United India Insurance Co Ltd v. Uma & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 30.9.2011CORAM :THE HONOURABLE Mr.JUSTICE G.M. AKBAR ALICivil Miscellaneous Appeal No.2878 of 2006and M.P.No.1 of 2006United India Insurance Co LtdNo.13 A, Nethaji Road, Cuddalore ...Appellant/2nd Respondentvs1. Uma2. Murugan ... Respondents/Petitioner & Petitioner & 1st Respondent Civil Miscellaneous Appeal filed under Sec.173 of the MotorVehicle Act, 1988 against the judgment and decree dated 4.1.2006 madein MACTOP No.1293 of 2004 on the file of the learned Principal SubJudge, Motor Accidents Claims Tribunal, (District Court OP No.1179 of2004) Cuddalore.For Appellant : Mr.C. Padmanabhan for Mr.M.J. VijayaraghavanFor 1st Respondent: Mr.N. DamodharanFor 2nd respondent: ExparteJUDGMENTAppeal filed against the judgment and decree dated 4.1.2006 madein MACTOP No.1293 of 2004 on the file of the learned Principal SubJudge, Motor Accidents Claims Tribunal, ( District Court OP No.1179of 2004 Cuddalore).2. The Insurance Company is the appellant. The liability isbeing challenged by the Insurance Company. The brief facts of thecase leading to the appeal are as follows:3. The 1st respondent filed a claim petition stating that on22.3.2004 around 1.45 p.m she was travelling in the auto bearingRegistration No TN-31- A-0245 from Vellagate Cuddalore. The driverof the auto drove the vehicle in a rash and negligent manner as aresult of which the auto capsized resulting in injuries to the 1strespondent. https://hcservices.ecourts.gov.in/hcservices/

4. The appellant insurance company denied the liability statingthat the auto driver did not possess valid licence at the time of theaccident. However, the Tribunal found that the insurance company wasliable as there was a valid policy and it would also state that thedriving licence was also filed and hence fastened the liability onthe insurance company. Aggrieved by which, the Insurance Company isbefore this court.5. Mr.M.J Vijayaraghavan, learned counsel for the appellantwould state that the driver of the auto did not possess a validlicence. According to the learned counsel, his licence had expired on18.10.2003 and a renewed licence was filed before the court which wasissued on 2.4.2004, almost 10 days after the accident that occurredon 22.3.2004. 6. The learned Counsel relied on the decisions rendered in2008 (1) TNMAC 294 (SC) (Sardari and others vs Sushil Kumar andothers) ,2009 (2) TNMAC 273 (SC) (New India Assurance Co Ltd vsSuresh Chandra Aggarwal), 2008 (2) TNMAC 369 (SC) (NationalInsurance Co Ltd vs Vidhyadhar Mahariwala and others) for thepreposition that, when the driver was not holding an effectivedriving licence on the date of accident, the insurer is not liable asthere is a breach of policy condition.7. On the contrary, Mr.N. Damodaran, learned counsel forthe 1st respondent would submit that Ex.P.4 the xerox copy of thelicence would show that the driver was in possession of valid licenceand he was also authorised to drive transport vehicle as perendorsement dated 19.10.2000 and therefore, it is presumed that hecontinued to possess valid licence at the time of accident.8. The learned counsel relied on the decision put forth in 2010(4) LW 742 Bajaj Allianz General Insurance Co Ltd, Pune vs P.Manimozhi , wherein the first bench of this court has ordered thecompensation on the principle of pay and recovery.9. He also relied on a decision reported in 2011 (3) LW 821 (K.Kanagammal and others vs Chandran) where a single Judge of this courthas ordered pay and recovery.10. Heard both sides and perused the materials available onrecord. 11. The liability of the insurance company is challenged inthis appeal for want of effective driving licence for the driver ofthe insured vehicle. Ex.P.4 is the xerox copy of the licence producedby the claimants. The date of issue was 2.4.2004 and it was validupto 1.4.2007. The endorsement on the licence would show thatoriginally he was issued with a licence from the year 1986 and he was https://hcservices.ecourts.gov.in/hcservices/ also authorised to drive transport vehicle badge no 86805 dated19.10.2000. However, there is also an endorsement to the effect thatthe previous driving licence expired on 18.10.2003. Obviously, thepresent licence was issued on 2.4.2004 i.e., ten days after theaccident. Therefore on the date of the accident the driver was notholding an effective driving licence. 12. In 2008 (2) TNMAC 369 (SC) (National Insurance Co Ltd vsVidhyadhar Mahariwala and others) the case involving one, where theaccident took place on 11.6.2004 and the licence expired on14.12.2003 and later renewed on 16.5.2005. the Apex court heldthat there was no valid licence.13. In 2009 (2) TNMAC 273 (SC) (New India Assurance Co Ltd vsSuresh Chandra Aggarwal), the Hon'ble Supreme Court has held that “18. We are fortified in our view by thedecision of this Court in the case ofJarnail Singh (supra). In that casealso, the Driving Licence of the driver,who drove the vehicle which got involvedin the accident, had expired on 16th May,1994. The accident took place more thanfive months thereafter i.e., on 20thOctober, 1994 and the Driving Licence wasrenewed only with effect from 28thOctober, 1996. On these facts, it washeld that Proviso to sub-section (1) ofSection 15 applied; the driver had nolicence to drive the vehicle on the dateof accident; the condition in the policyidentical to the one in the present casewas violated and therefore, the InsuranceCompany was not liable to pay any amountto the insured”.14. In 2010 (4) LW 742 Bajaj Allianz General Insurance Co Ltd,Pune vs P. Manimozhi , the First Bench held as follows:14. The next contention raised by thelearned counsel appearing for the appellantis that the third respondent, the rider ofthe two wheeler did not have a valid drivinglicence on the date of the accident andtherefore, the insurer is not liable to pay.The Hon'ble Supreme Court as regards thispoint namely, possession of valid drivinglicence broadly classified the same underfour different categories: https://hcservices.ecourts.gov.in/hcservices/ (i) Where, there was no licence(ii)Where, the licence is forged/fake(iii)Where, the licence is for a differentclass of vehicle and (iv) Where, the licence is for a learnerand held that when there is a breach ofcondition under an Insurance policy isproved then the Insurance Company must payand may recover. A Division Bench of thisvery Court in which one of us (T.S.Sivagnanam, J.,) was a party consideredthis very issue and after taking note of thedecisions of the Hon'ble Supreme Court inthe case of New India Assurance Co vs Kamla(2001) (4) SCC 342 = 2001 (3) L.W 421(United India Insurance Co. Ltd v Lehru,(2004 (1) TN MAC 340 (SC) = 2004 (1) L.W 5(Skandia Insurance Co Ltd vs KokilabedChandravadam, 1987 (2) SCC 654 – (1987) 100L.W 790, Sohan Lal Passi Vs P. Sesh Reddy,1996 (5) SCC 21, Oriental Insurance Co Ltd vSwaran Singh, 2004 (1) TN MAC 104 (SC) andNational Insurance Co Ltd vs Laxmi NarainDhut, 2001 (1) TN MAC 310 (SC) held that theinsurer must pay the amount and then mayrecover.15. In 2011 (3) LW 821 (K. Kanagammal and others vs Chandran)the learned single Judge held as follows: “12. In the present case , the Tribunalhas held that the driver, who actuallydrove the vehicle at the time of theaccident, had no valid and effectivedriving licence and thus, exonerated theInsurance Company from its liability. TheAppellants/claimants are the widow and sonsof the deceased, who was working as aWatchman. It is seen that the claimantsare in a state of penury and compensationwill not be immediately recoverable fromthe owner. In a fact situation, like thepresent case, the Honourable Supreme Court,even after exonerating the InsuranceCompany from the liability to paycompensation, has directed the InsuranceCompany to pay and recover. https://hcservices.ecourts.gov.in/hcservices/

13. In view of the decisions of theHonourable Supreme Court and also in viewof the fact that the owner of the offendingvehicle was not contesting the claimpetition and had remained exparte, to meetthe ends of justice, it is justified topass an order directing the InsuranceCompany to pay the compensation awarded andrecover it from the owner”.16. On the principles laid down by the above judgement, whenthere is no valid licence at the time of accident, there is noliability on the insurance company to indemnify the insured. However,the insured allowing the driver to drive the vehicle without validlicence is only a breach of policy condition and therefore, theinsurance company may pay and recover the same from the owner.17. As far as the compensation amount is concerned, it is justand reasonable and I am not inclined to interfere.18. In the result, the appeal is partly allowed. It issubmitted that by order dated 10.4.2007 in MP No.1 of 2006, theappellant was directed to deposit a sum of Rs.1,00,000/- togetherwith proportionate interest to the credit of MCOP No.1293/04 on thefile of the Motor Accident Claims Tribunal (Principal Sub Court,Cuddalore). If the appellant has already complied with the conditionimposed, the balance shall be paid within a period of eight weeksform the date of receipt of copy of this order. No costs.Consequently, connected Mp is closed.Sd/Asst. Registrar/true copy/Sub Asst.Registrar srToThe Principal Sub Judge, Motor Accidents Claims Tribunal, Cuddalore. C.M.A.No.2878 of 2006MRD(CO)Eu 30.11.11