IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:08.07.2008 C O R A M THE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR C.M.A.No.639 of 2002 1.Muthayammal 2.Soundaram 3.Mahendra varman 4.Karikal Varman ... Appellants/Claimants Vs. 1.Martin Jovialdass 2.S.Thanasekaran 3.National Insurance Company Limited, Branch Office, T.V.S. Street, Erode. ... Respondents/Respondents Prayer: Appeal filed under section 173 of M.V.act against the Judgment and award dated 19.10.2000 made in M.C.O.P.No.756 of 1998 on the file of the Motor Accident Claims Tribunal, I Additional Sub Judge, Erode and prays to modify the same. For Appellant : Mr.A.K.Kumaraswamy For Mr.D.Selvaraju For 1st Respondent : Mr.T.R.Sundaram For 2nd Respondent : Mr.N.Manoharan JUDGMENT This is an appeal filed by the claimants in M.C.O.P.No.756 of 1998 on the file of the Motor Accidents Claims Tribunal (I Additional Sub Judge), Erode against the award dated 19.10.2000 passed therein totally exonerating the third respondent herein/the insurer of the offending vehicle holding that the rider of the offending vehicle did not possess a valid driving licence at the time of accident. 2.The first appellant is the mother, second appellant is the wife and the appellants 3 and 4 are the sons of deceased Gnanasundaram, who died in an accident that took place at about 5.30 p.m. on 27.08.1997 on Periyasemur-Sathi Main Road opposite to Indian Overseas Bank. Admittedly, while the above said deceased Gnanasundaram was proceeding in his bicycle in the direction of west to east, the motorcycle bearing Registration No.TN 33 A 9833 https://hcservices.ecourts.gov.in/hcservices/ belonging to the second respondent herein came there in the opposite direction and hit the above said deceased which resulted in instantaneous death. Claiming that the accident occurred due to the rash and negligent driving of the motorcycle by its rider namely, the first respondent herein and that the said motorcycle stood insured with the third respondent herein, the appellants herein filed the MCOP claiming a sum of Rs.5,00,000/- as compensation. The accident in question has not been disputed. The finding of the Tribunal that there was an accident on 27.08.1997 in which the deceased Gnanasundaram was fatally knocked down by the motorcycle bearing Registration No.TN 33 A 9833 belonging to the second respondent has not been challenged by the respondents in this Civil Miscellaneous Appeal either by filing a separate appeal or by filing a cross objection. The finding of the Tribunal that the accident was due to the negligence and rashness on the part of the rider of the said motorcycle has also not been challenged. 3.The appellants, who were the claimants before the Tribunal have challenged only that part of the award exonerating the third respondent (insurer) from its liability to shoulder the liability of the insured (owner of the offending vehicle) towards third party victims. The Tribunal, besides holding that there was violation of a policy condition in so far as the motorcycle involved in the accident was allowed to be driven by a person not holding a valid driving licence, also held that the insurer was totally exonerated from making payment to the dependents of the victim of the accident. It has not adopted even the course of directing the insurer to pay the amount first and then recover the same from the insured. As such, the short point that arises for consideration in this appeal is: "Whether the liability of the insurer of the motorcycle involved in the accident towards third party victims came to an end because of the alleged violation of policy condition? whether the insurer should have been directed to satisfy the claim at the first instance with liberty to seek reimbursement from the insured?" 4.Admittedly, the vehicle involved in the accident namely, the motorcycle bearing Registration No.TN 33 A 9833 belonging to the second respondent stood insured with the third respondent at the relevant point of time. Based on the acquittal of the first respondent herein in the criminal prosecution launched by the police in connection with the above said accident and believing the evidence of the first respondent who deposed as R.W.1, the Tribunal came to the conclusion that R.W.1 was not the rider of the motorcycle at the time of accident. The Tribunal accepted the testimony of P.W.1, the alleged eyewitness who also was the informer to the police regarding the accident and came to the conclusion that the motorcycle belonging to the second respondent was the vehicle which caused the accident. However, may be on mere surmises, the Tribunal has chosen to hold that the motorcycle was driven by a person not holding a valid driving licence. https://hcservices.ecourts.gov.in/hcservices/ 5.The third respondent (insurer) chose to examine an employee of the RTO office to show that the first respondent was not possessing a valid driving licence. When the Tribunal has came to the conclusion that the first respondent was not a person who was driving the vehicle at the time of accident, whether he possessed a valid driving licence or not is of no consequence. However, since the second respondent/the owner of the offending vehicle chose to remain exparte, the Tribunal came to the conclusion that the vehicle should have been driven by a person not holding a valid driving licence. Whenever the Insurance Company comes forward with a plea that there is a violation of policy condition enabling the insurer to rescind the contract, it is for the Insurance Company to prove it by adducing proper evidence. In this case, excepting the evidence adduced through R.W.2, an employee of the RTO office, no other witness has been examined. R.W.2 was examined to prove that the first respondent did not possess a valid licence. Clear evidence has not been adduced on behalf of the third respondent to the effect that the vehicle was driven by any other person and such other person did not hold a valid driving licence. 6.Under such circumstances, this Court is of the view that the Tribunal should have held that the Insurance Company had not discharged its onus of proving absence of driving licence for the rider of the motorcycle involved in the accident. 7.In this appeal, the learned counsel for the appellants has submitted that even assuming that there was a violation of policy condition, the scheme of compulsory insurance of motor vehicles being a welfare scheme intended to benefit the third party victims of road accidents, it must be construed liberally and in favour of such victims and that if such a construction is made, the liability of the insurer towards the third party even in case of violation of policy conditions (of course not in case of absence of coverage) the liability of the insurer towards the third party should be held absolute with a rider that the insurer shall have the right to seek reimbursement from the insured based on such violation of policy condition. This Court finds substance and force in the said contention raised by the learned counsel for the appellants in fact in several cases, this Court as well as the Apex Court has taken similar view in respect of the liability of the insurer towards the third party victims in case of violation of policy condition and not absence of coverage. 8.The Hon'ble Supreme Court in National Insurance Company Limited V. Baljit Kaur and Others reported in 2004 ACJ 428 has chosen to hold that the insurer was not liable for the compensation payable by the insured in respect of persons other than the owner of goods or his authorised representatives or the employees of the owner transported in a goods vehicle. However, the Supreme Court applying https://hcservices.ecourts.gov.in/hcservices/ the dictum found in New India Assurance Company Limited V. Asha Rani reported in 2003 ACJ 1 (SC) prospectively, went further and directed the insurer to make payment of the compensation to the claimant, if not already paid, and then recover the same from the owner of the vehicle by levying execution in the very same case without having the necessity to file a separate OP or suit. The relevant portions of the said judgment are extracted hereunder:- "20.It is therefore, manifest that in spite of the amendment of 1994, the effect of the provision contained in section 147 with respect to persons other than the owner of the goods or his authorised representative remains the same. Although the owner of the goods or his authorised representative would now be covered by the policy of insurance in respect of a goods vehicle, it was not the intention of the legislature to provide for the liability of the insurer with respect to passengers, especially gratuitous passengers, who were neither contemplated at the time the contract of insurance was entered into, nor any premium was paid to the extent of the benefit of insurance to such category of people. 21.The upshot of the aforementioned discussions is that instead and in place of the insurer the owner of the vehicle shall be liable to satisfy the decree. The question, however, would be as to whether keeping in view the fact that the law was not clear so long such a direction would be fair and equitable. We do not think so. We, therefore, clarify the legal position which shall have prospective effect. The Tribunal as also the High Court had proceeded in terms of the decisions of this court in Satpal Singh, 2000 ACJ 1 (SC). The said decision has been overruled only in Asha Rani, 2003 ACJ 1 (SC). We, therefore, are of the opinion that the interest of justice will be subserved if the appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing court as if the dispute between the insurer and the owner was the subject-matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer." 9.The said judgment was followed in another case by a Division Bench of this Court in M/s.United India Insurance Company Limited V. Selvam and others reported in (2006) 1 M.L.J. 154 in which also the insurer was directed to satisfy the award and then recover the same from the owner of the vehicle by initiating a proceeding before the https://hcservices.ecourts.gov.in/hcservices/ executing Court. 10.In line, with the above said decisions of the Hon'ble Supreme Court and the Division Bench of this Court, this Court comes to the conclusion that the award of the Tribunal requires modification by directing the third respondent to satisfy the award and then seek reimbursement by levying execution in the very same proceeding without having the necessity to file a separate suit or OP. In the result, the Civil Miscellaneous Appeal is allowed in part and the award of the Tribunal shall stand modified to the extent indicated above. There shall be no order as to costs. sd/- Asst.Registrar /true copy/ Sub Asst.Registrar Sgl To The Additional Sub Judge, Motor Accidents Claims Tribunal, Erode. Copy to The Section Officer, V.R.Section, High Court, Madras +1 cc To Mr.D.Selvaraju, Advocate, SR.35616 +1 cc To Ms.N.B. Surekha, Advocate, SR.35752 +1 cc To Mr.N.Manoharan, Advocate, SR.35609 C.M.A.No.639 of 2002 scd [co] gkg/13.8 https://hcservices.ecourts.gov.in/hcservices/