First Appeal No.2018 of 2010

24th June, 2014.

Petitioner Counsel: Shri. SANTOSH G. CHAPALGAONKAR
Respondent Counsel: Shri. R.B. DESHPANDE

Cases Cited:
National Insurance Co. Ltd. Vs. Brij Pal Singh, 2003 ACJ 1274 [Para 11]
OIC Ltd. Vs. Shanti, 2013(5) ALL MR (JOURNAL) 22 [Para 11]
N.V. Kamat Vs. Alfredo, 1985 (2) SCC 574 [Para 12]
Rajendra Vs. Pramila Dattu, 2002(2) ALL MR 299=2002 (3) Bom. C.R. 305 [Para 12]
National Insurance Co. Ltd. Vs. Yogesh, 2012 ACJ 107 [Para 12]
Punam Devi Vs. Divisional Manager, New India Assurance Co. Ltd., 2004 (4) Bom. C.R. 48 SC [Para 12]
Chinni Subba Rao Vs. Syed Kareemuddin, 2011(2) ALL MR (JOURNAL) 1 [Para 12]
Bhuwan Singh Vs. M/s Oriental Insurance Company Ltd., 2009(2) ALL MR 913 (S.C.)=AIR 2009 SC 2177 [Para 14]
National Insurance Co. Ltd. Vs. Vidhyadhar Mahariwala, 2009(1) ALL MR 465 (S.C.)=AIR 2009 SC 208 [Para 14]
Oriental Insurance Co. Ltd. Vs. Premlata Shukla, 2007 ALL SCR 1750=2007 AIR SCW 3591 [Para 14]
S. Iyyapan Vs. M/s United India Insurance Company Ltd., 2013 ALL SCR 3581=(2013) 7 SCC 62 [Para 14]
National Insurance Co. Ltd. Vs. Swaran Singh, 2004(5) ALL MR 251 (S.C.)=(2004) 3 SCC 297 [Para 14]

JUDGMENT

JUDGMENT :- Admit.

2. Notice after admission made returnable forthwith. Heard both the sides for final disposal. Such order was made by this Court on 21st April 2014.

3. The appeal is filed by the Insurance Company against the judgment and award of MACP No.95 of 2008 which was pending before the Claims Tribunal Ambajogai, District Beed. In a petition filed by the respondent No.1, original claimant, the Tribunal has awarded compensation of Rs.1,42,500/- and the owner and Insurance Company are made jointly and severally liable to pay the compensation amount.

4. It is the case of the Insurance Company that the rider of the motor cycle was not holding valid and effective driving licence on the date of accident and so it cannot be held liable to pay the compensation. In view of this defence issue was framed by the Tribunal. Both the sides gave evidence.

5. The Insurance Company examined its officer and produced the record like copy of charge-sheet filed against the rider of the motor cycle. Case was filed against the rider of the motor cycle, the offending vehicle, for offence of driving the vehicle without valid and effective driving licence (under section 3 read with section 181 of the Motor Vehicles Act, 1988). The officer gave evidence that notice was sent by registered post with acknowledgment due on the address available on the record, supplied to the police and the owner was asked to supply information regarding the driving licence of the driver but the notice was returned with remark that the owner was not residing at the address. Copy of insurance certificate-cum-policy was produced to show that as per the statutory provisions there was clause in the policy and the vehicle could have been driven only by person holding valid and effective driving licence.

6. The Tribunal has observed that the burden was on the Insurance Company to prove that the driver was not holding valid and effective driving licence and that they failed to discharge that burden. It is observed that it was necessary for the Insurance Company to examine Investigating Officer to prove the aforesaid defence and even the driver could have been examined by the Insurance company.

7. Both the sides placed reliance on some reported cases on aforesaid point. Before considering the reported cases, relevant provisions of the Motor Vehicles Act, 1988 (hereinafter referred to as "the Act") need to be seen. In section 3 of the Act it is made clear that no person shall drive motor vehicle in any public place unless he holds a valid driving licence issued to him authorizing him to drive the vehicle. Section 5 shows that no owner or person in charge of the motor vehicle shall cause or permit any person who does not satisfy provision of section 3, to drive the vehicle. Provision of Section 133 of the Act shows that whenever accident takes place it is duty of the owner of motor vehicle to give information to police if it is demanded and the information should include information about name and address of the driver and particulars of the licence held by the driver. Provision of section 134 of the Act shows that this provision is applicable both to the driver and the owner (in explanation it is made clear that driver includes the owner). This provision shows that when accident takes place, the driver/owner must give information required by police if police officer is present on the spot and if no police officer is present on the spot, give report about the circumstances of the occurrence to the nearest police station as soon as possible (provision of Section 134(b)). The provision of Section 134(c) shows that, the driver / owner are expected to give information in writing to the Insurer about occurrence of accident and this information includes the information about name of the driver and the particulars of his driving licence.

8. The provision of section 158 of the Act shows that when such accident takes place and the driver of the vehicle does not at the time when officer of the spot produce the certificate/driving licence etc. he shall produce such record at police station at which he makes the report required by section 134.

9. The aforesaid provisions show that duty is cast on the driver/owner of the offending vehicle to produce relevant record before police and the record includes the particulars of driving licence of the driver. In view of these circumstances, when charge sheet is filed by police for the offence of driving of motor vehicle without holding driving licence (for offence punishable under section 3/181 of the Act), it needs to be presumed that the licence was not available, it was not produced by the driver/owner.

10. It is true that the initial burden to prove the breach of conditions of policy like driving vehicle by person who was not duly licenced is on Insurance Company. However, the aforesaid provisions need to be kept in mind. Whether driver was holding a driving licence or not is within the knowledge of the driver himself or the owner in view of the aforesaid provisions. It is practically not possible for the Insurance Company to give evidence for proving such defence. Provision of Section 114 of the Evidence Act needs to be used against the owner and driver in such cases. In the present case, the matter proceeded ex-parte against owner before the Tribunal. Public notice was required to be issued in the present matter for service as the address of the owner was not as per the record collected by the police. In such circumstances it becomes practically impossible for Insurance Company to serve notice of production and then to make submission for drawing adverse inference. In view of the aforesaid provisions when there are circumstances like present one, the owner and driver are not available, the Tribunal needs to act on the basis of the circumstances like filing of charge sheet for offence under section 3/181 of the Act against the driver of the vehicle. When driver was not holding licence, he is not expected to admit such a thing in a case like the present one. Examination of the officer from the RTO from the place of residence of the driver cannot be a solution as the interested party like the claimant or insurer can make a submission that there is possibility that the driver had obtained the driving licence from other place. When the provisions specify a specific duty, the Tribunal is expected to see that such duty was discharged. Thus when the initial burden is discharged by the Insurance Company and there is nothing in rebuttal, in view of the aforesaid provisions, the Tribunal can give finding that the driver was not duly licenced. It being a proceeding expected to be decided in summary manner, nothing more is required from the Insurance Company for proof of such defence available under section 149(2)(a)(ii) and in view of the aforesaid provisions.

11. The learned counsel for the Insurance Company placed reliance on decision of the Allahabad High Court which is reported as 2003 ACJ 1274 (National Insurance Co. Ltd. v. Brij Pal Singh). The High Court has considered the provision of Section 106 of the Evidence Act. Copy of the judgment delivered by the Allahabad High Court in this case (FAFO No.378/2002) decided on 13-12-2002 is also produced. In this case the aforesaid provisions are not discussed. This Court holds that in view of the provisions of the Act, quoted above, and in view of the circumstances that licence was not produced before police adverse inference needs to be drawn as provided under section 114(g) of the Evidence Act though strictly the provision of section 106 of the Evidence Act may not be applicable in such a case. Reliance is placed in a case reported as 2013(5) ALL MR (JOURNAL) 22 (OIC Ltd. v. Shanti). In that case, notice was given under Order 12 Rule 8 of the Code of Civil Procedure. The High Court held that the circumstances like prosecution of driver may not be sufficient to prove such defence but failure to produce licence in spite of notice under Order 12 Rule 8 CPC can lead to inference that the driver did not possess valid licence. When driver/owner are available giving of such notice is possible but when they are not available there is no other course open than discussed above.

12. The learned counsel for the respondent No.1 / claimant placed reliance on some reported cases like 1985 (2) SCC 574 (N.V. Kamat v. Alfredo). In this case provision of Section 124 of the Contract Act, Section 95 of the Motor Vehicle Act 1939 and also some provisions of the Insurance Act 1938 are discussed. There was no evidence given by the Insurance Company to prove breach and in view of the facts of the case, the Insurance Company was held liable. In the case reported as 2002 (3) Bom. C.R. 305 : [2002(2) ALL MR 299] (Aurangabad Bench) (Rajendra v. Pramila Dattu) when notice was given to call upon the driver to produce the driving licence it was held that such step was not sufficient to discharge the burden of proof. Provision of section 101 of the Evidence Act was considered but the aforesaid provisions of the Act were not considered by this Court. In the case reported as 2012 ACJ 107 (Rajasthan High Court) (National Insurance Co. Ltd. v. Yogesh) no evidence was given by the Insurance Company to prove the breach and so it was held that the Insurance Company cannot be exonerated. Similar observations were made in the case reported as 2004 (4) Bom. C.R. 48 (Supreme Court) (Punam Devi v. Divisional Manager, New India Assurance Co. Ltd.). As there was no evidence and so it was held that the Insurance Company had failed to discharge the burden. In the case reported as 2011(2) ALL MR (JOURNAL) 1 (Andhra Pradesh High Court) (Chinni Subba Rao v. Syed Kareemuddin) the investigator appointed by the Insurance Company was not examined and no evidence was given to prove the breach and so it was held that the Insurance Company failed to discharge its burden. However, the Insurance Company was allowed to recover the amount from owner of the vehicle. The Tribunal is expected to take decision on such defence on the basis of facts and circumstances of the case before it.

13. In view of the aforesaid discussion this Court holds that the Tribunal has committed error in holding that the Insurance Company has failed to discharge the burden of proof. In view of the discussions already made this Court holds that the Insurance Company has proved that the driver was not duly licenced and there has been breach of condition of policy.

14. The submission was made by the learned counsel for the Insurance Company that if there is such breach the Insurance Company gets exonerated, it cannot be made liable to pay anything. Reliance was placed on some reported cases like AIR 2009 SC 2177 : [2009(2) ALL MR 913 (S.C.)] (Bhuwan Singh v. M/s Oriental Insurance Company Ltd.). The facts of this case show that the driver was not holding even learner's licence on the date of the accident and it was held that the Insurance Company was not bound to reimburse the owner in terms of the contract of policy. It was a proceeding for reimbursement filed by the owner. In the case reported as AIR 2009 SC 208 : [2009(1) ALL MR 465 (S.C.)] (National Insurance Co. Ltd. v. Vidhyadhar Mahariwala) when the driver was not holding valid and effective driving licence, the Apex Court held that Insurance Company was exonerated from its liability. In the case reported as 2007 AIR SCW 3591 : [2007 ALL SCR 1750] (Oriental Insurance Co. Ltd. v. Premlata Shukla) it is observed by the Apex Court that when a party places reliance on some record and its part of the record is considered, the other part of the record cannot be ignored. To some extent the observations are applicable as the Insurance Company placed reliance on police papers and they show that there was charge sheet filed for offence under section 3/181 of the Act. On the other hand, on this point learned counsel for the respondent placed reliance on a case reported as (2013) 7 SCC 62 : [2013 ALL SCR 3581] (S. Iyyapan v. M/s United India Insurance Company Ltd). In this case the Apex Court has considered the provisions of sections 146, 147 and 149 of the Act. It is laid down that if there is breach of condition of policy, in view of the right of the third party to get compensation from the insured, the Insurance Company must pay the compensation and it may proceed against the insured for recovery of amount paid to third party. In reported case (2004) 3 SCC 297 : [2004(5) ALL MR 251 (S.C.)] (National Insurance Co. Ltd. v. Swaran Singh) decided by bench of 3 Hon'ble Judges the Apex Court has laid down that even after proving the breach of conditions of the insurance policy, the the Insurer must pay first and then it may be allowed to recover the amount from the owner. In the result, following order.

(i) The appeal is partly allowed.

(ii) The judgment and award of Tribunal is modified as follows :-

Insurance Company is to pay first, but, it is entitled to recover this amount from the owner by using this decision.

(iii) Other part of the judgment and order is confirmed.

Appeal partly allowed.