High Court of Jammu & Kashmir and Ladakh · 2018

owned by the appellant herein on 26th August 2011 upon a collision with an Alto Car bearing Registration No. JK05B/0410, at Trumgund Crossing National Highway, Sopore. Mac App 12/2023: i) In the instant appeal award dated 24.05.2018 along with order dated 15.03.2023, passed by MACT Srinagar, in claim petition 281/2011 titled as “Khadeeja Begum and Others vs National Insurance Company Ltd. and Others” has been challenged by the appellant herein. ii) The aforesaid claim petition came to be filed by the claimants/respondents 3 to 5 herein under the Provisions of the Motor Vehicles Act, 1988 before the Tribunal 2 | P a g e compensation owing to the death of one Mohammad Ashraf Akhoon S/o Abdul Ahad Akhoon on 26.08.2011, allegedly caused by vehicle(TATA Mobile) bearing registration No. JK01N/6641. Mac App 13/2023: i) In this appeal award dated 26.05.2018 along with order dated 15.03.2023, passed by the MACT Srinagar in file No. 283/2011 titled as “Mohammad Irfan Akhoon vs National Insurance Company Limited and Others”, is being challenged by the appellant. ii) The aforesaid claim petition came to be filed by respondent 3 herein under the provisions of Motor Vehicles Act 1988, for compensation on account of injuries claimed to have been suffered by him in the vehicular accident caused due to rash and negligent driving of vehicle (TATA Mobile) bearing registration No. JK01N/6641, on 26.08.2011.

#2. The Tribunal upon entertaining the claim petitions summoned the respondents therein being the Insurance Company, driver of the offending vehicle as also the owner being appellant herein and the said respondents opposed the claim petitions. 3 | P a g e

#3. The Insurance Company respondent 1 herein in its objections stated that the offending vehicle was driven by the driver without holding a valid and effective driving license on the date of accident and that the said vehicle was also being driven without valid and effective vehicular documents and that it, the Insurance Company, is not liable to pay any compensation to the claimants as the owner of the offending vehicle, the insured, committed the breach of the policy conditions of the Insurance Company.

#4. The other respondents in the claim petitions, being the owner appellant herein as also the driver of the offending vehicle in their objections filed to the claim petitions averred that the vehicle is insured with the National Insurance Company, while denying that the vehicle was being driven by the driver on the date of accident and that the police concerned falsely implicated the driver and the owner of the vehicle in the accident.

#5. The Tribunal on the basis of the pleadings of the parties framed various issues including the following issue; being relevant wherein, and to be pressed by the Insurance Company; i) Whether the respondent No. 3 driver was permitted by respondent No. 2-Owner knowingly to ply the offending vehicle on the date of accident with invalid and ineffective D/L and other vehicular documents like R/P, F/C etc. if yes, the respondent No. 2 insured insurance contract has committed breach of 4 | P a g e absolving the respondent No. 1 company from its liability on account of petitioners claim.? (OPR-1).

#6. The Insurance Company, respondent herein, in all claim petitions examined two witnesses namely Sh. Sumit Nargotra Licensing Clerk RTO Office Jammu Irshad Ahmad-Recordkeeper of RTO Office Kashmir Srinagar in order to prove issue No. 2.

#7. The Tribunal after adjudicating upon the claim petitions in terms the awards impugned instant appeals allowed compensation referred therein the appeals along with interest at the rate of 6.5% per annum in favour of the claimants. The Tribunal, however, while awarding said compensation in favour of the claimants yet provided a liberty to the Insurance Company respondent herein to recover the said amount of compensation from the owner of the vehicle, appellant herein, on the premise that the vehicle was found to have been driven by the driver with a fake driving license on the date of accident and, as such, the owner of the vehicle is vicariously liable for the acts of omission of the said driver.

#8. The appellant herein while challenging the impugned award qua the aforesaid liberty granted the Insurance Company respondent herein has questioned the same, inter alia, on the grounds that the Tribunal overlooked the evidence and material 5 | P a g e on record that the Insurance Company, respondent herein, have had failed to prove the issue in question to the effect that the owner/appellant herein had willfully and deliberately breached the insurance condition contained in the Insurance Policy by allowing the driver to ply the vehicle despite being not holding a valid driving license and that thus there was no occasion for the Tribunal to have provided a liberty to the Insurance Company respondent herein to recover the amount of compensation awarded to the claimants from the owner/appellant herein and that the Tribunal also failed to appreciate the law in respect of the said issue and in the process passed the impugned award against law. Heard counsel for the parties and perused the record.

#9. According to Mr. Mohammad Amin Tibetbakal, appearing counsel for the appellant, the Tribunal grossly erred while granting right of recovery to the Insurance Company, respondent 1 herein, qua the amount of compensation award in favour of the claimants from the owner/appellant herein as the Insurance Company, respondent 1 herein, did not prove the issue in question to the extent that the owner/appellant herein violated the 6 | P a g e Insurance contract by engaging and allowing a driver to drive the offending vehicle on the basis of fake driving license.

#10. On the contrary Mr. N.A. Dandru, appearing counsel for the Insurance Company, respondent herein, would vehemently oppose the submission of the counsel for the appellant and would submit that the Insurance Company, respondent herein, fully discharged the onus qua Issue in question and proved the said issue with credible evidence, as a consequence whereof, the Tribunal rightly and validly allowed the right of recovery to the Insurance Company, respondent herein, to recover the amount of compensation from the owner/appellant herein.

#11. Having regard to the aforesaid rival submissions of the appearing counsel for the parties, examination of the record of the Tribunal becomes imperative, a perusal whereof would reveal that the respondent in the claim petitions being the driver and the owner of the vehicle had filed a composite reply to the claim petitions and had denied that the vehicle was involved in the accident in question. Besides the said plea, the owner of the vehicle, appellant herein, had also pleaded that the offending vehicle is insured with the Insurance Company on the date of accident and that the same was being driven on the date of accident by the 7 | P a g e driver although having denied that the vehicle was involved in the accident.

#12. It is not in dispute that on the basis in the defence setup by the Insurance Company, respondent herein, before the Tribunal in opposition to the claim petitions, the Insurance Company have had specifically contended that the driver of the offended vehicle was permitted by the owner of the vehicle in question to ply the same on the date of accident knowing that the driver had no valid and effective driving license as also that vehicle did not have other vehicular documents, and, thus the owner of the offending vehicle committed breach of the Insurance Contract, absolving the Insurance Company from its liability qua the claim of the claimants, and based upon the said plea, the Tribunal framed the issue in question to be proved by the Insurance Company respondent herein and in furtherance thereof the Insurance Company, respondent herein, produced two abovenamed witnesses in order to prove the said Issue and although perusal of the statements of the said witnesses suggest that the Insurance Company has been able to prove that the driver of the offended vehicle was not possessed of an effective and valid driving license on the date of accident, yet has failed to prove that the 8 | P a g e said fact of invalid driving license of the driver of the offending vehicle was known to the owner/appellant herein and despite knowing the said fact the owner/appellant herein engaged the driver to ply the vehicle and, therefore, violated the terms of the Contract of Insurance absolving the Insurance Company from indemnifying the owner/appellant herein. Having failed to lead any evidence in support thereof inasmuch as to prove the said issue to the said extent, the Tribunal ought not to have granted liberty to the Insurance Company, respondent herein, to recover the amount of compensation from the owner/appellant herein, more so, in presence of law occupying the field in this regard and laid down by the Apex Court in case titled as ‘Pappu and others v. Vinod Kumar Lamba and Another’ reported in (2018) 3 SCC 208: National Insurance Company reported in AIR 2014 SC 305 and in case of ‘Rishi Pal Singh Vs New India Assurance Company Limited and Others’ reported in 2022 SCC page 2119 wherein following has been held in Paragraphs (7) and (8) respectively;

#7. To appreciate the contention of the appellant, the observations of this Court in Lehru (supra) have been reproduced as under: “20. When an owner is hiring a driver he will therefore have to check whether the driver has a driving licence. If the driver produces a driving licence 9 | P a g e which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that insurance companies expect owners to make enquiries with RTOs, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The insurance company would not then be absolved of liability. If it ultimately turns out that the licence was fake, the insurance company would continue to remain liable unless they prove that the owner/insurer was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly, even in such a case the insurance company would remain liable to the innocent third party, but it may be able to recover from the insured. This is the law which has been laid down in Skandia [(1987) 2SCC 654], Sohan Lal Passi [(1996) 5 SCC 21: 1996 SCC (Cri) 871] and Kamla [2001 4 SCC 342:2001 SCC (Cri) 701] cases. We are in full agreement with the views expressed therein and see no reason to take a different view.”

#8. The issue has been examined by a larger Bench in Swaran Singh (supra) wherein it was argued that the observations in Lehru were in conflict with the earlier judgment in New India Assurance Co. v. Kamla and Ors., (2001) 4 SCC 342. This Court held as under; “92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed herein before, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru case [(2003) 3 SCC 338:2003 SCC (Cri) 614] the matter has been considered in some details. We are 10 | P a g e in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insurer and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever. We would be dealing in some details with this aspect of the matter a little later.

#99. So far as the purported conflict in the judgments of Kamla [(2001) 4 SCC 342:2001 SCC (Cri) 701] and Lehru [(2003) 3 SCC 338:2003 SCC (Cri) 614] is concerned, we may wish to point out that the defence to the effect that the licence held by the person driving the vehicle was a fake one, would be available to the insurance companies, but whether despite the same, the plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case.

#100. This court, however, in Lehru [(2003) 3 SCC 338:2003 SCC (Cri) 614] must not be read to mean that an owner of a vehicle can under no circumstances have any duty to make any enquiry in this respect, the same, however, would again be a question which would arise for consideration in each individual case.”

#13. Viewed thus, the appeals succeed, as a consequence whereof the impugned awards insofar as it has granted liberty to the Insurance Company, respondent herein, to recover the award amounts from the owner/appellant herein is set aside including the order dated

15.03.2023. The statutory amount deposited by the appellant 11 | P a g e herein before the Registry of this Court upon presentation of the application is directed to be released in favour of the appellant herein along with the interest, if any, accrued thereon subject to proper verification and identification of the appellant.

#14. A copy of this order and judgment shall be placed on the record file of each of the appeals. (JAVED IQBAL WANI) JUDGE SRINAGAR 18.08.2025 Sabreena Whether order is speaking ? Whether approved for reporting ? Yes/No Yes/No 12 | P a g e