IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. FAO No. 444 of 2008 Date of Decision : December 18, 2008 Gopal Sharma …Appellant. Versus: Kamlesh & others …Respondents. Coram: The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for reporting?1 No For the appellant : Mr. Dibender Ghosh, Advocate. For respondents 1 to 6: Mr. B. S. Kanwar, Advocate. For respondent No. 7 : Mr. Praneet Gupta, Advocate SANJAY KAROL, JUDGE. (Oral) With the consent of the parties, the appeal was heard finally at the admission stage. The owner has assailed the impugned Award dated 1.5.2008 passed by the Motor Accident Claims Tribunal, Fast Track Court, Shimla, H.P. in M.A.C. No. 120-S/2 of 2005/2002, titled as Kamlesh & Others vs. Gopal Sharma & another. On 31.5.2002 deceased Parkash Chand was travelling in vehicle (Swaraj Mazda) No.HP-51-2252, owned by Shri Gopal Sharma and driven by Shri Mohan Lal. Due to the negligence of the driver, the vehicle met with an accident near Daoti Bus stop, Tehsil & District Shimla. Both S/Shri Mohan Lal and Parkash Chand died 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 as a result of the accident. FIR No.55/2002 was registered with Police Station, Kandaghat, Distt. Solan. The claimants as legal representatives of deceased Shri Parkash Chand filed a claim petition under Section 166 of the Motor Vehicle Act, 1988 (hereinafter referred to as ‘the Act’), claiming compensation of Rs.15 lacs on the ground that the deceased 41 years of age was having an income of Rs.8000/- per month and the claimants being the wife, 5 minor children and father were dependent upon him for income. The owner opposed the petition denying any negligence on the part of the driver but, however, the fact that the deceased was travelling in the vehicle at the time of the accident and that he died due to the same was admitted. The vehicle in question was insured with the New India Assurance Company, who filed a separate reply and opposed the petition, inter alia on the ground that the driver was not possessing a valid and effective driving licence; the deceased was a gratuitous passenger and the petition was collusive in nature. Based on the pleadings of the parties, the Tribunal framed the following issues:- 1. Whether on 31.5.2002 deceased Parkash Chand hired vehicle No.HP-51-2252 and due to rash and negligent driving of Mohan Lal, Parkash Chand died? …………OPP 2. To what compensation claimants are entitled and from whom? ……….OPP 3. Whether driver Mohan Lal was not having valid licence at the time of accident? ………..OPR 3 4. Whether there is collusion between the claimants and respondent No.1, if so, its effect? …….. OPR-2 Opportunity to adduce evidence was afforded to the parties. Appreciating the material on record (oral and documentary), the Tribunal while referring to and relying upon the statements of Shri Veda Nand (PW-1), Smt. Kamlesh (PW-2), Dr. S. R. Sharma (PW-6) and the FIR No.55/2002 dated 31.5.2002 (Ext.PW-1/A) and the post mortem report (Ext.PW-6/A) came to the conclusion that Shri Mohan Lal who was driving the vehicle at the time of the accident was negligent; there was criminal rashness and culpable negligence which resulted into the occurrence of the accident in which the claimants predecessor-in-interest had died. On the question of compensation, taking the income of the deceased to be Rs.3000/- per month and considering his age as also the age of the claimants, who were found dependent upon him, a sum of Rs.4,63,200/- was awarded as compensation towards the loss of income, consortium, love and affection, funeral charges. While deciding issue No.3, the Tribunal concluded that the driver was not possessing a valid and effective driving licence at the time of accident which stood proved from the testimonies of RW-1, RW-2 & RW-3. The licence was valid only upto 27.4.2001 whereas the accident took place much later i.e. on 31.5.2002. The Tribunal also found the deceased to be a gratuitous passenger and hence on both the counts the terms and 4 conditions of the insurance policy stood breached and thus the insurer was held not liable to have indemnified the insured and pay compensation to the claimants. Mr. Dibender Ghosh, learned counsel for the appellant has assailed the impugned Award on the limited ground. According to him, the findings that the deceased was a gratuitous passenger are not erroneous and are based on incorrect appreciation of the material on record; the findings with regard to not possessing a valid and effective driving licence are incorrect and contrary to the ratio of law laid down by the Apex Court in National Insurance Co. Ltd. vs. Swaran Singh & Others {2004(3) SCC 297(para 110 sub para (iii)}. Per contra, Mr. Praneet Gupta, learned counsel for the insurer has supported the Award for the reasons set out therein and has further argued that keeping in view the facts and circumstances of the present case, the insurer has discharged the burden to prove that the terms and conditions of the policy stood breached on both the counts as held by the Tribunal. Mr. B. S. Kanwar, learned counsel appearing for the claimants has referred to a decision of the Apex Court in Ram Babu Tiwari vs. United India Insurance Company Limited and others {2008(8) SCC 165} to contend that even if the insurer is held not liable to have indemnified the insured even then the insurer can be directed to pay the compensation to the claimants and recover the same from the owner. 5 I have heard the learned counsel for the parties and also perused the record. The fact that the deceased Parkash Chand was travelling in the vehicle; that the accident took place; in which he died, is not in dispute. The findings of the Tribunal that the accident occurred due to the negligence of the driver Shri Mohan Lal; that the claimants are dependent upon the deceased; that the compensation awarded to the claimants is just, fair and reasonable, is also not in dispute. In para 26 of the impugned Award, while arriving at its conclusion that the deceased Mohan Lal was travelling as a gratuitous passenger, the Tribunal has referred to documents Ext.PW-3/A & Ext.PW-3/B. Ext.PW-3/A in a petition filed by the claimants of the deceased driver Mohan Lal under the Workmen’s Compensation Act wherein in para-3 it is so pleaded “that at the time of accident Sh. Parkash Chand was the conductor in the said vehicle who also expired in this accident”. In response thereto in its reply Ext.PW-3/B, the owner pleaded as under:- “3. Para-3 of the petition is admitted to the extent that some other person also died in the said accident, but it is denied that he was engaged as conductor in the said vehicle. Rest of the averments made in this para are admitted.” The fact that Shri Parkash Chand was not the conductor was specifically denied. Therefore, the findings of the Tribunal “that the owner failed to plead in his reply Ext.RW-3/D that Shri Parkash Chand was travelling in the Swaraj Mazda as 6 owner of the goods” may be true but not enough to hold that Shri Parkash Chand was a gratuitous passenger. There was no need for the owner to have pleaded the same as the same was not an issue in the petition filed under the Workmen’s Compensation Act by the legal heirs of the deceased driver. The owner had no reason to tell lies or conceal information. The vehicle was insured and it is not that the legal heirs of Shri Parkash Chand were claiming him to be the employee of the owner. Even if Shri Parkash Chand had been employed as a conductor, he would still be adequately covered and protected under the insurance cover as the vehicle Swaraj Mazda was a commercial vehicle registered under the Motor Vehicles Act, for which a conductor is necessarily required to be employed. There was no reason for the owner to have deposed falsely. RW-5 has categorically deposed that the vehicle was engaged by the deceased to carry out the vegetables. There is no serious challenge to the said statement. Even PW-2 has deposed that the vehicle was utilized by her husband for carrying vegetables owned by him. Hence, it is held that the deceased was not a gratuitous passenger. As such, the findings of the Tribunal on this count are reversed. With regard to the driver not possessing a valid and effective driving licence, the statements of S/Shri Joginder Lal (RW-1), Khem Chand (RW-2), Kamal Narain (RW-4) and Gopal Sharma (RW-5) are relevant. Except for RW-5, the aforesaid witnesses have been examined by the insurer. 7 RW-5, the owner has simply deposed that driver Mohan Lal was competent to drive the vehicle and was possessing a valid licence which he had perused prior to his engagement. He has denied the suggestion put to him by the insurer that the driver was not possessing a valid and effective driving licence. RW-1 has proved on record criminal case No. 127/2 of 1999/98 titled as State vs. Mohan Lal pending in the Court of JMIC(5), Shimla. He has proved the fact that as per the record in the said case in the year 1998, the original driving licence of Shri Mohan Lal was taken by the police. He clarified that the order for release of the original licence was passed by the Court but, however, the original licence which was valid upto 27.4.2001 was still in the court file of the said case. This proves that after 1998 the original licence was never with the driver. RW-2, clerk from the Transport Authority (Rural), Shimla has proved that the driving licence No.329/SS/1998 was valid upto 27.4.2001. It is the licence in question issued in favour of deceased Mohan Lal. The fact that this licence was never got renewed is also evident from the deposition of RW-4 who was engaged by the insurer to carry out the investigation and has submitted his report Ext.RW-2/A also to the said effect. Thus, from the record it is evident that the original licence was always in the court file of case No.127/2 of 1999/98 and the same was never got renewed after 27.4.2001. There cannot be any straight jacket formula as to how the burden to prove a fact is to be discharged. It has been held in 8 Swaran Singh (surpa) that the same would depend upon the facts and circumstances of each case. In the present case, the insurer has taken all possible steps to plead and prove that the driver was not possessing a valid and effective driving licence and also that the insurer was guilty of negligence and had failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding the use of the vehicle by a duly licenced driver. Bald statement of RW-5, in my view, is not sufficient enough to prove the fact that the owner was not guilty of negligence. The burden stood discharged by the insurer and shifted upon the owner. The fact that RW-4 did not carry out any investigation pertaining to FIR Ext.PW-1/A would be of no consequence as it stands sufficiently proved that the original of the licence was on the Court file pertaining to the earlier case which was registered and licence taken much prior to the engagement of the services of the driver by the present owner/appellant. In Swaran Singh (supra), the Apex Court has 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. 9 (ii) An 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 the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has 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 the 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 a duly licensed driver or one who was not disqualified to drive at the relevant time. (iv) Insurance companies, 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 the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances 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 10 period, the insurer would not be allowed to avoid its liability towards the 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 insurer 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 fulfill 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 the insurer and the insured. The decision rendered on the claims and disputes inter se between the insurer and insured in the course of adjudication of claim for compensation by the claimants and the award made thereon is enforceable 11 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 the proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover the amount paid under the contract of insurance on behalf of the insured can be taken recourse to by the Tribunal and be extended to claims and defences of the insurer against the insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter 12 se might delay the adjudication of the claims of the victims.” It is not a case where the accident took place due to the mechanical fault or for the reasons other than the rash and negligent act of the driver. Hence the ratio of law laid down by the Apex Court in para 110 sub para (vi) cannot be pressed in favour of the owner. In fact in para 110 sub para (vii) it has specifically held that the question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver does not fulfill the requirements of law or not will have to be determined in each case. ‘Burden of proof’ and ‘onus of proof’ are such expressions which are totally distinct from each other. Burden of poof lies upon the person who has to prove a fact and it never shifts, but the onus of proof does shift. Such a shifting of onus is a continuous process in the evaluation of evidence. ‘Burden of proof’ has two distinct meanings, namely (i) the ‘burden of proof’ as a matter of law and pleadings and (ii) the ‘burden of proof’ as a matter of adducing evidence. The first remains constant, but the second shifts. (Ishwar Sahani and others vs. State of Jammu and Kashmir and another, {1993 ACJ 858} The vehicle in question was insured in terms of policy Ext.RW-5/A. Section 3 of the Act prohibits any person to drive a vehicle without possessing a valid and effective driving licence. Compliance of the statutory provisions is a sine qua non for the fulfillment of the terms and conditions of the insurance policy. 13 Therefore, in my view, the Tribunal has rightly held that the owner had committed material breach of the terms and conditions of the policy and as such, the insurer cannot be directed to indemnify the insured. This Court has consistently taken the view that even when the insurer is held not liable to have indemnified the insured, but however, keeping in view the interest of the claimants, the insurer can be directed to pay the compensation awarded by the Tribunal to the claimants and recover the same from the owner in accordance with law. In the peculiar facts and circumstances of the present case, I am inclined to follow the decision of this Court in FAO No.98 of 1999, decided on 1.9.2005 titled as Geeta Devi vs. Sanjeev Chauhan (ACJ 2006(III) 2010}. Even the Apex Court in Pramod Kumar Agarwal & Anr. v. Mushtari Begum & Ors. {2004 (8) SCC 667} and Ram Babu Tiwari v. United India Insurance Company Ltd. & Ors. {2008 (8) SCC 165} directed so. The insurer shall pay the entire amount to the claimants within a period of four weeks from today and the amount of Rs.25,000/- along with interest deposited by the owner shall be refunded to the insurer. With the aforesaid observations, the appeal is partly allowed. ( Sanjay Karol ), Judge. December 18, 2008. (rana)