IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO.No. 121 of 2010. Date of Decision: 27.12.2011. _______________________________________________ National Insurance Company Limited, through its Divisional Manager, Divisional Office, Hotel Himland, Cart Road, Shimla, District Shimla, H.P. ….Appellant. Versus. 1. Anita Devi widow of late Sh. Charan Singh. 2. Surinder Kumar, minor son late Sh.Charan Singh. 3. Ravinder Kumar minor son late Sh.Charan Singh. 4. Sohan Singh son of Swaran Singh 5. Darshan Singh S/o Swaran Singh 6. Sukh Dev S/o Sh.Swaran Singh (deleted vide order dated 2.5.2011) 7. Bimla Devi daughter of Swaran Singh. 8. Raksha Devi daughter of Khem Singh. 9. Ms. Kanta Devi daughter of Khem Singh. 10.Smt.Swarni Devi mother of deceased wife of Swaran Singh. All residents of village Nangal Salangari, Tehsil & District Una, H.P. 11.Rashpal Singh S/o Ram Prasad, R/o Amboa,Tehsil Amb, District Uan (owner of bus No.HP-19-1546). 12.Sona Devi widow of latte Sh.Jagroop Singh S/o Bhagwan Singh. 13. Aditya daughter of late Sh.Jagroop Singh. 14. Vivek minor son of late Sh.Jagroop Singh. 15. Ms.Sunita Devi daughter of late Sh.Jagroop Singh 16. Monu Devi daughter of late Sh.Jagroop Singh All residents of village Bari, P.S. Terris, Tehsil Dehra, District kangra, H.P. ….Respondents. Coram: Hon’ble Mr. Justice Dev Darshan Sud, Judge. 2 Whether approved for reporting1?. Yes. For the petitioner: Ms. Sunita Sharma, Advocate. For Respondent-11: Mr.Arvind Sharma, Advocate with Mr.Amit Sharma, Advocate. Dev Darshan Sud,J. The Insurance Company challenges the award passed by the learned Motor Accident Claims Tribunal, Una awarding a sum of Rs.4,18,000/- to the claimants-petitioners, who are the widow, sons and daughters of the deceased Charan Singh. 2. The facts as adjudicated by the learned Tribunal on the pleadings and evidence of the parties are that on 2.9.1998 at around 12.05 a.m., the deceased Charan Singh was on way to his shop at Jhalera. He was travelling on his scooter No. PB 10K-8226. PW3 Avtar Singh was the pillion rider. When they reached near his shop, bus No. HP-19-1546 travelling from Una to Jhalera being driven by Jagroop Singh (whose legal representatives have been impleaded in the appeal) collided with the scooter, knocking down the deceased, who suffered multiple injuries which proved to be fatal even before he could be rendered any substantial medical aid. It was pleaded that the bus was being driven in a rash and negligent manner. Compensation amounting to Rs.21,00,000/- was claimed as the loss suffered by the claimants. Whether reporters of the Local papers are allowed to see the judgment.yes. 3 3. The owner and driver of the bus resisted the claim petition on the ground that rash and negligent act, if any, was on the part of the deceased and not of the bus driver. The bus was being driven with due care and caution and no blame could be apportioned on the driver. 4. The Insurance Company resisted the claim on the ground that the bus driver was not in possession of valid driving license. On the settled issues, the learned court found this case in favour of the claimants and granted compensation as prayed for. 5. Adverting to issues No.3 and 4 which were with respect to the fact as to whether the driver possessed a valid driving license and that the bus had a valid route permit, the court held against the Insurance Company. 6. To reach this conclusion, adverting to the 4th settled issue as to whether the vehicle had a valid route permit, the court holds that the respondent-Insurance Company had not produced any evidence as such, the issue was decided against the Insurance Company. On the question as to whether the driver possessed an effective and valid driving license, the learned tribunal holds that the respondents had produced a report of the Registering and Licensing Authority, Palakkad stating that the driving license Ext.RW1/B was not a valid license. A Local commissioner was appointed by the learned Tribunal who vide his report dated 24.10.2009 stated that the license Ext.RW1/B had not been issued by the Registering Licensing Authority Palakkad. The 4 learned Tribunal then considers that Jagroop Singh driver of the bus had died on 23.3.2008 during the pendency of the previous appeal before this Court. The learned Tribunal then proceeds that it is common knowledge that drivers carry their driving license with them. He could not produce the original license in rebuttal to the report of the Local Commissioner at that time since he was dead. The court then holds that Ext.RW1/B has been renewed by the competent authority for the last twenty years by the authorities at Pathankot, Jalandhar, Shimla and Una. According to the evidence of RW1 Sh. Gurbachan Chand, the license had been renewed from 10.11.1997 to 9.11.2000. The learned Tribunal relies upon the judgment of the Supreme Court in United India Insurance Co. Ltd. Vs. Lehru and others, (2003) 3 SCC 338, holding: “20.When an owner is hiring a driver he will therefore have to check whether the driver has a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that Insurance Companies expect owners to make enquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 5 149(2)(a)(ii). The Insurance Company would not then be absolved of liability. If it ultimately turns out that the licence was fake the Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly even in such a case the Insurance Company would remain liable to the innocent third party, but it may be able to recover from the insured. This is the law which has been laid down in Skandia 's Sohan Lal Passi 's and Kamla 's case. We are in full agreement with the views expressed therein and see no reason to take a different view”. (P.352) 7. In National Insurance Company Ltd. Vs. Swaran Singh and others, (2004) 3 SCC 297, the Supreme Court holds: “110……………… (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 6 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 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. 7 (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.” (Pp.341 &342) 8. These principles have been reiterated in National Insurance Company Ltd. Vs. Laxmi Narain Dhut, (2007) 3 SCC 700, The court therein holds: “36 The inevitable conclusion therefore is that the decision in Swaran Singh's case (supra) has no application to own damage cases. The effect of fake license has to be considered in the light of what has been stated by this Court in New India Assurance Co., Shimla v. Kamla and Ors. (2001 (4) SCC 342). Once the license is a fake one the renewal cannot take away the effect of fake license. It was observed in Kamla's case (supra) as follows: "12. As a point of law we have no manner of doubt that a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged. Section 15 of the Act only empowers any Licensing Authority to "renew a driving licence issued under the provisions of this Act with effect from the date of its expiry". No Licensing Authority has the power to renew a fake licence and, therefore, a renewal if at all made cannot transform a fake licence as genuine. Any counterfeit document showing that it contains a purported order of a statutory authority would ever remain counterfeit albeit the fact that other person including some statutory authorities would 8 have acted on the document unwittingly on the assumption that it is genuine". (P.719) 9. Thereafter in Prem Kumari and others Vs. Prahlad Dev and others, (2008) 3 SCC 193, the Supreme Court holds: “9. The effect and implication of the principles laid down in Swaran Singh's case (supra) has been considered and explained by one of us (Dr. Justice Arijit Pasayat) in National Insurance Co. Ltd. vs. Laxmi Narain Dhut, (2007) 3 SCC 700. The following conclusion in para 38 are relevant: "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 interpretation has no application to cases relatable to Section 149 of the Act." 10. In the subsequent decision Oriental Insurance Co. Ltd. vs. Meena Variyal and Others, (2007) 5 SCC 428 which is also a two-Judge Bench while considering the ratio laid down in Swaran Singh's case (supra) concluded that in a case where a person is not a third party within the meaning of the Act, the Insurance Company cannot be made automatically liable merely by resorting to Swaran Singh's case (supra). While arriving at such a conclusion the Court extracted the analysis as mentioned in para 38 of Laxmi 9 Narain Dhut (supra) and agreed with the same. In view of consistency, we reiterate the very same principle enunciated in Laxmi Narain Dhut (supra) with regard to interpretation and applicability of Swaran Singh's case (supra). 11. In the case of National Insurance Co. Ltd. vs. Kusum Rai and Others, (2006) 4 SCC 250, the vehicle was being used as a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle was required to hold an appropriate licence therefore. Ram Lal, who allegedly was driving the said vehicle at the relevant time, was holder of a licence to drive light motor vehicle only. He did not possess any licence to drive a commercial vehicle. Therefore, there was a breach of condition of the contract of insurance. In such circumstances, the Court observed that the appellant-National Insurance Co. Ltd., therefore, could raise the said defence while considering the stand of the Insurance Company. This Court, pointing out the law laid down in Swaran Singh (supra) concluded that the owner of the vehicle cannot contend that he has no liability to verify the fact as to whether the driver of the vehicle possessed a valid licence or not. However, taking note of the fact that the owner has not appeared, the victim was aged only 12 years, the claimants are from a poor background and to avoid another round of litigation applying the decision in Oriental Insurance Co. Ltd. vs. Nanjappan, (2004) 13 SCC 224 and finding that though the appellant-Insurance Company was not liable to pay the claimed amount as the driver was not possessing a valid licence and the High Court committed an error in holding otherwise, in the peculiar facts and circumstances of the case 10 and in exercise of jurisdiction under Article 136 of the Constitution declined to interfere with the impugned judgment therein and permitted the appellant-Insurance Company to recover the amount from the owner of the vehicle.” (Pp.201 &202) 10. Lastly in National Insurance Company Limited Vs. Geeta Bhat and others, (2008) 12 SCC 426, the Supreme Court again re-assessing the entire precedent holds: “13. Thus, whereas in a case where a third party has raised a claim, Swaran Singh would apply, in a claim made by the owner of the vehicle or other passengers of a vehicle, it would not. 14. We would, therefore, assume that the licence possessed by the 6th respondent, Gopal Singh was a fake one. Only because the same was fake, the same, having regard to the settled legal position, as notice hereinbefore, would not absolve the insurer to reimburse the owner of a vehicle in respect of the amount awarded in favour of third party by the Tribunal in exercise of its jurisdiction under Section 166 of the Motor Vehicles Act, 1988.” (P. 432). 11. Adverting to the facts of the present case, what I find is that by judgment of this Court dated 7.11.2008; the case had been remanded by this Court to the Tribunal with the following directions: “The case is remanded to learned Motor Accident Claims Tribunal, Una, with a direction to decide the claim petition afresh expeditiously after giving opportunity to the insurance company to produce and examine the witness regarding the validity of the driving licence of the driver who was driving the bus at the time of accident, but it does not 11 mean that opportunities till infinity are to be given to the insurance company to examine the said witness. The learned Tribunal is at liberty to consider examination of concerned witness of insurance company on commission to be appointed at the cost of insurance company. It is made clear that learned Tribunal shall be at liberty to pass appropriate order regarding the evidence of insurance company if after reasonable time the insurance company failed to examine the concerned witness. The appellant and respondent No.12 through their learned counsel are directed to appear before the learned Tribunal on 4.12.2008. The registry is directed to return the record of the learned Tribunal so as to reach before the date fixed.” 12. After remand, an application for recording evidence by local commissioner has been filed on behalf of the Insurance Company. The pleading is very terse and states that nobody appeared from the Regional Transport Authority, Palakkad Kerala with the record pertaining to the licence and in this event, evidence may be recorded on commission. The interrogatories were then sent to the Deputy Commissioner of Police, East Division Bangalore, who returned it with the letter which reads: “From The Regional Transport Officer, Palakkad. To The Dy. Commissioner of Police East Division, Bangalore. Sir, Sub: Mvs-Dept:-MVCP 84/98-Driving Licence No.46081/78-79-details-reg. Ref: That office letter No. CB/Court/E/09 dt. 20.10.09. ……. 12 Referring to the above, I am furnish the following reply: 1.As per this office records, No such driving licence is seen issued in favour of Shr. Jagroop Singh S/o Shri Bhag Singh. 2. No. 3.Yes. 4.There is only one licensing authority in Palakkad 5. No. 6. Not applicable 7. Not applicable. 8. Not applicable. 9. Not applicable. 10. Not applicable. 11. Palakkad and Palghat (old name) are the same Licensing Authority. 12. Not applicable. Yours faithfully, Sd/- Regional Transport Officer Palakkad”. 13. Questions purported to be interrogatories have been sent by the Court to the Deputy Commissioner of Police, East Division Bangalore City and have come back with the responses purportedly from the Licensing Authority, Palakkad given to the Police Commissioner that such license was not issued. 14. I also find on the record a direct communication from the office of the Regional Transport Officer, Palakkad addressed to the Motor Accident Claims Tribunal, Una, in which he states that Palakkad District is in Kerala and not in Tamil Nadu Province. 15. Adverting to the license of RW1/B, it states that Palghat District is in “Province Tamil Nadu”. It is not understood as to on what basis the inquiry was got conducted in the State of Karnataka from the Commissioner of Police of Bangalore about a town which is in the State of Kerala. I also 13 find that the letter which has been addressed by the Regional Transport Authority, also does not clarify anything save and except that Palghat now Palakkad is in the State of Kerala and not in Tamil Nadu Province. In the confused state of evidence, it cannot be said that the Insurance Company has been able to discharge its duty. It is not at all clear as to how and why the Deputy Commissioner of Police of Bangalore is involved and why the Licensing Authority at Palakkad (which is in Kerala) is communicating with him. The so called responses to the questions cannot be treated as determining the entire issue. Therefore I find no merit in this appeal which is accordingly dismissed. (Dev Darshan Sud), Judge. December 27,2011(R)