Suresh Chand v. National Insurance Co. Ltd & Ors.

the Insurance Company at the first instance, which shall be recoverable from the owner. It is against this award that the appellant, the owner of the vehicle, is before this Court. Learned counsel for the appellant submitted that the direction of the learned Tribunal in the impugned award giving right to the Insurance Company to recover the amount of compensation, if paid to the claimant, from the appellant, is patently erroneous. In terms of the evidence produced on record by the FAO No. 1496 of 2008 [2] appellant, there was no question of issuing any such direction. In fact, from the evidence on record, it was clearly established that the driver of the vehicle was having a valid driving licence. It was renewed at Jind. RW-1- Ranbir Singh from DTO, Jind in his examination-in-chief while admitting renewal of licence further admitted in his cross-examination that licences are renewed after verification of correctness of the previous licences. With this material on record, the owner cannot be said to be negligent as the driver was employed after seeing the driving licence which was admittedly renewed at Jind. He has no means to make a roving enquiry about the genuineness of licence at different places. Relying on Lal Chand v. Oriental Insurance Co. Ltd., 2006 Accidents Claims Journal 2161, it was submitted that under the circumstances, the owner cannot be held liable. On the other hand, learned counsel for the Insurance Company submitted that there is no error in the direction issued by the learned Tribunal, giving right to the Insurance Company to recover the amount of compensation from the appellants, as the driving licence produced on record by the appellant was found to be fabricated one. Renewal of a fabricated licence will not make it valid. He submitted that the original licence issued by Licensing Authority, Dehradun was found to have been issued in the name of Sulakhan Singh. The appellant in the present case had not taken due care before the engagement of the driver. The same being breach of the conditions of policy, the Insurance Company would not be liable to indemnify the insured. Heard learned counsel for the parties and perused the relevant referred record. A perusal of the discussion on the issue regarding payment of compensation of the learned Tribunal shows that while referring to the evidence led by the parties on the issue and also noticing the respective arguments, the learned Tribunal held that respondent No. 2 was not having a valid driving licence at the time of accident. To prove the validity of the licence, RW1-Ranbir Singh, DTO, Jind was summoned. His statement is reproduced as under: “ I am a summoned witness. I have brought the summoned record pertaining to DL No. 545 dated 28.3.2002 in the name of Subhash son of Mange Ram. As per our record, the said licence was renewed for the period from 28.3.2002 to 27.3.2005. Thereafter, it was again renewed upto 20.7.2008. Previously, the said licence was issued by the Licensing Authority, Dehradun at Sr. No. S/7508. As per my record, the entry in this regard is Ex. R1.”. FAO No. 1496 of 2008 [3] In his cross-examination, the said witness stated as under: “It is correct that at the time of renewal of such licences, we renew the same on the basis of after verification correctness of the previous licence.” In United India Insurance Co. Ltd. v. Lehru and others, 2003(2) RCR (Civil) 278, Hon'ble the Supreme Court observed as under: “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 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 the 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, Insurance Company would continue to remain liable unless they prove that the owner/insured 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 person, but it may be able to recover from the insured.” In National Insurance Co. Ltd. v. Swaran Singh and others, 2004(3) SCC 297, the Hon'ble Supreme Court considered the entire scheme of the Motor Vehicles Act and the scope and purport of Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 and held as under: “(iii) The breach of policy condition e.g., disqualification of driver or invalid driving licence of the driver as contained in sub-section 149, have to be proved to have been “committed by the insured for avoiding liability by the insurer. 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. To avoid its liability towards insured, the insurer has to prove that the insured was guilty FAO No. 1496 of 2008 [4] of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding use of vehicle by duly licensed driver or one who was not disqualified to drive at the relevant time. (iv) The Insurance companies are, 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. (vi) Even where the insurer is liable to prove breach on the part of the insured concerning the policy condition regarding holding of a valid driving 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 on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunal in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defence available to the insured under Section 149(2) of the Act.” In Lal Chand's case (supra), Hon'ble the Supreme Court observed thus: “In the instant case, the owner has not only seen and examined the driving licence produced by the driver but also took the test of the driving of the driver and found that the driver was competent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, the owner having satisfied himself that the driver had a licence and was driving competently, there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would not then be absolved of its liability.” If the facts of the present case are considered in the light of enunciation of law, as referred to above, in my opinion, the appellant has been able to make out a case. Firstly, as noticed above, a perusal of the statement of RW1- Ranbir Singh shows that he had produced the record from the office pertaining to the driving licence held by respondent No. 2, which was firstly renewed from

28.3.2002 to 27.3.2005 and then upto 20.7.2008. The accident in the present case occurred on 13/14.6.2006. Another important aspect in his statement was that the FAO No. 1496 of 2008 [5] Licensing Authority had renewed the licence after verification of the previous licence issued by Licensing Authority, Dehradun. The Insurance Company had not been able to prove on record that the owner/insured was aware of or had notice to the effect that the driver was having a fake driving licence, but still permitted him to drive the vehicle. The owner is not supposed to make a roving enquiry from District Transport Office or Regional Transport Office to find out the genuineness of the licence. Rather, in the present case, the renewal of the licence admittedly was at Jind. The owner of the vehicle is not supposed to be more vigilant than verifying the licence and also that the person, who is being engaged as a driver, knows driving. Negligence of the owner in that regard has not been proved by the Insurance Company. For the reasons mentioned above, in my opinion, the findings recorded by the Tribunal are perverse and accordingly set side. The direction given by the learned Tribunal giving right to the Insurance Company to recover the amount of compensation from the appellant, in case the same is paid by it to the claimant, is set aside. The appeal is disposed of in the above terms.

5.4.2010 (Rajesh Bindal) Judge