United India Insurance Co. Ltd. v. Dhan Singh Bhandari And Another

Rajesh Tandon, J.:— Heard Sri D.S Patni, Counsel for the appellant and Sri Yogesh Pandey, Counsel for the respondent No. 1.

2. Present appeal has been filed by the appellant against the judgment and award dated 22.11.2003 passed by the Motor Accident Claims Tribunal, Champawat in Motor Accident Claims Petition No. 9 of 2003, Dhan Singh Bhandari v. Pankaj Singh, awarding a sum of Rs. 70,135/- as compensation to the claimant. Briefly stated, the facts giving rise to the present appeal are that Dhan Singh Bhandari has filed a claim petition for grant of compensation on account of injuries sustained by him in a motor vehicle accident occurred on 27.8.2002 at 1 p.m The petitioner has alleged that on 27.8.2002, he was going to Pithoragarh from Tanakpur by Jeep No. U.A 03-1007. The Jeep was being driven rashly and negligently due to which it met with accident one and half kilometre ahead from Dhaun. The petitioner sustained multiple injuries on his person and lost five teeth in the accident besides other injuries. The petitioner was employed as a clerk in Health Department of Nepal Government. The claim petition was contested by the opposite parties. Opposite party No. 1 Sri Pankaj Singh, who is the owner of the ill-fated vehicle, has filed his written statement and has admitted the accident, but he denied that the accident had taken place due to rash and negligent driving of the driver of the vehicle. Opposite party No. 2 United India Insurance Company has also filed its written statement. The Insurance Company has submitted that the driver and owner of the vehicle have flouted the terms and conditions of the insurance policy and that at the time of the accident, the vehicle was over-loaded.

3. On the pleadings of the parties, the following issues were framed:—

(I) Whether the accident took place on 27.8.2002 at 6 a.m on Pithoragarh Tanakpur Motor Road near Dhaun involving Jeep No. U.A 03-1007 due to rash and negligent driving of the driver of the Jeep and in the accident Dhan Singh Bhandari had sustained simple and grievous injuries?

(II) Whether the driver of the Jeep was having valid driving licence at the time of accident?

(III) Whether the Jeep was validly insured?

(IV) To what amount of compensation, is the petitioner entitled?

4. The Claims Tribunal has held that the accident took place due to rash and negligent driving by the driver of the jeep.

5. The Claims Tribunal has also held that the driver of the vehicle had valid driving licence at the time of accident and the jeep was validly insured with the opposite party No. 2.

6. On the basis of evidence adduced by the petitioner, the Claims Tribunal has held that the petitioner is entitled to get a sum of Rs. 69,135/- as compensation and Rs. 1,000/- as litigation expenses against the respondent No. 2 the Insurance Company.

7. Feeling aggrieved, the present appeal has been filed by the Insurance Company.

8. The main contention of the appellant is that at the time of accident, the driver had no valid driving licence and the Jeep was over loaded and thus the driver and owner of the vehicle have violated the terms and conditions of the insurance policy the Insurance Company is, therefore, not liable to pay compensation to the petitioner.

9. The learned Claims Tribunal has framed issues on the point of valid driving licence and violation of the insurance policy by the owner and driver of the jeep, and on the point that whether the jeep was overloaded at the time of accident.

10. Copy of the driving licence has been filed before the Claims Tribunal and respondent No. 2 Insurance Company has not pressed this point at the trial stage.

11. So far as the over-loading of the jeep is concerned, the Insurance Company on the basis of the report of its surveyor has contended that at the time of accident there were 13 passengers traveling on the jeep. The surveyor was neither present at the time of accident, nor he filed any documentary evidence in support of his assertion that the jeep was overloaded. Insurance Company has failed to adduce any oral or documentary evidence to prove that at the time of accident the jeep was overloaded. The burden of proof is on the Insurance Company to prove that at the time of accident, the jeep was over-loaded and there were 13 passengers travelling by the jeep and as such the insured has flauted the terms and conditions of the insurance policy.

12. However, the Insurance Company is liable to satisfy the third party claim.

13. The Apex Court in Oriental Insurance Co. Ltd. v. Inderjit Kaur,1 has held that the insurance company cannot avoid its liability in respect of the third party. The observations of the Apex Court are quoted below:

7. “We have, therefore, this position. Despite the bar created by section 64-VB of the Insurance Act, the appellant, an authorised insurer, issued a policy of insurance to cover the bus without receiving the premium therefor. By reason of the provisions of sections 147(5) and 149(1) of the Motor Vehicles Act, the appellant became liable to indemnify third parties in respect of the liability which that policy covered and to satisfy awards of compensation in respect thereof notwithstanding its entitlement (upon which we do not express any opinion) to avoid or cancel the policy for the reason that the cheque issued in payment of the premium thereon had not been honoured.”

“Now let us consider section 149(2). Reliance has been placed on section 149(2)(a)(ii). As seen in order to avoid liability under this provision it must be shown that there is a breach. As held in Skandia's and Sohan Lal Passis's cases (supra) the breach must be on part of the insured. We are in full agreement with that. To hold otherwise would lead to absurd results. Just to take an example, suppose a vehicle is stolen while it is being driven by the thief there is an accident. The thief is caught and it is ascertained that he had no licence. Can the Insurance Company disown liability? The answer has to be an emphatic “no”. To hold otherwise would be to negate the very purpose of the compulsory insurance. The injured or relatives of person killed in the accident may find that the decree obtained by them is only a paper decree as the owner is a man of straw. The owner himself would be an innocent sufferer. It is for this reason that the legislature, in its wisdom, has made insurance at least third party insurance compulsory. The aim and purpose being that an insurance company would be available to pay. The business of the company is to insurance. In all businesses there is an element of risk. All persons carrying on business must taken risks associated with that business. Thus it is equitable that the business which is run for making profits also bears the risk associated with it. At the same time innocent parties must not be made to suffer or loss. Those provisions meet these requirements. We are thus in agreement with what is laid down in aforementioned cases viz. that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The Insurance Company must establish that the breach was on the part of the insured.”

14. In view of the observation made by the Apex Court in the case of United India Insurance Company v. Lehru, the Claims Tribunals has awarded compensation to the petitioner on the basis of documentary as well as oral evidence filed by the petitioner. I find no infirmity or impropriety in the findings of the Claims Tribunal regarding amount of compensation. However, this plea is not open for the Insurance Company in view of the observations made by the Apex Court in New India Insurance Company v. Kiran Singh, the observations of the Apex Court are quoted below:—

“It is contended that the multiplier of 43 applied by the Tribunals is erroneous. In this connection, the learned Counsel for the appellant had referred to the decision of this Court in U.P State Road Transport Corporation v. Trilok Chandra,2 wherein this Court has held that the multiplier should not be more than 18. The Tribunal while applying the multiplier of 43 had considered the age of the deceased being 27 years and if he had not died in the accident he would have lived up to the age of 70 years and one day he would have been promoted to the post of Chief Engineer. Keeping the aforesaid background in view, the High Court was of the view, that if multiplier is reduced and multiplicand is enhanced not much difference would be caused to the amount fixed by the Tribunal. Even otherwise it is a trite law that the insurance company is not capable to challenge the quantum of compensation.”

15. In view of the above, the appeal has no force and is liable to be dismissed with costs.