The High Court · 2025

Petition untier Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings pursuance of the Judgment and decree dated 16-9-201 1 passed in MVoP No, 327 of 200g on the file of the Motor Accidents claims Tribunal-cum-lv Addl. District & Sessions Judge (FTC), Mahabubnagar. Counsel for the Appellants : Sri. T. Mahender Rao Counsel for the Respondent Nos. 1 to 3 : Sri p. Amba Shankar Counsel for the Respondent No. 5 : Sri J. Sandhya Rani The Court delivered the following: THE HON'BLE SRI JUSTICE T. VINOD KUMAR M.A.C.M.A. No.29l f)F2Ol4 JUDGMENT: L This Motor Accidents Civil Miscellaneous Appeal is preferred by the appellant/insurer-respondent No.3 in MVOP aggrieved by the judgment dated 16.09.2011 in O.p.No. 327 of 2008, passed by the Motor Vehicles Accidents Claims Tribunal- curn-IV Additional District and Sessions Judge (FTC), Mahabubnagar (for short ,the Tribunal,) insofar as the application of 'pay and recover' principle.

2. Heard Sri. T. 'Mahender Rao, leamed counsel for the appellant, Sri. P. Amba Shankar, leamed counsel for Respondents No. I to 3, Smt. J. Sandhya Rani, learned counsel for the Respondent No. 5 and perused the record.

3. 'Ihe Respondent No. I is the widowed daughter _ in _ law, the Respondents No.2 & 3 herein are the minor grandchildren, and Respondents No. 4 is the married daughter of the deceased Mr. Aleti Jangaiah. Respondent No. 5 herein is the owner of the offending vehicle. 2

4. The Respondents No. I to 3 herein filed the aforesaid Op claiming a compensation ol Rs.1,50,000/- lor the death of the deceased on 05.01.2008, in the accident caused by the motorcycle of the Respondent No.5 herein. The Tribunal on considering the oral and documentary evidence on record held that the accident was caused due to the rash and negligent driving of the offending motorcycle, allowed the OP in part, awarding a total compensation of Rs. 1,22,000/- and proportionate costs with inrerest @ 7 .5% p.a. liom the date of fiting of the award. Further, though the Tribunal observed that the driver of the offending vehicle did not possess a valid driving license, it hetd the Ap;ieltant liable to pay compensation to the Respondents No. 1 to 3 herein, while granting liberty to the appellant herein to recover the amount paid by it from the Respondent No.5 herein. Aggrieved by the same the instant appeal is preferred.

5. Leamed Standing Counsel appearing for the Appellants contended that the driver of the vehicle did not possess a valid driving license; that Tribunal on holding that Respondent No.5 had violated the conditions of the insurance policy ought not have applied the principle of 'pay and recover,. ptacing reliance on the decision of the Supreme Courl in Sardari and Ors. Vs. Sushil ) 3 Kumar and Orst, it is contended that a direction to pay compensation and recover the amount cannot be applied when the record establishes a breach in conditions ofthe policy

6. Per contra, leamed counsel for Respondents No.l to 3 contends that the order of the Tribunal did not suffer from any infirmity as the driver of the vehicle held a valid driving license

7. I have taken note the respective contentions urged.

8. At the outset, though reliance was placed on the decision in Sardari's case (supra) it is to be seen that the Hon'ble Apex Court has held that Court cannot fasten liability on the insurer when breach of conditions of contract is 'ex facie apparent from the record'. In the facts at hand, it is the consistent stand of the Respondent No.5 that as he had purchased the oilending vehicle recently, he was taking hetp from the driver one Mr. Murali, to Ieam riding; and that the said driver held a valid driving license. Further, Respondent No.5 in his cross examination denied the suggestion that he had entrusted the offending vehicle to the driver though he had knowledge that the said driver did not have a valid driving license ' (2008) 17 scc 208 4

9. Further, it is to be seen that the appellant herein claims to have established that the driver did not possess a valid driving license. on the basis of the evidence of RW-3 who is the sub inspector ol Police, Telkapally. However, a perusal ol the record shows that RW-3 did not make any request to the R.T.A. Office to ascertain as to whether the driver had a valid driving Iicense. RW-3 further admitted that he had not asked the driver to produce his driving license.

10. ln Ilnited India Insurance Company Lttl. Vs. Lehru and Ors2, the Apex Court held that in order to avoid third party liability the insurance company ought to prove/establish that thc insured was aware of the fact that the driver possessed an invalid driving license. The Apex Court further held even in cases where the insured had knowledge of the driver. possessing a lake driving license, though insurance company would still be liable to pay compensation to innocent third parties, they would have a right to recover from the owner of the vehicle. The relevant observations are as under: "18. Now lct us col'tsider Section 149(2). Reliance has been placed on Section 149(2)(a) (ii). As seen in order to avoid liability under this provision it must be shown that there is a "breach". As held in Skandia's and Sohan [-al Passi's cases ' (2003) 3 scc 338 (supra) the breach must be on part olthe insurcd. We are in lull agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen. Whilst it is being driven by the thief there is an accident. The thief is caught and it is ascertained that he had no licence. Can the lnsurance Company disown liabitity? The answer has to be an cmphatic "No"' To hold otherwise would be no negate the very purpose of compulsory insurance. The injured or relatives of pcrson kitled rn thc accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner hitnself would be an innocent sufferen It is for this reason that the Legislature, in its wisdont, has made insurance, at least third party insurance, compulsory. The aim and purpose being that an Insurance Company would be available to pay. The business of the ComPany is to insurance. In all businesses thcre is an element of risk. All pcrsons carrying on business must takc risks associated with that business. Thus it is equitable that thc business which is run for making profits also bears the risk associated with it. At the same time innocent partics must not be made to suffer or loss. These provisions meet these requiremcnts. We are thus in asrecment with what is laid down in a [oremcntio ned cases viz that in order to avoid liabilitv it is not sufficicnt to show that the Derson d rivins at the timc of accident was not dulv licensed. The Insurance ComDanv must establish that the breach on the oart ofthe insurcd.

20. When an owner is hiring a driver he will thercfore havc to check whether the driver was a driving licence, If the driver produccs a driving liccnce rvhich on the face of it looks genuine, the owner is not expectcd to find out whother the licence has in fact been issued by a competcnt authority or not. The owncr should then take the test of the driver. lf hc find that the driver is competenl to drive the vehicle, he will hire the driver We find it rather stra nse that Insurance Com Danres exDec t owners to make en o uiries with RTO's. which the d rivinp licence shown to them are sDread all over the counl rv. wh€thcr is valid or not. Thus where the owner has satisficd himsclI that the driver f has a licence and is driving compctently there would be no breach o Section 149(2)(a)(ii). The Insurance Company would not then be above of Iiability. If it uttimately tums out that the licence was fake thc Insurance Company would continue to remain liable unless they prove that the owner/insurqd was aware or had notice that the licence was fake and still permitted tha[ person to drive. More importantly even in such a cas€ the lnsurance Company would remain liable to the innocent ahird party, but it may be able to recovcr from the insured. This is the law which has been laid down in Skiandia's Sohan Lal Passi's and Kamla's case Wc are in full agreement with the views expressed therein and see no reason to take a dif'ferent view." (emPhasis suPPlied) ll. In the tight of the aforesaid position of law, the contention of the appetlant that the breach in the terms of the contract is ex facie apparent on the record because the Respondent No. 5 herein failed I I I I 6 to see the driving license of the driver cannot be accepted. Therefore, this Court is of the view that the appellant herein had failed to establish that the Respondent No. 5 herein had entrusted the vehicle to the driver despite having knowledge that the said driver did not have a valid drivers' license, thereby constituting as a breach in thc conditions of the contract.

12. Therefore, this Court is of the view that the order of the Tribunal cannot be held to be erroneous in absolving the appellant's tiability and apptying the principle of 'pay and recover'.

13. Resultantly, this Motor Accident Civil Miscetlaneous Appeal is dismissed. |r4. Pending miscellaneous petitions if any, shall stand closed. No order as to costs. Sd/- MOHD. ISMAIL STANT REGISTRAR AS /TTRUE COPY// SECTION OFFICER To, 1 2 J.

5. ID L AS The Chairman, lt/lotor Accident Claims Tribu & Sessions Judge (FTC), Mahabubnagar.(W One CC to Sri. T lVlahender Rao, Advocate [OPUC] one CC to Sri P Amba Shankar, Advocate [OPUC] One CC to Sri J Sandhya Rani, Advocate [OPUC] Two CD Copies nal- m-lV Additional District ith rec ords) ? \, w ' .{,{.r \ HIGH COURT DATED:141O212O25 JUDGMENT MACMA.No.291 ot 2014 DISMISSED sTArt 1 J C) O $b tt iut ): * ? [ 3166 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD FRIDAY, THE FOURTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE T.VINOD KUMAR MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL NO: 291 OF 2014 Between: Pajaj Allianz General Insurance Company Limite Plaza,2nd Floor, 3-6-'l 1't18, Street lti, Mlin Roa d,R d,H ep., by its Manager Far East imayathnagar, Hyderabad. ...AppellanURespondent No. 3 AND

1. 2 J 4 6 Aleti Laxmamma, Wo. Late aleti Thirupathaiah Housewife R/o. Raghupathipet Village, Kalwakurthy Mandal, Mahabubnagar District. A Rajitha, D./9 Lale Aleli Thirupathaiah Minor rep., by Mother i.e., Lespondent N_o_1 . R/o. Raghupdthipet Viilage, fiUaXurtny UfanOat, Mahabubnagar District. A Anitha, D/o. Late Aleti Thirupathaiah Minor rep., by [Vlother i.e., l-espondent No,1 R/o. Raghupithipet Viilage, fbUatLrttry Mandal, Mahabubnagar District. 9. Laxmamma, Wo. Mallaiah Housewife R/o. Raghupathipet Village, Kalwakurthy Mandal, Mahabubnagar District. ...Respondents/Petitioners G Hanumanthu,.S/o. Samya, Occ: Business Rio. Laxmapur Village, Amrabad Mandal, Mahabubnagar District ...Respondents/Respondent No. 1 Appeal Under section 173 of Motor Vehicles Act against the order and Decree made in M.V.o.P.No.327 of 2o08 dated 16.09.211on the file of the court of the Motor Accident claims Tribunal-cum-lV Additional District & sessions Judge (FTC), Mahabubnagar- ORDER :This appeal coming on for hearing and upon perusing the grounds of appeal, the Judgment and Decree of the court below and the material papers in the MVoP and upon hearing the arguments of sri. T Mahender Rao, Advocate for the Appellant and of Sri P Amba Shankar, Advocate for the Respondent Nos. 1 to 3 and of the ri J Sandhya Rani, Advocate for the Respondent No. 5. /.,/ This Court doth Order and Decree as follows:

1. That the MACMA be and hereby is dismissed 2. fhatsave as aforesaid, the Judgment and decree of the Tribunal shall stands confirmed in all other respects' arid

3. That there be no order as to costs in this Appeal' Sd/- MOHD. ISMAIL ANT REGISTRAR ECTION OFFICER u nal-C u m- lV Addrtidnal District //TRUE COPY// To, '1 . The Chairman, Motor Accident Claims Trib & Sessions Judge (FTC), Mahabubnagar' 2 Two CD CoPies As/DL HIGH COURT DAf ED:.1410212O25 DECREE MACMA.No.291 ot 2014 DISMISSED 9