SINGH RAMversusNIRMALA AND ORS.

36                       [2018]
              SUPREME COURT     3 S.C.R. 36
                            REPORTS                      [2018] 3 S.C.R.


A                               SINGH RAM
                                         v.
                           NIRMALA AND ORS.
                       (Civil Appeal No. 2103 of 2018)
B                             MARCH 06, 2018
           [DIPAK MISRA, CJI, A. M. KHANWILKAR AND
                  DR. D.Y. CHANDRACHUD, JJ.]
            Motor Vehicles Act 1988 – s. 166 – Compensation – Liability
     to pay when license fake – On facts, insured did not hold a valid
C
     driving licence at the time of the incident – Liability to pay
     compensation fastened on owner-cum-driver of the offending vehicle
     by courts below – Insurance company directed to pay and recover
     from the owner – Interference with – Held: Not called for – Owner
     did not depose in evidence – He produced a licence which was
D    found to be fake – Another licence he sought to produce had already
     expired before the accident and was not renewed within the
     prescribed period – Owner evidently failed to take reasonable care
     to find out as to whether the driving license produced by the driver,
     fake one or otherwise, fulfilled the requirements of law or not – He
     could not have been unmindful of facts within his knowledge –
E
     Thus, the direction by the courts below that the insurance company
     to pay and recover from owner cannot be faulted.
            In the instant case, the insured did not hold a valid driving
     licence at the time of the accident. As a result, the courts below
     absolved the insurer. However, the insurer was directed to pay
F    the compensation awarded to the claimant and to recover it from
     the owner cum driver of the offending motor cycle. Hence, the
     present appeal.
            Dismissing the appeal, the Court
            HELD : It is necessary to note that the owner did not
G    depose in evidence and stayed away from the witness box. He
     produced a licence which was found to be fake. Another licence
     which he sought to produce had already expired before the
     accident and was not renewed within the prescribed period. It
     was renewed well after two years had expired. The appellant as
     owner had evidently failed to take reasonable care to find out as
H
                                    36
                   SINGH RAM v. NIRMALA AND ORS                           37


to whether the driving license produced by the driver, fake one           A
or otherwise, fulfilled the requirements of law or not (proposition
(vii) of Swaran Singh) since he could not have been unmindful of
facts which were within his knowledge. In the circumstances, the
direction by the tribunal, confirmed by the High Court, directing
the insurance company to pay and recover from owner cannot be
                                                                          B
faulted. [Paras 8, 9] [41-A-C]
          National Insurance Co. Ltd. v. Swaran Singh [2004] 1
          SCR 180 : (2004) 3 SCC 297 – relied on.
                          Case Law Reference
          [2004] 1 SCR 180          relied on            Para 8           C
      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2103
of 2018.
     From the Judgment and Order dated 28.03.2014 by the High Court
of Punjab and Haryana at Chandigarh in F.A.O. No. 3790 of 2012
                                                                          D
(O & M).
      R. K. Kapoor, Rajat Kapoor, Ms. Rekha Giri, Anis Ahmed Khan,
Balbir Singh Gupta, Advs for the Appellant.
      Shish Pal Laler, Sonit Sinhmar, Devesh Kumar Tripathi, Advs for
the Respondents.                                                          E
          The Judgment of the Court was delivered by
          DR. D.Y. CHANDRACHUD, J. 1. Delay condoned.
       2. In a claim for compensation under Section 166 of the Motor
Vehicles Act 1988, the Motor Accident Claims Tribunal (‘the Tribunal’),   F
Yamunanagar at Jagadhri found that the insured did not hold a valid
driving licence at the time of the accident. The Tribunal absolved the
insurer for that reason. The insurer was, however, directed to pay the
compensation awarded to the claimant and to recover it from the owner
of the offending motor cycle. The High Court dealt with three appeals:
one filed by the claimant seeking enhancement of compensation, a second   G
by the insurance company and the third by the owner cum driver of the
offending vehicle. The High Court held that in view of the decision of
this Court in National Insurance Co. Ltd. v Swaran Singh1, the
Tribunal was correct in directing the insurer to pay the compensation
1
    (2004) 3 SCC 297                                                      H
38            SUPREME COURT REPORTS                           [2018] 3 S.C.R.


A    and to recover it from the owner-cum-driver of the offending vehicle.
     The present appeal has been filed by the owner and driver. The only
     point which has been urged in support of the appeal is that the Tribunal
     and the High Court erred in fastening the liability on him by granting a
     right of recovery to the insurer.
B           3. The accident took place on 22 March 2010. The deceased
     Sunil Kumar was riding a motor cycle bearing Registration No HR-
     04B-4673. The Tribunal found that the accident was caused as a result
     of the rash and negligent act of the appellant. This finding of fact has
     not been disturbed by the High Court. The deceased was employed as a
     sweeper in Haryana Roadways and was engaged on a salary of Rs
C    11,928 per month. The Tribunal allowed future prospects of 50%, the
     deceased being just short of 36 years of age.After deducting an amount
     representing one-fourth of the earnings for personal expenses, the
     Tribunal applied a multiplier of 15. The total compensation was computed
     at Rs 24,15,420 to which the Tribunal added an amount of Rs 20,000
D    under conventional heads. However, the Tribunal held that the financial
     assistance which the heirs of the deceased would receive over a period
     of 12 years from the employee (amounting to Rs 16,16,112) would have
     to be deducted from the compensation. After making the deduction, the
     Tribunal awarded an amount of Rs. 8,19,500 together with interest at
     7.5 per cent per annum from the date of the claim petition. The High
E    Court has enhanced the compensation to Rs 16,04,912.
           4. Special Leave Petition (C ) No 7737 of 2015 filed by the
     claimant,which was connectedto this appeal,has been dismissed on 8
     February 2018.

F           5. In the present appeal by the owner cum driver of the offending
     motor cycle,the submission is that in view of the decision of a Bench of
     three learned Judges of this Court in Swaran Singh (supra), the insurer
     ought not to have been absolved.Hence the direction to the insurer to
     pay and recover the compensation from the appellant should, it has been
     urged, be modified to fasten a joint and several liability on the insurer.
G
            6. Before we advert to the decision in Swaran Singh(supra) a
     brief reference to the facts as they emerge from the decision of the
     Tribunal is necessary. Initially before the Tribunal the appellant produced
     a driving licence issued by the Motor Vehicles Department, Agra (Exh.R-
     1). The driving licence was found to be fake. The statement of the
H    Senior Assistant in the office of the RTO, Agra was that Exh.R-1 had
                SINGH RAM v. NIRMALA AND ORS.                                     39
                  [DR. D.Y. CHANDRACHUD. J.]

not been issued by the office. The Tribunal noted that the witness had            A
proved the report (Exh.R-2) issued by the department and concluded
that the licence was fake. Faced with this situation, the appellant attempted
to prove that he held a valid driving licence issued by the licencing authority
at Jagadhri to drive a motor cycle. The Tribunal rejected the application
filed by the appellant for producing additional evidence. The Tribunal
                                                                                  B
noted that even otherwise, the licence which was issued by the licencing
authority, Jagadhri for a tractor and car was valid only until 29 August
2009. The accident took place on 22 March 2010. The licence was
renewed on 28 November 2011 more than two years after it had expired.
On these facts, the Tribunal observed that on the date of the accident,
the appellant was not holding a valid and effective driving licence nor           C
was there any evidence to indicate that the licence was sought to be
renewed as required in law, within 30 days of its expiry. The Tribunal
also observed that the appellant did not hold a valid licence to drive a
motor cycle. On these grounds, the insurer was absolved. The High
Court has confirmed the direction of the Tribunal to pay and recover.
                                                                                  D
      7. In Swaran Singh (supra), this Court held that the holder of a
driving licence has a period of thirty days on its expiry, to renew it:
       “45. Thus, a person whose licence is ordinarily renewed in terms
       of the Motor Vehicles Act and the Rules framed thereunder, despite
       the fact that during the interregnum period, namely, when the              E
       accident took place and the date of expiry of the licence, he did
       not have a valid licence, he could during the prescribed period
       apply for renewal thereof and could obtain the same automatically
       without undergoing any further test or without having been declared
       unqualified therefor. Proviso appended to Section 14 in unequivocal
       terms states that the licence remains valid for a period of thirty         F
       days from the day of its expiry.
       46. Section 15 of the Act does not empower the authorities to
       reject an application for renewal only on the ground that there is a
       break in validity or tenure of the driving licence has lapsed, as in
       the meantime the provisions for disqualification of the driver             G
       contained in Sections 19, 20, 21, 22, 23 and 24 will not be attracted,
       would indisputably confer a right upon the person to get his driving
       licence renewed. In that view of the matter, he cannot be said to
       be delicensed and the same shall remain valid for a period of
       thirty days after its expiry.”                                             H
40            SUPREME COURT REPORTS                             [2018] 3 S.C.R.


A         The following conclusion has been recorded in summation in the
     judgment::
           “(iii) The breach of policy condition e.g. disqualification of the
           driver or invalid driving licence of the driver, as contained in sub-
           section (2)(a)(ii) of Section 149, has to be proved to have been
B          committed by the insured for avoiding liability by the insurer. Mere
           absence, fake or invalid driving licence or disqualification of the
           driver for driving at the relevant time, are not in themselves
           defences available to the insurer against either the insured or the
           third parties. To avoid its liability towards the insured, the insurer
           has to prove that the insured was guilty of negligence and failed
C          to exercise reasonable care in the matter of fulfilling the condition
           of the policy regarding use of vehicles by a duly licensed driver or
           one who was not disqualified to drive at the relevant time.
            (iv) Insurance companies, however, with a view to avoid their
           liability must not only establish the available defence(s) raised in
D          the said proceedings but must also establish “breach” on the part
           of the owner of the vehicle; the burden of proof wherefor would
           be on them.
            (v) The court cannot lay down any criteria as to how the said
           burden would be discharged, inasmuch as the same would depend
E          upon the facts and circumstances of each case.
            (vi) Even where the insurer is able to prove breach on the part of
           the insured concerning the policy condition regarding holding of a
           valid licence by the driver or his qualification to drive during the
           relevant period, the insurer would not be allowed to avoid its liability
F          towards the insured unless the said breach or breaches on the
           condition of driving licence is/are so fundamental as are found to
           have contributed to the cause of the accident. The Tribunals in
           interpreting the policy conditions would apply “the rule of main
           purpose” and the concept of “fundamental breach” to allow
G          defences available to the insurer under Section 149(2) of the Act.
           (vii) The question, as to whether the owner has taken reasonable
           care to find out as to whether the driving licence produced by the
           driver (a fake one or otherwise), does not fulfil the requirements
           of law or not will have to be determined in each case”.
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               SINGH RAM v. NIRMALA AND ORS.                                  41
                 [DR. D.Y. CHANDRACHUD. J.]

       8. In the present case it is necessary to note, as observed by the     A
Tribunal, that the owner did not depose in evidence and stayed away
from the witness box. He produced a licence which was found to be
fake. Another licence which he sought to produce had already expired
before the accident and was not renewed within the prescribed period.
It was renewed well after two years had expired. The appellant as
                                                                              B
owner had evidently failed to take reasonable care (proposition (vii) of
Swaran Singh) since he could not have been unmindful of facts which
were within his knowledge.
       9. In the circumstances, the direction by the Tribunal, confirmed
by the High Court, to pay and recover cannot be faulted. The appeal is,
accordingly, dismissed. There shall be no order as to costs.                  C


Nidhi Jain                                                Appeal dismissed.


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