IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA FAO (MVA) No. 153 of 2004 Date of Decision: 18th November, 2008 Yudhister Bus Service Appellant Versus National Insurance Company and others Respondents. Coram The Hon’ble Mr. Justice Sanjay Karol,J. Whether approved for reporting1? Yes. For the appellant: Mr.Neeraj Maniktala, Advocate. For the respondent No.1: Dr.Lalit Sharma, Advocate. Sanjay Karol, J. (Oral) The owner/insured has filed the present appeal assailing the award dated 4th March, 2004 passed by Motor Accident Claims Tribunal (I), Kangra at Dharamshala (HP) in MACT Petition No. 38-P/II/2001, titled as Shri Yash Pal vs. Shri Naresh Kumar and others. The challenge is limited to the findings of the Tribunal with regard to Issue No.3 alone. For the purpose of deciding the appeal necessary facts are as under:- On 13.10.2000 claimant Shri Yash Pal was driving his Maruti Van No. HP-37-8707. Admittedly the said vehicle met with an accident at Bhawarna, Palampur, H.P. with Bus bearing No. HP-37-4272 being driven by Shri Naresh Kumar, respondent No.3 herein, owned by the Whether the reporters of Local Papers are allowed to see the Judgment? 2 appellant, and insured by National Insurance Company, respondent No.1 herein, (referred to as the Insurer). FIR (Ext.PW-1/A) was registered against said Shri Naresh Kumar and prosecution initiated. Maruti Van was damaged and consequently the claimant filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act). Based on the pleadings of the parties, the Tribunal framed the following issues:- 1. Whether Maruti Van bearing No. HP-37-8707 of the petitioner was got damaged in an accident caused by rash and negligent driving of the bus No. HP-37-4272 by respondent No.1, as alleged? OPP 2. If issue No.1 is proved, to what extent the Van was damaged and to what compensation is petitioner entitled? OPP 3. Whether respondent No.1 was not holding an effective driving licence at the time of accident? OPR-3 4. Whether the petition is bad for non joinder of necessary parties as another Bus No.HP-39-3925 of H.R.T.C. is involved in the accident? OPR-3. 5. Relief. Appreciating the material on record (oral and documentary), the Tribunal found the driver Naresh Kumar to have driven the Bus in a rash and negligent manner which resulted into the occurrence of the accident causing damage to the Maruti Van. The damages were quantified to be Rs.25,989/- and as such were awarded in favour of the claimant. The owner and the driver did not step into the witness box, however, as the owner had placed on record the driving licence, Mark ‘B’, 3 the insurer moved an application for appointment of Commission and issuance of interrogatories to the Motor Licensing Authority, Mumbai Centre. As per the Commissioner’s report, the licence produced on record by the owner had not been issued in favour of the driver Shri Naresh Kumar by the Motor Licensing Authority, Mumbai Centre. Consequently, the insured was held to have committed breach of the terms and conditions of the policy and as such the Insurer was held not to have indemnified the insured and pay the amount of compensation to the claimant. I have heard the learned counsel for the parties and also perused the record. That the accident took place; driver Naresh Kumar was negligent in driving Bus No. HP-37-4272, which caused the accident; in which the property of the claimant was damaged; the entitlement and quantification of damages by the Tribunal, is not in dispute. The record reveals that inspite of various opportunities given to the driver and the owner, no evidence was led except that the owner examined Shri Desh Raj, (RW-1), Conductor, of the Bus at the relevant time to repel the plea of negligence. Since negligence is not in issue in the present appeal, his testimony is of no consequence. The record also reveals that it was only when the owner closed his evidence, the Insurer moved an application for issuance of interrogatories, which was rejected on 14.11.2003. But, however, the Insurer moved a fresh application under Order 26 Rule 4, CPC for issuance of a Commission to examine the Regional Transport Officer, Mumbai Centre. The owner chose not to contest the same and accordingly, the Tribunal issued the Commission. 4 As per the Commissioner’s report licence No. 88/C/68110 was not issued in the name of Shri Naresh Kumar by the office of Regional Transport Office, Mumbai Centre. In this view of the matter, it is not disputed at the Bar that the licence produced on record by the owner is in fact fake. The question, however, which needs to be considered as to whether in view of the ratio of law laid down by the Apex Court in National Insurance Company Ltd. vs. Swaran Singh and others, 2004) 3 SCC 297, the Insurer has been able to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the terms and the conditions of the policy. The issue has been raised by Mr. Maniktala, learned counsel for the appellant, by referring to para 110 of the aforesaid report. It has also been argued that the Insurer had failed to discharge the burden of proving that the owner had the knowledge that the licence was fake, thus, committing the breach of the terms of the policy. In the alternative, it is argued that assuming that the licence was fake and the owner had failed to prove the reasonable care that he had taken in the matter of fulfilling the conditions of policy, the onus would still be on the insurer to prove that the breach of the condition of driving licence is so fundamental that it is found to have contributed to the cause of the accident. Dr. Lalit Sharma has invited my attention to the relevant provisions of Code of Civil Procedure as also the ratio of law laid down by the High Courts in Vemusetti Appayyamma vs. Lakshman Sahu, AIR1973 AP 168 and Harbhajan Singh vs. Smt. Shakuntala Devi Sharma and another, AIR 1976 Delhi 175 to contend that the Commissioner’s report is admissible as substantive evidence even without the examination of the Commissioner. This point has not been disputed by the learned counsel for 5 the appellant. Even otherwise there is no challenge to the report and the position of law is accepted. Swaran Singh (supra) was essentially dealing with the case arising out of third party liability. This is evident from para 5 of the report itself. While appreciating the various fact situation which were before the Apex Court, it was held that the breach on the part of the insured must be established by the Insurer to show that not only the insured used or caused or permitted the use of the vehicle in breach of the Act but also that the damage suffered flowed from the said breach. The Apex Court reiterated its view taken earlier in United India Insurance Co. Ltd. vs. Lehru, (2003) 3 SCC 338, and noticeably it clarified that the defence to the effect that the licence held by the person driving the vehicle was a fake one would be available to the Insurance Companies but where despite the same whether the plea of default on the part of the owner stood established or not would be a question which would have to be determined in each case. The Court clarified that the view taken in Lehru (supra) must not be read to mean that the owner of the vehicle would under no circumstance have any duty to make any enquiry in this regard. It cautioned that the same would be a question which would arise for consideration in each individual case. It further added that it was for the Insurer to prove that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the driver. The decision of Lehru (supra) and Swaran Singh (supra), subsequently came up for consideration before the Apex Court in Prem Kumari and others vs. Prahlad Dev and others, (2008) 3 SCC 193, wherein the facts were more or less identical to the facts in issue in the present appeal. 6 The Apex Court was dealing with a case where the licence was found to be fake and no evidence was led to prove the reasonable care and caution taken by the owner and consequently the Court came to the conclusion that the owner of the vehicle could not be allowed to contend that he had no liability to verify the fact as to whether the driver of the vehicle possessed a valid driving licence or not. The Court reiterated that where the owner had satisfied himself that the driver had a licence and was driving the vehicle competently there would no breach of the provision of Section 149 (2)(a)(ii) of the Act. It was in these circumstances, the Insurance Company would not be said to be absolved of its liability. In Prem Kumari (supra) referring to its earlier view taken in National Insurance Co. Ltd. vs. Laxmi Narain Dhut (2007) 3 SCC 700, the Court reiterated that where originally the licence was a fake one, renewal could not cure the inherent fatality and that since Swaran Singh (supra) dealt with the cases of third party risks alone, therefore, the concept of purposive interpretation had no application to cases relatable to Section 149 of the Act. The facts of the present case have to be considered in view of the principles laid down in the aforesaid various pronouncements. In the present case the owner has not stepped into the witness box at all. Under the Act the driver must possess a valid and effective driving licence and the vehicle has to be mandatory insured under the statute. Not possessing an effective and valid driving licence would itself be a breach of the terms and conditions of the policy. The Apex Court in Swaran Singh (supra) in fact has itself clarified that the Court cannot lay down any criteria as to how the burden of breach would be discharged. It has to depend on the facts and circumstances of each case. It is evident that the owner chose not to contest 7 the petition. In my view, considering the preliminary objection raised by the Insurer that the driver was not possessing a valid and effective driving licence it was absolutely incumbent upon the insured to have stepped into the witness box and deposed the reasonable care he had taken on the fulfillment of the condition of policy regarding the use of the vehicle by a duly licensed driver or one who was not qualified to drive at the relevant time. As to whether the burden is to be discharged by the Insurer or not, to that, in my view, there cannot be any straight jacket formula and each case has to be examined based on the material on record. In my view, the burden on the Insurer stood totally discharged once the report of the Commissioner was placed on record. Even after the same was placed on record, the owner could have sought opportunity of either leading fresh evidence or examining the Commissioner. In the present case, it was not done so. The driver not having possessed any licence as on the date of the accident, in my view, the breach is fundamental and cannot be said that the same would not have contributed to the cause of the accident. It is not a case where the accident occurred due to mechanical failure, an Act of God or reasons totally beyond the control of the driver. For the foregoing reasons, the appeal is dismissed. 18th November, 2008 (Sanjay Karol) (C) Judge.