MACA No. 926 of 2012 (Motor Accident Claims Appeal, Kerala High Court)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE S.S.SATHEESACHANDRAN** **WEDNESDAY, THE 18TH DAY OF DECEMBER 2013/27TH AGRAHAYANA, 1935** ## **MACA.No. 926 of 2012 ()** **-----------------------AGAINST THE AWARD IN OP(MV). 1282/2005 of MOTOR ACCIDENTS CLAIMS TRIBUNAL, THRISSUR DATED 31.12.2009** ## **APPELLANT(S)/RESPONDENT 1:** **--------------------------------------------------** **RAMESH DANIAL S/O.DANIAL, CHEMBAKASSERY (H), P.O.CHENGALOOR THRISSUR DISTRICT, NOW RESIDING AT CHEMABASSERY (H) MARIAPURAM ARCH ROAD, KUTTANELLUR, THRISSUR PIN 680 014.** **BY ADV. SRI.RANJITH XAVIER** **RESPONDENT(S)/PETITIONER(CLAIMANT)/RESPONDENTS 2 :** **----------------------------------------------------------------------------------------------------** ## **1. BINEESH K.M.** **S/O.MOHAN, KOTTUKULAM (H), P.O.CHENGALOOR THRISSUR DISTRICT, PIN 680 312.** ## **2. DEVASSY** **AGED 56, S/O.VAREED, AMBAZHAKKADAN HOUSE, MUKUNDAPURAM TALUK THRISSUR, PIN 680 319.** **3. THE ORIENTAL INSURANCE COMPANY LTD., IOC, BRANCH OFFICE, CITY HEIGHTS BUILDING CHALAKKUDY, PIN 680 307.** **R3 BY ADV. SRI.VPK.PANICKER R BY SRI.GEORGE CHERIAN (THIRUVALLA)** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 18-12-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **C.R.** ## **S.S.SATHEESACHANDRAN, J. ------------------------------M.A.C.A.NO.926 OF 2012 ----------------------------------Dated this the 18[th] day of December, 2013** ## **J U D G M E N T** Registered owner of a motor vehicle involved in an accident is the appellant. The 1[st] respondent, who suffered injuries in the accident, filed a claim petition against the owner, driver and insurer of the vehicle seeking compensation of Rs.81,000/-. Claim was resisted by the appellant contending that he had transferred the vehicle to the 2[nd] respondent much earlier to the accident producing original sale agreement. 2[nd] respondent, who was impleaded as the driver of the offending vehicle resisted the claim disputing the negligence imputed against him. He contended that compensation if any payable was realisable only from the 3[rd] respondent - insurer. The insurer disputed its liability to indemnify the insured - the owner of the vehicle - contending that 2[nd] respondent had no valid driving licence at the time of accident and that a petty case had been charged **M.A.C.A.NO.926/2012** **2** against him for driving the vehicle without duly licensed. Tribunal, adjudging the claim, on the materials placed, fixed and awarded compensation of Rs.23,000/- to the claimant. In the course of the enquiry, the tribunal had directed the 2[nd] respondent to produce the driving licence on the request made by the insurer. 2[nd] respondent failed to produce the licence. That being taken note of, the tribunal upheld the contention canvassed by insurer over the breach of policy condition by the insured and the award was passed directing the insurer to pay compensation, but, reserving its right to recover that sum from the 1[st] respondent - owner. Aggrieved by the right of recovery given to insurer to realise the compensation after deposit from the appellant, he has filed this appeal. 2. I heard the learned counsel for the appellant - registered owner of the vehicle and 3[rd] respondent - the insurer. The short question emerging for consideration is whether the insurer company has established the defence canvassed under Section 149 (2) of the Motor Vehicles Act, for short, the 'Act' to **M.A.C.A.NO.926/2012** **3** exonerate it from the liability to indemnify the registered owner of the vehicle involved in the accident which was covered by its policy at the time of accident. The insurer has contended that a petty case was charged against the 2[nd] respondent for riding the motorcycle without licence. No material was produced by the insurance company to substantiate that contention. A copy of the policy alone was tendered and exhibited in evidence as Ext.B1 by the insurance company. The tribunal accepted the contention canvassed by the insurance company solely for the reason that the 2[nd] respondent failed to comply with its direction to produce his driving licence. It has not even looked into Ext.A2 charge sheet produced in the case nor made any reference thereto, to find out whether any accusation had been made against the 2[nd] respondent that he did not possess a driving licence at the time of accident. In such circumstances, whether non-compliance of the direction given by the tribunal to 2[nd] respondent to produce his driving licence without anything else produced by the insurance company, to substantiate its defence, could have been acted and relied upon by the tribunal **M.A.C.A.NO.926/2012** **4** to hold that there was breach of policy condition by the insured - owner of the vehicle, is the question involved. 3. What has to be proved to satisfy the breach of policy condition envisaged under sub section (2) (a) (ii) of Section 149 of the Act is the fault of the insured thereof, to avoid the liability under the policy. The apex court in **National Insurance Co. Ltd. v. Swaran Singh (2004 (1) KLT 781 (SC))** has held that the insurance company has to establish its case of the breach of condition of policy by the insured by cogent evidence, making it clear that the degree of proof which would satisfy the requirement thereof would indisputably depend upon the facts and circumstances of each case. Merely asking the tribunal to issue a direction to the driver of the vehicle to produce his driving licence and on such direction issued failure by the driver to produce the licence, that alone, it cannot be stated that the insurance company has discharged its burden of proving breach of policy condition by the insured. Observations made by apex court in **Swaran Singh's case,** referred to above, that the **M.A.C.A.NO.926/2012** **5** insurer cannot avoid the liability even where the breach of policy condition regarding the holding of valid licence by driver is established unless it satisfies that such breach or breaches of the condition of the driving licence is/are so fundamental as are found to have contributed to the cause of the accident, cannot be lost sight of. The apex court in the above decision has observed thus: _“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 of the condition of the driving licence is/are so fundamental as are found to have contributed to the cause of the accident to the cause of action.”_ When such be the rigour of proof imposed on the insurance company in establishing breach of policy condition by the insured to avoid its liability to indemnify him, the tribunal was not at all justified in forming a conclusion that a breach of policy condition had been committed by the insured on default of the **M.A.C.A.NO.926/2012** **6** driver of vehicle to produce the driving licence on its direction. 4. Challenges as to absence, fake or invalid driving licence or disqualification of the driver for driving the vehicle at the time of accident, by themselves, cannot be considered as valid defences by the insurer to avoid its policy. In order to avoid the liability towards insured under the policy, it has to establish that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of policy regarding the use of vehicle by a duly licensed driver or one who was not disqualified to drive at the relevant time. In the present case, where the insurer has not placed any material to substantiate its contention that the 2[nd] respondent driver had no valid driving licence at the time of accident and, further, it has not pleaded and proved that any breach of condition of the policy was committed by the insured in entrusting the vehicle to a person having no licence, it cannot avoid its liability to indemnify the insured for the loss and injuries arising from the use of the insured motor vehicle. **M.A.C.A.NO.926/2012** **7** 5. Order of the tribunal granting right of recovery to the insurer for realisation of the sum of compensation on deposit, from the insured cannot be sustained where the insurer has failed to prove the breach of policy condition by the insured. Order granting recovery right to the insurer under the award passed by the tribunal, that alone, shall stand set aside. Appeal is allowed as above directing both sides to suffer their costs. ## **S.S.SATHEESACHANDRAN JUDGE** **prp**