HIGH COURT OF UTTARAKHAND AT NAINITAL (Court’s order whether the case is not approved for reporting) Description of the case A.O. No. 388 of 2007 National Insurance Co. Ltd. Vs. Km. Rukmani and others. Approved for reporting. Date of Decision: 25.3.2008 Initial of Judge: …………. ………………….. ………………….. Reserved HIGH COURT OF UTTARAKHAND AT NAINITAL A.O. NO. 388 OF 2007 Old No. 1504 of 2000 National Insurance Co. Ltd. Through its Assistant Manager, Divisional Manager, 25, M.G. Marg, Allahabad. ………….Appellant. Versus 1. Km. Rukmani, D/o Sri Khumani Singh, R/o H-21/11, Rana Park, Siraspur, New Delhi. 2. Saleem Ahmad, S/o Shri Iqbal Hussain, R/o Ward No. 1, Majra Pradbhu, Bajpur, Udham Singh Nagar. 3. Ajmer Singh, S/o Sri Hari Singh, R/o Kishanpur Maulagarh, District – Rampur (Driver of the truck UP 2 4686) ………………….Respondents. Dated: 25.3.2008 Hon’ble Rajesh Tandon, J. Heard Sri V.K. Kohli, Sr. Advocate, assisted by Sri I.P. Kohli, counsel for the appellant and Sri Ahrar Baig, Advocate & Smt. N. Intezar, Advocate for the respondent no.2. 2. By the present A.O. filed under Section 173 of the Motor Vehicles Act, 1988, appellant has prayed for setting aside the award dated 2.7.2000 passed by the Addl. District Judge, Udham Singh Nagar in M.A.C.P. No. 93 of 1999 Km. Rukmani Vs. Saleem Ahmad and others, whereby the claimant has been awarded a sum of Rs. 1,60,000/- towards compensation. 3. Briefly stated, a claim petition was filed by the claimant/ respondent no. 1 being M.A.C.P. N. 93 of 1999 Km. Rukmani Vs. Saleem Ahmad and others claimant a sum of Rs. 29,23,000/- towards compensation. 4. According to the claimant on 2.1.1999 at about 9.00, when her husband (Kali Charan @ Ajay Kumar) (hereinafter referred to as the deceased) was going to Kashipur from Sitarganj by Maruti Car No. DDC and as soon as the Car reached near Gopal Rice Mill, Gadarpur, all of a sudden a Truck No. U.P. 02 (hereinafter referred to as ‘truck in question’), which was coming from the opposite side and was being driven rashly and negligently by its driver, dashed the Car of the deceased as a result of which Kali Charan succumbed to injuries. First Information Report regarding the said accident was lodged by one Raj Kumar. At the time of accident, the deceased was 26 years of age and from the avocation of selling milk, he was earning Rs. 6000/- per month. 5. Respondent No. 2 (owner of the truck in question) has contested the claim by filing a written statement Paper No. 15 Kha stating therein that at the time of accident, the truck in question was insured with the appellant, permit was valid and the driver of the truck Ajmer Singh was holding valid driving licence bearing No. 173911, which was valid for the period from period from 13.7.1998 to 12.7.2001 and as such the insurer is liable to indemnify the loss suffered by the claimant, if any. 6. The respondent no. 3 (Driver of the truck in question) has also contested the claim by filing a written statement Paper No. 14 Kha stating therein that the truck in question was being driven by him it a moderate speed in a right direction holding a valid driving licence, which was valid for the period from 13.7.1998 to 12.7.2001. He has further stated that the accident occurred due to rash and negligent driving of the driver of Maruti Car. 7. Insurer / appellant has also contested the claim by filing a written statement Paper No. 13 Kha. In the written statement, it has been stated that truck in question was being driven against the terms and conditions mentioned in the policy and no information regarding the alleged accident was furnished to the company. 8. On the pleadings of the parties, the claims tribunal has framed following issues: 1. Whether on 2.1.1999 at about 9 p.m., due to rash and negligent driving of the driver of U.P. 02 4686, accident took place in which Kali Charan @ Ajay Kumar died, if yes, its effect? 2. To what amount of compensation, the claimant is entitled to get and from whom? 9. On behalf of the claimant, the claimant herself, one Jai Veer Singh and Kailash have been examined as P.W.1, P.W.2 and P.W.3 respectively. Towards the documentary evidence, copy of the first information report Paper No. 6Ga/2, copy of the post mortem report Paper No. 6Ga/3, copy of the Panch Nama Paper No. 6Ga/5, written evidence regarding the funeral of the deceased Paper No. 6Ga/8. Further copy of the driving licence has also been filed. 10. On behalf of the defendant/appellant, copy of the charge sheet, copy of the driving licence verification report of RTO Kathgodam dt. 17.11.1996, copy of the driving licence and copy of the First Information Report have been filed. 11. While deciding the issue as to whether on 2.1.1999 at about 9 p.m., due to rash and negligent driving of the driver of U.P. 02 4686, accident took place in which Kali Charan @ Ajay Kumar died, the claims tribunal has recorded a finding that accident took place due to rash and negligent driving of the driver of the truck in question. The claims tribunal has relied upon the statement of P.W.2 Jai Veer Singh, P.W.3 Kailash and copy of the First Information Report. Jai Veer Singh is not the ocular witness of the alleged accident, but on information, he went to the place of occurrence and got the FIR lodged. P.W.3 Kailash is the ocular witness of the alleged accident. He has deposed that on 2.1.1999 at about 9 p.m. when he was going to Kashipur from Sitarganj along with the deceased, as soon as the Car reached near Gopal Rice Mill, a truck No. U.P. 02/4686, which was coming from the opposite direction and being driven rashly and was negligently by its driver dashed the said Car, due to which the deceased who was boarded in the Car died on the spot and he received grievous injuries. First Information Report shows that the truck in question was being driven by Ajmer Singh and the report has lodged against him in P.S. Gadarpur and charge sheet has been submitted against the said driver under Sections 279/304A/338/427 of the I.P.C. 12. While deciding the issue no. 2 with regard to quantum of compensation, claims tribunal has relied upon the Paper No. 18 Ga and 19 Ga. Paper No. 19 Ga is the driving licence of Ajmer Singh, which shows that the same has not been rebutted by the defendants by filing any evidence. The claims tribunal has assessed the income of the deceased as Rs. 2000/- per month (Rs. 24,000/- per annum) and keeping into consideration the age of the deceased and the claimant, the multiplier of 10 has been selected. Further 1/3rd of the personal expenses has been deducted from the income, then the annual dependency comes to Rs. 16,000/-. Multiplying the annual dependency with multiplier of 10, the compensation has been worked out to Rs. 1,60,000/- along with interest @ 9% per annum. 13. Counsel for the appellant has submitted that the photocopy of the licence has been produced before the claims tribunal, which is not admissible, and the tribunal has believed the genuineness of the photocopy. It has further been submitted that the tribunal has wrongly accepted the Photostat copy of the driving licence and has recorded a finding that the driver had a valid driving licence. 14. By comparing the report of the driving licnece and the driving lecence, it appears that the report relates to some one else and no other document has been preferred by the appellant which can establish that the licence was fake. 15. Counsel for the appellant has also relied upon the verification report dated 17.11.1999, which reads as under: “ewy:Ik ls okil djrs gq, lwfpr djuk gS fd DL No. 17391/K/ ftldh Nk;k izfr vkids }kjk layXu dh xbZ gS tks vtesj flag S/o Jh gjh flag ds uke ls bl dk;kZy; ls tkjh ugha fd;k x;k gSA dk;kZYk; vfHkys[kkuqlkj DLNo. 17391/K/ Jh djuSy flag S/o Jh lqPPkkflag ds ukel ls 04@3@93 dks tkjh fd;k x;kA” 19. I have gone through the driving licence, the number of the driving licence produced by the owner of the Vehicle was 73911 K, which was issued on 17.4.1989. 17. Counsel for the appellant has referred the judgment of Premkumari & Others Vs.Prahlad Devi and Ors. 2008 AIR SCW 682. Paragraph 6 of the said judgment is quoted below: “6. In this appeal, the appellants mainly concerned about the orders of the Tribunal and the High Court exonerating the Insurance Company form its liability. Before considering the relevant decisions of this Court and the issue in question, let us note certain factual details. The first respondent is the owner of the offending vehicle, who is none other than the brother of the first respondent. Before the Tribunal, the Insurance Company contended that the driver was not having a valid and effective driving licence. Considering the materials in the form of oral and documentary evidence placed by the insurance Company the Tribunal found that opposite party No. , namely, driver of the offending vehicle did not have a valid and effective licence on the date of the accident. Based on the said conclusion, it exonerated the Insurance Company from its liability. When this specific finding was challenged by way of review application before the High Court, the judgment of this Court in united India Insurance Co. Ltd. vs. Lehru and others, (2003) 3 SCC 338, was pressed into service. In the said judgment, after considering Section 96(2) (b) (ii) of the Old Motor Vehicles Act and similar provision i..e 149(2) (a) (ii in the Motor Vehicles Act, 1988, this Court held as under: “17. XXX XXX XXX Thus under Sub-section (1) the insurance company must pay to the person entitled to the benefit of the decree, notwithstanding that it has become “entitled to avoid or cancel or may have avoided or cancelled the policy”. The words “subject to the provisions of this section” mean that the insurance company can get out of the liability only on grounds set out in Section 149. Sub section (7), which has been relied on, does not state anything more or give any higher right to the insurance company. On the contrary, the working of sub- section 97) viz. “no insurer to whom the notice referred to in sub-section (2) or sub-section (3) has been given shall be entitled to avoid his liability” indicates that the legislature wanted to clearly indicate that insurance companies must pay unless they are absolved of liability on a ground specified in sub- section (2). This is further clear from sub-section (4) which mandates that conditions in the insurance policy, which purport to restrict insurance would be of no effect if they are not of the nature specified in sub-section (2). The proviso to sub-section (4) is very illustrative. It shows that the insurance company has to pay to third parties to pay. The liability of the insurance company to pay is further emphasized by sub - section (5). This also shows that the insurance company must first pay, then it can recover. If Section 149 is read as a whole it is clear that sub-section (7) is not giving any additional right to the insurance company. On the contrary it is emphasizing that the insurance company cannot avoid liability except in the limited grounds set out in sub-section (2). 18. Now let us consider Section 149(2). Reliance has been placed on Section 149(2)(a)(ii). As seen, in order to avoid liability under this provisions it must be shown that there is a “breach”. As held in Skandia (1987) 2 SCC 654 and Sohan Lal Passi (1996) 5 SCC 21 cases, the breach must be on the part of insured. We are in full agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen. Whilst it is being driven by the thief there is an accident. The thief is caught and it is ascertained that he had no licence. Can the insurance company disown liability? The answer has to be an emphatic “No”. To hold otherwise would be to negate the very purpose of compulsory insurance. The injured or relatives of the person killed in the accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner himself would be an innocent sufferer. It is for this reason that the legislature, in its wisdom, has made insurance, at least third party insurance, compulsory. The aim and purpose being that an insurance company would be available to pay. The business of the company is insurance. In all businesses there is an element of risk. All persons carrying on business must take risks associated with that business. Thus it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time innocent parties must not be made to suffer or loss. These provisions meet these requirements. We are thus in agreement with what is laid down in the aforementioned cases viz. that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The insurance company must establish that the breach was on the part of the insured.” 18. In the aforesaid judgment, reliance has been placed on the judgment of National Insurance Company Limited Vs. Swaran Singh and others (2004) 3 SCC 297, where the Apex Court has held as under: “20. When an owner is hiring a driver he will therefore have t check whether the driver has a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find to rather strange that insurance companies expect owners to make enquiries with RTOs, which are spread all over the country, whether the driving shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The insurance company would not then be absolved of liability. If it ultimately turns out that the licence was fake, the insurance company would continue to remain liable unless they prove that the owner/insured was aware or had notice that the licence was fake and still permitted that person to drive. More importantly, even in such a case the insurance company woud remain liable to the innocent third part, but it may be able to recover from the insured. This is the law which has been lain down in Skandia (1987) 2 SCC 654, Sohan Lal Passi (1996) 5 SCC 21 and Kamla (2001) 4 SCC 342 cases. We are in full agreement with the views expressed therein and see no reason to take a different view.” 19. I have perused the aforesaid judgment, wherein it has also been observed as under: “It is clear from the above decision when the owner after verification satisfied himself that the driver has a valid licence and driving the vehicle in question competently at the time of the accident there would be no breach of Section 149(2)(a)(ii), in that even, the Insurance Company would not then be absolved of liability. It is also clear that even in that case that the licence was fake, the Insurance Company would continue to remain liable unless they prove that the owner was aware or noticed that the licence was fake and still permitted him to driver.” 20. In view of the above, Insurer cannot avoid its liability. The findings recorded by the claims tribunal, therefore, are confirmed. 21. Further the counsel for the appellant has submitted that the dependency cannot be more than ½. I am not convinced with his argument since the claimant is the real unmarried sister of the deceased, therefore, she comes in the definition of the family and therefore, there is no occasion to work out the dependency of ½. 22. In view of the above, I do not find any infirmity in the aforesaid award passed by the claims tribunal concerned and the same deserves to be confirmed. 23. Consequently, A.O. is dismissed. No order as to costs. (Rajesh Tandon, J.) 25.3.2008 SKS