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Case Number

L.P.A No. 163 of 1993

Attorney(S)

Mr. S. Sampathkumar; Counsel for the Appellant
No appearance for the Respondents.

Judges

AR. Lakshmanan, J.

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Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

The claimants (respondents 1 to 7), who are the legal representatives of the deceased Balaraman, filed M.C.O.P. No. 272 of 1981 before the Motor Accident Claims Tribunal, Principal Subordinate Judge, Vellore, seeking Rs. 60,000 as compensation for the death of Balaraman. The claimants alleged that the deceased was about 40 years old and earned Rs. 600 per month as a cobbler. The appellant is the owner of the vehicle involved in the accident. The opinion states that the 8th respondent is the insurance company (although elsewhere the insurance company is referred to as the 9th respondent), and the insurance company filed a counter (adopting the owner's counter) alleging that the driver had no valid licence on the date of the accident.

At the Tribunal, the 1st claimant and one Shanmugam were examined as P.Ws. 1 and 2, and the owner examined himself as R.W.1. The Tribunal found that the deceased fell while attempting to pluck sugarcane loaded on the trailer and was run over by the trailer tyre; it held that the death was not due to rash and negligent driving. Nevertheless, the Tribunal directed the owner (appellant) to pay Rs. 15,000 as compensation, without directing the insurance company to pay. The Tribunal ordered that if the amount was not deposited within two months, the claimants would be entitled to 12% interest on the award amount.

Aggrieved, the owner filed A.A.O. No. 613 of 1985 challenging the Tribunal's award. The claimants filed A.A.O. No. 62 of 1986 seeking enhancement. A learned single Judge of this Court, by judgment dated 5-12-1990, accepted the Tribunal's finding on the mode of death but held (contrary to the Tribunal) that the driver's rash and negligent driving was responsible; the learned Judge concluded that total compensation should be Rs. 30,000, and observed that the insurance company had paid Rs. 15,000 ex gratia. The learned Judge directed that no further liability was fastened on the insurance company and directed the owner to pay Rs. 15,000 (one half of Rs. 30,000). The owner has challenged the single Judge's apportionment in this Letters Patent Appeal.

Legal Issues Presented

Whether the order of the learned single Judge directing the owner of the vehicle (appellant) to pay Rs. 15,000 by way of contribution to the claimants is proper and justified?
Whether the insurance company ought to be directed to indemnify the owner of the vehicle for the entire award (Rs. 30,000) rather than only for the Rs. 15,000 it had paid ex gratia?
Whether the burden of proving that the driver did not hold a valid driving licence on the date of the accident lies on the insurance company (and whether mere pleading in the counter is sufficient proof)?

Arguments of the Parties

Appellant (Owner of the Vehicle) — Arguments

The owner contended before the Tribunal that the tractor was not driven in a rash and negligent manner and that the death resulted from negligence on the part of the deceased (a mistake of fact), i.e., that the deceased alone was responsible for his death and not the driver or vehicle.
Before the single Judge and on appeal, the owner argued that the insurance company had not discharged its burden to prove that the driver did not hold a valid licence; mere assertion in the counter would not suffice as proof.
The owner argued that if the learned single Judge found the driver was rash and negligent and fixed total liability at Rs. 30,000, then the insurance company should not have its liability restricted to Rs. 15,000 — the insurer should indemnify the owner for the entire award.

Claimants' Arguments

The claimants (legal representatives of the deceased) sought compensation (Rs. 60,000 originally) for death of Balaraman and later filed an appeal (A.A.O No. 62 of 1986) for enhancement of the award.

Insurance Company's Position

The insurance company adopted the counter of the owner but additionally asserted that the driver did not hold a valid driving licence on the date of the accident and on that basis sought to avoid liability under the policy.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Narcinva V. Kamat v. Alfredo Antonio Doe Martins (as cited in the opinion with reference to 1985 A.C.J.)	The Supreme Court held that the burden to prove breach of the contract of insurance (for example, that the driver did not have a valid licence) is on the insurance company; the owner is not obliged to furnish evidence to enable the insurer to escape liability.	The court relied on this decision as directly covering the matter and held that the insurance company failed to discharge its burden of proving the driver lacked a valid licence; therefore the insurer remained liable under the policy.
The Oriental Insurance Co. Ltd. v. Indirani (1995 (I) M.L.J. 82) — as cited in the opinion	Presented in the opinion as supporting the same proposition that the insurer must prove breach of the insurance contract and cannot rely on mere pleading.	The court noted this decision as supporting the same proposition, but observed that the matter was directly covered by the earlier Supreme Court decision (referred to above) and thus further elaboration was unnecessary.
National Insurance Co. Ltd. v. A. Babu (1990 A.C.J. 1003)	Also cited as authority for the proposition that the insurer bears the burden of proof to show a breach (e.g., driver lacked licence) and that mere pleading will not suffice.	The court mentioned this decision as being for the same proposition, although it relied principally on the Supreme Court decision noted above.

Court's Reasoning and Analysis

The court analysed the single Judge's order and the factual findings made by the Tribunal. Key steps in the court's reasoning were:

The court observed the Tribunal's factual finding that the deceased fell while attempting to pluck sugarcane and was run over by the trailer tyre; the Tribunal held the death was not caused by rash and negligent driving. The learned single Judge, however, had found that rash and negligent driving by the driver was responsible and fixed total compensation at Rs. 30,000.
The court accepted the appellant's submission that, having found the driver guilty of rash and negligent driving and fixed total liability at Rs. 30,000, the learned single Judge should not have limited the insurance company's liability to Rs. 15,000 only; there is no basis in law or on the facts for limiting the insurer's liability when the insurer failed to discharge its burden of proof on the contested defence (lack of licence).
The court emphasised the established legal principle (as set out in the cited Supreme Court decision) that the burden to prove breach of the contract of insurance — e.g., that the driver did not hold a valid licence — rests on the insurance company. The owner is under no obligation to produce evidence to enable the insurer to escape liability.
Applying that principle to the facts, the court noted that the insurance company did not produce the driving licence (issued by the concerned Regional Transport Officer) or other necessary evidence to substantiate its contention that the driver lacked a valid licence on the date of the accident. Mere pleading in the counter was insufficient.
Because the insurance company failed to prove lack of licence (the defensive fact on which it relied), its liability under the policy remained intact; therefore the insurer was obliged to satisfy the entire award under the policy of insurance.
On this basis, the court concluded that the learned single Judge's apportionment — leaving the owner to pay Rs. 15,000 and the insurer only Rs. 15,000 — was incorrect in law and required modification.
The court then dealt with the practical consequence that the appellant had deposited Rs. 7,500 in the trial court pending disposal of the appeal: the modified order entitled the appellant to withdraw that sum (or, if the claimants had already withdrawn it, to be reimbursed by the insurance company to the extent of Rs. 7,500, with the insurer paying the balance of Rs. 7,500 to the claimants).

Holding and Implications

Holding: The Letters Patent Appeal filed by the owner of the vehicle is allowed. The court modified the learned single Judge's order and held that the insurance company is liable to pay the entire compensation amount of Rs. 30,000 to the claimants together with interest at 12% per annum from the date of the petition till the date of payment. No costs were awarded.

Implications:

Direct effect on the parties: The insurance company must indemnify and pay the full award of Rs. 30,000 (plus 12% interest from the date of the petition till payment). The owner is relieved from contributing Rs. 15,000 and may withdraw the Rs. 7,500 deposit made in the trial court (or be reimbursed by the insurer if the claimants have already withdrawn that amount).
The court based its decision on existing precedent (the Supreme Court decision cited) applying settled principles about the burden of proof on insurers; the opinion treats the issue as being covered by precedent and does not purport to lay down new law beyond applying those authorities to the facts.

KA/RR/VCS

This summary is prepared exclusively from the content of the provided opinion. No facts or conclusions not present in the opinion have been added.

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Duraiswami Naidu v. Kanthammal And 7 Others

Though respondents 1 and 5 to 7 were served on 25-11-1993, Respondents 2 to 4 on 26-11-1993 and the 8th respondent insurance company on 15-11-1993, there is no representation on behalf of either of the respondents. The respondents are also called absent. Heard the learned counsel for the appellant.

2. This Letters Patent Appeal is directed against the judgment of a learned single Judge of this Court in A.A.O No. 613 of 1985 dated 5-12-1990.

3. The appellant is the owner of the vehicle. Respondents 1 to 7, who are the legal representatives of deceased Balaraman, are the claimants. The 8th respondent is the insurance company. The claimants filed M.C.O.P No. 272 of 1981 on the file of the Motor Accident Claims Tribunal Principal Subordinate Judge, Vellore, claiming a compensation of Rs. 60,000/- for the death of Balaraman. According to them, the deceased was aged abput 40 years at the time of his death and was earning a sum of Rs. 600/- per month by working as a cobbler. The owner of the vehicle appellant herein filed a counter opposing the claim. According to him, the tractor in question was not driven in a rash and negligent manner, that the driver of the vehicle was not even prosecuted as the case was one of negligence on the part of the deceased and that the same was referred as mistake of fact. It is the specific case of the owner of the vehicle that the deceased alone was responsible for his death and not either the driver or the vehicle. The insurance company 9th respondent filed a counter adopting the counter filed by the owner of the vehicle. The insurance company has, however, taken a stand that the driver who drove the vehicle had no valid licence on the date of the accident and therefore, the claim petition is liable to be dismissed.

4. Before the Tribunal, the 1st claimant and one Shanmugam were examined as P.Ws 1 and 2 and the owner of the vehicle examined himself as R.W 1. Exs. A-1 and B-1 to B-3 were marked on the respective sides. The Tribunal held that the deceased died due to the hitting and running over by the tyres of the trailer. The Tribunal has also held that the deceased in the course of his attempt to pluck the sugarcane loaded in the trailer has fallen down and met his death by the trailer tyre running over him. Therefore the Tribunal held that the deceased did not die due to the rash and negligent driving of the driver of the vehicle. However, the Tribunal has directed the owner of the vehicle appellant to pay a sum of Rs. 15,000/- by way of compensation. The Tribunal has not directed the insurance company to pay the compensation amount. The Tribunal has further directed that if the amount is not deposited within two months from the date of the award, the claimants are entitled to 12% interest on the award amount.

5. Aggrieved by the award of the Tribunal, the owner of the vehicle filed A.A.O No. 613 of 1985 in this Court questioning the correctness of the award while the claimants have filed A.A.O No. 62 of 1986 for enhancement. It was urged before the learned single Judge that the insurance company has not discharged its liability by adducing necessary evidence to prove that the driver of the vehicle was not holding a valid licence of the date of the accident and that a mere pleading to that effect in the counter will not amount to proof. It was further urged that the Tribunal has erred in fixing the burden of proof on the owner of the vehicle to prove that the driver had a valid licence when there is not even a charge in the criminal proceedings. Therefore, the award of the Trirbunal in respect of its finding on the liability of the owner was challenged before the learned single Judge as erroneous.

6. The learned single Judge by his judgment dated 5-12-1990 accepted the finding of the Tribunal that the deceased did not die due to the rash and negligent driving of the tractor-trailer by its driver but he died due to the hitting and running of the tyre of the trailor in the course of his trying to pluck sugarcane loaded in the trailor. Even so, the leaned Judge held that the compensation in a sum of Rs. 15,000/- should be awarded to the claimants, payable by the appellant/owner of the vehicle. In the other appeal viz., A.A.O No. 62 of 1986 filed by the claimants for enhanced compensation, a suggestion was made by the learned Judge to the insurance company that it may consider paying the claimants compensation in a sum of Rs. 15,000/- exgratia. The said suggestion was accepted by the insurance company and it issued a cheque for Rs. 15,000/-, which was handed over to the 1st claimant 1st respondent herein, on her behalf and on behalf of the other claimants, which was directed to be invested in any nationalised or scheduled bank. Regarding the quantum of compensation awarded to the claimants, the learned Judge held that the driver of the vehicle was rash and negligent, which was responsible for the accident, and therefore, the owner of the vehicle and the insurance company would both be liable to pay to the claimants compensation in a sum of Rs. 30,000/- and since the insurance company has already paid a sum of Rs. 15,000/- by way of their contribution, the learned Judge observed that no further liability need be fastened on the insurance company. With reference to the liability of the owner of the vehicle, the learned Judge directed the owner of the vehicle’ appellant herein to pay one half of Rs. 30,000/-. Consequently, the learned single Judge dismissed A.A.O No. 613 of 1985 filed by the owner of the vehicle with costs of the claimants respondents 1 to 7, and dismissed A.A.O No. 62 of 1986 filed by the claimant's in view of the payment of Rs. 15,000/- by the insurance company, however, without costs. The finding of the learned single Judge that the owner of the vehicle is liable to pay a sum of Rs. 15,000/- as compensation by way of his contribution is now challenged in this Letters Patent Appeal.

7. The only point which arises for consideration in this appeal is,

Whether the order of the learned single Judge in directing the owner of the vehicle appellant herein to pay a compensation of Rs. 15,000/- by way of his contribution to the claimants is proper and justified?

8. Point:— As already seen, the Tribunal has held that the deceased did not die due to the rash and negligent driving of the vehicle but he died due to the hitting and running over of the tyres of the trailor. However, the learned single Judge held that the rash and negligent driving of the vehicle by its driver was responsible for the accident. According to the learned counsel for the appellant’ owner of the vehicle, the learned single Judge having found that the rash and negligent driving of the vehicle by its driver was responsible for the accident and having further found that the owner of the vehicle and the insurance company would both be liable to pay to the claimants compensation in a sum of Rs. 30,000/-, ought not to have restricted the liability’ contribution of the insurance company to Rs. 15,000/- only. As rightly pointed out by the learned counsel for the appellant, the learned single Judge should have seen that there can be no limit on the liability of the insurance company to Rs. 15,000/- only either in law or on the facts of the case. In our opinion, the learned Judge ought to have directed the insurance company to indemnify the appellant for the entire award and not partly only, which is not correct in law. The insurance company ought to have been held liable to indemnify the owner of the vehicle’ appellant for the entire sum of Rs. 30,000/- and not for a part of it.

9. We are also in agreement with the argument advanced by the learned counsel for the appellant that it is not the burden of proof of the owner of the vehicle to prove that the driver had a valid licence and that the insurance company ought to discharge its liability by adducing necessary evidence to prove that the driver was not holding a valid licence on the date of the accident. Mere pleading to that effect in the counter affidavit, in our opinion, will not amount to proof. In support of his contention, the learned counsel for the appellant cited the decisions reported in Narcinva V. Kamat v. Alfredo Antonio Doe Martins (1985 AC.J 297) and The Oriental Insurance Co. Ltd. v. Indirani (1995 (I) M.L.J 82). In 1985 A.C.J 397 the Supreme Court held that the burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company and that the owner of the vehicle was under no obligation to furnish evidence so as to enable the insurance company to wriggle out of its liability under the contract of insurance. In the instant case, the insurance company has not taken any steps to produce the driving licence of the driver, which is issued by the concerned Regional Transport Officer in order to substantiate its contention that the driver of the vehicle was not holding a valid licence on the date of the accident. The insurance company having failed to do so, cannot now wriggle out of its obligation and plead otherwise. As observed by the Supreme Court, when once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the policy of insurance. The judgments reported in 1995 (I) M.L.J 82 and National Insurance Co. Ltd. v. A. Babu (1990 A.C.J 1003) are also for the same proposition. Since the matter is directly covered by the decision of the Supreme Court in 1985 A.C.J 397 there is no need to refer to the other two decisions cited by the learned counsel for the appellant. Therefore, we hold that the insurance company has failed to discharge its burden of proving that the driver of the vehicle was not holding valid driving licence on the date of the accident.

10. For the reasons aforesaid, we allow the Letters Patent Appeal filed by the owner of the vehicle and modify the order of the learned single Judge in so far as it relates to the apportionment of the liability of the appellant in a sum of Rs. 15.000/- is concerned. We hold that the insurance company is liable to pay the entire compensation amount of Rs. 30,000/- to the claimants together with interest at 12% per annum from the date of the petition till the date of payment. No costs.

11. It is now represented that the owner of the vehicle’ appellant has deposited a sum of Rs. 7,500/- on 31-10-1985 to the credit of the proceedings in trial court, pending disposal of A.A.O No. 613 of 1985. In view of the above modified orders of ours, the appellant’ owner of the vehicle is entitled to withdraw the said sum if it had not already been withdrawn by the claimants. If it had been already withdrawn by the claimants. If it had been already withdrawn by the Claimants, the insurance company shall reimburse of appellant to the extent of Rs. 7,500/- and pay the balance of Rs. 7,500/- to the claimants.

KA/RR/VCS

Duraiswami Naidu v. Kanthammal And 7 Others

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant (Owner of the Vehicle) — Arguments

Claimants' Arguments

Insurance Company's Position

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Duraiswami Naidu v. Kanthammal And 7 Others

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