Case: National Insurance Co. Ltd Vs. Kusum Rai

2. Respondent No. 3 herein is owner of a jeep bearing registration No. BR 03 P 9011. The said vehicle admittedly was being used as a taxi and, thus, a commercial vehicle. One Ram Lal was working as a Khalasi in the said taxi. He used to drive the said vehicle sometimes. He had a driving licence. Driving licence, however, was granted to him for driving a Light Motor Vehicle. The said taxi met with an accident on 14.8.2000 at about 1 p.m. as a result whereof a girl aged about 12 years, Km. Anjali Rai, died3. On an allegation made in that behalf that the said taxi was being driven rashly and negligently by the aforementioned Ram Lal, a claim petition in terms of Sections 163A and 166 of the Motor Vehicles Act, 1988 (for short the Act) was filed by the First and the Second Respondents herein. The said taxi admittedly was insured with the Appellant herein. One of the issues raised in the said proceeding was as to whether the driver of the said jeep was having a valid and effective licence. Another question which arose was as to whether the said Ram Lal was driving the said vehicle4. The learned Tribunal did not go into the said question. It inter alia held that the said Ram Lal had been driving the said vehicle having regard to the fact that he had been shown as the accused in the criminal case. However, as regard the question as to whether by permitting the said Ram Lal to drive the said vehicle, the Respondent No. 3 herein of its third party liability as the said question arises only between the owner of the vehicle and the insurance company. It was further held:Insurance Company can recover this amount from owner of vehicle. This legal proposition is fully applicable in this matter. So, Issue No. 3 is decided in favour of Petitioners5. The appeal preferred thereagainst by the Appellant herein before the High Court was dismissed on the premise that no appeal was maintainable wherefor reliance was placed by the High Court on a decision of this Court in National Insurance Company Ltd. Chandigarh vs. Nicolletta Rohtagi and others [JT 2002 (7) SC 251 ]. As regard the purported statutory liability of the Appellant, it was held:the mere fact that there was violation of the terms and conditions subject to which the insurance policy had been issued, cannot have the effect of exonerating the insurer from the statutory liability cast upon him in this regard to pay the amount to the third party victimIt will, therefore, be open to the insurer-appellant to initiate an appropriate proceeding for the refund of the amount paid by it to the claimants and establish the breach of the terms and conditions subject to which the insurance policy had been issued

Court's reasoning:
In a case of this nature, therefore, the owner of a vehicle cannot contend that he has no liability to verify the fact as to whether the driver of the vehicle possessed a valid licence or notHowever, in this case the owner has not appeared. The victim was aged only 12 years. The claimants are from a poor background. They must have suffered great mental agony. Therefore, we are of the opinion that it may not be appropriate to push them into another round of litigation particularly when it may be difficult for them to secure the presence of the owner of the vehicleAlthough, thus, we are of the opinion that the Appellant was not liable to pay the claimed amount as the driver was not possessing a valid licence and the High Court was in error in holding otherwise, we decline to interfere with the impugned award, in the peculiar facts and circumstances of the case, in exercise of our jurisdiction under Article 136 of the Constitution of India but we direct that the Appellant may recover the amount from the owner in the same manner as was directed in Nanjappan (supra)