IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA FAO (MVA) No. 55 of 2008 alongwith FAO (MVA) Nos. 56 and 57 of 2008 Reserved on :25th September, 2008 Date of Decision: 17th October, 2008 FAO (MVA) No. 55 of 2008 Dharam Parkash Appellant Versus Des Raj Bedi and others Respondents FAO (MVA) No.56 of 2008 Dharam Paraksh Appellant Versus Rishi Devi and others Respondents FAO(MVA) No. 57 of 2008 Dharam Parkash Appellant Versus Usha Devi and others Respondents Coram The Hon’ble Mr. Justice Sanjay Karol,J. Whether approved for reporting1? No. For the appellant: Mr.Rajiv Sirkeck, Advocate For the respondent-Insurance Company: Mr.Harish Behl, Advocate. For private respondents : Nemo. Sanjay Karol, J. The controversy in issue in all the aforesaid appeals is same, therefore, as such the same are being disposed of by a common order. Whether the reporters of Local Papers are allowed to see the Judgment? 2 Vehicle No.HPS-7437 owned by Shri Dharam Parkash, being driven by Shri Bishan Dass met with an accident at Nirmand, Kullu, H.P. In the said accident, various persons received injuries and consequently died. Various Claim Petitions were filed either by the legal heirs or by the injured persons claiming compensation before different Tribunals in the State of Himachal Pradesh and different amount of compensations were awarded. The vehicle was insured with the United India Insurance Company Limited and as such, the Insurer was held liable to indemnify the insured and pay the awarded amount. Various appeals assailing the awards passed by Tribunals were filed before this Court. While the issues with regard to negligence of the driver, the claimants entitlement and amount of compensation decided in their favour were upheld, but, however on the limited question of liability of the Insurance Company to indemnify the owner (Issue No.3) and also Issue No.4, the matter was remanded back to the Tribunal for consideration afresh, after affording due opportunity to the necessary parties of leading fresh evidence. For the purpose of determination of controversy, details of award passed by the Tribunal, relevant appeals filed by the Insurance Company and the orders passed by this Court are given as under:- No. of present appeal No. of claim petition Date of decision of claim petition Claim petition decided by Earlier Appeal No. of this Court and date of decision FAO No.55 of 2008 MAC Case No.12 of 1995 30.8.1997 MACT, Kinnaur at Rampur Bushahr FAO No.83 of 1998, decided on 23.5.2005 3 FAO No. 56 of 2008 MAC Case No. 13 of 1995 8.12.1997 MACT, Kinnaur at Rampur Bushahr FAO No.336 of 1998 and Cross objections No.27/99, decided on 23.5.2005 FAO No.57 of 2008 MAC Case No. 11 of 1995 30.8.1997 MACT Kinnaur at Rampur Bushahr FAO No.97 of 1998, decided on 23.5.2005 After remand, the Tribunal afforded opportunity to the necessary parties i.e. the Insurance Company as also the owner of the vehicle to lead evidence. For the sake of ready reference, Issues No.3 and 4 are reproduced as under:- “3. Whether the driver was not having a valid licence and the Insurance Company is not liable to indemnify the owner of the truck? OPR. 4. Whether deceased Devinder Bedi was an unauthorized passenger, if so, its effect? OPR-2.” Appreciating the material on record, the Tribunal decided the issues in terms of awards dated 12.10.2007, which have now been assailed by the owner in the present appeals. For the aforesaid reason, the scope of the present appeals is narrow and is confined to the determination of Issue No.3 only as Issue No.4 stood decided against the Insurance Company, against which no appeal has been filed. 4 I have heard learned counsel for the parties and also perused the record. In the Claim petition, the claimants specifically pleaded that the driver of the truck was negligent and had been driving the vehicle in a rash and negligent manner which was the cause of the accident. In response thereto the owner and the driver filed a joint reply in which the only defence they took was that the accident occurred due to the giving way of the retaining wall of the road and not as a result of any negligence on the part of the driver. Importantly, the Insurance Company in its reply took the defence that the driver was not possessing a valid driving licence at the time of accident and, therefore, the owner having committing serious and material breaches of the terms and conditions of the Insurance Policy, the insurer was not entitled to indemnify the insured. This Court, while remanding the matter back on 23.5.2005 specifically observed that the Insurance Company had taken a defence, but, however, sufficient opportunity had not been afforded to examine its witnesses and prove its case. The Court had specifically allowed the parties to lead their evidence to prove their respective defences. From the record, it is evident that earlier no evidence had been led either by the driver or the owner as only the claimants had led their evidence by examining different witnesses to prove their case. Even after remand the owner did not lead any evidence in support of his defence. Importantly, even in the written statement the owner did not plead that prior to the engagement he had verified the 5 contents and the validity of the driving licence possessed by the driver. In any event, the owner has not stepped into the witness box to depose in this regard. The Insurance Company led its evidence by examining two witnesses, namely, Smt. Rani Saini (RW-1) and Shri Surinder Kumar (RW- 2). From the record, it is evident that identical statements in all the aforesaid three appeals were recorded, therefore, the same are being considered for deciding the present appeals together. RW-1, the Administrative Officer, United India Insurance Company, Divisional Office, has categorically deposed that the vehicle in question was insured in terms of Insurance Policy (Ext.RW-1/A). After the accident the owner had lodged a claim vide Claim Form, Mark A, which contained the particulars of the driving licence of the driver driving the vehicle at the time of accident. On the basis of such disclosure the genuineness of the driving licence was got verified from Hyderabad by engaging the services of Shri G.Rammurti. Services of Shri Surinder Kumar, Investigator were also availed and the verification again got done through him. The reports of different RLAs/ branches at Hyderabad (Mark C to Mark H) were obtained. On the basis of such reports, the claim was repudiated as the licence was fake and not issued by RLA, Hyderabad and the driver not holding a valid driving licence, as such, in view of the violation of the terms and conditions of the Insurance Policy, the Company could not have indemnified the insured. The witness has been cross- examined by the owner and from the same nothing has emerged which would show that the verification was not carried out from different RLAs at Hyderabad. 6 Shri Surender Kumar (RW-2) has deposed that he had been engaged by the Insurance Company to verify the driving licence in question from RLAs at Hyderabad. In October, 1996 he carried out the verification himself by visiting the respective Branches of the RLAs at Hyderabad. He certified that he carried out the investigation and prepared the reports Mark C to Mark G (the documents were marked as the original was not produced by the Insurance Company). During his investigation he found that the driving licence bearing the number in question had not been issued by any of the offices of RLAs at Hyderabad. After his enquiry, he submitted the report in the office of Divisional Manager. There is no serious cross- examination of this witness. The suggestion is only to the effect that the verification was carried out in the absence of the owner and the licence holder. This is the only evidence on record after the matter was remanded by the Court. Documents Mark C to Mark H are photocopies. There is no explanation as to why the originals were not produced by the Insurance Company and as such cannot be looked into at all as the owner rightly objected to the marking of the said documents at the time of recording the statement. However, from the statements of RW-1 and RW-2, it is evident that verification was got carried out from different Branches of RLAs at Hyderabad. RW-2 has categorically deposed that he himself visited the Branches and found the relevant driving licence to be fake as no licence bearing the number in question had ever been issued by the Authorities. Importantly, there is no cross-examination on this point. Therefore, in my view, the Insurance Company has been sufficiently able to 7 prima facie show that the driving licence was fake and thus not effective and valid. In my view, the Insurance Company had taken all possible steps within their means to shift the onus of proving the factum of validity and effectiveness of the licence on the owner or the driver. The Apex Court in Swaran Singh (2004) 3 SCC 297, has held as under:- “The summary of our findings to the various issues as raised in these petitions are 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 effectuate the said object. (ii) 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 driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere 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 condition of the policy regarding use of vehicles 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 8 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 said burden would be discharged, inasmuch as the same would depend upon the facts and circumstance of each case. (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 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 insured under section 149(2) of the Act. (vii) The question as to whether the owner has taken reasonable care to find out as 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 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 insurer and the insured. The decision rendered on the claims and disputes inter se 9 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 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 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 proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against 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.” In the present case, the owner did not step into the witness box or lead any evidence whatsoever. Even in the written statement, no 10 such plea was taken that the owner had seen the driving licence of the driver prior to the engagement or had verified the contents thereof. This Court in National Insurance Co. v. Amar Chand & others, AIR 2006 HP 49, has held that where the owner does not produce any material to show that he had checked the driving licence at the time of employment, adverse inference is to be drawn against the employer. The Court further held that where the Insurance Company discharged the burden of proof, it was obligatory on the part of the owner to show that he had checked the driving licence at the time of employment as these facts are only in the knowledge of the owner which can be proved by deposing in the Court. In the present case, the Insurance Company has proved that the Insured was guilty of negligence and has failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of the vehicle by the duly licensed driver. The Apex Court in National Insurance Co. Ltd. vs. Laxmi Narain Dhut, (2007) 3 SCC 700 = 2007 ACJ 721, has held that the subsequent renewal of a fake licence would not cure the inherent defect and transforming the fake licence as genuine one. For the aforesaid reasons, I find no illegality or infirmity in the impugned award and the present appeals are dismissed. October 17, 2008 (Sanjay Karol) (C) Judge.