* 1 * FA : 986/1999 2.5.2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 986 OF 1999 The New India Assurance Co. Ltd. .... Appellant Sangli Vs. Shankar Shamrao Khote & Ors. .... Respondents Mr. S.R. Singh, Advocate for appellant. Mr. S.D. Mhaispurkar, Advocate for respondent no.1 Mr. Amit Borkar, Advocate for respondents no. 2 and 3. Coram : Smt. R.P. SondurBaldota, J. Date : 2nd May 2011. PC.: 1. This appeal by the insurance company is to avoid its liability to pay compensation to the victim of a motor vehicle accident on the ground that the driver of the offending vehicle did not hold any license whatsoever and that he was not even eligible to hold * 2 * FA : 986/1999 2.5.2011 any license on account of being underage i.e. 17 years old. Respondent no.1 to the appeal is the original claimant. Respondent no.2 is the driver of the offending vehicle and respondent no. 3, the owner. Respondent no. 2 is the son of respondent no.3. 2. On 5th July 1993, respondent no.1 was returning home at Padalvadi from village Vadgaon on his motorcycle. He was driving the motor cycle by the correct side of the road. When he reached near Ambabai Temple on Dop­Vadgaon road, the offending vehicle i.e. truck bearing registration no. MH­10­A­2085 coming from the opposite direction came to its wrong side of the road and gave dash to the motorcycle. With the impact, respondent no.1 was thrown off the motorcycle and sustained injuries. He then filed a petition in the Motor Accidents Claim Tribunal, seeking compensation of Rs.92,000/­ for the injuries. Respondents no. 2 and 3 as well as the appellant filed their written statements to oppose the claim petition. There was no dispute as regards the occurrence of the accident involving the offending vehicle, in the manner as described in the complaint to the police. There was also no dispute * 3 * FA : 986/1999 2.5.2011 that the offending vehicle is owned by respondent no. 3 and was at the relevant time being driven by respondent no.2. The appellant however contended in its written statement that respondent no. 2 did not hold any driving license and also that being not of the qualifying age, was not even entitled to hold driving license at the relevant time. There being clear breach of the terms and conditions of the insurance policy, the appellant was not liable to indemnify respondent no.3 by paying compensation to be awarded by the Tribunal to respondent no.1. Respondents no. 2 and 3 in their common written statement merely denied the entire claim of respondent no. 1 in the claim petition. Further at paragraph 8 of the written statement, they claimed that on the date and time of the accident, the offending vehicle was being driven at a moderate speed by the correct side of the road, when respondent no. 1 came at a high speed from the opposite direction and dashed against the offending vehicle. In other words, respondents no. 2 and 3 claimed that the accident had occurred on account of negligence on the part of respondent no. 1 and not on account negligence on the * 4 * FA : 986/1999 2.5.2011 part of respondent no.2. 3. Respondent no.1 examined himself in support of his claim in the petition. On 23rd July 1998, the appellant filed a pursis requesting that in view of the defence as regards want of license by respondent no. 2, he and respondent no.3 be called upon to produce driving license, if any, held by respondent no.2. That application came to be granted by the Tribunal on the same day. However, no license was produced by respondents no. 2 and 3. Report of the accident had been registered with Vadgaon Police Station vide C.R. No.67 of 1993 for the offence punishable under Sections 279, 338 Indian Penal Code and 180, 184, 187, 130/177 of Motor Vehicles Act against respondents no.2. Respondent no.1 produced copies of the complaint along with the spot panchanama and statement of respondent no.2 recorded by the Police. In his statement, respondent no. 2 admitted his age of 17 years and the fact that he did not hold any license to drive a motor vehicle. The appellant in addition, had examined Sairoba Govind Sawant, retired Assistant Sub Inspector, who was at the relevant time attached to Vadgaon * 5 * FA : 986/1999 2.5.2011 Police Station and who had got the complaint of the accident registered. He deposed that during the enquiries into the complaint, it was revealed that respondent no.2 did not hold any driving license. He had run away from the accident scene but was later arrested on the same evening. 4. Mr. S.R. Singh, the learned counsel for the appellant submits that there is a clear admission on the part of respondent no.2 that he did not hold any driving license. He further submits that the very fact that respondent no. 2 at the relevant time was aged 17 years, there was no question of he holding valid driving license, since he had not even attained the qualifying age for being eligible for the license. According to Mr. Singh, the learned Member of the Tribunal ought to have appreciated these facts and held that there was breach of condition of policy which exonerates the appellant from paying compensation awarded to respondent no.1. He also points out that respondent no.3, the owner of the offending vehicle had failed to establish that she had done everything in her power to fulfill the promise under the insurance policy and hence * 6 * FA : 986/1999 2.5.2011 was not guilty of deliberate breach of the insurance policy. 5. Mr. Borkar, the learned counsel for respondents no. 2 and 3 submits on the other hand that the statement of respondent no.2 recorded during the course of investigation in C.R.No. 63 of 1993 by the Police, heavily relied upon by the appellant cannot be used in evidence in view of the intrinsic bar under Code of Criminal Procedure. In any case, according to him, xerox copy of the statement produced is not admissible in evidence and further the statement was required to be duly proved by the respondent. He also submits that the fact that the respondent no.2 did not hold license to drive the vehicle at the relevant time has not been independently proved by the appellant. Mr. Borkar lastly submits that even if this Court has to accept the contention of the appellant and exonerate it from payment of the compensation awarded, direction should be given to the appellant to pay the compensation to respondent no.1 and recover the same from respondent no.3. 6. As regards the proof and use of the statement recorded by the Police, under Section 162 Criminal Procedure Code in the * 7 * FA : 986/1999 2.5.2011 present proceedings, I find no substance in the submission advanced. The bar contained in Criminal Procedure Code for use of the statement recorded under Section 162, Criminal Procedure Code cannot be extended to the present proceedings. Besides, Section 169 Motor Vehicles Act provides that the Claims Tribunal in holding enquiries for awarding compensation to the accident victims may follow such summary procedure as it thinks fit. In that case, the standard of proof required to decide the claims would be below what is required for a civil case. Hence, the Police record relating to the report of the accident is not required to be strictly proved. In any case in the facts of the present case, it cannot be even said that the statement is not at all proved. The appellant has examined the Assistant Sub Inspector, who recorded the complaint and the statement of respondent no.2. 7. Mr. Singh has heavily relied upon decision of the Apex Court in the case of National Insurance Co. Ltd. vs. Swaransingh and others, reported in (2004) 3 Supreme Court Cases, page 297 in support of his submission as regards breach of the terms of the * 8 * FA : 986/1999 2.5.2011 policy. The Apex Court in the case was considering identical questions relating to the defences raised by insurance companies in terms of Section 149(2)(a)(ii) of the Motor Vehicles Act, wherein (a) the driving license produced by the driver or owner of the vehicle was a fake one; (b) the driver did not have any license whatsoever; (c) a license, although was granted to the driver concerned but on expiry thereof, the same had not been renewed; (d) if the license granted to the drivers being for one class or description of vehicle but the vehicle involved in the accident was of different class or description; and (e) the vehicle in question was driven by a person having a learner's license. The Apex Court, in the decision reiterated its earlier view that the insurance company with a view to avoid its liability is not only required to show that the conditions laid down under Section 149(2)(a) or (b) are satisfied, but is further required to establish that there has been breach on the part of the insured. Such a breach on the part of the insured must be established to show that not only the insured used or caused or permitted to be used the vehicle in breach of the Act, but also that * 9 * FA : 986/1999 2.5.2011 the damage, the victim suffered flowed from the breach. It quoted with approval its observations in the case of Scandia Insurance Company Ltd. vs.Kokilaben Chandravadan, reported in A.I.R. 1987, Supreme Court, 1184, the same read as follows : 14. Section 96(2)(b)(ii) extends immunity to the insurance “ company if a breach is committed of the condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified from holding or obtaining a driving licence during the period of disqualification. The expression "breach" is of great significance. The dictionary meaning of "breach" is "infringement or violation of a promise or obligation" (See Collins English Dictionary). It is, therefore, abundantly clear that the insurer will have to establish that the insured is guilty of an infringement or violation of a promise that a person who is duly licensed will have to be in charge of the vehicle. The very concept of infringement or violation of the promise that the expression "breach" carries within itself induces an inference that the violation or infringement on the part of the promisor must be willful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect, how can it be conscientiously posited that he has committed a breach ? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving licence, that it can be said that he is "guilty" of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the insurance company that the breach was on the part of the insured and that it was the insured who was guilty of violating the * 10 * FA : 986/1999 2.5.2011 promise or infringement of the contract. Unless the insured is at fault and is guilty of a breach, the insurer cannot escape from the obligation to indemnify the insured and successfully contented that he is exonerated having regard to the fact that the promisor (the insured) committed a breach of his promise. Not when some mishap occurs by some mischance. When the insured has done everything within his power inasmuch as he has engaged a licensed driver and has placed the vehicle in charge of a licensed driver, with the express or implied mandate to drive it himself, it cannot be said that the insured is guilty of any breach.".... In other words, as summarised, at para 110 of Swaransingh's case mere absence, fake or invalid driving license 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. 8. Therefore, in order to succeed in the appeal, the appellant must establish two facts, firstly that respondent no. 2 did not hold driving license at the relevant time and secondly that the breach of * 11 * FA : 986/1999 2.5.2011 the terms and conditions of the insurance policy in the insured vehicle being allowed to be driven by a person without license was either the deliberate act of respondent no. 3 or was to her knowledge. The evidence before the Tribunal undoubtedly establishes not only that respondent no.2, at the time of the accident, did not hold license to drive a motor vehicle much less a heavy motor vehicle like a truck, but was not even qualified to hold any driving license, he being underage. This is seen from the evidence of Assistant Sub Inspector of Police examined by the appellant and also from the statement of respondent no.2 recorded by him, during the course of investigation. Coming to the second fact required to be established by the appellant, the evidence before the Court indicates that respondent no. 3 was not even aware that respondent no.2 had taken away the truck. Respondent no.2 stated to the Police that as the truck had been lying idle for a long time, He at about 7.00 am. drove away the truck without informing his parents,for charging its battery. If the statement of respondent no. 2 is accepted in the evidence, it must be accepted in its entirety. * 12 * FA : 986/1999 2.5.2011 Undoubtedly, the joint written statements filed by respondents no. 2 and 3 does not mention the fact that the truck was driven by respondent no.2 without the knowledge of his parents. However, even if that is so, the Court cannot ignore the material on record which shows that respondent no. 2 had taken away the truck without the knowledge of his parents. There is no evidence brought forth by the appellant to prove that respondent no. 3 was guilty of negligence and failed to exercise reasonable care n the matter of fulfilling the condition of the policy regarding the use of the vehicle by the duly licensed driver. The cross examination of the witnesses on behalf of respondent nos. 2 and 3 shows that it was the claim of respondent no.3 that the person engaged to drive the truck was her husband who held a due and valid license. Since, both respondent no. 3 and her husband were not even aware that respondent no. 2 had taken away the vehicle, no responsibility of breach can be fastened upon respondent no.3. Therefore, it cannot be said that the appellant had established the fact that respondent no. 3 was guilty of negligence and failed to exercise * 13 * FA : 986/1999 2.5.2011 reasonable care in the matter of fulfilling the condition of the policy. Therefore, the appeal must fail. The appeal is accordingly dismissed. (Smt. R.P. SondurBaldota, J.)