Jarnail Singh vs National Insurance Co. Ltd. and Others

K. Kannan, J.—The owner of the vehicle who was saddled with the liability for death of a pillion rider on a scooter is in appeal. The Insurance Company had denied before the Tribunal its liability on the ground that there had been violation of the terms of the insurance policy and there has been no liability for such payment. This omnibus defence for the insurance was understood by the parties in the context of evidence led on two aspects: one, whether there was a valid insurance cover to provide for protection for death of a pillion rider by the terms of policy and two, whether a driver of the insured''s vehicle had a driving licence.

On the issue of the terms of the policy, the Tribunal held that it was an Act Policy and therefore, there was no liability for making the insurer liable for death of the pillion rider. Learned Counsel appearing for the owner/Appellant points out that the Tribunal had committed mistake in taking the policy as providing a cover only to third party when it was a package policy for which extra premium had been paid.. Premium details stipulated in the policy read as follows, which are unfortunately without the various heads against which amounts have been collected. There is also no evidence during the trial, explaining the various heads:Premium Details

123:00

Less 25% 30:00

93:00

160:00

50:00

303:00

Less 50:00

253:00

25:00

278:00

In the cover note, it is mentioned, "the risk is hereby held covered under the terms of the Company''s usual form of Comp (rehensive) Policy applicable thereto." It is stated elsewhere in the cover note, "This policy does not cover "use for carrying passengers in the vehicle, except employees(other than the driver) coming under the purview of the Workmen''s Compensation Act, 1923." I do not want to conjecture as how the details of premium have to be understood in the absence of evidence. I shall include it to cover the risk to a pillion rider. I would place the burden of proof on the insurer to plead and prove exclusion of liability. 4. The Insurance Company had another ground urged before the Tribunal namely that the driver did not have a valid driving licence at the relevant time, This was considered by the Tribunal under issue No. 3 where it found that the driving licence had been renewed after the expiry. Although it was after the period of the accident, the contention of the owner of the vehicle was as if to state that if there was a renewal it should be taken as renewal even for the period when the driving licence was not effective and valid. This observation and reasoning of the Tribunal is erroneous and conflicts with the law laid down by the Hon''ble Supreme Court at least in three recent decisions, "i) National Insurance Company v. Jarnail Singh and Ors. (2007) 15 SCC 28; ii) National Insurance Co. Ltd. Vs. Vidhyadhar Mahariwala and Others, ; iii) New India Assurance Co. Ltd. Vs. Suresh Chandra Aggarwal, . It is therefore, wrong to assume that if a renewal takes place even beyond a period of expiry, namely 30 days from the date of expiry of the licence as required to be done u/s 15 of the Motor Vehicles Act, the licence could be taken to be valid and effective. If at all, such a characteristic could be attributed to a driving licence, it would apply only for the period when the renewal is effected and when the driving licence itself stipulates the period of its validity. In this case, the driver of the vehicle did not have a valid driving licence between the period of 9.02.2000 to 10.03.2005. The accident had taken place on 10.11.2001. The application for renewal itself appears to have been made only in the year 2005 and secured it on 11.03.2005. The driver was therefore, clearly not duly licenced and there had been a breach of terms of the policy that would enable the insurer the recovery against the insured/ owner of the vehicle.

Learned Counsel appearing for the Appellant contends that there is no appeal by the insurance company against the finding that the licence was valid. I cannot accede to such an argument, since the insurance company could not be treated to be aggrieved by the judgment, since the impugned judgment had exonerated the insurer of any liability. In an appeal filed by the owner, it shall be always to competent for a Respondent to urge that the judgment could still be supported for on other grounds which are adverse to the Respondents.

Learned Counsel appearing for the Appellant also refers to several decisions of this Court and the Hon''ble Supreme Court with reference to the liability of the insurer in a case where the driver''s licence had expired, I will state one by one so as to how they are inapplicable, irrelevant or overruled by the decision of the Hon''ble Supreme Court referred to above.

The reliance on the judgment of the Hon''ble Supreme Court in National Insurance Co. Ltd. Vs. Swaran Singh and Others, is meaningless. For it is decision which lays down the law clearly as to how the licence which is fake or invalid will entitle a claimant to make an enforcement of the award against the insurer and the insurer shall however, have a right of recovery, if there had been a violation of terms of policy by a driver not having a valid driving licence. In that case it was in the context of a fake driving licence or licence which was not renewed on expiry. The exception in Swaran Singh''s case (supra) dispensation dealt with were in situation where the accident arose due to mechanical defect or when it was an act of god, when the issue regarding the validity of driving licence itself was held to be irrelevant. Learned Counsel refers to a judgment in where United India Insurance Company Limited Vs. Shanti Devi and Others, this Court held that if the licence had expired before the date of accident but was got renewed after the accident and if the driver was not disqualified from not holding a licence after its expiry then the Insurance Company shall still be liable. In my view, this judgment cannot be stated to be laid down correct law particularly after the decisions in Vidya Dhar''s and Suresh Chander Aggarwal''s case (supra) There are other decisions as well one by decision of the Madhya Pardesh High Court in Oriental Insurance Co. Ltd. Vs. Shailendra Singh and Others, , New India Assurance Company Ltd. Vs. Sughra Bibi and Others, and New India Assurance Company Ltd. v. Purna Hazarika and Ors. (2010) ACJ 1371 (Gauhati). I do not feel obliged to make reference to judgments of the Courts at Chattisgarh, Jammu Kashmir and Gauhati when I clearly bound by the decisions of the Hon''ble Supreme Court which I have referred to above.

The owner will therefore, continue to be liable for the award but not in the manner set forth by the award of the Tribunal. The insurer is bound to satisfy the claim of the claimants and shall have a right of recovery against the owner, in view of the findings rendered above. It appears that during the pendency of the proceedings the insurer has recovered a portion of the award from the Appellant/owner. Such amount shall be given due credit at the time when the claimants seek for enforcement of the award against the insurer. The appeal is dismissed.