Thankamma, W/o. Sadanandan v. Life Insurance Corporation of India

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 18TH JULY 2008 / 27TH ASHADHA 1930 M.F.A.No. 926 of 2001(C) ---------------------OPMV.295/1992 of THE MOTOR ACCIDENT CLAIMS TRIBUNAL, PARAVUR .................... APPELLANT: – RESPONDENT NO.1 ----------------- THE BRANCH MANAGER, L.I.C. OF INDIA, N. PARAVUR 9OWNER) BY ADV. SRI.S.EASWARAN SC FOR LIC RESPONDENTS: - CLAIMANT & RESPONDENTS 2 TO 5 --------------------- 1. THANKAMMA, W/O. SADANANDAN, PAZHAKUNNATH HOUSE, AYYAMPILLY P.O. 2. SHELLY, S/O. RATHANKUMAR, THAIKOOTTATHIL HOUSE, KOTTUVALLIKKADU, MOOTHAKUNNAM (DRIVER) 3. THE UNITED INDIA INSURANCE CO. LTD., KALAMASSERY BRANCH, KOCHI – 682022. 4. THE NEW INDIA ASSURANCE CO. LTD., ERNAKULAM. 5. RATHANKUMAR, THAIKOOTTATHIL HOUSE, KOTTUVALLIKKADU, MOOTHAKUNNAM. BY ADVS. SRI.RAJU G. SHENOI FOR R1 SRI.O.T.THOMAS FOR R1 SRI.KKM.SHERIF FOR R4 SRI. M.S. BABURAJ FOR R5 SRI.M.P.RAMNATH FOR R5 SRI.GANESH G.PILLAI FOR R5 THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 18/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **ORDER ON C.M.P.No. 7161/2001 IN M.F.A.No. 926/2001** DISMISSED. SD/M.N. KRISHNAN, JUDGE. 18.07.2008 /TRUE COPY/ P.A. TO JUDGE. vkm ## **M.N. KRISHNAN, J** ## **---------------------------------** ## **M.F.A.No. 926 OF 2001** ## **--------------------------------------** Dated this the 18[th] day of July, 2008 ## **J U D G M E N T** This appeal is preferred against the award of Motor Accident Claims Tribunal, N. Paravur in O.P(MV) No. 295/1992. Unfortunately, here is a case where the Life Insurance Corporation of India is pitted against United India Insurance Company in an accident claims case. The claimant sustained injuries in a road accident and she has been awarded a compensation of Rs. 11,000/by the Tribunal. The Tribunal also directed respondents 1, 2 and 4 to pay the amount and the 4[th] respondent namely the New India Assurance Company is given an entitlement to recover it from the Life Insurance Corporation of India, the first respondent in the claim petition who is the registered owner of the vehicle. The points that had to be considered in this case are: 1. Whether the Motorcycle was driven by a person without a valid licence? 2. Whether on account of the factum of not having a driving licence alone is M.F.A.No. 926/2001 -2- sufficient to exonerate the Insurance Company from its liability? 3. Who is the owner of the vehicle on the date of the accident? 4. In case of entitlement for reimbursement whether it is only the registered owner in whose name the policy stands, is liable to pay the amount? 5. In such cases whether the registered owner is entitled to get that amount recovered from the owner in possession on the date of the accident? 2. Let me first deal with the question of driving licence. The Claims Tribunal held that there was no valid driving licence for the 2[nd] respondent and whether it will exonerate the Insurance Company from the liability. The Tribunal held that it can be reasonably inferred that the 2[nd] respondent had not held proper licence to drive the motor vehicle and therefore it granted the right of reimbursement. Whether the mere absence of a driving licence will totally exonerate the Insurance Company from indemnifying the insured has been considered in the decision of the Apex Court reported in _**National Insurance Company Ltd. v. Swaran Singh in 2004(1) KLT 781 (SC)**_ in para 102(iii) the Apex Court has M.F.A.No. 926/2001 -3- summarised the point as follows: “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.” In clause (vi), the Apex Court held that: “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 driving licence is/ are so fundamental as are not to have contributed to the cause of the accident. So the mere non possession of a driving licence does not ipso facto lead to the conclusion that the Insurance Company is to be exonerated from the liability, unless it is proved that the other M.F.A.No. 926/2001 -4- ingredients mentioned in the above paragraphs are also proved by the Insurance Company. The burden of proof is on the Insurance Company is also laid down in 102 clause (iv). This award was passed in the year 2001 and the benefit of the _**Swaran Singh's**_ case was not available to the Tribunal at that point of time. So the matter requires reconsideration at the hands of the Tribunal in the light of the enunciated principles laid down by the Apex Court in the said decision. Therefore on that point the matter has to be reconsidered and for that purpose it has to be remanded. 3. The next question is regarding the ownership. In case, it is found that there is breach of policy conditions as contemplated by law and proved as per the decision of the Apex Court in _**Swaran Singh's**_ case, the question will arise who will be liable to reimburse the amount to the Insurance Company. On that point, a Division Bench of this Court in the decision of _**Ashraf v. Fathima in 2004 (2) KLT 598**_ held that : “Here the insured is still the registered owner as admittedly, the appellant, registered owner, did not inform the matter of transfer to the insurance company and insurance is not transferred. The Insurance Company cannot recover it from the M.F.A.No. 926/2001 -5- defacto owner because there is no contractual agreement between the defacto owner and the Insurance Company. The Insurance Company can recover it only from the insured.” So in the light of this decision if there is a recovery clause, the Insurance Company can only get it reimbursed from a party on whose name the Registered ownership and Policy remains. Therefore the registered owner will be liable for the reimbursement. 4. Now lastly the question to be determined is, who is the owner of the vehicle? This question has to be incidentaly considered for the reason that if the Insurance Company is entitled to reimburse and if it is recovered from the registered owner namely Life Insurance Corporation of India, whether the Life Insurance Corporation of India will be entitled to get it collected from the 5[th] respondent, its agent. For this purpose, the learned counsel for the Life Insurance Corporation of India invited my attention to Section 2(30) of the Motor Vehicles Act wherein the owner also takes in person who by virtue of an agreement is in possession. A document is produced before the court and as per that document, the Life Insurance Corporation of India has advanced the amount for the purpose of purchase of the vehicle M.F.A.No. 926/2001 -6- and a liability is caused to the 5[th] respondent, to pay that amount in so many instalments and on payment of the entire amounts, the 5[th] respondent become the owner of the vehicle. But it is very clearly stated therein that the registration will continue in the name of the Life Insurance Corporation of India. The Apex Court as well as this Court, in so many decisions had held under a hire purchase agreement the person in possession will be the owner. So a reconsideration regarding the ownership of the vehicle on the date of the accident is also necessary for the limited purpose of considering the said liability between the Life Insurance Corporation as well as the 5[th] respondent. 5. So from these discussions, I set aside the award passed by the Tribunal, so far as it relates to the reimbursement clause as well as the liability and direct the Tribunal to consider the points as mentioned in the previous paragraphs of the judgment. All the parties are permitted to adduce oral as well as documentary evidence in support of their respective contentions and the matter to be disposed of in accordance with law and also taking into consideration the latest decision of the Apex Court on relevant date of the disposal of the case. M.F.A.No. 926/2001 **==> picture [15 x 9] intentionally omitted <==** The Court shall try to dispose of this matter within 4 months from the date of first appearance of the parties before the Tribunal. Parties are therefore directed to appear before the Tribunal on 27.8.2008. **M.N. KRISHNAN, JUDGE.** vkm