FAO No. 1627 of 2008 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O. No. 1627 of 2008 (O&M) Date of decision: 19.1.2010 Parminder Singh .. Appellant v. Janak Raj Kapoor and others ..Respondents. CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL Present: Mr. Munish Gupta, Advocate for the appellant. Mr. Suvir Dewan, Advocate for respondent No. 2. Mr. H. K. Aurora, Advocate for respondent No. 3. ... Rajesh Bindal J. This is an appeal by the owner of the vehicle impugning the award dated 6.2.2008, passed by the Motor Accidents Claims Tribunal, Jalandhar (for short, `the Tribunal'), whereby while assessing the amount of compensation payable to the claimant and putting the liability thereof on the Insurance Company to pay the same at the first instance, it has been given right to recover the same from the appellant-owner of the vehicle. Briefly, the facts of the case are that on 27.1.2005, respondent No. 1/claimant was coming from Mukerian to Jalandhar on his scooter bearing No. PB-08-T-7356. A truck bearing No. PB-12/0123, being driven by driver-Gulzari Lal, came from Jalandhar and collided with the scooter. As a result of the accident, respondent No. 1-claimant received multiple injuries. The Tribunal awarded Rs. 3,78,723/- as compensation to the petitioner. The stand of the Insurance Company before the Tribunal was that the driver of the vehicle was not holding a valid driving licence and there being FAO No. 1627 of 2008 [2] violation of the terms of policy, the Insurance Company was not liable. The plea having been accepted, the Insurance Company was given right to recover the amount from the owner after its payment to the claimant. It is against this direction of the Tribunal that the owner of the vehicle is before this Court. Learned counsel for the appellant relying upon United India Insurance Co. Ltd. v. Lehru and others, 2003(2) RCR (Civil) 278; Lal Chand v. Oriental Insurance Co. Ltd., 2006(4) RCR (Civil) 204; National Insurance Co. Ltd. v. Swaran Singh and others, 2004(3) SCC 297 and Sant Baba Labh Singh v.Santto, 2008(3) RCR (Civil) 210 submitted that in the present case, the appellant, the owner of the vehicle, had taken all the steps, which could possibly be taken to ensure that the driver engaged by him to drive the vehicle knew driving and was having a valid driving licence. The driving test was taken. The driving licence produced by the driver was verified from the Licensing Authority at Hoshiarpur and was found to be duly recorded therein. Under these circumstances, in view of the law laid down in the aforesaid case, the owner of the vehicle could not be made liable to satisfy the award and he was entitled to be indemnified by the Insurance Company. On the other hand, learned counsel for the Insurance Company submitted that a bare perusal of the award of the learned Tribunal shows that no such plea was raised before the Tribunal. The appellant in the present case had not taken due care before the engagement of the driver. The same being breach of the conditions of policy, the Insurance Company would not be liable to indemnify the insured. Heard learned counsel for the parties and perused the paper book. Learned counsel for the appellant has placed on record the affidavit filed by the appellant in his examination-in-chief. The relevant contents thereof are extracted below: “That I employed Sh. Gulzari Lal s/o Tulsi Ram resident of village Sehjowal P. S. Bullowal Tehsil and Distt. Hoshiarpur as a driver on my truck no. PB-12-0123 in the month of January 2004. Before employing him I took his driving test and got his driving licence verified from Licensing Authority, Hoshiarpur.” In United India Insurance Co. Ltd.'s case (supra), Hon'ble the Supreme Court observed as under: “When an owner is hiring a driver he will therefore have to check whether the driver has a driving licence. If the driver produces a FAO No. 1627 of 2008 [3] 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 the 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 it rather strange that insurance companies expect owners to make enquiries with-RTOs which are spread all over the country, whether the driving licence 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, Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly, even in such a case the Insurance Company would remain liable to the innocent third person, but it may be able to recover from the insured.” In National Insurance Co. Ltd.'s case (supra), the Hon'ble Supreme Court considered the entire scheme of the Motor Vehicles Act and the scope and purport of Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 and held 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 149, have to be proved to have been “committed by the insured for avoiding liability by the insurer. More 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 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 conditions of the policy regarding use of vehicle 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 the available defence(s) raised in the said proceedings but must also establish “breach” on the part of the owner of the vehicle, the burden of proof wherefor would be on FAO No. 1627 of 2008 [4] them. (vi) Even where the insurer is liable to prove breach on the part of the insured concerning the policy condition regarding holding of a valid driving 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 Tribunal in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defence available to the insured under Section 149(2) of the Act.” In Lal Chand's case (supra), Hon'ble the Supreme Court observed thus: “In the instant case, the owner has not only seen and examined the driving licence produced by the driver but also took the test of the driving of the driver and found that the driver was competent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, the owner having satisfied himself that the driver had a licence and was driving competently, there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would not then be absolved of its liability.” If the facts of the present case are considered in the light of enunciation of law, as referred to above, in my opinion, the appellant has been able to make out a case, firstly, as noticed above, in his examination-in-chief, the appellant had stated that he had checked that the driver was having a driving licence duly issued by the Licensing Authority at Hoshiarpur. He had even taken his driving test before employment. It has further been noticed by the learned Tribunal, while recording finding on the issue as to whether the driver was holding a driving licence or not, that Gopal Kishore-RW1, Junior Assistant from the office of D.T.O., Hoshiarpur produced documentary evidence on record to show that the duplicate licence had been issued to Gulzari Lal, driver of the vehicle, on 18.6.2003, which was valid upto 18.6.2006, the date of accident in the present case being 27.1.2005. However, it was sought to be explained that in fact the original driving licence with that number was in the name of Jaspal son of Sita Ram and not in the name of Gulzari Lal. Be that as it may, but the admitted fact on record is that a duplicate licence was issued by Licensing Authority at Hoshiarpur in the name of Gulzari Lal, who was driving the vehicle at the time of accident. The FAO No. 1627 of 2008 [5] owner of the vehicle is not supposed to be more vigilant than verifying the licence and also that the person, who is being engaged as a driver, knows driving. In fact, the findings recorded by the Tribunal on this issue are primarily perverse. Considering the fact that the statement made by the appellant to the effect that he had checked the licence of the driver and also had taken his driving test at the time of employment were not taken into consideration while recording the findings on issue No. 3. Accordingly, the appeal is accepted. The impugned award of the learned Tribunal is set aside to the extent recovery rights had been given to the Insurance Company and it is held liable to indemnify the appellant for the amount of compensation, which has been awarded to the respondent No. 1-claimant. (Rajesh Bindal) Judge 19.1.2010 mk (Refer to Reporter)