IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.08.2010 CORAM THE HONOURABLE MRS. JUSTICE CHITRA VENKATARAMAN C.M.A. No.314 of 2009 Iffco Tokio General Insurance Co. Ltd., Thulasi Chambers, 3rd Floor, 195, T.V. Samy Road, R.S.Puram, Coimbatore, ..Appellant/2nd Respondent Vs. 1. Pappa 2. Kanmani 3. Minor. Periasamy 4. Minor. Ayyathurai (Minor Respondents 3 and 4 are represented by Mother and next friend 1st respondent herein) 5. Palaniammal ..Respondents 1 to 5/Petitioners 6. M.Marimuthu (6th respondent ex-parte in Lower Court hence notice may be dispensed with) ..6th Respondent/1st Respondent Prayer: Civil Miscellaneous Appeal filed u/s 173 of Motor vehicles Act 1988, against the Judgment and Decree dated 25.09.2008 made in M.C.O.P.No.1432 of 2006 on the file of Motor Accidents Claims Tribunal, Principal Additional District Court, Salem. For Appellant :: Mr.N.Vijayaraghavan For Respondents :: Mr.S.D.S.Phillip for Mr.I.Syed Sibghatulla /RR- 1 to 5 :: Ex-parte R-6 J U D G M E N T This appeal arises out of the award granted in respect of the claim on the accident that happened between the minidor auto and a motor cycle on 24.07.2006 at about 4.30 p.m. in Jalagandapuram – Tharamangalam Main Road. The accident resulted in the death of 52 years old Madeswaran, who was working as driver- cum-owner of the minidor auto. The claimants are the wife, minor children, mother and sister (since dead pending trial) of the deceased. The Tribunal awarded compensation of Rs.3,42,900/-. Taking note of the income of the deceased at Rs.3,300/- per month and deducting one-third, the Tribunal applied multiplier 11 to arrive at the pecuniary loss of Rs.2,90,400/- and a sum of Rs.2,500/- towards transport and funeral https://hcservices.ecourts.gov.in/hcservices/ expenses, Rs.15,000/- towards loss of consortium, Rs.35,000/- towards love and affection, thus, totalling to a sum of Rs.3,42,900/- was awarded as compensation payable to the claimants with interest at 7.5% per annum. 2. It is seen from the award that on 24.07.2006 at 4.30 p.m., the deceased Madeswaran was driving his minidor auto. At that time, the two wheeler, insured with the appellant herein, coming in the opposite direction in a rash and negligent manner and in a high speed, dashed against the auto resulting in the deceased Madeswaran caught underneath the auto. The said Madeswaran died on the spot. The Tribunal considered the negligence aspect in the context of the evidence let in therein. 3. The Insurance Company took the defence that the driver of the two wheeler did not have a valid licence to drive the same. Going by the very evidence of the driver of the two wheeler that he did not possess the licence, no liability could be fastened on the Insurance Company. In any event, if the Tribunal is to conclude that the two wheeler driver was also responsible for the accident, the liability has to be contributed equally among the two wheeler and the minidor auto owner cum driver. It was also suggested to P.W.1, an eye witness to the occurrence, that as against only one person to travel in a minidor auto, five persons have travelled and consequently, the negligence of the driver of the auto is also responsible for the accident. 4.The Tribunal pointed out that based on the First Information Report and the enquiry made, proceedings were taken against the two wheeler driver and ultimately, he was fined and prosecuted before the Magistrate. R.W.2, an Executive of the Insurance Company, deposed in this case that having regard to the breach of policy condition, no liability could be fastened on the Insurance Company. The Tribunal considered the evidence therein and ultimately accepted the evidence on the side of P.W.1 and came to the conclusion that the accident was caused by the driver of the two wheeler. Consequently, the compensation has to be borne by the Insurance Company. The Tribunal further pointed out that having regard to the fact that the vehicle was insured with the Insurance Company, the Insurance Company as well as the insurer were jointly and severally liable to pay the compensation therein. 5. As against the award on the aspect of joint and several liability, the Insurance Company has come up on appeal, contending that when the driver R.W.1 had admitted the absence of driving licence, the question of fastening the liability in the case of breach of policy condition did not arise. In support of the said contention, learned counsel for the appellant placed reliance on the decision of the Supreme Court reported in 2008 ACJ 1307 (Sardari v. Sushil Kumar) and 2008 ACJ 2860 (National Insurance Co. Ltd. v. Vidhyadhar Mahariwala) only to contend that when the driver had no licence, there is no necessity to let in evidence by the Insurance Company to prove the breach of insurance condition. Hence, applying https://hcservices.ecourts.gov.in/hcservices/ the decision of the Apex Court as referred above, which had, in turn, followed the decision of the Apex Court in Swaran Singh's case reported in 2004 ACJ 1, it is only the owner of the vehicle who has the statutory obligation to meet the liability. Consequently, the order of the Tribunal on the aspect of joint and several liability has to be set aside. 6. Per Contra, learned counsel appearing for the respondents/ claimants placed reliance on the decision of the Apex Court reported in AIR 1959 SC 1331 (B.I.G. Insurance Co. vs. Itbar Singh), (1998) 1 SCC 371 (Oriental Insurance Co. Ltd. vs. Inderjit Kaul and others), 2004 ACJ 1 (National Insurance Co. Ltd. vs. Swaran Singh and Ors) and (2007) 3 SCC 700 (National Insurance Co. Ltd. vs. Laxmi Narain Dhut) to contend that considering the object of the Act, the liability of the Insurance Company, as such, could not, in any manner, be undermined. He further pointed out that the Insurance Company is statutorily liable to satisfy the award. Pointing out to the concept of pay and recover applicable herein, given the fact that the claimants come from socially and economically weaker section, the Court has every discretion to direct the appellant to satisfy the award first and thereafter proceed against the owner. In the circumstances, placing reliance on the decision of this Court reported in 2009 (2) TN MAC 103 (United India Insurance Co. Ltd. vs. S.Saravanan) as well as 2010 (1) TN MAC 613 (ICICI Lombard General Insurance Company Ltd. Chotta Bai Center, Chennai, vs. Ahilandam), it is contended that the appeal has to fail. 7. Even though at the outset I had my own reservation to accept the submission of the respondents of pay and recover, yet, going by the fact that the concept of pay and recover is a matter of discretion to be exercised in the given set of facts, considering the difficulties that the claimants would face in spite of an award in their favour, I have no hesitation in accepting the plea of the respondents that given the circumstances of the claimants herein, even with policy violation, the Insurance Company may have to meet the liability with liberty to recover the same from the insured herein. 8. Admittedly, the insured in this case had remained ex parte throughout. Before going into the other aspects of the case, it is relevant to note the law declared on the subject of policy violation and the liability of the Insurance Company to pay the award and recover the same from the insured. In the decision reported in 2004 ACJ 1 (National Insurance Co. Ltd. vs. Swaran Singh and Ors), the Apex Court considered the liability of the Insurance Company under various circumstances. Dealing with a case of no licence, in paragraph 77, the Apex Court pointed out that when a disputed question of fact arises as to whether when the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance by consciously allowing any person to drive a vehicle who did not have a valid driving licence, the question as to whether the Insurance Company would have to meet the liability has to be decided, particularly with reference to the https://hcservices.ecourts.gov.in/hcservices/ provisions of Sections 3 and 4 of the Motor Vehicles Act. However, where the driver, admittedly, did not possess any licence and the owner had the knowledge of the same but nevertheless allowed the driver to drive the vehicle, then the insurer is entitled to succeed in its defence and avoid its liability. Referring to the decision reported in 2006 ACJ 1336 (National Insurance Co. Ltd. vs. Kusam Rai) as well as Swaran Singh's case, cired supra, in the decision reported in 2008 ACJ 1307 (Sardari v. Sushil Kumar) and 2008 ACJ 2860 (National Insurance Co. Ltd. v. Vidhyadhar Mahariwala), the Apex Court held that where there is a breach of conditions of insurance policy, by reason of the licence not being there, the question of mulcting the liability on the Insurance Company did not arise. However, taking note of the poor circumstances and the age of the victim, in order to avoid another round of litigation, applying the decision reported in 2004 ACJ 721 (Oriental Insurance Co. Ltd. v. Nanjappan), in exercise of jurisdiction under Article 136, the Apex Court held that it was a fit case that the Insurance Company should meet the liability and recover the same from the owner of the vehicle. 9. A reading of the decision of this Court reported in 2009 (2) TN MAC 103 (United India Insurance Co. Ltd. vs. S.Saravanan) referred supra, shows that even though the owner has breached the policy condition, considering the consistent view taken as regards the third party risks, the insurer has to meet the liability and then take a decision to proceed against the owner. This Court held that this would be in consonance with the spirit of the Act. Thus, in paragraph 25 of the judgment, this Court referred to the series of decisions of the Apex Court only to reiterate the settled position that the insurer must pay the amount as far as third party risks are concerned and then recover the same from the insured, if so advised. In the light of the decision of this Court and that of the Apex Court rendered in similar circumstances, this Court holds that the just and fair course in the given set of facts like this, would be to direct the Insurance Company first to meet the liability and thereafter proceed against the insurer, if so advised, to recover the amount due and payable under the award. 10. Even though in the decisions reported in 2008 ACJ 1307 (Sardari v. Sushil Kumar) and 2008 ACJ 2860 (National Insurance Co. Ltd. v. Vidhyadhar Mahariwala), referred supra, on similar circumstances, this Court had held that the Insurance Company is not liable to meet the liability on a question of policy violation, yet, given the circumstances in which the third party claimants are placed, and going by the sentiments expressed by the Apex Court in the decision reported in (1998) 1 SCC 371 (Oriental Insurance Co. Ltd. vs. Inderjit Kaul and others), cited supra, I have no hesitation in accepting the plea of the respondents herein that this is a fit case where the claimants should have the award met by the Insurance Company and that for the recovery of the same, the respondents should not be driven to proceed against the insurer solely by reason of the policy violation, namely, the absence of a valid licence. https://hcservices.ecourts.gov.in/hcservices/ 11. With the above observation, the Civil Miscellaneous Appeal is dismissed, with liberty to the Insurance Company to proceed against the insured to recover the award amount. No costs. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar sra To The Principal Additional District Judge, Motor Accidents Claims Tribunal Salem. 1 cc to Mr.N.Vijayaraghavan, Advocate, Sr.No.62852 2 cc to Mr.I.Syed Sibghatulla, Advocate, Sr.No.62453 C.M.A.No.314 of 2009 SSN {CO} TP/22.10.2010. https://hcservices.ecourts.gov.in/hcservices/