Saturday 19 February 2022

Whether the insurance company can pay and recover compensation from the offending vehicle owner if the vehicle driver had no driving license on the date of the incident?

 In Parminder Singh vs. New India Assurance Company Ltd.

& Ors.2019 SAR (Civil) 795, the Hon'ble Apex Court has held as under :

“7. On the issue of liability to pay the

compensation awarded, we affirm the view taken

by the High Court that the Respondent – Insurance

Company is absolved of the liability to bear the

compensation, as evidence has been produced from

the office of the Regional Transport Office to prove

that the drivers of the two offending trucks were

driving on the basis of invalid driving licenses. It is

also relevant to note that the owners and drivers of

the offending trucks have not appeared at any

stage of the proceedings, including this Court.

7.1. This Court in Shamanna & Ors. v. The

Divisional Manager, The Oriental Insurance Co. Ltd.

& Ors., held that if the driver of the offending

vehicle does not possess a valid driving license, the

principle of ‘pay and recover’ can be ordered to

direct the insurance company to the pay the victim,

and then recover the amount from the owner of the

offending vehicle. (2018) 9 SCC 650. {Para 6}

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

FIRST APPEAL NO.172 OF 2019

WITH

INTERIM APPLICATION NO.765 OF 2021

IN

FIRST APPEAL NO.172 OF 2019

 THE NEW INDIA ASSURANCE CO. LTD. V/s.  SMT. MANISHA SANJAY NIKAM 

CORAM : V. G. BISHT, J.

PRONOUNCED ON : 17th FEBRUARY 2022

JUDGMENT :

1 This first appeal is preferred by the New India Assurance

Company Limited (original respondent) against the judgment

and order dated 13th April 2018 passed in M.A.C.P. No.62 of 2013

by the learned Member, M.A.C.P., Karad thereby directing the

appellant and others to pay jointly and severally to the claimant a

sum of Rs.7,11,000/- towards compensation together with simple

interest thereon at rate of 6% p.a. from the date of petition till

realization of entire amount within two months from the passing

of the judgment and order.

2 I have heard both the parties. The learned counsel for

appellant has raised a very short issue. As far as the amount of

award is concerned, it is not disputed. However, according to the

learned counsel for appellant, the learned Tribunal ought to have

considered that on the date of accident, the driver was not

holding a valid driving license and in such circumstances, it

ought to have ordered that the appellant is entitled to recover the

amount of award from the owner of the vehicle of the offending

truck, which was rejected by the learned Member.

3 I have also heard the learned counsel for the respondent /

claimant who also admits the position of law and has no

objection if it is so ordered by this Court.

4 On going through the record it is seen that respondent no.6

- owner of the offending truck though duly served through

private notice i.e. through Registered A.D./ Speed Post (Flag B)

but remained absent. It is also seen from the record that during

the pendency of the present appeal, the driver of the said

offending truck i.e. respondent no.7 came to be deleted, in view

of pursis (Exhibit 21) filed before the M.A.C.T.

5 Perused the impugned judgment and order.

6 Though learned trial Court noted that on the date of

accident the driver of the offending vehicle was having no driving

license, but made following observations at paragraph 21 :

“21 However, from the above details of license

it can be said that offending truck driver has a

driving skill to drive the truck and it is difficult to

say that he has lost his skill or forgotten expertise

for driving the vehicle. The said driver has got

renewed the license w.e.f. 27/3/2013 after it was

expired on 12/2/2012. The accident took place

hardly 11 days prior to 27/3/2013. Therefore, I

am of the opinion that the opponent no.3 cannot

avoid its liability. Therefore, opponent nos.1 and 3

are liable to pay compensation, jointly and

severally.”

6 In Parminder Singh vs. New India Assurance Company Ltd.

& Ors.2019 SAR (Civil) 795, the Hon'ble Apex Court has held as under :

“7. On the issue of liability to pay the

compensation awarded, we affirm the view taken

by the High Court that the Respondent – Insurance

Company is absolved of the liability to bear the

compensation, as evidence has been produced from

the office of the Regional Transport Office to prove

that the drivers of the two offending trucks were

driving on the basis of invalid driving licenses. It is

also relevant to note that the owners and drivers of

the offending trucks have not appeared at any

stage of the proceedings, including this Court.

7.1. This Court in Shamanna & Ors. v. The

Divisional Manager, The Oriental Insurance Co. Ltd.

& Ors., held that if the driver of the offending

vehicle does not possess a valid driving license, the

principle of ‘pay and recover’ can be ordered to

direct the insurance company to the pay the victim,

and then recover the amount from the owner of the

offending vehicle. (2018) 9 SCC 650.

7.2 We deem it just and fair to direct the

Respondent – Insurance Company to pay the

enhanced amount of compensation as indicated in

Para. 6 above, to the Appellant within a period of

12 weeks from the date of this judgment. The

Respondent – Insurance Company is directed to

make out a Demand Draft in the name of the

Appellant, which can be used for his care for the

rest of his life. The Respondent – Insurance

Company is entitled to recover the amount from

the owners and drivers of the two offending

trucks.”

7 In Shamanna and Another vs. Divisional Manager, Oriental

Insurance Company Limited and Others (2018) 9 Supreme Court Cases 650, the Hon'ble Apex Court  has held as under :

“14 So far as the recovery of the amount from

the owner of the vehicle, the insurance company

shall recover as held in the decision in Oriental

Insurance Co. Ltd. v. Nanjappan and others (2004)

13 SCC 224 wherein this Court held that : (SCC p.

226 para 8)

“8…...For the purpose of recovering the same

from the insured, the insurer shall not be

required to file a suit. It may initiate a

proceeding before the concerned Executing

Court as if the dispute between the insurer and

the owner was the subject matter of

determination before the Tribunal and the

issue is decided against the owner and in

favour of the insurer.””

8 From the impugned judgment and order at hand it is more

than clear that on the date of accident the driver of the offending

vehicle was having no valid driving license. This being so, the

learned Member, M.A.C.T., could not have overlooked that

infirmity while fixing the responsibility of the respondents. It

seems that the learned Member also did not keep in mind the

above dictum of the Hon'ble Apex Court and for that simple

reason the finding of the learned Member is not sustainable in

law.

9 In the result, the impugned judgment and order of the

learned Member of the M.A.C.T., in so far as amount of award is

concerned, the same is affirmed. Further, in so far as direction

given to the appellant directing the appellant to pay the sum of

Rs.7,11,000/- towards compensation together with simple

interest is concerned, is set aside, and the appeal is partly

allowed. In view of above, pending Interim Application 765 of

2021 also stands disposed off.

10 I direct that the appellant Insurance Company shall pay the

compensation to the respondents/claimants along with accrued

interest and the appellant Insurance Company shall recover the

same from the owner of the vehicle i.e. respondent no.6. No

costs.

(V. G. BISHT, J.)


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