THE HON’BLE SRI JUSTICE D.S.R.VARMA CIVIL MISCELLANEOUS APPEAL No.1079 of 2003 Date : 19.08.2010 Between: The National Insurance Company Ltd., Rep.by its Regional Manager, Hyderabad. … Appellant And Smt. K. Saraswathi and others. … Respondents THE HON’BLE SRI JUSTICE D.S.R.VARMA CIVIL MISCELLANEOUS APPEAL No.1079 of 2003 ORAL JUDGMENT: Heard learned Standing Counsel for the appellant-National Insurance Company Limited as well as the learned counsel for respondent Nos.1 and 2-claimants. 2. Aggrieved by the judgment and decree, dated 02.08.2002, in O.P.No.807 of 1998, passed by the Motor Accident Claims Tribunal- cum-I Additional District Judge, Ranga Reddy District (for brevity “the Tribunal”), awarding a sum of Rs.1,60,480/- as against the claim of Rs.2,00,000/- made by the claimants for the death of the deceased- K.Vishnuvardhan Reddy, who died in a motor accident that occurred on 05.05.1998 at 7-00 a.m., while the deceased was proceeding as a cleaner of the lorry bearing No.ABT 836 from Hyderabad to Kurnool and when the lorry reached Pulloor village limits on NH No.7, due to the rash and negligent driving on the part of driver of the said lorry, the present civil miscellaneous appeal has been preferred by the appellant-National Insurance Company Limited. 3. The appellant herein is the insurer, respondent Nos.1 and 2 are the claimants and respondent No.3 is the owner of the offending lorry. 4. This is a case of death in a motor accident. The other particulars regarding the method and the manner in which the accident had occurred and also the aspect of negligence are not referred to since not in dispute. The Tribunal, after appreciating the evidence on record, both oral and documentary, awarded a sum of Rs.1,60,480/- towards compensation to the claimants, holding the insurer and the owner of the offending lorry jointly and severally liable to pay the same. Hence the present appeal by the insurer. 5. The only point that arises for consideration in this appeal is whether the appellant insurer is liable to pay the compensation in case where the driver of the offending vehicle, who caused the accident, had no valid licence. 6. Learned Standing Counsel for the insurer contended that the driver of the offending vehicle had no valid driving licence and hence, the liability cannot be fastened against the appellant-insurer. In support of his contention, the learned Standing Counsel placed reliance in the judgment rendered in NEW INDIA ASSURANCE CO. LTD. v. KAMALA[1]. 7. In the above said judgment, it is observed that in case of invalid licence or fake licence or no licence or inadequate licence, proper care ought to have taken by the owner of the offending vehicle, in case of any breach. 8. In this regard, it is to be seen that following the said judgment and also various other judgments of the apex Court in NATIONAL INSURANCE CO. LTD., v. BALJIT KAUR – 2004 (1) ALD 98 (SC) = 2004 ACJ 428 (SC); NATIONAL INSURANCE CO. LTD., v. BOMMITHI SUBBHAYAMMA – 2005 ACJ 721 (SC); NATIONAL INSURANCE CO. LTD., v. SWARAN SINGH – 2004 (2) ALD 36 (SC) = 2004 ACJ 1 (SC); ORIENTIAL INSURANCE CO. LTD. v. NANJAPPAN – 2004 ACJ 721; UNITED INDIA INSURANCE CO. LTD. v. LEHRU – 2003 ACJ 611; and UNITED INDIA INSURANCE CO. LTD. v. TILAK SINGH – 2006 (3) ALD 75 (SC) = (2006) 4 SCC 404, a Division Bench of this Court, to which I am (DSRV,J) a party, in UNITED INDIA INSURANCE CO., LTD., GUNTUR v. D. PRAMEELA DEVI[2] observed as under: “The question of fastening the liability on the insurer, as a matter of basic principle of redemption, would arise when initial liability is fastened against the insured. But, in cases like ‘fake driving licence’ or ‘inadequate driving licence’, as already pointed out, a fundamental duty is cast upon the insurer to prove that the insured was negligent in allowing the vehicle to be driven by a person with ‘fake driving licence’ or ‘inadequate driving licence’.” The Division Bench further held— “that the insurer would not be allowed to avoid its liability to pay the compensation, and, on the other hand, is girdled with the initial liability of paying the amount of compensation and recover the same from the insured or the driver, as the case may be.” 9. Therefore, in view of the principle laid down by the apex Court time and again and as followed by a Division Bench of this Court and also in view of the fact that the legislation is in the nature of beneficial to the victim, in order to accord immediate sustenance to the next kin, I am of the view that the initial liability of the insurer to pay the compensation to the claimant cannot be erased. Obviously, the said judgments have been rendered with a view to meet the ends of justice and on equitable lines. 10. In the instant case, I am convinced that the Tribunal had awarded the amount of compensation rightly, having assessed the circumstances, and fastened the liability jointly and severally against the insurer and also the owner. However, having regard to the fact that has been established by the insurer that the driver of the offending lorry did not possess valid licence, on the other hand he is having fake licence, I feel it appropriate to direct the insurer initially to pay the entire amount awarded by the Tribunal towards compensation and recover the same from the owner or the driver of the offending lorry, as the case may be. 11. Further, the Tribunal had awarded interest on the amount of compensation at 9% per annum. I am of the view that the said rate of interest is on higher side. Therefore, I feel it appropriate to reduce the rate of interest from 9% to 7.5% per annum. 12. Accordingly, the civil miscellaneous appeal is allowed in part, with a direction to the appellant-insurer to pay the amount of Rs.1,60,480/- awarded by the Tribunal towards compensation to the claimants and recover the same from the 3rd respondent-owner of the offending lorry, and further reducing the rate of interest from 9% to 7.5% per annum on the amount awarded towards compensation from the date of petition till realisation. In all other aspects, the judgment passed by the Tribunal shall remain unaltered. There shall be no order as to costs. _______________________ JUSTICE D.S.R.VARMA 19.08.2010. Msr THE HON’BLE SRI JUSTICE D.S.R.VARMA CIVIL MISCELLANEOUS APPEAL No.1079 of 2003 19.08.2010 (Msr) [1] 2001 ACJ 843 [2] 2007 (4) ALD 495 (DB)