V.R. Raveendran vs M. Sarojini and Others

R. Basant, J.—The respondent No. 2 before the Tribunal who is the owner of a motor cycle involved in the accident is the appellant. His vehicle was involved in an accident. At the time of the accident, respondent No. 4 was riding the motor cycle and one Ramkumar, son of respondent No. 1 and the brother of respondent Nos. 2 and 3, was riding as pillion. In the accident respondent No. 4 and the said Ramkumar suffered injuries. Ramkumar succumbed to the injuries suffered by him. Mother and brothers of Ramkumar (hereinafter referred to as ''the claimants'') staked a claim for compensation against the respondent No. 4 (the rider), the appellant (the owner) and respondent No. 5 (the insurer). An amount of Rs. 2,60,000 was claimed as compensation. Binu (i.e., respondent No. 4), the alleged rider of the motor cycle, took up a contention that, not he, but the deceased was riding the motor cycle at the time of the accident. The appellant owner contended that the rider of the vehicle was at the relevant time riding the vehicle without his permission or authorisation. According to him, he is employed in the Railways. He had gone for his work on 12.4.1994 after entrusting the vehicle to the workshop of RW 3 for repairs. He had returned from work only on 14.4.1994. He then came to know that the accident had taken place on 13.4.1994. In short, he contended that the rider of the vehicle did not have his authority to ride the vehicle and hence he is not liable to compensate the claimants. The insurer admitted that there was a Comprehensive Policy issued in respect of the vehicle issued to the owner appellant at the relevant time. However, the insurer contended that it is not liable as the rider, respondent No. 1, at the relevant time did not have a valid driving licence. The insurer thus disputed the liability to satisfy the claim. There was, of course, dispute regarding the quantum of compensation payable also.

The claimant No. 1 examined herself as PW 1. Exhs. A1 to AS were produced. The only document relevant for our consideration is Exh. A6 as per which the police after investigation had filed final report indicting respondent No. 4 herein as the rider of the vehicle alleging that he was guilty of culpable rashness and negligence.

On the side of the respondents, RWs 1 to 4 were examined and Exhs. B1 to B8 were marked. Exhs. X1 to X2 (a) were also marked.

The appellant owner had staked a claim before the insurance company claiming payment of amounts towards the loss suffered by the vehicle which was covered by the Comprehensive Policy of insurance. Exh. B7 is the policy of insurance and Exh. B6 is the claim staked by appellant before the insurance company claiming amounts for damage suffered by his vehicle. Along with the same, he had produced before the insurance company Exh. B8, photocopy of the driving licence of the rider, i.e., the respondent No. 4 herein.

The insurance company took the stand that respondent No. 4 did not have a valid driving licence. Insurance company examined RW 1, an official of the Motor Vehicles Department which allegedly had issued Exh. B1, driving licence, which is the original of Exh. B8. Exhs. X1 to X2 (a) were produced and marked through RW 1 to substantiate the contention of the insurance company that Exhs. B1/B8 driving licence was a fake and non-genuine driving licence.

The appellant examined himself in support of his contention that he had entrusted the vehicle on 12.4.1994 to the workshop where RW 3 is the mechanic. He examined RW 3 as a witness in support of that contention. He examined RW 4 and proved Exh. X2 and Exh. X2 (a) to fortify his contention that he was on duty from 12.4.1994 to 14.4.1994 and was not available in the locality when the accident took place. RW 3 was examined to confirm that the vehicle had been entrusted for repairs to the workshop and that respondent No. 4 and the deceased Ramkumar had taken the vehicle from the workshop during the absence of the appellant who had gone on duty.

The Tribunal came to the conclusion that the claimants are entitled to an amount of Rs. 1,94,250 as compensation along with interest and costs. It must be noted straightaway that the said finding/direction is not assailed by anyone before us. The Tribunal found that the contention of the appellant owner that the vehicle was being driven by the respondent No. 4 without the consent and authority of the appellant owner is not acceptable. The Tribunal further found that respondent No. 4 did not have a valid driving licence and that Exhs. B1/B8 produced by the appellant before the insurance company along with Exh. B6 claim was a fake and non-genuine driving licence. According to Tribunal, the insurer has in these circumstances successfully established breach of the condition u/s 149 (2) (a) (ii) of the Motor Vehicles Act, 1988 that the rider of the motor cycle did not have a valid driving licence at the time of the accident. However, as the policy was a Comprehensive Policy of insurance notwithstanding the fact that the deceased was the pillion rider, the Claims Tribunal proceeded to direct the insurance company to pay compensation due to the claimants. But the insurance company was permitted to recover the amount from the owner, i.e., the appellant herein.

We have heard learned counsel. The learned counsel for the appellant owner assails the impugned direction to him to pay the amount to the insurance company on the following specific grounds:

(1) The respondent No. 4 rider had no authority to use the vehicle of the appellant and in these circumstances the appellant cannot be mulcted with liability for the tortious act committed by respondent No. 4.

(2) At any rate, the insurer has not succeeded in establishing that there was ''breach'' of the policy condition falling within section 149 (2) (a) (ii) of the Motor Vehicles Act and hence the permission granted to the insurance company to recover the amount from the appellant after making payment to the claimants is not justified.

We shall now proceed to consider the challenge raised on these grounds. We may incidentally mention that the learned counsel for insurance company attempted to advance an ingenious contention though the same does not appear to be supported by the pleadings raised. Learned counsel contends that the policy of insurance is a Comprehensive Policy. Under the compulsory policy of insurance, the liability of the pillion rider is not covered. Breach u/s 149 (2) (a) (ii) of the Act need be established by the insurer strictly only in a case where the liability is compulsorily insurable and not in the case of a liability outside the compulsory policy of insurance on the basis of a voluntary Comprehensive Policy of insurance issued by the insurer to the insured. The counsel proceeds further to contend relying on the decision in United India Insurance Co. Ltd. Vs. Rakesh Kumar Arora and Others, , that the decision in National Insurance Co. Ltd. Vs. Swaran Singh and Others, , is not applicable in such a case where the insurer''s liability arises not from the statutory stipulations in a compulsory policy of insurance but from a voluntary policy of insurance issued to the insured.

We feel that the said question deserves deeper consideration. But, in the absence of specific pleadings raised and evidence adduced, we are not persuaded to go into that question which is not seen canvassed even before the Tribunal. The contract of insurance has not been produced. Though the contention raised by advocate Mr. Ziyad Rahman is interesting, we are not proceeding to delve deeper into that contention in the absence of adequate pleadings and evidence.

We now proceed to consider the grounds of challenge raised by the appellant owner. The first contention is that the appellant had not authorised respondent No. 4 to ride his vehicle. Evidence of the owner as RW 2; workshop mechanic, RW 3; and the representative of the employer (Railways) of the appellant as RW 4 are, of course, available. This indicates that RW 2 had gone for his work on 12.4.1994 after entrusting the vehicle to RW 3 for repairs. RW 2 had returned only on 14.4.1994 and the accident had taken place on 13.4.1994. The vehicle was taken from the workshop of RW 3 by deceased Ramkumar and respondent No. 4 and the vehicle had met with the accident on 13.4.1994.

The appellant wants the court to believe that RW 3 had handed over the vehicle to the deceased and respondent No. 4 without permission, consent or authority of the appellant. RW 3 appears to have obliged RW 2 by subscribing to that version. We have assessed and evaluated the acceptability of the contention. Less said about the contention, better, according to us. Absolutely no objection is taken by the appellant RW 2 at any point of time against the conduct of RW 3 permitting the deceased and respondent No. 4 to take the vehicle from RW 3. Even while examining RW 3, it is not brought out at all that RW 3 had contumaciously handed over the vehicle to the deceased and respondent No. 4. Nay, what is more relevant is that in Exh. B6, claim for money from the insurance company for own damage of the vehicle, it is not even remotely suggested that the rider of the vehicle was riding the vehicle without authority, permission or consent of the owner. At that stage, it appears that this defence was not even contemplated. It was admitted in Exh. B6 claim form that respondent No. 4 was riding the vehicle and it was not asserted that there was anything contumacious on the part of respondent No. 4 in riding the vehicle or RW 3 in releasing the vehicle to him and deceased. The subsequent conduct of the appellant in having submitted Exh. B6 claim to the insurer and in not having raised his little finger against RW 3 or respondent No. 4 clearly indicates and points out the availability of permission/consent to ride the vehicle to respondent No. 4 from the appellant. We are unable, on the touchstone of probabilities, to accept the contention that respondent No. 4 and the deceased had without any permission, consent or authority of the appellant taken away the vehicle from RW 3 as to justify and accept the contention that the appellant had no responsibility for the negligent act allegedly committed by respondent No. 4 which led to the accident. It must be noted straightaway while assessing probabilities that the respondent No. 4 and the deceased were admittedly friends/colleagues of the appellant. That fact is indeed crucial. The first contention raised must, in these circumstances, fail.

It has been laboriously urged before us by the learned counsel for the appellant that the mere fact that the appellant after coming to know about the accident did not initiate proceedings against RW 3 or the respondent No. 4 (or the deceased) cannot be reckoned as a relevant circumstance to draw any adverse inference against him. The totality of circumstances has to be taken into consideration. When the available inputs are tested and measured on the touchstone/yardstick of a reasonable and prudent person, we find it absolutely safe to conclude that the appellant''s permission/consent/authority was certainly there for respondent No. 4 and the deceased to take the vehicle from RW 3 and use the same. The challenge raised on the first ground must, in these circumstances, fail.

We now come to the challenge raised on ground No. 2. After the decision in National Insurance Co. Ltd. Vs. Swaran Singh and Others, , there can be no dispute or doubt about the propositions of law that are applicable. Breach u/s 149 (2) (a) (ii) of the Motor Vehicles Act is to be proved primarily by the insurance company. The mere fact that the rider did not have a valid driving licence or the driving licence which he had was fake or non-genuine does not ipso facto establish the breach of the stipulations contemplated u/s 149 (2) (a) (ii) of the Act. It is for the insurance company to not only establish that the rider had no driving licence but it is up to them to further prove that there was wilful/contumacious breach on the part of the owner.

We feel that it would only be apposite straightaway to refer to propositions (iii) to (v) which appear in the summary of findings in para 102 in National Insurance Co. Ltd. Vs. Swaran Singh and Others, . We extract (iii) to (v) below:

(iii) The breach of policy conditions, e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of 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 of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time.

(iv) The insurance companies, 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.

(v) The court cannot lay down any criteria as to how said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.

We feel compellingly persuaded to refer to paras 62 and 63 which to a certain extent explain the approach/course which we must make/follow while considering the question whether there has been contumacious/wilful breach on the part of the owner-insured. We extract paras 62 and 63 below:

(62) The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. [See Sohan Lal Passi Vs. P. Sesh Reddy and others, ].

(63) Apart from the above, we do not intend to lay down anything further, i.e., degree of proof which would satisfy the aforementioned requirement inasmuch as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance. Each case may pose different problem which must be resolved having regard to a large number of factors governing the case including conduct of parties as regards duty to inform, correct disclosure, suppression, fraud on the insurer, etc. It will also depend upon the fact as to who is the owner of the vehicle and the circumstances in which the vehicle was being driven by a person having no valid and effective licence. No hard and fast rule can therefore be laid down. If in a given case there exists sufficient material to draw an adverse inference against either the insurer or the insured, the Tribunal may do so. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of contract of insurance on the part of the insured by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records.

With all the inputs available, we have to decide whether the mutual burden resting on the insurer and the owner have been discharged and whether the insurer is entitled to recover the amount under the proviso to section 149 (4) of the Motor Vehicles Act.

To undertake the evaluation, we must first of all note that the appellant has advanced an unsatisfactory and contradictory version which does not inspire confidence in the mind of the court. Initially, a contention was raised that the deceased and respondent No. 4 had taken away the vehicle from the workshop without permission, consent or authority of the appellant and that hence the appellant is not liable to pay any compensation to the victims. This contention has to be considered in the light of the earlier statement made in Exh. B6 claim form that respondent No. 1 was riding the vehicle. In that claim form it was not contended that the respondent No. 1 was acting without permission, consent or authority when he drove the vehicle. An attempt was made to contend that respondent No. 4 had a valid driving licence. After making laborious attempt, the insurer has been able to establish, by the evidence of RW 1 and Exh. X1, that the said driving licence, Exhs. B1/B8, is a false and fake one.

We have already entered a finding that this version of the appellant cannot be accepted. Deceased and respondent No. 4, it is not now disputed, were colleagues/friends of the appellant. The appellant even now has not chosen to initiate any proceedings against the workshop owner for unauthorised handing over of the vehicle to respondent No. 4 and the deceased. It is, in these circumstances, that we have come to the conclusion that the theory that the deceased and respondent No. 4 had taken away the vehicle unauthorisedly, cannot be accepted.

It is now contended that, at any rate, the appellant had bona fides and he cannot be held to have committed breach of the stipulation in section 149 (2) (a) (ii) of the Motor Vehicles Act. We note, first of all, that there is no honest contention at any point of time that the deceased and respondent No. 1 were permitted to take the vehicle under the bona fide impression that they had valid driving licence. In this context, we must appreciate the contention that RW 3 was instructed not to hand over the vehicle to anyone. The meek support received by the appellant from RW 3 when he was examined on oath, notwithstanding the theory, has no legs to stand on. The express or implied consent of the appellant to RW 3 to hand over the vehicle to respondent No. 4 and the deceased had to be inferred by any prudent mind. No heavier burden can obviously be cast on the insurer to avoid liability. It is not a case where the victim in whose favour the compassion of law flows will be deprived of compensation. The available inputs clearly suggest that the appellant had permitted respondent No. 4 and the deceased to take the vehicle. While handing over the vehicle the appellant either knew that they did not have driving licence, or contumaciously did not apply his mind to that aspect of the matter. Subsequently, it is found that he attempted to rely on a fake driving licence allegedly issued in the name of respondent No. 4. At any rate, bona fides is not a virtue we can discover or invent in the hands of the appellant considering the course of conduct adopted by him.

That the driving licence relied on by the appellant is a fake one is proved beyond doubt. That the appellant had authorised, at least impliedly, respondent No. 4 and the deceased Ramkumar to take the vehicle from the workshop is as clear as daylight. We are, in these circumstances, satisfied that the reasonable burden which alone can be cast on the insurer to prove breach of condition u/s 149 (2) (a) (ii) of the Motor Vehicles Act has been satisfactorily established by the insurer on the basis of the materials placed before the court. We do not find any merit in the contention that the breach has not been proved and consequently the insurer in these circumstances should not have been granted right to recover the compensation amount paid by the insurer to the victim under the proviso to section 149 (4) of the Motor Vehicles Act.

The challenge raised on the second ground must also in these circumstances fail.

We record that the learned counsel for the appellant has referred to our attention to the decisions in-

(1) Oriental Insurance Co. Ltd. Vs. Nirarudeen, ;

(2) P.T. Moidu v. Oriental Insurance Co. Ltd. 2009 ACJ 1104 (Ker);

(3) Lal Chand Vs. Oriental Insurance Co. Ltd., ;

(4) National Insurance Co. Ltd. Vs. Swaran Singh and Others, ;

(5) Ram Babu Tiwari Vs. United Indian Insurance Co. Ltd. and Others, ;

(6) Oriental Insurance Co. Limited Vs. Prithvi Raj, ;

(7) United India Insurance Co. Ltd. Vs. Gian Chand and others, ;

(8) Sohan Lal Passi Vs. P. Sesh Reddy and others, ;

(9) Kashiram Yadav and Another Vs. Oriental Fire and General Insurance Co. and Others, ; and

(10) Skandia Insurance Co. Ltd. Vs. Kokilaben Chandravadan and Others, .

We need only mention that we have anxiously considered these decisions, but are unable to agree that the burden on the appellant as insisted by the decision in National Insurance Co. Ltd. Vs. Swaran Singh and Others, , the relevant passages of which we have already extracted above can in any way be held to be discharged satisfactorily. We do not also accept that the respondent No. 4 was driving the vehicle at the relevant time without the authority/permission and consent of the appellant.

We are not adverting to all these decisions in detail in this judgment. We have gone through the same. There is no dispute on the principles of law. That the owner shall have no vicarious liability, if the tortfeasor is not acting under the authority of the owner, is well settled. That the insurer must prove breach u/s 149 (2) (a) (ii) is trite. Whether that burden has been discharged or not is a question of fact to be decided in each case. We have, on facts, taken a view against the appellant owner on the basis of the evidence available in the instant case. In the result, this appeal is dismissed.