1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.1093 OF 2000 Savita Bhaskar Dole & Ors. .. Appellants versus Sayyad Iqbal Gani Mohd. & Ors. .. Respondents Mr.Sanjay Shinde i/by Mr.M.M.Sathye for the appellants. Mr.P.N.Joshi for Respondent no.2 Mr.J.S.Chandanani for Respondent no.3 CORAM : A.S.OKA, J. DATE : 1st December 2009. JUDGMENT: . The appellants who are the original claimants have taken an exception to the judgment and award passed by the learned Member of the Motor Accident Tribunal in a claim petition filed under section 166 of the Motor Vehicle Act, 1988 (hereinafter referred to as the said Act). The 1st appellant is the widow of deceased Bhaskar and the 2nd to 4th appellants are the children of deceased Bhaskar. The claim petition was filed by the appellants claiming compensation on account of death of the said Bhaskar. The said Bhaskar was travelling by an auto-rickshaw on 24th September 1990 which was at the material time being driven by the 1st respondent. The allegation is that due to rash and negligent driving on the part of the 1st 2 respondent the accident occurred and the deceased sustained injuries all over the body. On 2nd October 1990 the deceased succumbed to the injuries. A claim petition was filed by the appellants claiming compensation of Rs. 5,00,000/-. 2. The 1st and 2nd respondents did not appear before the Tribunal after service of notice. The 3rd respondent insurer appeared and filed written statement contending that at the time of accident, the 1st respondent was not holding a valid licence. The Tribunal accepted the defence of the 3rd respondent. The Tribunal found that the 1st respondent was possessing a licence on the relevant date to drive LMV auto rickshaw (non-transport) and the auto rickshaw in which the deceased was travelling was a transport vehicle. The learned Member of the Tribunal held that the appellants were entitled to compensation of Rs.3,30,000/- inclusive of amount received of Rs.25,000/- on account of no fault liability. The 1st and 2nd respondents were ordered to pay compensation. However, the claim petition as against the 3rd respondent was dismissed. 3. The learned counsel appearing for the appellants invited my attention to the findings recorded by the Tribunal. He submitted that the Tribunal ought not to have exonerated insurer of the vehicle. He placed reliance on the decision of the Apex Court in the case of National Insurance Company Ltd Vs. Swaran Singh and Ors [(2004) 3 Supreme Court Cases 297]. He submitted that admittedly on the date of the accident, the 1st respondent was 3 holding a licence to drive auto rickshaw of non-transport category. He submitted that the burden was on the 3rd respondent to prove that the 2nd respondent insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of the auto rickshaw by a duly licenced driver. He submitted that in any event even assuming that there is a breach of conditions of the policy regarding holding of a valid licence by a driver, the said breach was not so fundamental that the same could have contributed to the cause of the accident. He invited my attention to a decision of the Gujarat High Court in the case of Bhailalbhai Garbabhai Vasava and Another Vs. Munikhan Ismailkhan Sayed and Ors (2003 ACJ 1117). He submitted that the learned Member of the Tribunal has committed an error by holding that the 3rd respondent was not liable. The learned counsel appearing for the 2nd respondent supported the appellants and submitted that in view of policy of insurance the 3rd respondent ought to have been held liable. 4. The learned counsel appearing for the 3rd defendant relied upon a decision of the Apex Court in the case of Oriental Insurance Company Vs. Zaharulnisha and Others (AIR 2008 Supreme Court 2218). He also relied upon a decision of the Apex Court in the case of New India Insurance Company Vs. Darshana Devi and Others [(2008) 7 Supreme Court Cases 416]. He submitted that the breach of terms and conditions of the policy of insurance was established inasmuch as on the date of the accident, the 1st 4 respondent was not holding a licence to drive an auto rickshaw of transport category. He, therefore, submitted that the learned Member of the Tribunal was right in exonerating the 3rd respondent. Without prejudice to the said contention he submitted that at highest the 3rd respondent can be ordered to pay compensation with liberty to the 3rd respondent to recover the said amount from 2nd respondent insured by executing the same award. 5. I have given careful consideration to the submissions. The 3rd respondent insurer examined a clerk in the office of the Regional Transport Office and produced licence register at Exhibit 56. The licence register showed that on 6th September 1990 , a driving licence was issued to the 1st respondent authorising him to drive LMV auto rickshaw (non- transport). As stated earlier, accident occurred on 24th September 1990. There is further endorsement on the licence register that on 15th December 1993 , a licence was granted to the 1st respondent to drive auto rickshaw of transport category. The 3rd respondent insurer wants to avoid the liability on the ground that a breach has been committed of the terms and conditions of the policy requiring that the vehicle should be driven by a person who was holding a valid driving licence. 6. On this aspect, the Apex Court in the case of National Insurance Company Ltd (supra) considered and summarised law on the point. The Apex Court considered various contingencies in the said decision. The Apex 5 Court considered a case where the driver was not holding any driving licence. The second case considered by the Apex Court was of a driver holding a licence for driving one type of vehicle but was driving another type of vehicle at the time of accident which was not covered by the licence. The third category considered by the Apex Court was in a case where driver’s licence was found to be fake and the fourth category was where the driver was holding a learners’ licence. In paragraph 89 , after considering various types of vehicles as defined under section 2 of the said Act of 1988, the Apex Court observed thus: “89. Section 3 of the Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle which he intends to drive. Section 10 of the Act enables the Central Government to prescribe forms of driving licences for various categories of vehicles mentioned in sub-section (2) of the said section. The various types of vehicles described for which a driver may obtain a licence for one or more of them are: (a) motorcycle without gear, (b) motorcycle with gear, (c) invalid carriage, (d) light motor vehicle, (e) transport vehicle, (f) road roller, and (g) motor vehicle of other specified description. The definition clause in Section 2 of the Act defines various categories of vehicles which are covered in broad types mentioned in sub-section (2) of Section 10. The are “goods carriage”, “heavy goods vehicle”, “heavy passenger motor vehicle”, “invalid carriage”, “light motor vehicle”, “maxi-cab”, “medium goods vehicle”, “medium passenger motor vehicle”, “motor-cab”, “motorcycle”, “omnibus”, “private service vehicle”, “semi-trailer”, “tourist vehicle”, “tractor”, “trailer” and “transport vehicle”. In claims for compensation for accidents, various kinds of breaches with regard to the conditions of driving licences arise for consideration before the Tribunal as a person possessing a driving licence for “motorcycle without gear”, [sic may be driving a vehicle] for which he has no licence. Cases may also arise where a holder of driving licence for “light motor vehicle” is found to be driving a “maxi-cab”, “motor-cab” or “omnibus” for which he has no licence. In each case, on evidence led before the Tribunal, a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or 6 contributory cause of accident. If on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence”. (Emphasis added) 7. Paragraphs 90 and 91 of the decision read thus: “90. We have construed and determined the scope of sub-clause (ii) of sub-section (2) of section 149 of the Act. Minor breaches of licence conditions, such as want of medical fitness certificate, requirement about age of the driver and the like not found to have been the direct cause of the accident, would be treated as minor breaches of inconsequential deviation in the matter of use of vehicles. Such minor and inconsequential deviation in the matter of use of vehicles. Such minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to the third parties. 91. On all pleas of breach of licensing conditions taken by the insurer, it would be open to the Tribunal to adjudicate the claim and decide inter se liability of insurer and insured; although where such adjudication is likely to entail undue delay in decision of the claim of the victim, the Tribunal in its discretion may relegate the insurer to seek its remedy of reimbursement from the insured in the civil Court”. (Emphasis added) 8. After summarising and considering the entire law on this aspect, in paragraph 110 the Apex Court recorded summary of conclusions. Clauses (iii) to (vii) thereof read thus: “110. ...... (i) .... 7 (ii) .... (iii) The breach of policy condition e.g disqualification of the driver or invalid driving licence of the driver, as contained in the 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 of 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 of his qualification to drive during the relevant 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 fulfil the requirements of law or not will have to be determined in each case. (viii) ........” (Emphasis added) 9. As held by the Apex Court, the burden on the insurer is not only to establish the defence but to establish a breach on the part of owner of the vehicle. As stated earlier, the 1st respondent was holding a licence to drive auto rickshaw of non-transport category and the auto rickshaw which met 8 with the accident was a transport vehicle. In view of what is observed by the Apex Court in clause (vi) of paragraph 110 of the aforesaid decision,in the facts of this case, the insurer will have to prove that the breach was so fundamental that it has contributed to the cause of the accident. Going by the findings recorded by the Tribunal and the material on record, it is not possible to say that the said breach has contributed to the accident. In the present case the 1st respondent was holding a licence to drive the same category of vehicle, namely, an auto rickshaw. His licence was confined to driving an auto rickshaw of non-transport category and on the date of the accident , he was driving vehicle of the same category, namely, an auto rickshaw which was used for transporting passengers. The learned Member of the Tribunal in paragraph No.13 has observed that the accident occurred 18 days after licence was granted to the 1st respondent. As stated earlier, there is no evidence on record to show that the breach on the part of the 1st respondent was the reason for accident or that the said breach contributed to the accident. 10. At this juncture, it will be necessary to consider the other decisions relied upon by the learned counsel appearing for the 3rd respondent. It must be stated here that the aforesaid decision of the Apex Court in the case of National Insurance Company Ltd (supra) is delivered by a larger bench of the Apex Court consisting of three honourable Judges. In the case of New India Assurance Company Vs. Darshana Devi & Ors. (supra), the Apex 9 Court considered the aforesaid decision and held that the decision in the case of Swaran Singh (supra) has no application to the cases other than third party risks. The Apex Court further observed that where originally the licence was a fake one, renewal cannot cure the inherent fatality. In the case of Oriental Insurance Company Ltd (supra) ,the Apex Court dealt with the provisions of the said Act of 1988 and the decision in the case of Swaran Singh (supra). This was a case where the Apex Court found that on the date of the accident the driver was not holding any valid and effective licence. 11. Coming back to the facts of the case in hand, the 1st respondent was holding a licence on the date of the accident to drive same category of vehicle, namely, auto rickshaw of non-transport category and after the accident, he obtained a licence to drive auto rickshaw of transport category. There is nothing shown from the record to indicate that this breach on the part of the 1st respondent has contributed to the accident. Therefore, in the facts of the present case, the learned Member of the Tribunal has committed an error by holding that breach of terms and conditions of the policy has been established by the 3rd respondent. Any such breach on the part of the isured was not established by the 3rd respondent and therefore, the 3rd respondent could not have avoided liability to pay compensation under policy of insurance. To that extent the opponents must succeed and the impugned award will have to be modified. 10 12. Hence, I pass the following order: : O R D E R : (a) Clause Nos.1 and 2 of the operative part of the impugned judgment and award are modified and it is directed that 1st to 3rd respondents shall be jointly and severally liable to pay compensation to the appellants. Rest of the award is confirmed. If 1st and 2nd respondents have not complied with the award, the 3rd respondent will have to comply with the award. For that purpose, time of four months from today is granted to the 3rd respondent. (b) The appeal is allowed in above terms with no orders as to costs. (A.S.OKA,J)