New India Assurance Company Ltd. v. Ramesh, K.V.Mohammed Jaffer, Jagadeesh and Shine.K.R.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID TUESDAY, THE 2ND DECEMBER 2008 / 11TH AGRAHAYANA 1930 MACA.No. 1809 of 2006() ----------------------OPMV.3650/2000 of MOTOR ACCIDENTS CLAIMS TRIBUNAL, THRISSUR .................... APPELLANT(S)/3RD RESPONDENT -------------------------------------- NEW INDIA ASSURANCE COMPANY LTD., BRANCH OFFICE, KUNNAMKULAM, REPRESENTED BY ITS ADMINISTRATIVE OFFICER. BY ADVS. SRI.KKM.SHERIF SRI.T.K.SAIDALIKUTTY SRI.P.A.MOHAMMED ASHROF SRI.A.A.ZIYAD RAHMAN SMT.SHEENA SAMUEL RESPONDENT(S): PETITIONER/RESPONDENTS 2 AND 4 --------------------------------------------- 1. RAMESH, S/O.BALACHANDRAN, KUNNATH HOUSE,MADEKADAVU DESOM. 2. K.V.MOHAMMED JAFFER, S/O.KUNJIMON, KARAPPAM VEETTIL, P.O.BLANGADU, CHAVAKKADU. 3. JAGADEESH, S/O.ARUMUGHAN, PATTARUPURAKKAL HOUSE, MADEKADOVU DESOM, MANATHALA VILLAGE. 4. SHINE.K.R., S/O.REVEENDRAN, KOZHIPARAMBIL HOUSE, PORKULAM. ADV. SRI.RAJIT FOR R4 SRI.RANJIT BABU FOR R4 SRI.O.V.MANIPRASAD FOR R.3 SRI.M.L.SURESH KUMAR FOR R1 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING COME UP FOR ADMISSION ON 23/09/2008, THE COURT ON 02/12/2008 DELIVERED THE FOLLOWING: ## **C.N. RAMACHANDRAN NAIR & HARUN-UL-RASHID, JJ.** ## **--------------------------------------------------------M.A.C.A.NO. 1809 OF 2006 ---------------------------------------------------------** Dated this the 2nd day of December, 2008. ## **JUDGMENT** ## **Harun-Ul-Rashid, J.** The New India Assurance Company Limited is the appellant. The appeal is directed against the award passed in O.P.(MV) No. 3650 of 2000 on the file of the Motor Accidents Claims Tribunal, Thrissur. The Original Petition was filed by the first respondent herein claiming compensation under the Motor Vehicles Act for the injuries sustained by him in road traffic accident. 2. The first respondent was a pillion rider in a motor cycle. According to him, the second respondent who was riding the motor cycle drove the same recklessly as a result of which the motor cycle hit a telephone post and due to the impact of the hit, the first respondent/petitioner was thrown off the motor cycle thereby sustaining serious injuries. The Tribunal held that the accident occurred due to the M.A.C.A. NO.1809/2006 2 rash and negligent driving of the motor cycle. The petitioner sustained compound fracture of left shoulder, severe injury to tendon and his left hand became immobile. He sustained fracture to the ribs damaging internal organs with profuse bleeding, injuries to both knees, left ear and pain all over the body. There was also fracture of clavicle and first and second ribs of left side. Ext.A2 is the copy of the wound certificate. Permanent disability was assessed at 20%. The first respondent was aged 19 at the time of the accident and fixing the monthly income notionally at Rs.2,000/-, the Tribunal assessed compensation for permanent disability at Rs.76,800/- and awarded a total compensation of Rs.1,38,550/- under various heads. 3. The Tribunal further considered the question, in the background of the contentions raised by the appellant, whether the Insurance Company is liable to indemnify the owner of the vehicle. The contention raised was that the second respondent who was driving the motor cycle was not having a valid driving licence. The Tribunal accepted the contention and held that the insurer is absolved from indemnifying the owner of the vehicle as he has knowingly allowed the second respondent to drive the vehicle without a licence. The Tribunal, therefore, passed an award against the fourth respondent and directed the Insurance Company, the M.A.C.A. NO.1809/2006 3 third respondent therein to deposit the decreed amount with interest at the rate of 7% per annum. 4. Senior Standing Counsel appearing for the Insurance Company contended before us that the insurer is not liable to indemnify the insured in respect of the injuries sustained to a pillion rider because the policy is only an Act policy. Counsel cited the decision reported in **United India Insurance Co.Ltd. v. Tilak Singh and Others, 2006(4)SCC 404** and contended that the Tribunal ought to have exonerated the insurer from indemnifying the insured. According to the learned counsel, in the absence of any statutory or contractual obligation, the appellant ought not to have been directed to satisfy the award. 5. The appellant did not adduce any oral or documentary evidence, except Ext.B1 copy of the Insurance Policy and Ext.B2 copy of final report of Chavakkad Police Station, in support of its contention that the second respondent was not holding a valid driving licence at the time of the accident. It is a settled position that the burden to prove the contention regarding violation of policy conditions is on the insurer. It is also settled law that in order to avoid its liabilities, it is not sufficient for the insurer to show that the person driving at the time of the accident was not duly M.A.C.A. NO.1809/2006 4 licensed but it must further be established that there was a breach on the part of the insured and the alleged breach has contributed to the accident. A three member Bench of the Apex Court in the decision reported in **National Insurace Co.Ltd. v. Swaran Singh, A.I.R. 2004 S.C. 1531** summarised the legal position regarding liability of the Insurance Company when the driver of the insured vehicle has no licence or no effective licence at the time of the accident. The Apex Court held that breach of policy condition e.g. disqualification of driver or invalid driving licence of the driver 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 third parties. The Apex Court further held that to avoid its liability towards the 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 not duly licensed driver or one who was disqualified to drive at the relevant time. This decision was followed by a Division Bench of this Court in **P.T. Moidu v. Oriental Insurance Co. Ltd., 2007(4) K.H.C. 385** . The Apex Court in the decision reported in **New India Assurance Co. v. Kamla and Others JT 2001 (4) SC 235** held that the driver was holding only a fake M.A.C.A. NO.1809/2006 5 licence and that the insurance Company has to pay the amount and recover the amount from the owner. So, the settled position is that even if there is no driving licence and breach of policy condition is proved, Insurance Company should pay the amount and satisfy the statutory liability to third parties and then recover the amount from the insured. The Apex Court was following the said pattern in a number of reported cases, the latest being **New India Assurance Co. v. Kamla and Others, 2001(4) SCC 342, United India Insurance Co. Ltd. v. Lehru and Others, 2003(3) SCC 338 and Oriental Insurance Co.Ltd. v. Nanjappan, 2005 SCC (Cri) 148.** We also find that in so many cases, the Apex Court again held that it is not sufficient for the insurer to show that the person driving at the time of the accident was not duly licensed but it must further be established that there was a breach on the part of the insured and the alleged breach has contributed to the accident. **(Narcinva V. Kamath and Another v. Alfredo Antonio Doe Martins and Others, 1985 (2) SCC 574, Skandia Insurance Co. Ltd. v. Kokilaben Chandevadan and Others, 1987 (2) DCC 654, Sohan Lal Passi v. Pl Sesh Reddy and Others, 1996 (5) SCC 21 and United India Insurance Co.Ltd. v. Lehru and Others, 2003 (3) SCC 338).** 6. Above explained being the settled position, the contention of the M.A.C.A. NO.1809/2006 6 appellant that the Tribunal ought not to have directed it to satisfy the award cannot stand. The Tribunal fastened the liability not on the insurer, but on the insured and issued direction to the appellant to recover the amount from the fourth respondent. The only contention raised by the appellant before the Tribunal is that the second respondent was not holding a valid driving licence . No contention was raised before the Tribunal that the appellant is not entitled to pay compensation for the reason that the injured was a pillion rider. The Tribunal held that the insurer is not liable to indemnify the insured, though not on the ground that the first respondent was a pillion rider and liability was fastened on the owner, but for another reason. We find no reason to interfere with the judgment under appeal. The appeal is accordingly dismissed. ## **(C.N. RAMACHANDRAN NAIR) JUDGE** **(HARUN-UL-RASHID) JUDGE** **sp/** M.A.C.A. NO.1809/2006 7 **C.N. RAMACHANDRAN NAIR** **& HAURN-UL-RASHID, JJ.** **M.A.C.A. NO. 1809/2006** **JUDGMENT** **2nd December, 2008**