IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO No. 133 of 2008 a/w a/w FAOs No. 379 of 2007 and 18, 19 & 20 of 2008 Reserved on: 15.05.2015 Decided on: 22.05.2015 1. FAO No. 133 of 2008 National Insurance Company Ltd. …Appellant. Versus Smt. Kaushlaya & others …Respondents. ....................................................................................................................... 2. FAO No. 379 of 2007 National Insurance Company Ltd. …Appellant. Versus Smt. Lalita Devi & others …Respondents. ....................................................................................................................... 3. FAO No. 18 of 2008 National Insurance Company Ltd. …Appellant. Versus Sh. Madan Singh & others …Respondents. ....................................................................................................................... 4. FAO No. 19 of 2008 National Insurance Company Ltd. …Appellant. Versus Sh. Madan Singh & others …Respondents. ....................................................................................................................... -: 2 :- 5. FAO No. 20 of 2008 National Insurance Company Ltd. …Appellant. Versus Smt. Kanta Devi & others …Respondents. Coram The Hon’ble Mr. Justice Mansoor Ahmad Mir, Chief Justice. Whether approved for reporting? Yes. FAO No. 133 of 2008 For the appellant: Mr. Ashwani K. Sharma, Advocate. For the respondents: Mr. Ramesh Sharma, Advocate, for respondents No. 1 to 4. Nemo for respondents No. 5 to 7. ....................................................................................................................... FAO No. 379 of 2007 For the appellant: Mr. Ashwani K. Sharma, Advocate. For the respondents: Mr. V.S. Chauhan, Advocate, for respondents No. 1 to 3. Mr. Neeraj Gupta, Advocate, vice Ms. Jyotika Gupta, Advocate, for respondents No. 4 and 5. Nemo for respondent No. 6. ....................................................................................................................... FAO No. 18 of 2008 For the appellant: Mr. Ashwani K. Sharma, Advocate. For the respondents: Mr. V.S. Chauhan, Advocate, for respondent No. 1. -: 3 :- Ms. Charu Gupta, Advocate, for respondent No. 3. Nemo for other respondents. ....................................................................................................................... FAO No. 19 of 2008 For the appellant: Mr. Ashwani K. Sharma, Advocate. For the respondents: Mr. V.S. Chauhan, Advocate, for respondent No. 1. Ms. Charu Gupta, Advocate, for respondent No. 3. Nemo for other respondents. ....................................................................................................................... FAO No. 20 of 2008 For the appellant: Mr. Ashwani K. Sharma, Advocate. For the respondents: Mr. V.S. Chauhan, Advocate, for respondents No. 1 to 4. Mr. Hoshiar Kaushal, Advocate, vice Mr. Karan Singh Kanwar, Advocate, for respondent No. 6. Nemo for other respondents. Mansoor Ahmad Mir, Chief Justice This judgment shall govern all the five appeals because these are outcome of one motor vehicular accident. 2. The claimants in all the five claim petitions, which are subject matters of these appeals, filed separate claim petitions, four -: 4 :- claim petitions before the Motor Accident Claims Tribunal, Fast Track Court, Shimla (for short "the Tribunal-I) and one claim petition before Motor Accident Claims Tribunal (II), Shimla (for short "the Tribunal-II") on the grounds that they became the victims of the vehicular accident, which was allegedly caused by the driver, namely Shri Sushil Kumar, while driving the offending vehicle, i.e. passenger bus, bearing registration No. HP-07-5186, rashly and negligently on 30.10.2000, near Banol, P.S. Kotkhai, caused the accident, in which five persons sustained injuries and succumbed to the injuries. 3. All the five claim petitions were resisted by the legal representatives of the owner-insured and the insurer on the grounds taken in the respective memo of objections. 4. It is apt to record herein that the driver of the offending vehicle did not choose to contest the claim petitions and was set ex-parte in all the five claim petitions. 5. Issues came to be framed in all the five claim petitions. Claimants in all the claim petitions, the insurer and the legal representatives of the owner-insured examined witnesses, details of which are given in the impugned awards. 6. After scanning the evidence, oral as well as -: 5 :- documentary, both the Tribunals determined the claim petitions, awarded compensation vide separate awards of different dates, held that the appellant-insurer is liable to satisfy the awards and saddled it with liability (for short "the impugned awards") . 7. The claimants and the owner-insured have not questioned the impugned awards on any count, thus, have attained finality so far it relate to them. 8. Appellant-insurer has questioned the impugned awards by the medium of these appeals on the following grounds: (i) that the driver of the offending vehicle was not having a valid and effective driving licence at the relevant point of time and was possessing a fake licence; (ii) that the owner-insured has committed willful breach by employing a driver, who was having a fake licence; and (iii) that the amount awarded is excessive. 9. The owner-insured died during the pendency of the claim petitions and his legal representatives have been brought on record, who have contested the claim petitions and led evidence in support of their case. -: 6 :- 10. The legal representatives of the owner-insured have led evidence and have specifically stated that the owner-insured had taken all precautions at the time of employing the driver of the offending vehicle. He had also perused his driving licence. The evidence led by the legal representatives of the owner-insured has remained unrebutted. 11. It was for the appellant-insurer to prove that the owner- insured of the offending vehicle was in the know of the fact that the driving licence of the driver was fake one and he has committed a willful breach. The appellant-insurer has led evidence to the effect that the driving licence of the driver of the offending vehicle was fake one, but has not led any evidence to prove that the owner- insured has committed any willful breach. Thus, the appellant- insurer has failed to discharge the onus. 12. The Apex Court in a case titled as National Insurance Co. Ltd. versus Swaran Singh & others, reported in AIR 2004 Supreme Court 1531, held that the insurer has not only to prove that the driver of the offending vehicle was not having a valid driving licence, but has to prove that the owner-insured has committed a willful breach. -: 7 :- 13. It is apt to reproduce relevant portion of para 105 of the judgment herein: “105. ..................... (i) ......................... (ii) ........................ (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 the said proceedings but must also establish 'breach' on the part of the owner of the vehicle; the burden of proof wherefore would be on them. (v)......................... (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a -: 8 :- 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.” 14. The Apex Court in another case titled as Pepsu Road Transport Corporation versus National Insurance Company, reported in 2013 AIR SCW 6505, held that the owner-insured is not supposed to go beyond verification to the effect that the driver was having a valid driving licence and the competence of the driver. It is profitable to reproduce para 10 of the judgment herein: “9. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the -: 9 :- extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh's case (supra). If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation.” 15. The same principle has been laid down by this Court in a series of cases including FAO No. 427 of 2006, titled as Parveen & another versus Chetan Sood & others, decided on 21.03.2014 and FAO No. 166 of 2007, titled as Oriental Insurance Company Ltd. versus Smt. Pratibha Devi and others, decided on 10.10.2014. 16. Applying the test to the instant case, I am of the considered view that the appellant-insurer has failed to discharge the onus and both the Tribunals have not fallen in an error in saddling it with liability. 17. It appears that the Tribunal-I has awarded interest @ -: 10 :- 9% per annum from the date of the claim petitions till its realization in four claim petitions, i.e. M.A.C.s No. 72-S/2 of 2005/2001, 65-S/2 of 2005/2000, 61-S/2 of 2005/2000 and 9-S/2 of 2005/2000 (subject matters of FAOs No. 133, 18, 19 and 20 of 2008, respectively) and Tribunal -II has awarded interest @ 7.5% per annum from the date of the claim petition till its realization in M.A.C. Petition No. 13-S/2 of 2001 (subject matter of FAO No. 379 of 2007). 18. Keeping in view the facts of the case read with the mandate of Section 171 of the Motor Vehicles Act, 1988 (for short "the MV Act"), I deem it proper to modify the rate of interest awarded in the four claim petitions, which are subject matters of FAOs No. 133, 18, 19 & 20 of 2008, and hold that the claimants in all the five claim petitions are entitled to interest @ 7.5 per annum from the date of the respective claim petitions till its realization. 19. Registry is directed to release the awarded amount in favour of the claimants strictly as per the terms and conditions contained in the impugned awards after proper identification. Excess amount, if any deposited by the appellant-insurer, be released in its favour through payee's account cheque. 20. Having said so, all the appeals are disposed of and the impugned awards in M.A.C.s No. 72-S/2 of 2005/2001, 65-S/2 of -: 11 :- 2005/2000, 61-S/2 of 2005/2000 and 9-S/2 of 2005/2000 (subject matters of FAOs No. 133, 18, 19 and 20 of 2008, respectively) are modified, as indicated hereinabove. 21. Send down the record after placing copy of the judgment on each of the Tribunal's files. (Mansoor Ahmad Mir) Chief Justice May 22, 2015 ( rajni )