NATIONAL INSURANCE CO LTD Vs. CHANDU LAL

JUDGEMENT

(1.) This appeal has been filed by the appellant insurance company against the award dated 14.12.2002, passed by Motor Accidents Claims Tribunal, vide which a sum of Rs. 3,20,000 along with interest was awarded as compensation to the claimants on account of death of Raj Rani, deceased in a motor vehicular accident. The driver, the owner and the insurance company were jointly and severally held liable to pay the said amount of compensation to the claimants.

(2.) Learned counsel for the appellant insurance company submitted before us that the appellant insurance company had filed an application under section 170 of the Motor Vehicles Act, 1988, but the learned Tribunal had wrongly dismissed the same. It has been submitted that even though the driver and owner of the offending vehicle had not contested the petition, yet the Tribunal declined to allow the application of the appellant insurance company to take up all the defences. However, we find no force in this submission of the learned counsel for the appellant insurance company. A perusal of the record would show that the driver and the owner of the offending vehicle, who were respondent Nos. 1 and 2 before the Tribunal, were duly represented by their counsel and in fact, copy of the driving licence was produced in the court as Exh. R1 and as such it could not be said that respondent Nos. 1 and 2 had not cooperated with the insurance company. In fact, learned Tribunal found that the insurance company had failed to prove that the driver and owner of the offending vehicle had colluded with the claimants. In this view of the matter, in our opinion, learned Tribunal was justified in dismissing the application of appellant insurance company under section 170 of the Motor Vehicles Act, 1988.

(3.) It was then submitted by the learned counsel for the appellant insurance company that proper opportunity was not given to appellant insurance company to produce the report from the licensing authority about the validity of the driving licence of the driver and that the evidence of the appellant insurance company was wrongly closed by court order. However, we find no force in this submission as well. It is no doubt true that the appellant insurance company had summoned the Licensing Clerk from the Licensing Authority, Lucknow, in respect of driving licence of Devi Parshad, driver. However, since no steps were taken by insurance company to effect the service upon the witness, the remaining evidence of the insurance company was closed by court order. It is not the case of the appellant insurance company that besides examining the Licensing Clerk, the appellant insurance company wanted to produce any other evidence in support of its case. In our opinion, even if the Licensing Clerk had been examined and even if he had produced evidence to show that the driving licence produced by Devi Parshad was not valid or had not been validly renewed, yet in our opinion, the same would be of no consequence, in view of the law laid down by a Bench of three Hon'ble Judges of the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh, 2004 ACT 1 (SC). In the reported case, in the summary of findings, it was held by the Hon'ble Supreme Court in para 102 (iii) that 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. It was further held that 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. It was further held in clause (iv) that insurance- companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish 'breach' on the part of the owner of the vehicle, the burden of proof wherefor would be on them. It was further held in clause (vi) 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 found to have contributed to the cause of the accident.