IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. FAO No. 192 of 2008 Date of Decision : September 17, 2008 Achhar Singh …Appellant. Versus: Chinta Devi and others …Respondents. Coram: The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for reporting?1 No For the appellant : Mr. Tara Singh Chauhan, Advocate For respondents 1 to 5: Mr. Sanjeev Kumar, Advocate. For respondent No.7 : Mr. Ratish Sharma, Advocate. SANJAY KAROL, JUDGE (Oral) The present appeal arises out of an impugned Award dated 26.12.2007 passed by the Motor Accident Claims Tribunal- II, Mandi, District Mandi, H. P. in Claim Petition No. 17 of 1994 titled as Chinta Devi and others vs. Achhar Singh and others. The scope of the present appeal is narrow and, therefore, necessary facts for adjudication of the same are being narrated as under:- Respondents No.1 to 5 (hereinafter referred to as the claimants) filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the Act’) claiming compensation for the death of the deceased Shri Kanshi 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 Ram alias Nika Ram due to an accident of vehicle No.HIB-474 on 3.12.1993. The vehicle owned by the appellant (hereinafter referred to as the owner) was allegedly driven by Shri Khem Raj, respondent No.6 herein (ex-parte) (hereinafter referred to as the driver) and was insured by the New India Assurance Co. Ltd., respondent No.7 herein (hereinafter referred to as the Insurer) On the basis of the pleadings of the parties, the Tribunal framed the following issues:- “1. Whether on 3.12.1993, truck No. HIB-474 was being driven in rash and negligent by the respondent No.2 Khem Raj as a result of which accident took place in which Kanshi Ram died? ….. OPP 2. Whether the petitioners are entitled to the compensation for the death of Kanshi Ram in the accident as alleged? If so to what amount and from whom? ……. OPP 3. Whether the respondents No. 1 and 2 have not supplied the documents to the respondent No.3, Insurance Company as alleged, if so its effect? ..OPR-3. 4. Whether the driver was not having valid driving licence at the time of the accident? If so and its effect? ……OPR-3 5. Whether the deceased was gratuitous passenger as alleged? If so its effect? …….OPR-3 6. Whether the petitioners should be directed to supply the postmortem report, age proof, income proof etc. to the respondent as alleged? ….OPR 7. Whether the deceased was driver of the truck as alleged? If so its effect? ……OPR-2 8. Relief.” After adjudication, the Tribunal in terms of its Award dated 7.12.1999, answered the issues by holding that the 3 accident occurred due to the rash and negligent driving of the driver in which deceased Kanshi Ram sustained fatal injuries. A sum of Rs.1,92,000/- was awarded as compensation. The vehicle being insured, the liability was fastened upon the Insurance Company. The said Award was assailed by the Insurance Company in FAO No.94 of 2000 and in terms of its judgment dated 11.8.2005, this Court remanded the matter back to the Tribunal for adjudication of Issues No. 3, 4 & 5 afresh in accordance with the provisions of law. However, while doing so, the findings of the Tribunal that in fact it was the “driver” who was driving the vehicle in a rash and negligent manner and also the quantum of compensation , were upheld by this Court. After the matter was remanded, the Tribunal issued notices to the concerned parties and afforded opportunities to the Insurance Company to lead evidence in support of its case. From the record, it is evident that prior to the passing of the earlier Award, adequate opportunities had been afforded to the Insurance Company to lead evidence but, however, for one reason or the other totally attributable to the Insurance Company, no effective steps were taken to lead evidence. It was much later that the Insurance Company filed an application under Order 18 Rule 17(A) CPC praying for the summoning of the driver and also produce his driving license. Even after the remand, the record shows that the matter was adjourned from time to time but, however, the driver 4 could not be examined for want of service of the summons. However, eventually the driver as witness of the Insurance Company appeared and deposed before the Court. The “owner” also examined himself as RW-1 and deposed in support of his case. Thus, after the remand, the statements of driver Shri Khem Raj (RW-1), owner Shri Achhar Singh (RW-2) and another witness of the owner Shri Sita Ram (RW-3) were recorded. The Apex Court in National Insurance Co. Ltd. vs. Swaran Singh and others {2004(1) ACJ 1} has held as under:- “The summary of our findings to the various issues as raised in these petitions are as follows: (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. (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 5 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 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. 6 (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 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 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 7 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 proviso thereunder and sub-section (5) which are intended to cover specified contingencies mentioned therein to enable the insurer to recover amount paid under the contract of insurance on behalf of the insured can be taken recourse of by the Tribunal and be extended to claims and defences of insurer against insured by relegating them to the remedy before regular court in cases where on given facts and circumstances adjudication of their claims inter se might delay the adjudication of the claims of the victims.” This Court in New India Assurance Co. Ltd. v. Satya Parkash Thakur and others {2007(1) ACJ 714} has held that where the driving license was not placed on record but it was proved by the owner that he had engaged the driver, who was holding a valid license to drive the bus, it could not be said that the owner of the vehicle was either aware that the driver was not having a valid license or there was any carelessness on the part of the owner who allowed the driver not having a valid and effective license to drive the vehicle. In view of the aforesaid principles, the additional evidence led by the parties needs to be examined. It is not in dispute that the “driver” stands convicted under Sections 279, 337 & 304-A IPC by the Criminal Court in 8 Police Challan No. 21-11/94 for having driven the vehicle in question in a rash and negligent manner. This Court earlier had upheld the findings of the Tribunal to the said effect. In this background, from the record it is evident that the deposition of the driver (RW-1) is false. Being a witness of the Insurance Company, on oath he has totally denied that he was driving the vehicle in question at the time of the accident. He has in fact gone to the extent of deposing that he does not have license at all. His deposition being untrue and unreliable cannot be looked into. On the other hand, the owner has himself stepped into the witness box and as RW-2 deposed that he had engaged the “driver” to drive the vehicle in question and at the time of engagement he had checked the driving license and only thereafter, permitted the driver to drive the vehicle. He has also deposed that deceased Shri Kanshi Ram, in fact was the Conductor of the vehicle at the time of the accident. The Insurance Company has extensively cross-examined him but, however, there is nothing to even prima facie show that his deposition is false. He has in fact examined RW-3 to prove that it was RW-1 who in fact had been driving the vehicle in question for quite some time. It is not the case of the Insurance Company that any notice was ever issued to the owner to produce the driving license, except for the preliminary objection No.1 taken in the reply to the claim petition, which is as under:- 9 “That without policy particulars, and requisite vehicular documents and driving license the liability neither can be accepted nor can be denied emphatically as such respondents No. 1 and 2 may kindly be ordered to supply the documents failing which the vehicle in question is denied to be insured with the replying respondent.” No steps were taken for seeking production of the driving license. Even at the time of moving the application under Order 18 Rule 17(A) CPC, it was not prayed that the owner be asked to produce the driving license. The driver appeared as a witness of the Insurance Company, whose testimony is not only totally unreliable and untrustworthy but in fact appears to be collusive. The driver was earlier ex-parte and did not lead any defence or lead any evidence. He was held to be guilty and by deposing falsely and trying to conceal documents was already trying to save his skin. It cannot be said that the owner failed to supply the documents to the Insurance Company. In the absence of the license, it cannot be proved that the driver was not having a valid driving license at the time of the accident. It is true that the driving license was not produced on record by the driver but it is equally true that the owner has sufficiently proved that it was the driver who was driving the vehicle at the time of the accident and he had taken all precautions prior to his engagement. 10 The burden to prove issues No. 3, 4 & 5 were heavy upon the Insurance Company. To my mind, no steps whatsoever were taken by the insurer to even prima facie show that the owner 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 licensed driver. Even prima facie there is nothing on record to show that any of the term of the conditions of the Policy stood breached willfully by the owner. The Insurance Company did not take any steps to shift the burden upon the owner. On the contrary, the owner faced with the situation where the driver had deserted him has sufficiently proved to the contrary. In the impugned Award, the Tribunal while answering issues No. 3 & 4 has simply held that except for the bald statement of the owner, there is nothing on record to prove that the owner had engaged the driver to drive the vehicle. The Tribunal exceeded its jurisdiction and returned the finding in the teeth of the findings of facts upheld by this Court in FAO No. 94 of 2000. The Tribunal misdirected himself while examining this question. It is true that earlier this Court had held that it was not for the Insurance Company to lead any negative evidence to show that the driver did not have a valid driving license, but it is equally true that at the time when the Tribunal had rendered its earlier decision both the driver and the owner were ex-parte and in fact no defence was pleaded and no evidence was led on their 11 behalf. It was in this background that such an observation was made by the Court. The position, however, after remand is entirely different. In this view of the matter, I am of the considered view that the Tribunal has seriously erred in deciding issues No. 3 & 4 in favour of the Insurance Company and holding it not liable to indemnify the owner. For the aforesaid reasons, the appeal is allowed and the findings on issues No. 3 & 4 are reversed. The Tribunal has already held issue No.5 in favour of the owner. The awarded amount, deposited in the Registry of this Court vide order dated 10.4.2000 in FAO No.94 of 2000 already stands disbursed to the claimants. ( Sanjay Karol ), Judge. September 17, 2008. (rana)