MACA No. 314 of 2010 (OPMV.1339/2007) – United India Insurance Co. Ltd. v. Kochukunju and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT & THE HONOURABLE MR. JUSTICE N.K.BALAKRISHNAN WEDNESDAY, THE 13TH JULY 2011 / 22ND ASHADHA 1933 MACA.No. 314 of 2010() ---------------------OPMV.1339/2007 of MOTOR ACCIDENT CLAIMS TRIBUNAL, KOLLAM .................... APPELLANT/5TH RESPONDENT ---------------------------UNITED INDIA INSURANCE CI. LTD., CHINNAKKADA, KOLLAM. BY ADV. SRI.P.V.JYOTHI PRASAD RESPONDENTS/ PETITIONERS AND RESPONDENTS 1 TO 4 ------------------------------------------------- 1. KOCHUKUNJU, AGED 54 YEARS, S/O.KUNJALASAM KUNJU, MADATHIL, MADAPPALLY MURI, CHAVARA VILLAGE, MUKUNDAPURAM PO,KARUNAGAPPALLY, KOLLAM DISTRICT. 2. VENUGOPAL, S/O. GOPALAN, PROPRIETOR, CHOLOMANDALAM INVESTMENT & FINANCE CO. LTD., COCHIN-25, RESIDING AT 157/8 CHEMBATTU HOUSE, KAKKASSERY, ERAVALLY, THRISSUR. 3. VARGHESE.A.K, S/O. KOCHAPPAN, ARAKKAL HOUSE, POOVATHUR, PERIMGADU DESOM, PAPPARATHI VILLAGE, CHAVAKKAD TALUK. 4. K.GOPALAKRISHNAN NAIR, S/O. KARUNAKARA KURUP, KOTTAKKATHU KIZHAKKATHIL(MANIMANDIRAM) ERAVICHIRA NADUVIL, PATHARAM PO, KUNNATHOOR. 5. RAMABHADRAN NAIR, S/O. JANARDHANAN PILLAI, PANICKARA VEEDU, MADAPALLY MURI, CHAVARA VILLAGE. ADV. SRI.RASHEED C.NOORANAD FOR R3 SRI.K.RAMACHANDRAN FOR R1 & 5 SRI.S.SREEDEV FOR R1 & 5 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 13/07/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **R.BASANT & N.K.BALAKRISHNAN, JJ. * * * * * * * * * * * * *** M.A.C.A.No.314 of 2010 ---------------------------------------Dated this the 13[th] day of July 2011 ## **O R D E R & J U D G M E N T** ## **BASANT,J.** ## C.M.Application No.388 of 2010 This petition is to condone the delay of 100 days in filing an appeal. Heard. We take a lenient view. This petition is allowed. Delay is condoned. ## M.A.C.A.No.314 of 2010 If an accident takes place, wilthin the grace period of 30 days conceded under the proviso to Section 15(1), can it be said that the owner of the vehicle was negligent and had breached the stipulation under Section 149(2((a)(ii) of the Motor Vehicles Act justifying the claim for exoneration by the insurance company. This is the crucial question arising for consideration in this case. 2. The driving licence of the driver of the vehicle expired on 20/07/2007. He had time till 20/08/2007 under proviso to Section 15(1) to apply for renewal. If he had applied for renewal, he would have been entitled for renewal from M.A.C.A.No.519/2005 2 20/07/2007, the date of expiry of the licence. 3. The accident occurred on 15/08/2007 - within the grace period of 30 days. The driver, obviously, because of the trauma of the accident and its aftermath, did not apply for renewal within the period of 30 days. He applied for renewal later and got his licence renewed with effect from 28/09/2007. 4. The insurer raised a contention that the insured was guilty of breach of the terms of the policy in having permitted the driver to drive the vehicle after the validity of the driving licence had expired on 20/07/2009. On the strength of such breach, it was contended that the insurance company is entitled for exoneration under Section 149(2)(a)(ii). 5. The Tribunal did not consider the question pointedly. However, relying on the decision in **Oriental Insurance Co.Ltd. v. Nirarudeen [2008(2) KLT 291],** the Tribunal took the view that it having not been proved that the absence of driving licence is the cause of the accident, the insurer cannot claim exoneration. 6. Before us, no arguments are advanced on the strength of **Oriental Insurance Co.Ltd.** (Supra). The learned counsel for the respondents/claimants and the driver of the vehicle, M.A.C.A.No.519/2005 3 contend that in any view of the matter, the accident having taken place within the grace period of one month conceded under the proviso to Section 15(1) of the M.V.Act, the owner/insured cannot be held to be guilty of negligence and no contumacious breach can be held to have resulted justifying the claim for exoneration by the insurance company under Section 149(2)(a) (ii). 7. The three Judges Bench of the Supreme Court in **National Insurance Company Ltd. vs. Swaran Singh (2004 (1)KLT 781 SC)** had considered the question in detail about the impact of the driver not having a valid driving licence at the relevant time. Propositions 1 to 6 appearing in paragraph 102 of that decision appear to be crucial? We extract the same below: “102.(i) Chap.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 M.A.C.A.No.519/2005 4 as to effectuate the said object. ii) Insurer is entitled to raise a defence in a claim petition filed under S.163-A or S.166 of the Motor Vehicles Act, 1988 inter alia in terms of S.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-s.(2)(a) (ii) of S.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 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 M.A.C.A.No.519/2005 5 vehicle; the burden of proof wherefore 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 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 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 S.149(2) of the Act............................” (emphasis supplied) 8. In the instant case, the accident occurred within a period of 30 days from the date of expiry of a valid driving licence. On any day within the period of 30 days, the driver could have applied for renewal and then renewal would have 6 M.A.C.A.No.519/2005 been granted by the authorities with effect from the date of expiry of the licence. No one has a case that the driver was disqualified from getting renewal. As a matter of fact, the licence was renewed with effect from 20/09/2007 also. In the light of the dictum in **Swaran Singh** (Supra), the crucial question before us is whether the insured/owner, in permitting the driver to drive the vehicle within the grace period of 30 days, can be held to be guilty of negligence and contumacious breach justifying the claim for exoneration by the insurance company under Section 149(2)(a)(ii). 9. The question whether the owner/insured is guilty of contumacious negligence/breach in so permitting a driver without a valid driving licence on the date of the accident, it is trite, is a question of fact to be decided on the basis of facts and circumstances of each case [see proposition 5 of **Swaran Singh** (Supra)]. In the instant case, the insured can be assumed to know that the driving licence of his driver had expired on 20/07/2007. He can also be assumed to know that if application for renewal is made within 30 days of the date of expiry of the driving licence, renewal with effect from the date of expiry shall be granted to the driver. With such knowledge, if an M.A.C.A.No.519/2005 7 owner/insured permits his driver to drive the vehicle, by no stretch of imagination can it be held that such insured/owner is guilty of contumacious negligence/breach justifying the claim for exoneration under Section 142(2)(a)(ii). The owner/insured is entitled to assume that the driver could have made the application within the period of 30 days and thereupon renewal with continuity from the date of expiry would have been granted to him. If with such knowledge, which we assume that the owner/insured had, he permitted the driver to drive the vehicle and for unfortunate reasons, the renewal application could not be made within time after the accident, that cannot, at any rate, be reckoned as contumacious negligence/breach on the part of the insured/owner as to justify a claim for exoneration by the insurer under Section 149(2)(a)(ii). 10. It follows from the above discussion that the Tribunal was perfectly justified in issuing the direction to the insurance company to satisfy the award without any rider that the insurer can recover the amount from the owner/insured. Though that aspect has not been specifically referred to in the impugned award, we hold that, by no stretch of imagination can the owner/insured, in the facts and circumstances narrated above, M.A.C.A.No.519/2005 8 be held to be guilty of any such contumacious negligence/breach. Therefore, the impugned award does not call for any interference at the instance of the appellant/insurer. 11. This appeal is accordingly dismissed. ## **(R.BASANT, JUDGE)** ## **(N.K.BALAKRISHNAN, JUDGE)** jsr // True Copy// PA to Judge