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New India Assurance Co. Ltd. v. Latha Jayaraj And Others
Factual and Procedural Background
Jayaraj died on 8-10-1987 after his scooter was struck at Thottakkattukara by a lorry (KLN 5458) owned by the 6th respondent and driven by the 5th respondent. Jayaraj's wife, daughter and parents (respondents 1–4) claimed Rs. 2,61,750/- in the Motor Accidents Claims Tribunal, Ernakulam. Respondents 5 and 6 resisted the claim. The insurer (appellant) filed a written statement disavowing liability and contending its liability was limited to Rs. 1,50,000/-. The Tribunal awarded Rs. 1,46,250/-. The insurer appealed.
Legal Issues Presented
- Whether the insurer can deny liability on the ground that the deceased was not duly licenced (he held only a learner's licence exhibited by an 'L' board).
- Whether the insurer may challenge the quantum of compensation in appeal given the restrictions in Section 96(2) and Section 110-A of the Motor Vehicles Act.
Arguments of the Parties
Appellant's Arguments
- The deceased was not validly licenced (he possessed only a learner's licence as evidenced by an 'L' board), so the insurer can invoke the policy exclusion for persons who are not duly licenced.
- The amount awarded by the Tribunal is exorbitant and should be interfered with on appeal.
The opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| National Insurance Co. Ltd. v. A. Babu, AIR 1990 Madras 305 | That a person holding a learner's licence is a valid permit-holder and a policy condition excluding persons holding learner's licences would be contrary to Section 96(2). | The court agreed with this authority, holding the deceased with a learner's licence was "duly licenced" and there was no violation of the policy conditions permitting the insurer to deny liability. |
Court's Reasoning and Analysis
The court examined Section 96(2) of the Motor Vehicles Act, which allows an insurer to defend a compensation proceeding on specified grounds, including driving by a person who is not duly licenced. The Motor Vehicle Inspector's report showed an 'L' board on the scooter; however, the court interpreted Section 96(2)(b)(ii) and related rules to treat a learner's licence as a form of licence issued under the Motor Vehicles Rules. Relying on and agreeing with the Madras High Court decision in National Insurance Co. Ltd. v. A. Babu, the court held that a person holding a learner's licence is "duly licenced" for the purposes of Section 96(2), so the insurer could not invoke a policy exclusion to avoid liability.
On the challenge to quantum, the court noted that Section 96(2) limits the grounds on which an insurer can defend a claim and permits the Tribunal to allow the insurer to contest the merits only upon application and for reasons recorded (for example, where collusion is suspected). The appellant had not sought such permission from the Tribunal. Consequently, the insurer was restricted to the statutory grounds in Section 96(2), which were absent. The court further observed that Section 110-A does not permit the insurer to canvass the merits of the Tribunal's award in appeal except as provided by the Act. Thus, the appellant could not properly impugn the quantum in this appeal.
Holding and Implications
Appeal dismissed.
Direct consequences: the Tribunal's award of Rs. 1,46,250/- stands; the deceased's possession of a learner's licence was held to constitute being "duly licenced" for the purposes relied upon by the court, so the insurer could not avoid liability on that ground; and the insurer was not permitted to re-open the merits of the award on appeal in the absence of permission under the statutory scheme.
Balanarayana Marar, J.:— The insurer is the appellant. Respondents 1 to 4 are the legal representatives of one Jayaraj who died in a motor accident which happened on 8-10-1987. He was riding a scooter from Angamaly to Alwaye. When he reached Thottakkattukara the lorry KLN 5458 owned by 6th respondent and driven by 5th respondent dashed against the scooter as a result of which Jayaraj sustained serious injuries and subsequently succ umbed to the injuries on the same day. His wife, daughter and parents moved Motor Accidents Claims Tribunal, Ernakulam claiming an amount of Rs. 2,61,750/- as compensation. Respondents 5 and 6 resisted that application. Written statement was also filed by appellant disclaiming liability and contending that their liability is limited to Rs. 1,50,000/-. The Tribunal after evidence and hearing both parties awarded an amount of Rs. 1,46,250/-. Aggrieved by that award the insurer has come up in appeal.
2. Heard counsel for appellant.
3. The main grievance of the appellant appears to be that the deceased was not having a valid licence at the material time and that the amount awarded is exorbitant.
4. Under Section 96(2) of the Motor Vehicles Act an insurer to whom notice of the bringing of any proceeding for compensation has been given can defend the action on any of the grounds mentioned therein. One of the grounds is violation of a condition excluding driving by a named person or persons or by any person who is not duly licenced or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification. The deceased was riding the scooter with an ‘L’ board presumably for the reason that he had obtained only a learner's licence.
5. The report of the Motor Vehicle Inspector shows that an ‘L’ board was seen exhibited on the scooter. The contention is that a person who is riding a scooter with an ‘L’ board is not duly licenced and as such the insurer can enforce the condition excluding driving by a person who is not duly licenced. But a person who is holding a learner's licence is also ‘duly licenced’ within the meaning of Section 96(2)(b)(ii) of the Act. A person holding a learner's licence is also entitled to drive the vehicle. The licence is also issued under the provisions of the Motor Vehicles Rules. For all practical purposes a person holding a learner's licence is a person duly licenced to drive a Vehicle. The Madras High Court had occasion to consider, this aspect in National Insurance Co. Ltd. v. A. Babu, AIR 1990 Madras 305. It was held that the condition in the policy that the person holding learner's licence would not be entitled to drive the vehicle would run counter to the provisions of Section 96(2). It was further held that it would not be possible for the insurance Company to avoid its liability to indemnify the owner of the vehicle driven by a person holding a learner's licence. It was observed that, the licence is issued under Rule 39 of the Tamil Nadu Motor Vehicles Rules and a person receiving instructions in driving a motor vehicle is issued a permit commonly known as learner's licence. In view of these circumstances it was held that the learner's licence is also a valid permit issued by the specific authority. We are in agreement with this view and hold that the deceased though holding only a learner's licence was duly licenced to drive the vehicle and that there has not been any violation of the conditions in the policy of insurance.
6. The insurer has also challenged the quantum awarded by the Tribunal. Section 96(2) of the Motor Vehicles Act permits the insurer to canvass the merits of the award only on one or other of the grounds mentioned therein. In case the insurer apprehends that there is a collusion between the person making the claim and the person against whom it is made the insurer is not without a remedy. A request can be made to the Tribunal by the insurer for permitting them to contest the claim. If the Claims Tribunal is satisfied that there is collusion between the person making the claim and the person against whom the claim is made or if the person against whom the claim is made has failed to contest the claim the court can direct that the insurer will have the right to contest the claim on all or any of the grounds that are available to the person against whom the claim has been made. No such request is seen to have been made by the appellant before the Claims Tribunal. In order to enable the insurer to contest the claim the court has to issue a direction and that has to be done for reasons to be recorded. Evidently no permission has been obtained by the insurer from the court to contest the claim. It necessarily follows that the insurer can resist the claim only on one or other of the grounds under Section 96(2) of the Act and the grounds therefore are absent.
7. The merits of the claim made under Section 110-A of the Act do not find a place in that sub-section. In view of the prohibition contained in that Section it is not open to the appellant to canvass the merits of the award in appeal. There is no provision in the Act enabling the insurer to raise the merits of the award in appeal except in accordance with the provisions of the Act. In other words the rights of the insurer are not in any way enlarged in appeal. The request of the appellant for interference of the award has therefore to be refused.
8. The appeal is therefore dismissed.
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