IN THE HIGH COURT OF JUDICATURE AT PATNA Miscellaneous Appeal No.407 of 2007 National Insurance Company Limited, Branch Office at Madhubani Deepak Hotel, Post Office + Police Station + District/Town Madhuabni. ... ... Appellant. Versus 1. Mosomat Asha Devi, Wife of Late Ganesh Das. 2. Sunil Kumar Das 3. Anil Kumar Das 4. Savita Kumari, Minor sons and daughter of Late Ganesh Das. 5. Kaushalaya Devi, Wife of Bahru Das, Respondent nos.1 and 5 are wife and mother of the deceased respectively and Respondent nos.2, 3 and 4 are Minor sons and daughter of the deceased under the guardianship of their mother Asha Devi and All are Residents of Village & Post office Loans, Police Station Sadar Darbhanga, District Darbhanga. 6. Pawan Kumar Jha, Son of Yogendra Jha, Village Baliya, Post Office Raiyam Factory, Police Station Sakri, District Madhubani. ... ... Respondents. ---------------------------------- 17. 29.9.2011. Heard Shri Prakash Kumar, learned counsel for the appellant and Shri Ashutosh Kumar, learned counsel appearing on behalf of the respondent nos.1 to 5. Despite valid service of notice, the respondent no.6 has not entered his appearance. The present appeal has been preferred under Section 173 of the Motor Vehicles Act,1988 (hereinafter referred to as the Act) against the judgment dated 14.5.2007 and award dated 30.5.2007 by the Fast Track Court No.IV, Madhubani (hereinafter referred to as the Tribunal). The Tribunal has directed the 2 appellant/National Insurance Company Limited, which was insurer of offending vehicle i.e. Jeep bearing registration No.BR-32A-0041 to pay compensation amount of Rs.1,89,900/- to the claimants/respondent nos.1 to 5 with simple interest at the rate of 6% per annum from the date of filing of the claim petition. Short fact of the case is that on 2.5.2002, while husband of respondent no.1 was traveling along with others in the offending Jeep at about 9.45 P.M. due to rash and negligent driving of the vehicle, the jeep turned turtle by the road side as a result of which the husband of respondent no.1, namely, Ganesh Das, who was sitting extreme right in the middle seat of the jeep got crushed beneath the jeep and died on the spot itself. Thereafter, an F.I.R. was lodged against the driver of the offending vehicle vide Madhubani Town P.S. Case No.115 of 2002 under Sections 279, 337 and 304(A) of the Indian Penal Code. In the first information report, the driver‟s name was mentioned as Madan Mishra, son of Jogendra Mishra. However, during 3 investigation, it was found that offending vehicle at the time of accident was being driven by respondent no.5, Pawan Kumar Jha, who was also owner of the said vehicle and thereafter, charge sheet was submitted against him. The claimants i.e. respondent no.1, wife of the deceased, respondent nos.2 to 4, son and daughters of the deceased jointly filed Claim Case vide MACT Case No.20 of 2002 under Section 166 of the M.V. Act in the court of Motor Accident Claims Tribunal/District Judge, Madhubani arraying the driver and owner of the offending vehicle as opposite party nos.1 and 2 and the appellant being insurer was impleaded as opposite party no.3. In the case, despite valid service of notice, the driver-cum-owner of the offending vehicle did not appear and as such the Claim Tribunal proceeded against him ex-parte. In the case, the insurer i.e. appellant appeared and filed a written statement objecting to the claim petition. The claimants besides producing documents examined altogether five witnesses and the claimants before the Tribunal fully 4 established that the death of the deceased had occurred in a Motor Vehicle Accident due to rash and negligent driving of the offending vehicle. They also established regarding the income of the deceased and finally the Tribunal directed the insurer to pay the compensation amount to the claimants as indicated above. Aggrieved with the impugned judgment and award, the National Insurance Company Limited has preferred the present appeal. The appeal has been preferred primarily on the ground that the driver, who was the owner of the offending vehicle, was driving the vehicle at the time of accident without any valid license. During internal investigation conducted by the Insurance Company, the purported driving license was found as fake since the driving license, which was claimed to be in the name of the driver of the offending vehicle was actually standing in the name of a different person and as such the Claim Tribunal instead of directing the owner of the offending vehicle has incorrectly and illegally directed the insurer of the 5 vehicle to make payment of the compensation amount. At the time of hearing, learned counsel for the appellant Shri Prakash Kumar has only raised the issue that in case of invalid driving license the insurer was not liable to pay compensation amount. It was argued that time without number, it has been held that in absence of valid driving license the insurer cannot be directed to pay compensation, but in such case, the owner of the offending vehicle is required to be directed to pay compensation. In support of his argument, Shri Prakash Kumar, learned counsel for the appellant has heavily relied on an apex court judgment reported in 2008(3) SCC 193 (Prem Kumari and others Vs. Prahlad Dev and others). He has specifically relied on paragraph-9 of the judgment. For proper appreciation, it would be appropriate to quote paragraph-9 of Prem Kumari‟s case (Supra), which is as follow : “9. The effect and implication of the principles laid down in 6 Swaran Singh case has been considered and explained by one of us (Dr. Arijit Pasayat,J.) in National Insurance Co. Ltd. v. Laxmi Narain Dhut. The following conclusions in para 38 are relevant : (Laxmi Narain case, SCC p.719): “38. In view of the above analysis the following situations emerge : 1. The decision in Swaran Singh case has no application to cases other than third-party risks. 2. Where originally the licence was a fake one, renewal cannot cure the inherent fatality. 3. In case of third-party risks the insurer has to indemnify the amount, and if so advised, to recover the same from the insured. 4. The concept of purposive 7 interpretation has no application to cases relatable to Section 149 of the Act.” Relying on aforesaid judgment, it was submitted that in the instant case, driver of the offending vehicle was non else, but the owner himself and in such situation, it was the owner, who was liable to be directed to pay compensation not the insurer. On this ground alone, it has been prayed to set aside the impugned judgment and award. Shri Ashutosh Kuamr has appeared on behalf of respondent nos.1 to 5/claimants. Even before this Court, the respondent no.6/driver-cum-owner of the offending vehicle, despite valid service of notice has not appeared and participated in the present proceeding. Learned counsel for the claimant has argued that onus was on the insurer to establish the fact that driver of the offending vehicle at the time of accident was not having any valid license. Before the tribunal, the insurer has not produced any evidence to establish that the 8 driver was not having license to drive the vehicle. It was argued that except filing written statement before the tribunal and investigation report, which was internally got conducted by the Insurance Company, the insurer has produced no cogent evidence in support of its claim. In absence of any material, the learned claim tribunal has rightly allowed the claim case since the appellant was the insurer of the offending vehicle and at the time of accident, the offending vehicle was under the cover of insurance policy. Besides hearing learned counsel for the parties, I have also perused the materials available on record. Since the appellant has challenged the impugned judgment and award only on the ground that driver was not having any valid driving license, there is no requirement to discuss other facts in detail. It is not in dispute that at the time of accident, the offending vehicle was under insurance cover of the appellant and the appellant was the insurer of the vehicle. There is plethora of judgment on the point that for taking the 9 defence under Section 149(2) of the M.V. Act, the insurer is required to establish that the driver at the time of accident was not having any valid driving license. If the insurer is taking such plea, it is mandatory for the insurer to establish such plea by cogent and reliable evidence. Before the claim tribunal in the present case, the insurer has not at all bothered to produce or lead any evidence on the point of invalid or no driving license in favour of the driver of the offending vehicle. On perusal of the written statement also, it is evident that no such plea was specifically taken by the insurer. Regarding the plea of driving license, a vague averment was made in paragraph-11 of the written statement of insurer. For just decision in the matter, it would be appropriate to quote the said paragraph, which is as follows : “11. That driving license, fitness certificate, registration documents, age certificate of the deceased, 10 tax token, insurance Police have not furnished on the record which is encumbrant upon claimants as well as O.P. owner, be directed to produce and prove in this case failing which it should be presumed that there is statutory violation of the condition of the policy, if any, as contemplated u/s 149 of M.V. Act and this O.P. will not as such stand in law to indemnify the awarded amount of compensation, if at all in future.” It is further evident that the insurer has not produced any evidence. Regarding the plea of invalid/fake driving license the insurer has brought on record a report of verification of driving license (Ext.A) prepared by one Shri Dewashish Gupta, advocate, which was addressed to the Branch Manager, National Insurance Company Ltd., Brahmpura Branch, Murshidabad along with the application for information. The 11 insurer had claimed before the tribunal that Driving License No.MSD/136/90 was issued in the name of one Shri Ashok Kumar Rudra. However, on the record, there was a photo copy of driving license vide No.136 of 1990 issued in the name of one Shri Prakash Kumar Jha, who was driver and owner of the offending vehicle. The photo copy of the driving license in the name of Shri Prakash Kumar Jha was issued from the District Transport Officer, Samastipur. In view of aforesaid material, it is difficult to comprehend as to how it can be presumed that the driver of the offending vehicle was not having any valid driving license. Apparently, in such situation, the onus was completely on the insurer to produce reliable evidence for establishing that driver was carrying either no license or was having fake driving license. On the basis of materials available on record, the court is of the opinion that the insurer had completely failed to establish the plea of invalid/fake driving license. In a case reported in 2004(3)SCC 12 297 (National Insurance Company Ltd. Vs. Swaran Singh), it has been held that for establishing breach of policy condition i.e. dis-qualification of the driver onus would be on the insurer. At this stage, it is appropriate to quote paragraph-110 of Swaran Singh‟s case (Supra), which is as follows : “110. The summary of our findings to the various issues as raised in these petitions is as follows : (i) Chapter XI of the Motor Vehicles Act, 1988 providing compulsory insurance of vehicles against third-party risks is a social welfare legislation to extend relief by compensation to victims of accidents caused by use of motor vehicles. The provisions of compulsory insurance coverage of all vehicles are with this paramount object and the provisions of the Act have to be so interpreted as to 13 effectuate the said object. (ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149(2)(a)(ii) of the said Act. (iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence of, 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 14 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. (iv) insurance companies, 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 them. (v) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case. 15 (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 149(2) of the Act. (vii) The question, as to whether the owner has taken reasonable care to find out as 16 to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. (viii) If a vehicle at the time of accident was driven by a person having a learner‟s licence, the insurance companies would be liable to satisfy the decree. (ix) The Claims Tribunal constituted under Section 165 read with Section 168 is empowered to adjudicate all claims in respect of the accidents involving death or of bodily injury or damage to property of third party arising in use of motor vehicle. The said power of the Tribunal is not restricted to decide the claims inter se between claimant or claimants on one side and insured, insurer and 17 driver on the other. In the course of adjudicating the claim for compensation and to decide the availability of defence or defences to the insurer, the Tribunal has necessarily the power and jurisdiction to decide disputes inter se between the insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable and executable in the same manner as provided in Section 174 of the Act for enforcement and execution of the award in favour of the claimants. (x) Where on adjudication of the claim under the Act the Tribunal arrives at a conclusion that the insurer has 18 satisfactorily proved its defence in accordance with the provisions of Section 149(2) read with sub-section (7), as interpreted by this Court above, the Tribunal can direct that the insurer is liable to be reimbursed by the insured for the compensation and other amounts which it has been compelled to pay to the third party under the award of the Tribunal. Such determination of claim by the Tribunal will be enforceable and the money found due to the insurer from the insured will be recoverable on a certificate issued by the Tribunal to the Collector in the same manner under Section 174 of the Act as arrears of land revenue. The certificate will be issued for the recovery as arrears of land revenue only if, as required by sub-section (3) of Section 168 of the Act 19 the insured fails to deposit the amount awarded in favour of the insurer within thirty days from the date of announcement of the award by the Tribunal. (xi) The provisions contained in sub-section (4) with the proviso thereunder and sub- section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.” 20 In view of aforesaid proposition of law, it was duty on the part of the insurer/appellant to establish the breach by the insured/driver and owner of the offending vehicle in the present case and since there were no evidence on record to raise finger in respect of driving license there is no reason to interfere with the impugned judgment and award. In the facts and circumstances of the present case, the court is of the opinion that the appellant being insurer of the offending vehicle cannot be exonerated from the liability of the compensation amount, which has been directed by the Claim Tribunal and as such I do not find any material to interfere with the impugned judgment and award and appeal stands dismissed. In view of dismissal of the appeal, the statutory amount deposited by the appellant may be remitted back to the court below. N.H./ ( Rakesh Kumar,J.)