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Case Number

C.M.P(M) Nos. 529 and 530 of 1993

Judges

M. Srinivasan, C.J

Acts

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Smart Summary

Summary of Legal Opinion: M. Srinivasan, C.J.

Factual and Procedural Background

These matters are revision petitions filed under Article 227 of the Constitution of India. The petitions were originally framed to include section 115 of the Civil Procedure Code but, following an objection by the court office, counsel for the petitioners agreed to delete that provision and confined the petitions to Article 227. The petitions are brought by the insurance company challenging an award of compensation (the compensation awarded was below Rs. 10,000/- and thus, counsel submitted, no appeal was maintainable). The insurance company disputes its liability to pay on the ground that the person driving the vehicle at the time of the accident was an unlicensed cleaner (Devi Singh) and therefore the insurer should be absolved of liability. The claimants/respondents maintain that the vehicle was being driven by the licensed regular driver (Harpal Singh) and that the insurer remains liable.

Legal Issues Presented

Whether a challenge under Article 227 is maintainable to question the correctness of the award where the compensation awarded is below Rs. 10,000/- (thus no appeal was available).
Whether the insurance company is liable to pay the award where the insurer contends that the vehicle was being driven by an unlicensed cleaner (Devi Singh) at the time of the accident, or whether the available evidence establishes that a duly licensed driver (Harpal Singh) was driving the vehicle, thereby fixing liability on the insurer notwithstanding the cleaner's lack of licence.

Arguments of the Parties

Petitioner (Insurance Company)

The insurance company contended it was not liable because the person driving the truck at the time of the accident was Devi Singh (the cleaner), who did not possess a driving licence (and admitted as much in his statement, RW 1).
To support this contention, the petitioner relied on the statement of Devi Singh (RW 1) and placed reliance on the F.I.R. and the police challan to show that Devi Singh was the driver at the relevant time.
Based on these facts, the petitioner argued that the insurer's liability should be displaced because the vehicle was being driven by an unlicensed person, implicating the policy condition against driving by persons not duly licensed.

Respondents / Claimants

The respondents relied on witness testimony and the owner’s evidence to show that the vehicle was being driven by Harpal Singh, the regular and duly licensed driver authorised by the owner.
The respondents also relied on authority from the Supreme Court (Sohan Lal Passi v. P. Sesh Reddy and related decisions) to submit that where the owner has engaged a duly licensed driver, and the accident occurs when another (unlicensed) person drives without the owner’s authorisation or knowledge, the insurer nevertheless remains liable to third parties.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Sohan Lal Passi v. P. Sesh Reddy, 1996 ACJ 1044 (SC)	Holds that if the owner had authorised a duly licensed driver but that driver allowed an unlicensed person to drive, the insurer cannot escape liability to third parties on the ground of contravention of the policy condition.	The court relied on this authority to state the principle that an insurer remains liable where the owner appointed a licensed driver and it is not established that the insured wilfully violated the policy condition; applied it to reject the insurer’s contention and to dismiss the petitions.
Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 ACJ 411 (SC)	Interpreted the concept of 'breach' in the relevant statutory provision and emphasised that insurer must prove wilful breach by the insured to escape statutory liability; underscored policy interpretation in favour of claimants.	Quoted within the Sohan Lal Passi discussion and relied upon to support the proposition that a mere occurrence of an unlicensed person driving does not automatically absolve the insurer unless wilful breach by the insured is proved.
Kashiram Yadav v. Oriental Fire & Genl Ins. Co. Ltd., 1989 ACJ 1078 (SC)	Reiterated that without the knowledge of the insured, if by the driver's acts or omission others meddle with the vehicle and cause an accident, the insurer would still be liable; insurer cannot take defence of breach of condition in such cases.	The court agreed with and applied this principle to the present facts to conclude that the insurer's defence would fail where the insured had authorised a licensed driver and there was no proof of wilful violation by the insured.

Court's Reasoning and Analysis

The court proceeded by examining the factual evidence and the legal principles applicable to insurer liability where an unlicensed person is alleged to have been driving.

Procedural framing: The petitions were confined to Article 227 after deletion of section 115 from the petitions, and the insurer contended that because the award was below Rs. 10,000 an appeal was not maintainable and the correctness of the award should be tested by revision.
Evaluation of testimony and documentary reliance:
- The insurer relied upon the statement of Devi Singh (RW 1) to show the cleaner was driving; however, the court noted that Devi Singh himself had stated that Harpal Singh (the driver) drove the vehicle at the relevant time, and that after the accident the driver left the truck to inform the owner and took away the key of the engine. Nothing in cross-examination rebutted this part of his statement.
- The insurer also relied on the F.I.R. and the police challan to show Devi Singh was the driver, but the court held that neither the F.I.R. nor the challan was admissible in evidence and therefore could not be considered as proof that Devi Singh was driving.
- Evidence of the vehicle owner, Nirmal Singh (RW 2), was that Harpal Singh was the authorised driver, had a valid licence, and had been the driver for four years.
- Witness PW 2 stated that they had “caught hold of the driver … who was sitting on the steering,” but when pressed in cross-examination he said he did not remember the name of the driver, undermining any definitive identification of Devi Singh as the driver.
- PW 4 said a man was sitting inside the truck under the influence of liquor and pointed to Devi Singh in court, but the court found that this did not establish that Devi Singh was driving the vehicle at the time of the accident.
On these factual findings, the court concluded that the evidence was insufficient to accept the insurance company's case that Devi Singh (the cleaner) was driving at the time of the accident. The evidence instead supported the conclusion that the vehicle was driven by Harpal Singh, a duly licensed regular driver authorised by the owner.
Legal application: The court applied the Supreme Court authorities (Sohan Lal Passi and related cases) establishing that where the insured has engaged a duly licensed driver, and an unlicensed person drives without causing a proven wilful breach by the insured, the insurer cannot repudiate statutory liability to third parties. The court agreed with these principles and held that even if a driver authorised to drive allowed someone else to drive, the insurer remains liable.
Accordingly, combining the factual conclusion (that a licensed driver was driving) with the legal principle that an insurer cannot escape statutory liability under the cited precedents, the court found no merit in the insurance company's petitions.
Finally, the court addressed interlocutory applications by the respondents under C.M.P. Nos. 105 and 106 of 1996: the objection that the main petitions should be dismissed in limine under section 173 of the Motor Vehicles Act was found unsustainable; the C.M.P.s praying dismissal of the petitions on preliminary objections were dismissed, while the prayer that the awarded amount be released to the claimants was granted.

Holding and Implications

DISMISSED — The revision petitions filed by the insurance company were dismissed.

Implications and direct effects:

The court held that on the facts the vehicle was driven by a duly licensed driver (Harpal Singh) and the insurance company could not avoid liability on the ground that an unlicensed cleaner was the driver.
By applying Supreme Court precedents, the court reaffirmed that where the insured appointed a licensed driver and it is not established that the insured wilfully allowed an unlicensed person to drive, the insurer remains liable to third parties.
There will be no order as to costs in respect of the main petitions.
The respondents' interlocutory applications seeking release of the awarded amounts were granted: the Registry was directed to pay the compensation amounts by cheque to the counsel for the claimants appearing in these cases.
No broader precedent beyond applying and following the cited Supreme Court authorities was announced; the decision applied those established principles to the facts and resulted in dismissal of the insurer’s petitions.

Disposition

Petitions dismissed. C.M.P.s 105 and 106 of 1996 were dismissed insofar as they sought dismissal of the main petitions on preliminary objections; the prayer in those C.M.P.s for release of amounts to the claimants was allowed and the Registry was directed to pay the amounts by cheque to the claimants' counsel.

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New India Assurance Co. Ltd. v. Jagtar Singh And Others

M. Srinivasan, C.J:— These petitions are under Article 227 of the Constitution of India. Though originally section 115 of Civil Procedure Code was also quoted, on an objection by the office, counsel agreed to delete that provision and confined the petition to Article 227 of the Constitution of India. It is submitted that as the compensation awarded is below Rs. 10,000/-, no appeal is maintainable and consequently the correctness of the award could be challenged under Article 227 of the Constitution of India. Hence, these revision petitions are taken up for hearing.

2. These petitions are filed by the insurance company which disputes its liability to pay compensation on the ground that the person who was driving the vehicle involved in the accident was one who did not have a driving licence to drive a vehicle. According to the insurance company it was only the cleaner of the truck who was driving the vehicle at the relevant time who did not possess a driving licence even according to his own statement and therefore the insurance company is not liable to pay any part of the compensation. For this purpose reliance is placed upon the statement of Devi Singh who was examined as RW 1. No doubt he has stated that he was not possessing driving licence at the time of accident but he has clearly stated that the person who drove the vehicle at the relevant time was Harpal Singh, driver, son of Mast Ram. According to Devi Singh, RW 1, after the accident the driver left the truck and went to inform the truck owner about the same after requesting the witness to stay at the place of accident. It is also stated by him very clearly that the key of the engine of the truck had been taken away by the driver. Nothing has been elicited in the cross-examination to dispute that statement. In such circumstances, the statement of Devi Singh that he did not possess driving licence at the time of accident will not help the petitioner herein.

3. Reliance is also placed on the F.I.R and the challan of the police to show that Devi Singh was the driver at the relevant time. Neither the F.I.R nor the challan is admissible in evidence and the same could not be looked into. On the other hand, the evidence on record in the present case is very clear to the effect that the vehicle was driven not by Devi Singh but by a regular driver of the vehicle. Nirmal Singh, RW 2, is the owner of the vehicle. He has stated categorically that at the time of the accident it was only his driver who was driving the vehicle and he has also added that he had authorised only Harpal Singh to drive the truck and no one else. According to him, Harpal Singh had a valid driving licence and he had been his driver for four years. PW 2 has stated in the chief-examination that himself, Ramesh Chand and Jagtar Singh, owner of another truck bearing No. 5065, were going on the road when the accident took place. According to him, Rakesh Chand, deceased sustained serious injuries and died. He was driver of truck owned by PW 2 bearing registration No. HNE 365. PW 2 also received simple injuries. He has stated in the chief-examination that they had caught the driver at the time of accident when he was sitting at the steering. He stated as follows:

“…We caught hold of the driver of the truck HYE 1913 who was sitting on the steering. The police also reached at the spot. Police took Devi Singh to Police Station, Parwanoo.”

4. Learned counsel for the petitioner wants this court to make an inference that the person who was caught by the witness and another was the same as Devi Singh who was taken to the police station. No such inference can be drawn. It is very significant that the witness does not mention the name of the driver when he has stated that he himself and another person caught hold of the driver and again when he referred to Devi Singh he did not say that Devi Singh was the driver of the truck.

5. No doubt in another place the witness has stated that accident took place due to negligence of Devi Singh, driver of truck No. HYE 1913 but this statement has been completely washed away by the statement made in the cross-examination which has been elicited by the petitioner itself. In the cross-examination of the insurance company the witness has stated very categorically that:

“…It is incorrect to suggest that we had caught the driver at the time of accident when he was at the steering. I do not remember the name of the driver who is driving the vehicle after the accident.”

6. This statement has been brought out by insurance company itself in the cross-examination. PW 4 has stated as follows:

“A man was sitting inside the truck who was under the influence of liquor. I do not know whether he was a driver or conductor/cleaner. I can recognize him.” (The witness pointed out towards Devi Singh respondent standing in court today).

7. This statement will not prove that it was Devi Singh who was driving the vehicle at the time of accident. Thus the evidence on record is hardly sufficient to accept the case of the petitioner insurance company that the vehicle was being driven by Devi Singh who was the cleaner of the vehicle, who had no driving licence at the time of accident. On the facts it is very clear that the vehicle was driven only by Harpal Singh who had a valid driving licence.

8. Learned counsel for the respondents has brought to my notice the judgment of the Supreme Court in Sohan Lal Passi v. P. Sesh Reddy, 1996 ACJ 1044 (SC). The Supreme Court has clearly held that if the owner of the vehicle had authorised the vehicle to be driven by a duly licensed driver but the driver allowed the cleaner/conductor having no driving licence, the insurance company cannot escape the liability so far as third parties are concerned on the ground of contravention of condition in the policy. The court referred to the judgment in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan, 1987 ACJ 411 (SC) and a passage from that judgment is extracted which reads as follows:

“If the person who has got the vehicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression ‘breach’ occurring in section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of section 96. In the present case, far from establishing that it was the appellant who had allowed Rajinder Pal Singh to drive the vehicle when the accident took place, there is not even any allegation that it was the appellant who was guilty of violating the condition that the vehicle shall not be driven by a person not duly licensed. From the facts of the case, it appears that the appellant had done everything within his power inasmuch as he has engaged a licensed driver Gurubachan Singh and had placed the vehicle in his charge. While interpreting the contract of insurance, the Tribunals and courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds. Unless it is established on the materials on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licensed to drive the vehicle when the accident took place, the insurer shall be deemed to be a judgment-debtor in respect of the liability in view of sub-section (1) of section 96 of the Act. It need not be pointed out that the whole concept of getting the vehicle insured by an insurance company is to provide an easy mode of getting compensation by the claimants, otherwise in normal course they had to pursue their claim against the owner from one forum to the other and ultimately to execute the order of the Accidents Claims Tribunal for realisation of such amount by sale of properties of the owner of the vehicle. The procedure and result of the execution of the decree is well-known.”

9. The court referred to the judgment in Kashiram Yadav v. Oriental Fire & Genl Ins. Co. Ltd., 1989 ACJ 1078 (SC), wherein the statement of law laid down in the above case was reiterated and the court added:

“We may also state that without the knowledge of the insured, if by driver's acts or omission others meddle with the vehicle and cause an accident, the insurer would be liable to indemnify the insured. The insurer in such a case cannot take the defence of a breach of condition in the certificate of insurance.”

10. The court expressed its agreement with the above views.

11. In this case as a fact it has been found that it was only a duly licensed driver who was driving the vehicle. As a matter of law the Supreme Court has held that even if the driver had authorised somebody else to drive the vehicle without the permission of owner, the insurance company will still be liable. Hence, there is no merit in these petitions and the same are dismissed. There will be no order as to costs. The objection raised by the respondents in each case by filing C.M.P Nos. 105 and 106 of 1996 that the main petitions should be dismissed in limine in view of the provisions of section 173 of the Motor Vehicles Act is not sustainable. C.M.Ps have to be dismissed in so far as they prayed for dismissal of the main petitions on preliminary objections. However, the prayer in the C.M.Ps that the amount may be ordered to be released to the claimants-respondents-applicants is granted. In view of the dismissal of the main C.M.Ps the claimants are entitled to get their amounts of compensation as per the award. The Registry may pay the amount by cheque to the counsel for claimants appearing in these cases.

12. Petitions dismissed.

New India Assurance Co. Ltd. v. Jagtar Singh And Others

Summary of Legal Opinion: M. Srinivasan, C.J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner (Insurance Company)

Respondents / Claimants

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Disposition

New India Assurance Co. Ltd. v. Jagtar Singh And Others

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