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IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Appeal From Order No. 461 of 2011 The Oriental Insurance Company Ltd. …..Appellant
Versus
Smt. Usha Bahuguna & Ors. ….Respondents
Mr. D.S. Patni, Advocate for the appellant Mr. M. S. Bhandari, Advocate for the respondent nos. 1 to 3.
Hon’ble Lok Pal Singh, J. This appeal is directed against the judgment and award dated 10.08.2011 passed by the Motor Accident Claims Tribunal/ District Judge, Pauri Garhwal in MAC No. 18 of 2002, Smt. Usha Bahuguna & Others vs. Harpreet Singh & others, whereby the learned Tribunal has allowed the claim petition and awarded an amount of Rs.9,45,000/- to the claimants as compensation along with 7% interest from the date of filing the claim petition.
Heard learned counsel for the parties at length and perused the record carefully.
Brief facts of the case are that on 09.05.2001 late Dayal Mani Bahuguna along with his wife by his Maruti Car No. UP06-4050 was going to attend a marriage from Haridwar to Pauri when he reached near I.D.P.L., Rishikesh the vehicle No. HR26M-5130 was came from the front, who was driven by its driver rashly and negligently and hit the car of deceased, who sustained injuries on chest,
stomach and other part of the body and the wife of the deceased has also sustained injuries. They were taken to Nursing Home, Rishikesh, deceased was referred to the higher centre and succumbed injuries on 10.05.2001 at about 12:30 PM.
The claim petition was filed on the ground that the deceased was running his own business and at the time of accident the deceased was earning of Rs. 15,000/- per month. Notices were issued to the respondents of the claim petition, the opposite party nos. 2 & 3 filed their written statement, the oriental insurance company filed its written statement and contended that the driver of the vehicle was not having the valid driving licence and was driving the vehicle against the terms and conditions of insurance policy. It is further contended that deceased was driving the vehicle rashly and negligently. It is further contended that the accident occurred on 09.05.2001 the premium of the insurance was paid through cheque, but cheque was dishonoured, therefore the policy was cancelled by the insurance company. Therefore, the insurance company is not liable to pay any compensation.
On the basis of pleading of the parties, the learned Tribunal formulated the following issues: 1. Whether Dayal Mani Bhauguna died due to injuries received in an accident on 9.5.2001 at about 3:00 P.M. near kali eke dhal, Rishikesh, on account of rash and negligent driving of a Toyta
Qualish bearing Registration No. H.R. 26M/5130, as alleged in the claim petition? 2. Whether the driver of said Toyta Qualish was not holding valid driving licence at the time of accident? 3. Whether the accident took place due to rash and negligent driving of Maruti Car o. UP 06-4050 by the deceased himself, as alleged in para No. 27 of W.S. filed by O.Ps. No. 2 & 3? 4. What amount of compensation, if any, are the petitioners entitled and from whom? 5. Whether the vehicle involved in accident was validly insured or not, if so effect? 6.
On behalf of the claimants, copy of the car registration, post mortem report, FIR, driving licence, insurance policy, copy of the income tax return of the financial year 2000-2001 etc., were filed. On behalf of the claimants Smt. Usha Bahuguna, PW-1, was examined.
On behalf of the insurance company, copy of the policy certificate, photocopy of cheque, cheque dishonoured slip, cancellation of policy etc. were filed.
The learned Tribunal decided all the issues in favour of the claimants. Issue no. 3 the learned Tribunal has recorded its finding at the relevant time
the driver of the Toyta Qualish was not having valid driving licence and decided issue no.3 accordingly.
The learned Tribunal awarded an amount of Rs. 9,45,000/- in favour of the claimants along with 7% interest to be paid from the date of filing the claim petition till the date of payment is made.
The appellant-insurance company has preferred the present appeal on the following grounds:- 1. The insurance policy issued in favour of the owner of the vehicle was cancelled on account of dishonoured of the cheque. 2. The driver of the vehicle was not having the driving licence. 3. In any case this Court held that the order of recovery is legal, the same should be in the light of the judgment of Oriental Insurance Co. Ltd. Vs. Nanjappan and other, reported in 2004 (13) SCC 224.
Mr. D.S. Patni, Advocate appearing on behalf of the appellant-insurance company would submit that the policy was granted on 12.01.2001 for a period of one year, since the cheque issued by the owner of the vehicle was dishonoured due to insufficient fund, therefore, the policy was cancelled on 24.01.2001 and accident took place, thereafter on 09.05.2001. He would further submit that since the policy was cancelled on account of dishonoured of
cheque, therefore, the liability cannot be fastened upon the appellant to pay the compensation.
Per contra, Mr. B. S. Bhandari, learned counsel for the respondents has placed reliance upon the judgment of Hon’ble Apex Court in the case of Oriental Insurance co. Ltd., vs. Inderjit Kaur and others, reported in AIR 1998 SCC has held that since the policy was issued, therefore, the insurance company become liable to indemnify third parties in respect of liability which policy covers and satisfy awards of compensation, the relevant paragraph nos. 7 & 10, which are reproduced herein under: “7. We have, therefore, this position. Despite the bar created by S. 64-VB of the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to cover the bus with out receiving the premium therefor. By reason of the provisions of Ss. 147(5)and 149(1) of the Motor Vehicles Act, the appellant became liable to identify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured. 10. It must also be noted that is was the appellant itself who was responsible for its predicament. It had issued the policy of insurance upon receipt only of a cheque towards the premium in contravention of the provisions of S. 64-VB of the Insurance Act. The public interest that a policy of insurance serves must, clearly, prevail over the interest of the appellant.”
Learned counsel for the appellant has placed reliance upon the judgment in the case of Oriental Insurance Co. Ltd. Vs. Nanjappan and other reported in 2004 (13) SCC 224, the relevant paragraph no. 8, which is reproduced herein under:-
“8. Therefore, while setting aside the judgment of the High Court we direct in terms of what has been stated in Baljit Kaur's case (supra) that the insurer shall pay the quantum of compensation fixed by the Tribunal, about which there was no dispute raised, to the respondents-claimants within three months from today. For the purpose of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the insured, owner of the vehicle shall be issued a notice and he shall be required to furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executing Court shall take assistance of the concerned Regional Transport authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in which the insured, owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle, the insured. The appeal is disposed of in the aforesaid terms, with no order as to costs.”
Learned counsel for the appellant has placed reliance upon the judgment in the case of National Insurance Co. Ltd. Vs. Baljit Kaur and others reported in 2004 (2) SCC 1, the relevant part of paragraph no. 21, which is reproduced herein under:- “21. We, therefore, are of the opinion that the interest of justice will be sub- served if the appellant herein is directed to satisfy the awarded amount in favour of the claimant if not already satisfied and recover the same from the owner of the vehicle. For the purpose of such recovery, it would not be necessary for the insurer to file a separate suit but it may initiate a proceeding before the executing court as if the dispute between the insurer and the owner was the subject matter of determination before the tribunal and the issue is decided against the owner and in
favour of the insurer. We have issued the aforementioned directions having regard to the scope and purport of Section 168 of the Motor Vehicles Act, 1988 in terms whereof it is not only entitled to determine the amount of claim as put forth by the claimant for recovery thereof from the insurer, owner or driver of the vehicle jointly or severally but also the dispute between the insurer on the one hand and the owner or driver of the vehicle involved in the accident inasmuch as can be resolved by the tribunal in such a proceeding.”
The ratio of the judgment is cited by the learned counsel for the appellant is that the insurance company has to pay the amount of compensation and for the purpose of recovery of the amount from the owner of the vehicle. The offending vehicle shall be attached, as a part of the security. It is held that, if necessity arises the Executing Court shall take assistance of the concerned Regional Transport authority and to pass the appropriate order.
The such contingency is not arose here as the appellant- insurance company has not moved application before the Executing Court for seizing the offending vehicle and has not moved an application before the Executing Court to attach the offending vehicle or any other property belongs to the owner of the offending vehicle. In the view of the judgment (supra) rendered in the oriental insurance company, it is held that since the vehicle was insured with the appellant herein. The learned Tribunal held that the appellant shall pay and recover from the owner of the vehicle.
The submission of the learned counsel for the appellant has no force in regard to the fact that
the policy was cancelled, it is true the policy was cancelled by the appellant itself on 24.01.2001, but the communication was not made to the insurer to apprise him that on account of dishonour of cheque the insurance policy has been cancelled there cannot be unilateral act of cancellation of the policy at the hands of insurance policy. The insurance company cannot be denied the liability to pay the compensation and recoverable rights, thus the question no. 1 is answered against the appellant and held that it is found any liability in the judgment passed by learned Tribunal in fastened liability upon the appellant to pay and recover.
Learned counsel for the appellant has placed reliance upon the judgment in the case of National Insurance Co. Ltd. Vs. Swaran Singh and Others reported in 2004 (3) SCC 297, has submitted that since in the present case there was no licence with the driver of offending vehicle, therefore, the appellant cannot be directed to pay and recover the amount. The relevant paragraphs are reproduced herein under:- ”42. We may also take note of the fact that whereas in Section 3 the words used are 'effective licence', it has been differently worded in Section 149(2) i.e. ' duly licensed'. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 141 of the Act but Section 149 pertains to insurance as regard third party risks. 43. A provision of a statute which is penal in nature vis-a-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently. 48. Furthermore, the insurance company with a view to avoid its liabilities is not only required to
show that the conditions laid down under Section 149(2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured. By reason of the provisions contained in the 1988 Act, a more extensive remedy has been conferred upon those who have obtained judgment against the user of a vehicle and after a certificate of insurance is delivered in terms of Section 147(3) a third party has obtained a judgment against any person insured by the policy in respect of a liability required to be covered by Section 145, the same must be satisfied by the insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy or may in fact have done so. The same obligation applies in respect of a judgment against a person not insured by the policy in respect of such a liability, but who would have been covered if the policy had covered the liability of all persons, except that in respect of liability for death or bodily injury. 78. The social need of the victim being compensated as enacted by the Parliament was the subject matter of consideration before a three- Judge Bench of this Court as early as in 1959 in British India General Insurance Co. Ltd. vs. Captain Itbar Singh and Others [(1960) 1 SCR 168], wherein Sarkar, J speaking for the Bench observed (AIR p. 1335, para 16) "16. Again, we find the contention wholly unacceptable. The Statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it. It is not for us to add to those grounds and therefore to the statute for reasons of hardship. We are furthermore not convinced that the statute causes any hardship. First, the insurer has the right, provided he has reserved it by the policy, to defend the action in the name of the assured and if he does so, all defences open to the assured can then be urged by him and there is no other defence that he claims to be entitled to urge. He can thus avoid all hardship if any, by providing for a right to defend the action in the name of the assured and this he has full liberty to do. Secondly, if he has been made to pay something which on the contract of the policy he was not bound to pay, he can under the proviso to sub- s.(3) and under sub-s.(4) recover it from the assured. It was said that the assured might be a man of straw and the insurer might not be able to recover anything from him. But the answer to that is that it is the insurer's bad luck. In such circumstances the injured person also would not have been able to recover the damages suffered
by him from the assured, the person causing the injuries.” 84. We have analysed the relevant provisions of the said Act in terms whereof a motor vehicle must be driven by a person having a driving licence. The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle admittedly did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand at all, e.g. a case where an accident takes place owing to a mechanical fault or vis-major. 108. Although, as noticed hereinbefore, there are certain special leave petitions wherein the persons having the vehicles at the time when the accidents took place did not hold any licence at all, in the facts and circumstances of the case, we do not intend to set aside the said awards. Such awards may also be satisfied by the petitioners herein subject to their right to recover the same from the owners of the vehicles in the manner laid down therein. But this order may not be considered as a precedent.
Learned counsel for the appellant would submit that there was no valid driving licence, the appellant-insurance company cannot be liable to pay and recover. Thus, the judgment (supra) has no help to the appellant in the present facts.
Learned counsel for the appellant further submits that the Hon’ble Apex Court admittedly the vehicle insured with the appellant.
This Court relied upon the aforesaid judgment of Hon’ble Apex Court and the judgment of Hon’ble High Court in the case of New India Assurance Co. Ltd. Vs Smt. Meena Joshi & Ors reported in 2018 (1) U.D., 273. Thus, in view of the judgments (supra) of Hon’ble Apex Court, the appeal has no force and is liable to be dismissed. The same is dismissed. No order as to costs.
Statutory amount deposited before this Court be remitted to the Tribunal concerns along with interest if any.
Let the LCR be sent back to the concerned Tribunal.
(Lok Pal Singh, J.) 21.06.2018 Balwant