been placed upon the judgment of this court in the case of The New India Assurance Company Ltd. Vs. Shanti Devi and others (2006-1) PLR 313, wherein this court has been pleased to lay down as under:- “7. Thus, the insurance company cannot be absolved of its liability to indemnify the insured on account of an invalid or fake driving licence because the insurance company has not led any evidence to prove that the insured was guilty of any 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.” On consideration of the matter, I find force in the contentions CR No.6119 of 2007 6 raised by the learned counsel for the petitioners. In the present case the petitioners took a positive stand and led evidence to prove that steps were taken to verify the licence and that driver was subjected to driving test. The said evidence was not controverted by the insurance company. The insurance company failed to prove the negligence on the part of petitioner No.1 in exercising reasonable care in the matter of fulfilling the conditions of policy regarding use of vehicle by duly licenced driver. No evidence was also led to show that breach was the fundamental cause of the accident. The revision petition as well as both the FAOs are allowed. The impugned part of the award giving right of recovery to the insurance company is ordered to be set aside, while rest of the award with respect to awarding compensation to the claimants is upheld. 11.11.2008 (Vinod K.Sharma) rp Judge