Santosh M.V. v Binu P.C. and United India Insurance Company Ltd. and Rajeevan ( impleaded) [MACA No. 56 of 2013]

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE S.S.SATHEESACHANDRAN** **THURSDAY, THE 2ND DAY OF JANUARY 2014/12TH POUSHA, 1935** ## **MACA.No. 56 of 2013 ()** **----------------------AGAINST THE AWARD IN OP(MV).NO.376/2008 of MOTOR ACCIDENTS CLAIMS TRIBUNAL, KALPETTA DATED 12-04-2012** ## **APPELLANT(S)/2ND RESPONDENT:** **------------------------** **SANTHOSH M.V., S/O.VIJAYAN M.V, MADAYAMMALIL HOUSE ARINCHERMALA POST, PANAMARAM, MANANTHAVADY TALUK.** ## **BY ADV. SMT.CELINE JOSEPH** ## **RESPONDENT(S)/RESPONDENTS 1 &3:** **----------------------------** ## **1. BINU P.C.** **S/O.CHACKO, PURAIKKAL HOUSE, KALLUVAYAL NEERAVARAM POST. 673 120** ## **2. UNITED INDIA INSURANCE COMPANY LTD** - **KALPETTA.673 121** ## **ADDL. RESPONDENT:** **3. RAJEEVAN,S/O.ONAKKAN, AROTHKANDY HOUSE, AKKAI P.O., KAVILUMPARA, KOZHIKODE DISTRICT.** **ADDL.3RD RESPONDENT IS IMPLEADED AS PER ORDER DATED 2.1.2014 IN I.A.NO.3258 OF 2013.** **R2 BY ADV. SMT.RAJI T.BHASKAR R BY SRI.JOHN JOSEPH VETTIKAD** **THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 02-01-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **C.R.** ## **S.S.SATHEESACHANDRAN, J.** **------------------------------M.A.C.A.NO.56 OF 2013** **----------------------------------Dated this the 2[nd] day of January, 2014** ## **J U D G M E N T** Second respondent in O.P.(MV).No.376 of 2008 of Motor Accidents Claims Tribunal, Kalpetta, is the appellant. He was proceeded against as the owner of an autorickshaw bearing registration No.KL 11H/2406, with the driver and insurer of that vehicle, in the above claim for compensation moved by the pillion rider of a bike who sustained injuries in the accident occurred involving the two vehicles - autorickshaw and bike. That application (O.P.(MV).No.376 of 2008) was jointly considered with another claim moved by the rider of bike, who too sustained injuries. A common award was passed by the Tribunal, by which, the 2[nd] respondent - insurer of the autorickshaw - was directed to pay the compensation adjudged and awarded. On review petition filed by the insurer stating that no finding had been entered by Tribunal over its challenge that the driver of **M.A.C.A.NO.56/2013** **2** autorickshaw had no valid driving licence, and, thus, there was breach of policy condition by the insured enabling insurer to an order for recovery on payment of compensation, the Tribunal reviewed its previous award to provide recovery right to insurer on payment of compensation. Appeal is filed impeaching the correctness and legality of the reviewed award providing such recovery rights to the insurer, by the owner of the autorickshaw. 2. A preliminary objection over the maintainability of appeal is canvassed by the learned counsel for 2[nd] respondent/insurer on the premise that the award passed in the connected claim petition O.P.(MV).No.20 of 2009, in which also under the reviewed award, recovery right on payment of compensation was provided to claimant therein, has not been challenged and it has become final. Since there is no appeal against the award in the connected claim petition, the present appeal is barred by res judicata is the challenge canvassed to contend that the appeal is not entertainable. I do not find any **M.A.C.A.NO.56/2013** **3** merit in the objection canvassed. Where more than one claim petition arise from an accident, it is desirable and more advantageous for the Tribunal to consider all such claims together. Even if common findings are made with respect to the points for determination arising under such claims, that by itself cannot be viewed as barring one or other party in the proceedings from challenging the legality and correctness of the findings in one of the claim petitions alone disposed under the common award by the Tribunal. In O.P.(MV).No.20 of 2009, which was disposed jointly with the claim petition involved in the present appeal, the claimant had been awarded only a meagre sum of Rs.3,700/- as compensation. That may be the reason why the appellant has chosen not to prefer any appeal against the compensation awarded in the claim. Common findings are made when claims of more than one arising in an accident are considered together by the Tribunal can no way affect the right of a party, if he is aggrieved by the common award passed, to file appeal against only one of the claims awarded. Even the **M.A.C.A.NO.56/2013** **4** principles of res judicata cannot be pressed into service to deny the right of such aggrieved person to limit his challenges against the award passed in one of the claim petitions alone decided under the common award. 3. The 2[nd] respondent/insurer in its written statement had contended that the driver of the autorickshaw had no driving licence. Later, an application moved by it to direct that driver to produce the driving licence was allowed by the Tribunal, but, the licence was not produced. Canvassing the above circumstances, the insurer, after passing of the previous award, applied for review and that was entertained and reviewed awards were passed by the Tribunal. In the reviewed common award, the Tribunal accepted the defence canvassed by the insurer to avoid its liability with the following observation:- _“The vehicle though insured with the third respondent at the relevant time, the owner had violated the terms and conditions of the policy in deploying an unauthorised person to drive the_ **M.A.C.A.NO.56/2013** **5** _vehicle. So the third respondent is not liable to pay compensation. But the petitioners are third parties and they need not suffer any hardships due to the breach of conditions of the policy. Therefore the third respondent shall pay the compensation and then recover the same from R2.”_ Defence canvassed by the insurer to avoid its liability under the policy was not considered in accordance with settled position of law. No evidence was tendered by the insurer other than contending that the driver had no valid driving licence and moving an application for production of licence by him. Order of the Tribunal directing the driver or owner to produce the driving licence if not complied with would give rise to only an adverse inference against them. An adverse inference can be drawn for non-compliance of the order of production cannot supplement the place of evidence. A statutory liability is cast upon the insurer when a policy had been issued to a vehicle to indemnify the owner of that vehicle. If there was breach of policy condition by the insured, it has to be proved and established by the insurer to avoid its liability. What is to be **M.A.C.A.NO.56/2013** **6** established is breach of policy condition by the insured - owner of the vehicle, and so long as it has not been proved by satisfactory evidence, the insurer cannot avoid its 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 insurer cannot avoid the liability even where the breach of policy condition regarding the holding of valid licence by driver is **M.A.C.A.NO.56/2013** **7** 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 justified in forming a conclusion that breach of policy condition had been committed by the insured, on default of the driver of vehicle to produce the driving licence on its direction. **M.A.C.A.NO.56/2013** **8** 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.56/2013** **9** 5. Where no evidence was let in by the insurer to substantiate its case that there was breach of policy condition by the insured - owner of the vehicle - other than contending that the driver had no valid driving licence and of moving an application for production of licence by the driver, the Tribunal has gone wrong in reviewing its previous award to hold that there was breach of policy condition by the insured, and, on that basis, passing an order allowing the insurer right of recovery, on deposit of compensation, from the insured. In fact review canvassed by insurer and allowed by Tribunal, which can be permitted only to correct an error apparent on the previous award or such other justifiable ground, was improper and unjustified. In the award previously passed by Tribunal if the challenge canvassed over the breach of policy condition was not considered and decided, then, the remedy of insurer is to prefer an appeal against that award and it cannot be corrected by review as an error apparent on the award. **M.A.C.A.NO.56/2013** **10** 6. Right of recovery granted to the insurer on deposit of the compensation under the reviewed award passed by the Tribunal cannot be sustained where the insurer has failed to establish breach of policy condition by the insured. Order enabling the insurer to recover the amount on deposit from the appellant/insured in the award of the Tribunal shall stand vacated. Appeal is allowed to the extent indicated above, directing both sides to suffer their costs. ## **S.S.SATHEESACHANDRAN JUDGE** prp