IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. FAO(MVA) No. 248 of 2005 with FAO No. 255/2005 Date of Decision : May 19, 2009 FAO(MVA) No. 248 of 2005 Oriental Insurance Co.Ltd., …Appellant. Versus: Harnam Singh & others …Respondents. FAO No. 255 of 2005 Oriental Insurance Co.Ltd., …Appellant. Versus: Chottu Ram & others …Respondents. Coram: The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for reporting?1 No For the appellants : Dr. Lalit Kumar Sharma, Advocate. For respondents 2 & 3: Mr. Harsh Khanna, Advocate. Sanjay Karol, J. (Oral) In the present appeals, the insurer M/s. Oriental Insurance Co. Ltd. has assailed the common award dated 8.10.2004, passed by the Motor Accidents Claims Tribunal-II, Solan, Distt. Solan, H.P. The point in issue is limited and, therefore, the facts necessary for adjudication of the appeals are stated as under:- 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 Mohindra Jeep No. HP-02-8606 driven by Shri Gopal Singh and owned by Shri Sham Lal Thakur, collided with Scooter No.HP-17-2587 which was driven by the claimant Shri Harnam Singh. The accident took place on 15.11.2001 near Bohali, on Kumarhatti-Nahan Road, Police Station, Dharampur, Distt. Solan, H.P. Both Shri Harnan Singh and the pillion rider Shri Chhotu Ram sustained injuries. The claimants were given medical treatment. FIR No. 120/2001, dated 15.11.2001 was registered against Shri Gopal Singh for having driven the vehicle in a rash and negligent manner. Claimant Shri Harnam Singh filed claim petition No.17-S/2 of 2002 titled as Harnam Singh v. Sham Lal Thakur & Ors., and claimant Shri Chhotu Ram filed claim petition No.18- S/2 of 2002, titled as Chhotu Ram v. Sham Lal Thakur & Ors., before the Motor Accidents Claims Tribunal-II, Solan, Distt. Solan, H.P. Based on the pleadings of the parties, the Tribunal framed the following issues in Claim Petition No.17-S/2 of 2002:- “1. Whether on 15.11.2001 at about 1 PM at Bohali on Kumarhatti-Nahan road, the petitioner compound multiple fractures in his right leg and other grievous injuries on his body in a vehicular mishap, as alleged? ……..OPP 2. If issue No.1 is proved in affirmative, to what amount of compensation the petitioner is entitled to and from whom? …………OPP 3. Whether the petitioner being scooter rider did not have the valid driving licence at the time of accident, as alleged? ……..OPR1 & 2 3 4. Whether Shri Gopal Singh, taxi driver did not have the valid driving licence at the time of accident? ….. OPR-3. In Claim Petition No.18-S/2 of 2002, the Tribunal framed the following issues:- 1. Whether on 15.11.2001 at about 1 PM at Bohali on Kumarhatti-Nahan road, the petitioner compound multiple fractures in his right leg and other grievous injuries on his body in a vehicular mishap, as alleged? ……..OPP 2. If issue No.1 is decided in affirmative, to what amount of compensation the petitioner is entitled to and from whom? …………OPP 3. Whether the petitioner being scooter rider did not have the valid driving licence at the time of accident, as alleged? ……..OPR1 & 2 4. Whether Shri Gopal Singh, taxi driver did not have the valid driving licence at the time of the accident? ….. OPR-3. The respondent-owner pleaded that Shri Gopal Singh was not entrusted with the vehicle. Opportunity to lead evidence was afforded to the parties. Based on the material on record (oral and documentary), the Tribunal concluded that the claimants sustained injuries in an accident, which took place on 15.11.2001, between the two vehicles. The cause of the accident being the rash and negligent driving of the vehicle of respondent No.3, Shri Gopal Singh against whom an FIR was also 4 registered. The claimants were thus entitled for compensation both as pecuniary and non pecuniary damages. However, while deciding issue No.4 (identical in both the cases), the Tribunal recorded the following findings:- “The contention was raised by the respondent No.3 insurance company that the jeep No.HP-02- 8606 was a light transport vehicle and as such by dint of the aforesaid licence the respondent No.2 was not authorized to drive the said vehicle. However, there is no evidence to prove that jeep No.HP-02- 8606 was a light transport vehicle. Even if the contention that the respondent No.3 insurance company is analyses and held that there was breach of the policy conditions whereby the respondent No.1 authorized the respondent No.2 who was holding licence for light motor vehicle to the jeep. It cannot be held that the conditions of driving licence was so fundamental as to have contributed to the cause of accident. The licence was issued in favour of the respondent No.2 on 30.9.1999. The accident took place on 15.11.2001 that is after the lapse of more than 2 years of the issue of licence. The respondent No.2 during the intervening period would have acquired proficiency in the act of driving and as such even could have driven the jeep No.HP-02-8606 validly. The respondent No.2 was also holding licence to drive the light motor vehicle for more than 2 years and as such was entitled to issuance of licence to drive a transport vehicle, therefore, he was eligible for grant of driving licence to drive the transport vehicle and as such even if it is held that there was breach of policy condition and that the respondent 5 No.1 knowingly committed such breach by handing over custody of vehicle to respondent No.2, the respondent No.3 cannot avoid liability to make payment to the petitioner who is third party as the accident is not proved to have been caused due to breach which is fundamental and has caused due to breach which is fundamental and has contributed to the cause of accident. The reliance is placed on decision reported in 2004 (S.C.) 1531) in case titled as National Insurance Company Ltd. v/s Swaran Singh and others where in it has been held as under:- (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. 6 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 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 7 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. The ratio of the aforesaid decision makes it evident that the insurer cannot be allowed to avoid its liability towards insured unless the breach of policy condition or breach of the condition of driving licence is so fundamental as is found to have contributed to the cause of accident. Therefore, the amount of compensation in this case payable on behalf of respondents No. 1 and 2 is to be indemnified by respondent No.3. If it is assumed that Shri Laiq Ram was driving the jeep No. HP-02-8606 which though is not proved then the respondent No.3 cannot contend that the amount is not to be paid by the respondent No.3 as Ext.R-1 copy of driving licence of Shri Laiq Ram makes it evident that he was having a driving licence to drive the light transport vehicle since 16.11.1994. Thus, it is held that the respondent No.2 was having valid and effective driving licence to drive the jeep No.HP-02-8606. This issue is decided against the respondent No.3.” Undisputedly, respondent No2. Shri Gopal Singh was possessing a driving licence (Ext.RW-4/A) whereby he was authorized to drive only motorcycles/scooters and light motor vehicles. This is also evident from the statement of Shri Laiq Ram (RW-6). 8 The fact that the vehicle in question was being driven as a taxi stands admitted by the driver Shri Gopal Singh (RW-4) himself. As to whether one Shri Laiq Ram was driving the vehicle or not, as is sought to be pleaded by Mr. Harsh Khanna learned counsel for the owner, was not an issue before the Tribunal, hence, the same cannot be considered now and more so, keeping in view the admission made by driver Shri Gopal Singh. The finding returned by the Tribunal that there was no proof of the vehicle being driven as a commercial vehicle is also erroneous for the said reason. The holder of the licence can drive only that category of vehicle for which he has been authorized. The ratio of law laid down by the Apex Court in National Insurance Co. Ltd. vs. Swaran Singh & Others (2004) 3 SCC 297, has been misconstrued. The Tribunal further erred in holding that even if Shri Gopal Singh was not holding a valid and effective driving licence, the breach was not fundamental which could have contributed to the cause of the accident. The Apex Court in National Insurance Co. Ltd., vs. Kusum Rai & Ors. (2006) ACJ 1336, after taking into account its earlier decision rendered in Swaran Singh (supra) has held that if the driver does not possess a driving licence to drive the type of the vehicle which he was driving at the time of the accident, it would amount to breach of conditions of contract of insurance, 9 entered into between the insured and the insurer, and the insurer is exempted from the liability under the contract. In the said case also, the vehicle being used as a taxi was considered to be a commercial vehicle, and since the driver possessed licence only to drive light motor vehicle, the insurer was held not liable to indemnify the insured. For the aforesaid reasons, the appeals are allowed and the findings in the impugned award to the aforesaid extent are set-aside. However, the insurer shall pay the awarded sum to the claimants who shall be at liberty to recover the same from the owner. ( Sanjay Karol ), Judge. May 19, 2009. (rana)