RAM CHANDRA SINGH versus RAJARAM AND ORS. on 14 August 2018

RAM CHANDRA SINGH

v.

RAJARAM AND ORS.

(Civil Appeal No. 8145 of 2018)

AUGUST 14, 2018

[DIPAK MISRA CJI AND A.M. KHANWILKAR, J.]

Motor Vehicles Act, 1988:

Fatal Accident – Claim for compensation – Tribunal awardedcompensation, but absolving the insurer on the ground that driverof the offending vehicle did not possess valid licence – Liability topay compensation amount was laid on the owner and the driver ofthe vehicle – Appeal by the vehicle owner – Dismissed by HighCourt – On appeal, held: Insurer can be absolved only when theowner of the offending vehicle is aware of the fact that the licencewas fake and still permitted the driver to drive the vehicle – Merefact that the driving licence is fake, per se, would not absolve theinsurer – Courts below made no attempt to analyse the pleadingsand evidence to ascertain whether the owner was aware of the fakedriving licence possessed by the driver – Therefore, matter remittedto High Court to reconsider the question whether liability was ofthe owner or the insurer to pay the compensation amount.

Allowing the appeal, the Court

HELD: 1. It is well established that if the owner was awareof the fact that the licence was fake and still permitted the driverto drive the vehicle, then the insurer would stand absolved.However, the mere fact that the driving licence is fake, per se,would not absolve the insurer. Indubitably, the High Court notedthat the counsel for the appellant did not dispute that the drivinglicence was found to be fake, but that concession by itself wasnot sufficient to absolve the insurer. [Para 11] [1088-E-F]

2. In the present case, the Tribunal made no attempt toanalyse the pleadings and evidence on record to ascertainwhether the appellant (owner) was aware of the fake drivinglicence possessed by the driver (respondent No.6). The Tribunalmerely adverted to the investigation and verification report and

A

B

C

D

E

F

G

H

[2018] 9 S.C.R.

Afound that the stated driving licence was invalid. The High Courtalso made no attempt to enquire into the relevant aspect, as hasbeen consistently expounded by Supreme Court. It would beappropriate to relegate the parties before the High Court forfresh consideration of the appeal filed by the appellant (owner)only on the question of liability of the owner or of the insurerB(respondent No.7) to pay the compensation amount. [Paras 9 and13] [1087-B; 1089-A]

PEPSU Road Transport Corporation v. NationalInsurance Company (2013) 10 SCC 217 : [2013] 9 SCR 266; Premkumari and Ors. v. Prahlad Dev andCOrs. (2008) 3 SCC 193 : [2008] 1 SCR 874 – reliedon.

United India Insurance Co. Ltd. v. Lehru and Ors.(2003) 3 SCC 338: [2003]2 SCR 495; NationalInsurance Co. Ltd. v. Swaran Singh & Ors. (2004) 3DSCC 297: [2004] 1 SCR 180; National Insurance Co.Ltd. v. Laxmi Narain Dhut (2007) 3 SCC 700 : [2007] 3 SCR 579 – referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8145of 2018.

From the Judgment and Order dated 28.11.2016 of the of theHigh Court of Judicature at Allahabad in First Appeal From Order No.G3290 of 2016.

S. R. Singh, Sr. Adv., Mangal Prasad, Ms. Shweta Yadav, KuldeepYadav, Adarsh Verma, Yash Pal Dhingra, Abhishek Gola, Sudhir Naagar,Advs. for the appearing parties.

H

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J. 1. The singular question involved inthis appeal against the judgment and order dated 28[th] November, 2016passed by the High Court of Judicature at Allahabad in First AppealFrom Order No.3290 of 2016, is whether the Motor Accident ClaimsTribunal, Firozabad, was right in holding that the insurer was not liable asthe driver had a fake licence.

2. Shorn of unnecessary details, the respondent Nos.1 to 5 fileda motor accident claim before the Motor Accident Claims Tribunal,Firozabad, bearing M.A.C.P. No.169 of 2012, consequent to the deathof Sanoj Kumar on account of motor accident which occurred on 10[th]May, 2012 at 6.30 A.M., when he was going for his morning walk towardsMustafabad Chauraha. At that time, the driver of Bolero loader bearingregistration No.UP-71/0084 while driving the vehicle in a high speedand in rash and negligent manner, hit the deceased from behind. TheTribunal partly allowed the claim petition and awarded compensationamount of Rs.6,27,000/-, but absolved the Oriental Insurance CompanyLtd. (for short, “the insurer”) on the finding that the offending vehiclewas driven by one Shivgyani (respondent No.6) who did not have a validdriving licence. The Tribunal, however, directed the insurer to pay thecompensation amount as determined in terms of the award dated 24[th]August, 2016, with liberty to recover the same from the vehicle owner(appellant herein) and the driver (respondent No.6) jointly and severally.

3. The appellant, being the vehicle owner, alone filed an appealbefore the High Court of Judicature at Allahabad which was dismissedon the finding that the counsel for the appellant did not dispute that thedriving licence was found to be fake and no evidence was adducedbefore the Court to show that the driving licence was genuine. Thisconcurrent view is the subject matter of challenge in the present appeal.

4. It is contended by the appellant that even if the finding of theTribunal, that the driving licence relied upon by the owner of the vehicleand driver was fake, is maintained as it is, even then the Tribunal couldnot have absolved the insurer and made the owner of the vehicle liable,in the absence of a clear finding that the owner of the vehicle wasaware about the factum of fake licence and despite the same, he madeno attempt to take corrective measures, including to verify the genuinenessthereof. In absence of such a finding, the insurer cannot be straightaway B

C

D

E

F

G

H

Aabsolved. In support of this proposition, reliance was placed on PEPSURoad Transport Corporation Vs. National Insurance Company[1], andPremkumari and Ors. Vs. Prahlad Dev and Ors.[2].

5. The counsel for the insurer submits that the appellant havingadmitted the fact that the driving licence was fake and failing to produceBany other evidence to prove otherwise, cannot be heard to make anygrievance about the finding recorded by the Tribunal and affirmed bythe High Court absolving the insurer from the liability to pay thecompensation amount.

6. We have heard Mr. S.R. Singh, learned senior counselCappearing for the appellant and Mr. Abhishek Gola, learned counselappearing for the respondents.

7. We have perused the entire pleadings and the evidence onrecord as also the judgments of the Tribunal and the High Court. It isnoticed that the insurer had taken a specific plea in the written statementDfiled before the Tribunal, that the driving licence of the driver was not avalid licence. In the alternative, it was asserted that the owner of thevehicle must produce the driving licence so that it can be verified fromthe licencing authority. Additionally, the insurer placed on record aninvestigation report, verification report and photocopy of the driving licenceto establish the fact that the driving licence relied upon by the owner andEthe driver was fake and not valid. For, it was authenticated that no suchdriving licence was issued by the authority concerned.

8. It is also noticed that in the oral evidence, the appellant hadstated that he had seen the photocopy of the driving licence of Shivgyaniand was also satisfied about his driving skills, before employing him asFthe driver for driving the vehicle. In his cross-examination by the insurer,the appellant stated thus:

“……I have not sold the vehicle. Driver Shiv Gyani was workingwith me from February 2012. He was permanent resident ofDistrict – Fatehpur. I never got verified the driving licence ofGShiv Gyani. ……… This was not in my knowledge that he hasno driving licence. This is incorrect to say that I provided myvehicle to him to drive despite I was aware that he has boguslicence. I am aware of this that licence is issued on the address 1 (2013) 10 SCC 217H2 (2008) 3 SCC 193

one resides. ……………This is incorrect to say that I am givingfalse evidence to save my skin.”

9. The Tribunal while answering issue No.3, however, made noattempt to analyse the pleadings and evidence on record to ascertainwhether the appellant (owner) was aware of the fake driving licencepossessed by the driver (respondent No.6). The Tribunal merely advertedto the investigation and verification report and found that the stated drivinglicence was invalid. The High Court also made no attempt to enquireinto the relevant aspect, as has been consistently expounded by thisCourt and restated in PEPSU Road Transport Corporation (supra).Even in the case of Premkumari (supra), the Court after consideringthe judicial precedents opined as follows:

“It is clear from the above decision when the owner afterverification satisfied himself that the driver has a valid licenceand was driving the vehicle in question competently at the timeof the accident there would be no breach of Section 149(2)(a)(ii),in that event, the insurance company would not then be absolvedof liability. It is also clear that even in the case that the licencewas fake, the insurance company would continue to remain liable unless they prove that the owner was aware or noticed that thelicence was fake and still permitted him to drive.”

10. The decision in PEPSU Road Transport Corporation (supra)was relied upon by the appellant before the High Court which, however,distinguished the same by observing that it was on the facts of that case,where the Court opined that there was no evidence to prove that thedriving licence produced by the authorities was fake. That approach, inour opinion, is manifestly wrong. Whereas, even in that case, the Courtwas called upon to deal with the similar question as is involved in thisappeal. In that case, the Court first adverted to the decision in UnitedIndia Insurance Co. Ltd. Vs. Lehru and Ors.[3], and then to the three-Judge Bench decision in National Insurance Co. Ltd. Vs. SwaranSingh & Ors.[4]. Paragraphs 99-101 of Swaran Singh (supra) have beenextracted, which read thus:

“99. So far as the purported conflict in the judgments of Kamlaand Lehru is concerned, we may wish to point out that the defence 3 (2003) 3 SCC 338

4 (2004) 3 SCC 297

A

B

C

D

E

F

G

A

to the effect that the licence held by the person driving the vehiclewas a fake one, would be available to the insurance companies,but whether despite the same, the plea of default on the part ofthe owner has been established or not would be a question whichwill have to be determined in each case.

100. This Court, however, in Lehru must not be read to meanthat an owner of a vehicle can under no circumstances have anyduty to make any enquiry in this respect. The same, however,would again be a question which would arise for consideration ineach individual case.

B

C101. The submission of Mr Salve that in Lehru case, this Courthas, for all intent and purport, taken away the right of an insurerto raise a defence that the licence is fake does not appear to becorrect. Such defence can certainly be raised but it will be forthe insurer to prove that the insured did not take adequate careand caution to verify the genuineness or otherwise of the licenceDheld by the driver.”

The Court then went on to advert to a two-Judge Bench decision of thisCourt in National Insurance Co. Ltd. Vs. Laxmi Narain Dhut,[5] beforedealing with the facts of the case before it.

11. Suffice it to observe that it is well established that if the ownerEwas aware of the fact that the licence was fake and still permitted thedriver to drive the vehicle, then the insurer would stand absolved.However, the mere fact that the driving licence is fake, per se, wouldnot absolve the insurer. Indubitably, the High Court noted that the counselfor the appellant did not dispute that the driving licence was found to beFfake, but that concession by itself was not sufficient to absolve the insurer.

E

12. As aforementioned, in the present case, neither the Tribunalnor the High Court has bothered to analyse the pleadings and evidenceadduced by the parties on the crucial matter. Be that as it may, in thisappeal, the limited grievance of the appellant-owner of the vehicle isGabout unjustly absolving the insurer merely on the finding that the drivinglicence of the driver (respondent No.6) was fake. No other aspect hasbeen raised by the appellant nor do we intend to analyse or consider thesame.

H5 (2007) 3 SCC 700

13. We, therefore, deem it appropriate to relegate the parties beforethe High Court for fresh consideration of the appeal filed by the appellant(owner) only on the question of liability of the owner or of the insurer(respondent No.7) to pay the compensation amount.

A

14. We make it clear that the High Court shall not examine anyother issue in the remand proceedings. For, the compensation amount,as determined and directed by the Tribunal, has already been made overto the claimants.

B

15. Accordingly, we set aside the impugned judgment and orderpassed by the High Court of Judicature at Allahabad and restore theFirst Appeal From Order No.3290 of 2016, to the file of the High CourtCto its original number for being decided afresh, on the limited question ofwhether the liability to pay compensation amount, is cast upon theappellant (owner of the vehicle) or respondent No.7 (insurer). That aspectbe decided on its own merits in accordance with law. We may not beunderstood to have expressed any opinion, either way, on the efficacy ofDthe pleadings and the evidence produced by the parties adverted to inthis judgment or in any other evidence on record. All questions in thatbehalf are left open.

16. The appeal is allowed in the aforementioned terms with noorder as to costs.

E

Kalpana K. Tripathy Appeal allowed.

F

G

H