The United India Fir... v. Ayisa And Others,, Madras High Court, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

A.A.O Nos. 515 and 516/1975

Advocates

M/s. T. R. Rajagopolan and T. R. Rajaraman for Applt.
M/s. G. M. Nathan, N. Vanchinathan, P. S. Srisailam and K. M. Santhanagopalan for Respts.

Judges

Ramaprasada Rao, C.J
Ramanujam, J.

Acts

S. 96(2)(b)(ii) of the Motor Vehicles Act

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Smart Summary

Factual and Procedural Background

These two appeals were filed by the Insurance Company against a common award issued by the Motor Accidents Claims Tribunal, Coimbatore, concerning two claims related to deaths resulting from the same motor vehicle accident on 31st December 1971. The accident involved three pedestrians, Ibrahim, Gangadharan Nambiar, and Moideen Kutty, who were struck by a car driven by T. C. Ganesan. Gangadharan Nambiar died instantly, and Ibrahim died later in hospital. The driver fled the scene and was subsequently convicted under Section 304-A of the Indian Penal Code. The widows and children of the deceased filed two separate claims for compensation before the Tribunal. The Tribunal found the driver guilty of rash and negligent driving and awarded Rs. 25,000/- compensation in each case. The driver did not challenge the award; only the insurer appealed.

Legal Issues Presented

Whether the Insurance Company is liable to pay compensation despite the driver not holding a valid driving licence at the time of the accident.
Whether the compensation amount awarded by the Tribunal is excessive.

Arguments of the Parties

Appellant-Insurance Company's Arguments

The driver did not have a valid licence at the time of the accident; hence, the insurance contract is void and the insurer is not liable to indemnify.
The compensation awarded by the Tribunal is excessive.

Respondent-Claimants' Arguments

The driver was rash and negligent, as evidenced by the accident circumstances and damage to the vehicle.
The deceased were not contributorily negligent.
The compensation claimed was justified given the circumstances of the deaths.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
United India Fire and General Insurance Co. Ltd. v. Parvathi and others, 1978 T.L.N.J 482 C.M.A No. 534 of 1975	The insurer cannot question quantum of compensation without joining the insured as a co-appellant.	The court held the insurer’s challenge to compensation quantum was not maintainable without the insured as co-appellant, leading to abandonment of this contention.
Public Prosecutor v. Lim Ghin Ghaun	An insurance company cannot avoid liability if the driver was not disqualified from holding a driving licence.	Supported the court’s view that absence of a valid licence at the accident time did not exonerate insurer where the driver was not disqualified.
Public Prosecutor v. Albert Sen, 1972 A.C.J 381	Similar principle as above regarding liability despite lack of valid licence if no disqualification.	Reinforced the principle that insurer’s liability stands where driver was not disqualified.
Chanchallam and others v. Shailesh Kumar Pandurao Thakri & others, 1974 A.C.J 393	Insurance liability upheld where driver had no valid licence at time of accident but was not disqualified.	Confirmed the Tribunal’s approach in the present case.
Madras Motor & General Insurance Co. Ltd. v. Madathi Ammal, A.I.R 1975 Mad. 250 = 87 L.W 888	S. 96(2)(b)(ii) of Motor Vehicles Act cannot be interpreted to absolve insurer if driver was not disqualified though licence expired.	Supported the court’s conclusion that insurer remains liable under such circumstances.
Srinivasa Roadways v. Saroja, 1974 II M.L.J 364	Same principle as Madras Motor & General Insurance case regarding insurer’s liability despite expired licence.	Further endorsed the court’s ruling in the present appeals.

Court's Reasoning and Analysis

The court analyzed whether the insurer could avoid liability on account of the driver’s invalid licence at the time of the accident. It noted that Section 96(2)(b)(ii) of the Motor Vehicles Act permits avoidance of insurance contracts only if a specific condition regarding licensed drivers is incorporated in the policy. Here, the policy contained a general condition excluding unlicensed or disqualified drivers but did not incorporate the specific statutory provision. The driver’s licence had expired but he was not disqualified from holding or obtaining one. The court relied on precedents holding that in such circumstances, the insurer remains liable. Regarding the quantum of compensation, the court referred to binding precedent that the insurer cannot dispute the amount without the insured as co-appellant, and thus did not entertain this argument. Consequently, the court affirmed the Tribunal’s conclusion on liability and compensation.

Holding and Implications

The Civil Miscellaneous Appeals filed by the Insurance Company are dismissed with costs.

This decision confirms that an insurer cannot avoid liability solely because the driver’s licence was expired at the time of the accident if the driver was not disqualified and the insurance policy does not specifically incorporate the statutory provision allowing such avoidance. The ruling directly affects the parties by upholding the Tribunal’s award of compensation to the claimants. No new precedent beyond the application of established principles was set.

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The United India Fire And General Insurance Company Limited Respresenting The Union Assurance Society Limited v. Ayisa And Others,

(Ramanujam, J.)

1. These two appeals have been filed by the Insurance Company against the common award of the Motor Accidents Claims Tribunal, Coimbatore in respect of two claims made by two sets of individuals in respect of two deaths caused by the same accident.

2. On 31st, December, 1971, at 1.30 A.M three persons, Ibrahim, Gangadharan Nambiar and Moideen Kutty were proceeding form south to north on Jail Road, Coimbatore after attending a film. One T. C. Ganesan who was driving his Car, M.D.A 3737, came behind in a rash and negligent manner and dashed against Ibrahim and Gangadharan Nambiar. Gangadharan Nambiar died on the spot and Ibrahim died in the Hospital sometime thereafter. The said T. C. Ganesan fied away from the place of accident without giving even the immediate first aid to the injured. He was charged by the police under S. 304-A. I.P.C and on his admission, the was convicted by the Additional First Class Magistrate, Coimbatore. The widow and children of Ibrahim filed M.C.O.P No. 55 of 1973 claiming a sum of 50,000/—as compensation and the window of Gangadharan Nambiar filed M.C.O.P, No. 56 of 1973 claiming a sum of Rs. 40,000/- The case of both sets of claimants was that the said T. C. Ganesan was rash and neligent in driving his car and that the place of the accident and damage to the vehicle will positively prove his culpable negligence in driving the vehicle.

3. The claim was resisted by the said T.C Ganesan, the driver of the car as also the appellant-insurer. Their defence was that the driver of the car was keeping to the correct side of the road, that the deceased and another, Moideen Kutty were walking in a drunken mood, that when he sounded the horn from behind, the said three persons walking in a haphazard manner came to the middle of the road and fell under the car and that therefore, the driver of the car cannot be said to be rash and negligent. They also contended that in any event the compensation claimed in both the cases was excessive. The appellant as insurer raised an additional defence that at the time of the accident the driver of the car was not having a valid licence and, therefore, the insurer was not liable to indemnify the insured.

4. The Motor Accidents Claims Tribunal, after going through the evidence, both oral and documentary in considerable detail, came to the conclusion that the accident which resulted in the death of the two deceased was due to the rash and negligent driving of the car by the said T. C. Ganesan, and that the deceased were not guilty of any contributory negligence. As regards the quantum of compensation, the Tribunal fixed a compensation of Rs. 25,000/- in each of the two cases. The driver of the car has not challenged the award of the Motor Accidents Claims Tribunal, but it is only the insurer who has filed the above appeals.

5. In the grounds of appeal, two contentions have been urged, (1) That as the driver of the car did not have a valid licence at the time of the accident, the Insurance Company is not liable to meet the claim for compensation made in the above two cases, and (2) in any event, the compensation granted by the Tribunal is excessive.

6. As regards the second contention, this court has held in the United India Fire and General Insurance Co. Ltd. v. Parvathi and others . 1978 T.L.N.J 482 C.M.A No. 534 of 1975 that the insurance Company is not entitled to question the quantum of compensation without bringing in the insured as a co-appellant. In view of the said decision, this contention has not been urged before us by the learned counsel for the appellant at the time of the hearing of the appeals.

7. As regards the first contention, the submission of the learned counsel for the appellant is that admittedly the driver of the car did not have a valid license at the time of the accident and, therefore, the insurance company is entitled to avoid the contract of insurance. The Tribunal found that. T. C. Ganesan had a driving licence which had expired towards the end of September, 1971, that the same had been renewed only on 7th, January, 1972, and that as such on 31st, December, 1971, the date of the accident he had no valid licence. However, it took the view that as the driver had a valid licence earlier and had not been disqualified from driving or holding a driving licence and as S. 96(2)(b)(ii) of the Motor Vehicles Act had not been incorporated in the insurance policy, the appellant has to meet the claim. This view of the Tribunal has been challenged before us.

8. However, we are of the view that the Tribunal has come to the right conclusion. S. 96(2)(b)(ii) enables the insurance company to avoid the contract of insurance if a condition is incorporated in the policy to the effect that the vehicle should be run only by a person holding a licence. But in this case, one of the conditions incorporated in the policy is that the vehicle should not be driven by any person who is not duly licenced or by a person who has been disqualified from holding or obtaining a driving licence during the period of disqualification. It is therefore, clear that the appellant has not chosen to take ad vantage of the provision contained in S. 96 (2) (b) (ii) by incorporating a suitable provision in the insurance policy excluding the use of the vehicle by all non-licensees. In similar circumstances it has been held in Public Prosecutor v. Lim Ghin Ghaun that the insurance company cannot avoid the liability as the driver of the car who drove it had not been disqualified from holding a driving licence. Public Prosecutor v. Albert Sen . 1972 A.C.J 381 is also to the same effect. A similar view has also been taken in Chanchallam and others v. Shailesh Kumar Pandurao Thakri & others’. . 1974 A.C.J 393 There are also two decisions of this court which also laid down the same principle. In Madras Motor & General Insurance Co. Ltd. v. Madathi Ammal . A.I.R 1975 Mad. 250=87 L.W 888 Maharajan, J. has taken the view under similar circumstances that S. 96(2) (b)(ii) cannot be so interpreted as to exonerate the Insurance Company from its liability where it specifically has undertaken to cover liability in respect of a person who at the time of the accident had no effective licence but who had held a licence and was not disqualified from holding or obtaining a licence. The said view also found acceptance before a Division Bench of this Court in Srinivasa Roadways v. Saroja . 1974 II M.L.J 364. In view of the above decisions and in view of the provision contained in the policy, the appellant cannot avoid its liability.

9. The Civil Miscellaneous Appeals are, therefore, dismissed with costs.

VCS

The United India Fir... v. Ayisa And Others,